Gemba Panta Rei

According to news reports today April 29, 2005, Hyundai Motors is predicting that they will be the top quality producer by 2008, displacing Toyota. This is good news for Toyota and their kaizen efforts. Toyota needs a worthy challenger to keep them on their toes so they won't grow complacent at being the best. It's hard to wring water out of a dry towel, but the harder kaizen is at Toyota, the harder they try.

Today Toyota averages 101 complaints per 100 vehicles, and Hyundai 102. Much better than the competition, but still not 'defect-free' from a consumer standpoint. We can safely assume that neither of these companies will lower their standards, so this challenge by Hyundai is good news for the consumer.

Hyundai has been studying and adopting Toyota's systematic approach to improving quality, whether they call it kaizen or not. The hands-on, shop-floor focused attitude of their executives is reminiscent of the hunger Toyota had to "catch up with America" 40 years ago.

Hopefully Detroit and its extended supply chain will take this as a wake-up call. Hyundai was a joke less than 20 years ago. Hyundai has recognized the 'best practices' of TPS and adopted them, and now they are the number 6 auto maker worldwide. If the U.S. automobile industry doesn't step up to this challenge, they risk becoming irrelevant in the next decade. Wait and watch until 2008, or pick up a copy of The Toyota Way on the way to your next kaizen event?

Posted by Jon Miller at 9:48 PM | Permalink | Comments (0)

On Monday April 25th 2005 Chairman Hiroshi Okuda of Toyota gave a speech to the Nippon Keidanren (Japan Business Federation) in which he said "we are concerned about GM and other automakers" and called on Japanese automakers to help out struggling automakers such as GM and Ford. Chairman Okuda was referring to General Motors has posting losses surpassing $1 billion for the quarter, and GM's deep structural problems that underlie this performance.

Toyota is basically offering to help make GM healthy again in the spirit of Kaizen. "We should give them a little time to breathe," Okuda said. His specific proposal was to raise prices for Japanese cars imported to the U.S., presumably to make American automobiles more attractive to consumers, but may also include technical assistance. No doubt this would include instruction in TPS and kaizen.

This reminded me of a cartoon in the New Yorker. Two dogs in business suits are standing at a bar drinking cocktails. One dog says to another with an evil grin, "It痴 not enough that we succeed. Cats must also fail." While this is funny, in America too often this is the ethic with corporations and CEOs who act in predatory if not cannibalistic ways towards the competition, their employees, and the environment.

Compare this to Toyota. They have not had a layoff in over 50 years and they are leaders in protecting the environment through developing new technologies for reforestation of deserts. Toyota has turned their factories into "zero landfill" operations. Toyota is the most profitable auto maker with a market cap larger than Ford and GM combined. If you understand kaizen, and that Toyota has been doing it for 50 years, it is no surprise.

Toyota certainly knows that GM, Ford and their supply base are major employers in the United States (the world's biggest market for automobiles). Stability and strength in American industry is a key to a strong U.S. market for Japanese cars (now accounting for 30% of the cars sold). There is a profit motive behind this helping hand from Toyota, but one that reflects deep though and consideration of the long-term rather than a dog-eat-dog (or cat) short term mentality.

When Toyota offers to help GM with technical assistance and kaizen, I hope GM accepts, for the sake of America.

Posted by Jon Miller at 5:32 PM | Permalink | Comments (0)

In one of our Lean Manufacturing Benchmarking Tours to Japan (Japan Kaikaku Experience) the people on the tour had a goal to come up with company-wide metrics. The same metrics would be used for different business units so that the conglomerate could judge them better.

The question was put to Toyota's management, "What metrics do you use in running your lines?" There was a bit of a pause and the manager said, "It may seem strange to you, but metrics are very specific to the lines, even under the same factory roof. For example, similar lines will measure different things." This response took the group totally by surprise.

He then continued, "The individual leads will decide what measurements will work best for their area. Generally, the metrics are similar, but the weightings are different."

In fact, we saw repeatedly at the leanest companies in Japan, the metrics posted or being evaluated were very simple. One company even told us that OEE was too complicated to be a useful metric.

Posted by Brad Schmidt at 1:51 PM | Permalink | Comments (2)

One of the companies we visited in Japan in our Japan Benchmarking Trips (Japan Kaikaku Experience) employed a large percentage of temporary labor to help make their labor costs truly variable. One of the questions asked to them from our group was "How do you do Kaizen and Lean Manufacturing with a largely temporary workforce with high turnover? Isn't training them in Kaizen a waste in itself?"

The manager replied that they only ask three things from their temporary employees which does help with the Kaizen effort.
1. What is hard to do?
2. What do you have to do over?
3. What do you have to constantly concentrate on?

By getting this feedback, the full-time employees along with the temporary employees can help eliminate muda or waste in the system. Also, it allows the full-time employees a chance to explain Kaizen, 5S, and Lean Manufacturing to the temps thus making them understand it better.

Posted by Jon Miller at 1:37 PM | Permalink | Comments (0)

As we do in each of our trips to benchmark the best lean companies in Japan, on our latest trip in March we visited Toyota. One of the surprising things to come out of this visit and later on our Q&A time with them was that Toyota doesn't want their line to operate at 100%.

To Toyota, 100% efficiency means that the employees are not stopping the line. They are not finding opportunities for kaizen. The manager there told us that they think a good goal is 97% or 15 minutes of downtime in 8 hours. This efficiency number indicates to the management that the workers are hungry to find defects and problems. They have the mindset and eyes for kaizen.

A little background information. In a Lean Manufacturing facility, the idea is to stop the production whenever a defect is found. This is called Jidoka, and it is how people ensure built-in quality. This is often done by pulling on a cord or pushing a button to stop the production line. The defect or problem is fixed and then the line gets moving again. Workers are told that besides their normal job of value-added work, another part of their job is to "stop the line" when something is not right.

There is a healthy tug of war between workers and managers. Workers are told "stop the line!" Managers who are told "don't let the workers stop the line" This means not that workers are scolded by managers when the line stops, but that managers should actively find ways to error proof and make it harder to find problems because there are fewer problems.

To have daily, persistent kaizen, 100% efficiency (or line uptime) is not the goal. This is yet another counterintuitive lesson from Toyota, the masters of Lean.

Posted by Brad Schmidt at 3:45 PM | Permalink | Comments (0)

The key to Lean in the office is good information flow. In fact, all Kaizen activities done in the office should have this as their primary goal. One key factor we use in determining how Lean an office is (and if we can help them) is the height of cubicle walls. Here is my rule of thumb:

Walled offices = disaster
6ft cubicles = joke
4ft cubicles = changeable
No walls = good foundation for Lean

Why the focus on the cubicle wall height? Well until recently, it was "just because walls are not Lean". Recently, however, a client told me how walls between people in the office multiply all of the 7 wastes, namely, Defects, Inventory, Processing, Waiting, Motion, Transportation, and Overproduction. Let's start with Defects. The more walls between people the less likely they'll get the right information and work will be accurate. There is a much higher chance of re-work, or as we would define it, defects. Errors are not caught as quickly, so the cost to correct the error increases.

Inventory, in this case Work-in-Process documents or information, will have a tendency to pile up if there are walls between people. Also, there is a higher chance that more inventory of office supplies since people will not be able to see the unused (and available) inventory at another person痴 desk or office. Purchasing agents will tend to buy more at one because that will be the easier thing to do, especially if the purchasing agent for those parts is under a lot of time pressure.

Processing waste which takes the place of meetings and updates is a large factor of life with walls around people. I work in an environment without walls, and it's amazing how much I pick up through osmosis. We don't have to have a meeting, because we all know what's going on. There's a tendency to struggle less with problems on your own when you're in an open office. If you're walled in, you may struggle with something for 15 minutes before deciding to get help. In an open environment, it's more like less than 5 minutes.

Another common processing waste is when you have no visibility of the fact that some people are working on the wrong things (lower priority). After kaizen when the walls come down, it becomes quickly obvious what are the hottest projects that need help, what projects can be put down, and who has time to help.

Waiting definitely occurs when there are walls. The person we need to talk to isn't there or it's just too much of a pain to walk over to their desk to see if they really are there. Jobs wait too as they go from one in-box to the next.

Taking down the walls can eliminate a lot of motion waste. Because you can't just see if someone is there, you have to call them. They also increase the use of e-mail which should maybe be a separate waste category all on its own!

Because you can稚 see if someone is available, quickly talk to them to get the information you need, and move on with your work instead you spend time writing e-mails, setting up meetings, and generally no adding value (processing waste).

Transportation: folders and other jobs tend to have to go around from office to office a lot more when you're walled in.

Overproduction: Since it's practically impossible to see if someone or some department is overwhelmed, work will continue to come in regardless of how efficient those people can process it. Some will be working like crazy while others will have their feet up on their desk. So in the future, if you have to prove to a skeptic why you want to take those walls out, just go through the 7 wastes with him / her. Hopefully you'll convince them and increase the efficiency of information flow in your office.

Posted by Brad Schmidt at 4:55 PM | Permalink | Comments (1)

As followers of the Toyota Way we try to stay we try to stay true to the practices, principles, and values that come out of that great company. There is always a lot more to learn about what we call Lean (TPS). Toyota is always taking kaizen to a higher level.

One of the core practices at Toyota (as well as any Lean company) is the relentless reduction of waste and non value added activities. About 50 years ago, Taiichi Ohno of Toyota formalized this by identifying 7 types of waste in production.

We learned them, and we teach them as Overproduction, Transportation, Motion, Waiting, Processing, Inventory, and Defects. We have found that these categories are appropriate for describing all non-value activities, if you think deeply about them.

Some organizations have added an 8th, 9th, or 10th waste. We've never been tempted to tailor the Lean message for ourselves, and preferred to stick to the Toyota Way. I have to admit that we became rigid, and we were in for a shock when we learned that Toyota in North America (and in English language in general) expresses the 7 wastes as:

Overproduction
Conveyance (instead of Transportation)
Motion
Waiting
Processing
Inventory
Correction (instead of Defects)

At first we thought "The meanings are the same, words are a little different, probably just a poor translation." But would Toyota make such an error? Let's think more deeply about the differences in the two words.

First, 'transportation' conjures up images of forklifts, trucks, carts, and large quantities of materials being moved between production and storage facilities. 'Conveyance' is typically used to describe the movement of materials between adjacent machines on conveyors or materials presentation to assembly lines via carts, chutes, etc. When you visit a Toyota factory, you won't see forklifts in the plant. Bicycles, AGV (automatic guided vehicles), tuggers, definitely doing something that looks a lot like transportation, but in routes according to a set sequence, timing, and specific content and quantity of material. It is a much more refined process that still adds no value, but perhaps deserves to be called 'conveyance'.

As far as 'defects' vs. 'correction' the difference is obvious and huge. The word 'defects' conjures up images of bad parts, scrap, poor quality escapes, and rework. ‘Correction’ suggests that an error was caught before being passed on downstream and corrected. At a basic level it's the difference between end-of-line inspection and in-process inspection, detection vs. prevention.

The Japanese words Toyota uses for the 7 wastes haven't changed, as far as we know. Perhaps this is thinking too deeply on the meaning of two words. But it would be cool if the word choices in English were intentional, signaling that Toyota had 'graduated' from 'defects' to 'correction' and 'transportation' to 'conveyance' after 50 years of kaizen.

Posted by Jon Miller at 9:38 PM | Permalink | Comments (4)

Sometimes I'm forced to wonder why smart people fight good ideas. Sometimes I find answers. This was true recently when an engineer at one of our clients who was also the project manager for a factory layout redesign stubbornly refused to see the benefits of what the kaizen team was presenting in the way of a new cell design.

There's a saying that you can lead a horse to water but you can't make it drink. As Lean people, we need to ask 'Why?' Why won't the horse drink? Is the water bad? Is the horse not thirsty? Maybe the horse just doesn't like being 'made' to do anything, even though it is thirsty.

This engineer clearly felt a strong sense of ownership over his factory layout project. Senior management had placed a great deal of responsibility and trust in him. He had put a lot of time into the project. These things made it difficult if not impossible for him to consider putting it down or taking a major new direction with the project, even though he was smart enough to see the benefits of Lean. The significant productivity improvement the kaizen team demonstrated would compel a rational person to rethink the direction of their project. This horse wasn稚 quite ready to drink.

There is a quote that I like. It goes:

"Every act of conscious learning requires the willingness to suffer an injury to one's self-esteem. That is why young children, before they are aware of their own self-importance, learn so easily; and why older persons, especially if vain or important, cannot learn at all."
-Thomas Szasz, author, professor of psychiatry (1920- )

We tell our consultants to always remain humble. There are many reasons for this. One of them is that we have to always be open to learning. Helping people is about first learning what needs fixing, and then why. If we think we know the answers and don't take time to listen, we fail.

Too many times we hold on tightly to what we have (knowledge, beliefs, projects, etc.) rather than being open to letting something go to gain something new. This is the challenge with our engineer friend. He is young, he is fond of kaizen, and I think we will eventually win him over.

Motivating people to learn, even at the risk of injury to self-esteem is one of the many challenges of successfully implementing Lean for any organization. A basic appreciation of human psychology goes a long way.

Posted by Jon Miller at 6:13 AM | Permalink | Comments (0)

The title may throw you for a moment, with French, English, and Japanese all in one. The phrase 'fait accompli' is French for "an accomplished and presumably irreversible deed or fact". I realized during a recent kaizen event that fait accompli is a good phrase to explain a key reason that kaizen events are still one of the most effective ways to implement rapid change.

A kaizen event is typically held over 3 to 5 days depending on the scope of the project. A cross-functional team of between 5 and 10 people focus on observing, analyzing, redesigning, and testing a new work flow. It is very hands-on. By the end of a successful kaizen event you should have a new, improved process functioning.

While the improvement need not be 100% implemented or working perfectly smoothly without any hitches or hiccups, it should be "ready for Monday morning" so to speak (assuming the kaizen event ends on Friday).

One of the biggest questions we hear about kaizen and Lean implementation is "how do we sustain the improvements?" The key is to make the improved process a 'fait accompli'. That means it is stable enough by the end of the kaizen event for the managers, supervisors, and workers to feel comfortable working in the new method. There is no time for debate and complicated analysis, since the proof is there for all to see.

The kaizen event fait accompli also helps make the concern of getting 'buy-in' for proposed changes a non-issue. First it must be said that kaizen events must have a certain level of permission to make changes within the scope of their project, or have the decision maker be on-site each day to give the nod. If the new process is in place and functioning by the end of the week, there is no time for the changes to be debated in a committee or for management attention to wander to the next crisis, leaving the team to wait for an answer. It's a fait accompli.

The art of running effective kaizen events is 80% in the preparation, scoping, team selection, and communication. Just as you 'till the soil' to make it ready for planting the seeds (new ideas and change) you have to make sure the environment is right for rapid change (kaizen) to succeed. The kaizen event itself, where facilitation skills and knowledge of TPS come in are the remaining 20%.

Most organizations focus on building up the skills in the 20% area, and this is fine as long as the low-hanging fruit is hitting you on the head. Apply Lean principles throughout your organization, particularly in non-production processes where the flow of work is less visible and the improvements are less intuitive requires a higher degree of pre-work. Sustained long-term improvement comes in a series of short bursts of improvement - kaizen events, fait accompli.

Posted by Jon Miller at 4:19 PM | Permalink | Comments (0)