Amazon buys in on Lean manufacturing

Amazon has traditionally been known as an online retailer, but the Seattle, Washington-based company is quickly diversifying into other areas. One of the new service packages it is developing, Amazon Web Services (AWS), is a cloud-computing platform designed for businesses.

AWS is a radical new direction for the company, but Amazon wants to do it the right way. For that reason, the internet retailer has turned to Toyota's Lean manufacturing approach as a means to eliminate and reduce any inefficiencies standing in its way. Because AWS is a low-margin offering, the company is determined to make it as efficient as possible.

“We make money when people use our devices. AWS is very similar in that it's a pay-as-you-go business,” Werner Bezos, chief technical officer at Amazon, told CNet. “Our point of view on this is, if we can arrange things so our interests are aligned with our customers, it'll work out in the long run.”

This extends to software developers as well. By making AWS so efficient, application developers and data center costs are aligned.

“The data center has been an application-free zone for developers. You write code and you have no idea how much it consumes,” Bezos added. “One of the most unappreciated benefits of AWS is that developers get a real sense of what's really driving the cost.”

Lean as a pan-industry approach

Lean as a concept was developed for manufacturers, but innovative companies outside of the industry (such as Amazon) are now discovering ways to apply it to their operations. Bezos notes that this willingness to take chances and try new things, regardless of whether these involve going Lean or developing a new service offering, is what sets Amazon apart from competitors. Whereas some companies just want to beat out other companies in their sector, Amazon is determined to create products and services that are aligned with its customers' needs.

“Innovation is a point of view,” Bezos said, adding, “You also have to have a willingness to fail and be misunderstood for a while.”

Companies looking to bolster their efficiency should consider integrating Lean. It doesn't matter which industry they are a part of, as Lean may be used to reduce costs and improve workflow at any business.