Lean isn't a word that's generally associated with smoke-belching factories and mammoth manufacturing plants. But in some circles it is--more and more, these days.

"Henry Ford used the word 'lean' when referring to manufacturing," says Mike Mitsch, VP of operations at Keihin Aircon North America Inc., a company that has used lean-manufacturing techniques for nearly a decade to make heating, ventilating, and air-conditioning components for the automotive industry. "Lean has been around for years in different capacities, and now it's making a comeback."

Mitsch is referring to the practice of lean manufacturing, a methodology that seeks to eliminate all waste from the manufacturing process. With a sluggish economy and increasing competition from abroad, U.S. companies are taking a hard look at their manufacturing strategies, and lean is increasingly appealing. Fortunately, it's happening at a time when software tools are being customized to help companies synchronize enterprise systems with lean-manufacturing processes, such as real-time communication, and extend those processes beyond their factories' four walls.

"In the last half of the 1990s, operations weren't a relevant issue, and everyone was driven by a need to change their business models," says James Womack, who introduced the term "lean manufacturing" to the American public in 1990 with his book, The Machine That Changed The World, an in-depth look at Japanese automakers' manufacturing systems. "Now what [companies] need to do is pay attention to the operations side of the business, get costs out, and improve performance."

The practice of lean manufacturing originated in Japan some 50 years ago at Toyota Motor Co. The goal is to create a production environment driven by demand that holds only a small amount of inventory and products at any given time. In a lean-manufacturing environment, whenever finished goods are sold, the sale triggers a signal to the process one level back calling for a replenishment. The replenishment generates yet another signal one level back asking for components that go into the finished product; the components process then sends a signal back asking for parts that make up components, and so on. "It's a reverse cascade, and each step consults with the previous step in the chain," says Womack, founder and president of the Lean Enterprise Institute, a nonprofit training, publishing, and research organization.

Lean manufacturing encompasses a number of modern practices, including just-in-time inventory and delivery, kaizen, and kanban. Just-in-time processes ensure that goods arrive when needed for production, rather than ending up as inventory. Kaizen is a Japanese term that refers to continuous improvement; a kaizen strategy calls on everyone in an organization to look for ways to improve quality, cycle times, safety, and other aspects of an operation. Kanban, the Japanese term for signal, establishes a "pull" instead of "push" system of moving goods through the factory. It typically relies on printed cards that contain specific information on parts for production or final assembly and are used to signal the start of steps, such as raw-material replenishment, that flow in reverse order (from shipping of goods to receiving supplies) in a production line.

Lockheed Martin Commercial Space Systems, which manufactures both commercial and government satellites, needs to wring every advantage out of its operations. "The competition right now--our classic word to describe it--is brutal," says Fred Musco, CIO of the Lockheed Martin Corp. division. A companywide strategy to embrace lean-manufacturing principles, called the LM 21 Program, has helped Lockheed reduce manufacturing cycle times by at least a third, and the division can now deliver a satellite, which can cost anywhere from $100 million to $150 million, in two years.