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The authors have seen North American and European companies make improvements by implementing lean production techniques. The authors now argue that linking these individual breakthroughs up and down the value chain, creating a lean enterprise, is the next step in achieving superior performance. The lean enterprise is a group of individuals, functions, and legally separate but operationally synchronized companies that creates, sells, and services a family of products. Few companies have created a lean enterprise. Individuals, functions, and companies have needs that conflict with each other and with those of the lean enterprise. The strengths and weaknesses of the German, U.S., and Japanese industrial traditions suggest that trade-offs between these three entities are inevitable.