Gemba Panta Rei

There is a saying "Not seeing the forest for the trees" which means that you can't see the overall situation because you are too focused on one or more of the smaller details. This is a common challenge for people trying to implement Lean.

Traditional manufacturing has been so focused on doing individual jobs better without understanding the impact of local optimization on the flow across the whole enterprise. Individual asset utilization is valued over the throughput of value across the entire process, even at the expense of individual assets.

An enterprise-wide Lean approach should be:

1. Look at the forest first. Conduct a business assessment. What are the vital few objectives that will be the focus of Lean implementation?

2. Next look at the woods. This means drawing the door to door value stream map to see where there are issues with material flow or information flow at the factory level.

3. Next look at the individual trees. Which processes are broken, unstable, or highly variable in quality or time? Where is the inventory?

4. Look next at the branches. What are the steps, work sequences, or time elements that are causing the problem?

5. Finally look at the leaves at the end of the branches. What are the root causes of these problems from 4M + 1E perspective (manpower, material, machinery, method, and environment) standpoint?

On a recent visit to an electronics manufacturer in China drew interesting parallels to seeing trees and forests and social policy. The Chinese government sets out 5-year plans to build roads, turn villages into forests, towns into cities, rice paddies into industrial parks. This is possible because of the continuity of the one-party system and the lack of left-right swings we see in policy with each President of the United States, for instance.

China definitely looks at the forest. Their goal is to develop a "well off society". They have succeeded in reducing poverty and improving social services. Admittedly they have a longer way to rise (more room for improvement) but nonetheless their progress from year to year is quite amazing. An afforestation project near Beijing is a good example.

In order to address the problem of the severe "yellow sand" sandstorms that blow in from the steppes of Mongolia and mix with industrial pollutants the Chinese government is spending more than $200 million to plant forests in a large part of the Hebei province. This will result in displacing the people of two entire towns, or approximately 80,000 people who live in the area.

This is an example of looking at the "forest" or the good of the overall society and the 14 million people living around Beijing, at a cost of ignoring the "trees" or the dislocation and the disturbed lives of 80,000 people. Any similar projects would spend a decade in the courts in the U.S.A., eminent domain notwithstanding. In China, the trees are replanted.

Certainly the best long-term solution is the root cause corrective action of reducing pollutants and stemming desertification that results in yellow sand storms. China is also addressing these areas by cutting coal consumption and tightening emissions requirements on the growing number of automobiles.

These drastic measures are possible because they have a strong central government. In change management terms they are able to execute these rapid improvements "top down" rather effectively, as compared to the years of process and debate that prevents building better public transit in cities such as Seattle.

In Lean we must take the "forest" approach to improving processes. This is in contrast to Six Sigma which can tend to look at the branches or leaves of individual trees. It is also in contrast to the traditional engineering approach of optimizing individual processes and maximizing output of assets, too often at an overall increase in cost, lead-time, and defects.

The Value Stream Mapping tool is very effective in helping people see the entire forest. Collecting actual data can often demonstrate that although the trees (individual process) may appear healthy individually, the entire forest (the series of business processes serving the customer) is sick. Factories and societies can succeed by focusing on the trees after considering the entire forest.

Posted by Jon Miller at 4:54 AM | Permalink | Comments (2)

The last few months I have been working with customers in lands where they don't speak English as a first language. This has helped me better understand what my Japanese teachers said and did as they taught kaizen in the U.S. It has also given me some clues on why Lean emphasizes the visual aspect so much.

Just like my Japanese teachers, I am spending a lot of time drawing sketches and using non-manufacturing examples from real life to explain Lean concepts. These can be powerful, common sense examples such as "Would you watch a washing machine run at home? Then why do you have to watch you CNC lathe run in the factory?" Some of these sketches and examples can border on the silly, and this has the effect of making people relax so that they are willing to learn.

Lean is very visual in nature. The goal of 5S is to create standards of what is normal in the factory so that waste is made visible. Many of the tools such as TPM, andon lamps, and kanban emphasize the visual aspect. While traditional manufacturing managers tend to manage through reports, dashboards, and computer screens Lean managers manage by going to the floor and seeing if work is flowing one at a time to takt. This can happen after the process has been made as simple as possible (one-piece flow) and standard work has been established.

In a Lean factory words should not be necessary. Processes should be simple and direct so that visual management of abnormality is “at a glance”. A takt counter or clock displays how often a product should be finished and started to meet customer demand. Hourly production boards show the status (progress and delay) of work. While it can be an effort to set up and maintain these visuals, it makes it possible to manage visually, without words.

If you had to teach someone how to implement Lean without using words, how would you do it? You would use pictures, drawings, examples as much as possible. You would take their hand and go to the Gemba and help them see. The 'genchi gembutsu' principle is extremely important to help people see what actually is, rather than what people think.

Just as my Japanese teachers would day "just do it!" I found myself taking the team to the factory to pick and deliver material to the assembly line as an example of timed material replenishment in exact quantities. One hour of demonstration was far more effective than a day of discussion.

There is no point in debating opinions with people from different countries about how best to run a manufacturing operation. Even without gaps in language, the cultural gaps make debate nearly pointless. This is because one culture may expect that when logic prevails and the debate is done, the losing side of the debate will do what is logical. I have found that this is not so in many cultures.

When it comes to how a factory should run, the basic assumptions behind a debate (value of work vs. family, following rules vs. working from trust, respect for the group vs. respect for the individual, etc.) need to be understood first when you are working in different cultures. Even if you understand them, you are most often helpless to change them. So once again debate and discussion is pointless.

Adult learning theory says that people learn by doing, and they accept the new things that they learn when they can make it their own and see value in what they are creating. This is a full-body activity, and not a verbal and mental activity. Luckily Lean implementation through kaizen makes this easy in any language or culture.

Another important point is that there is simply no point in debating Lean operations vs. batch & queue operations with anyone in any language. The two are simply completely different ways of thinking. Until the necessary ground rules of Lean (takt time, one piece flow, downstream pull, built-in quality, standard work, and jidoka) are understood by both sides the debate is like making soup without water or fire.

The best way to respect the experience and opinions of others but to avoid debate is to listen and as "why" as often as possible. Most of the time managers of non-Lean operations will be stumped after 3 or 4 rounds of "why" and will be willing to listen to any better ideas you may have. This is probably where the "5 Why" root cause analysis tool came from.

So are words useless in teaching Lean? Probably not completely, but mostly. If as a facilitator of a kaizen event you spend much more than 15% of the time talking instead of showing or doing, you are probably limiting the effectiveness of the kaizen team.

Posted by Jon Miller at 4:59 AM | Permalink | Comments (0)

It has been an interesting week for Toyota watchers.

In response to Chairman Okuda's call to Japanese automobile makers last week to raise prices to give GM some "breathing room", Toyota's operational executives quickly announced that there were no plans to do this. Yet the helping hand from Toyota to GM remains extended.

There were several articles this week reporting that Toyota and GM are in talks to share Toyota's hybrid technology. This would allow GM to build hybrids to compete with Toyota's line up including Prius and the Lexus RX 330 hybrid. Together, the two giant firms could offer a much wider range of hybrids.

Although the No. 1 (GM) and No. 2 (Toyota) global automobile manufacturers are rivals, this technology partnership makes sense for both. GM's performance is hurting partially because it heavily depends on gas guzzling SUVs for earnings. According to an unpublished study from the University of Michigan Transportation Research Institute, the estimated drop in profits attributable to reduced sales of large and midsize SUVs for GM, Ford and Chrysler is 40%, or nearly $7 billion between 2001 and the end of 2004.

Toyota's long-term vision and strategy call for the hybrid becoming the de facto standard as the next generation of vehicles (instead of hydrogen fuel cell vehicles or gasoline vehicles, for instance). As GM and Toyota have already had a successful joint venture at the NUMMI manufacturing facility in California this new partnership has a high chance of success.

Giving GM breathing room is one thing; allowing GM to remain No. 1 is quite another matter. Toyota made news this week several about plans to expand production capacity as well as local production of key products this week. Toyota announced plans for their 7th automobile factory in North America to be located in Ontario, Canada. Also, Toyota is firming up plans to make a hybrid Camry at the Georgetown, KY factory. If the popularity of the Camry and of the hybrid Prius is any indication, this would be a blockbuster product. Toyota is also mulling production of the Prius and a hybrid Corolla in North America.

In a May 12, 2005 article titled "Heavy Load: For Toyota, a New Small Truck Carries Hopes for Topping GM", the Wall Street Journal reported on Toyota's plans to expand production of its Hilux truck through increased production of components within free-trade zones in lower labor cost countries, closer to the markets for the Hilux. These additional 500,000 Hilux vehicle sales in emerging markets represents one third of the 1.6 million vehicles Toyota needs to sell to overtake GM in their No. 1 position. There are quality challenges to increasing production of components outside of Japan and certainly strengthening the awareness of kaizen among these factories is a key.

In financial news, Toyota reported record-high earnings, up 0.8% for the last fiscal year which ended in March. Yet is profits were down by 17% for the final quarter. "Toyota's Push for Market Share Cut Into Its Fourth-Quarter Net" called out the Wall Street Journal headline on May 11, 2005. Demonstrating the American talent for short-term thinking, Goldman Sachs cut its rating on Toyota stock from "outperform" to "inline". Essentially, they told the investment community that Toyota's investment in growth made the stock less attractive for the next 90 days.

Toyota is investing rapidly in growth. Why not slow down and maximize shareholder return in the short term? Toyota has grown from selling 6.7 million vehicles in 2003 to 7.4 million vehicles in 2004, growing in all of its key markets. Toyota has doubled the number of their production facilities outside of Japan to 51 over the last 10 years. They have done this profitably. It is worth keeping in mind that Toyota has a habit of announcing growth targets and hitting them, consistently.

Unlike some executives in U.S. firms who announce growth plans or financial targets and manipulate numbers for short term stock performance, Toyota uses a process called Hoshin Kanri to ensure their breakthrough plans are well thought out, properly resourced, monitored, and corrective actions are taken to stay on course.

I have never heard an executive of a Japanese manufacturing company speak the words "maximize shareholder value". This phrase and this thinking simply do not seem to be first on the list. When stock price or shareholder value is on the top 3 list, it is well-balanced by dedication to community, environment, and corporate social responsibility. The top objectives of the best performing and most successful Japanese firms are based on a business philosophy of long-term sustainability. This week痴 news of Toyota痴 plans to expand the availability of hybrids (environmental & social responsibility) and expansion of production at or near local markets demonstrates Toyota痴 philosophy is a balance of profit and caring for people.

As teachers and students of Lean manufacturing who look up to Toyota, are what can we practically learn from Toyota's vision and how they take action to support it? Certainly if a company is not making money, it may not be able to afford thinking globally and act with social responsibility first in mind. It is necessary to first become Lean, in some cases making painful cuts or restructuring in order to survive. Once a company has stability (a viable and sustainable business plan), it makes sense to shift attention to long-term environmental and social commitments.

Toyota is the world standard as a Lean manufacturing company and has the growth, the profitability and the cash to take the 100 year view and act on it this quarter. Toyota's philosophy of kaizen encompasses not only production processes but seemingly all aspects of their business planning.

Posted by Jon Miller at 8:31 PM | Permalink | Comments (0)

This is an excellent book for anyone willing to try a new approach to making an improvement in your life. It is a 180 page book with small pages, an easy read for a weekend or an airplane ride. The combination of ideas based in science, connections to Dr. Deming and Toyota's idea of kaizen and real life examples makes this book quite readable.

As the title of this book would suggest, it is a self-help book. Written by a behavioral health instructor Robert Maurer, Ph. D., this book emphasizes the 'many very small changes' approach to kaizen. The book is full of both clinical examples of helping people with weight loss, stopping smoking, and other hard to change habits.

The basic idea is rather than "eat zero carbs" you start with something as small as "eat one less noodle per day". The author backs us these examples with science, explaining that our three-part brain is responsible for the difficulty we have in changing habits.

The mid-brain (amygdala) is responsible for the "fight or flight" response, allowing us to focus on survival rather than rational thought (in the cortex). The Kaizen Way shows how by asking small questions (what can I do for 60 seconds each day to get exercise?) your cortex is stimulated towards creative, actionable steps rather than fear created by facing big problems (how will I find time for 30 minutes of aerobic exercise each day?).

The brain likes questions and problem solving, so instead of "taking the leap" and "facing your fears" this book recommends asking small questions about how you see your situation. In addition to asking questions, the technique of mind sculpture (image training in sports) is introduced to train the mind. This book is essentially about getting from ground zero to step 1, or from complete inertia (zero momentum) to getting the ball rolling when making a change in your life.

The book has similarities to Norman Bodek's "The Idea Generator" and the Quick & Easy Kaizen approach to gaining employee suggestions. Many very small ideas keep people thinking. People get satisfaction from accomplishing things in their job (or life), even if they are small. The author also makes reference to Dr. Deming's idea of "intrinsic motivation", or the idea that kaizen ideas and suggestions are better rewarded with recognition or items of small value rather than large amounts of cash.

Even for those of us used to facilitating breakthrough changes and even transformations (creating flow, cross-functional cooperation within an enterprise) there is a lesson to be learned in the ideas in this book, particularly in how to mentor and bring along valued senior managers or long-term employees who find changing to the new way very difficult.

The book talks primarily how individuals can use the kaizen way. As a behavior modification tool, it may be most valuable when used by an individual. It is also a long-term approach to kaizen rather than fast, focused, team-based improvement. For the consultants, trainers, Lean Champions, coaches and change agents among us, the ideas in this book and how to incorporate them into our efforts to make things better merit deep consideration.

Posted by Jon Miller at 3:14 PM | Permalink | Comments (0)

The development of the awareness and practice of Lean in the healthcare sector has been interesting to watch over the last several years. Although a great number of people who work in healthcare are still in the "unaware" category there are increasing signs that it is developing rapidly.

The main reason why hospitals are not going Lean is still the excuse that "we are different" or that the trainers or consultants in question do not have a healthcare background. This is rapidly changing as resources become available and Lean healthcare slowly moves towards the mainstream.

Three years ago there was practically no one credible (including us) teaching Lean (Toyota Production System) and how it applied effectively to healthcare. Today there is a variety of individuals, organizations and approaches being used to successfully take waste out of healthcare.

The first group consists of Lean manufacturing consultants who have successfully crossed the chasm to teaching hospitals how to become Lean organizations. They bring a consulting background but no healthcare background.

Academic and educational organizations including LEI (Lean Enterprise Institute) and the University of Michigan are teaching courses and providing certification in Lean healthcare. More are sure to follow.

There are former nurses and doctors who have turned consultants and trainers either as a result of work experience in the automotive industry and exposure to Lean or through research in the area of TPS. This has lead to the development of some unique adaptations of TPS tools (waste, value stream maps, A3 reports, process observation) for healthcare that may be particularly suited to healthcare's unique needs.

We have heard from hospitals on both coasts as well as in the Midwest who are using industrial engineering firms, taking their Lean approach to observing and improving processes within hospitals.

Some progressive hospitals are recruiting Lean Managers or Continuous Improvement Managers from industry, building in the capability to train staff in Lean principles, mapping the primary value streams, and holding kaizen events or other improvement initiatives in-house to drive out waste.

There are major employers, non-profit institutions, and local governments partnering with healthcare providers to improve quality, cost, and safety through not only Lean but behavioral changes on the parts of employers, employees, and healthcare providers. An example is the Puget Sound Health Partnership in King County, Washington. Another is the "Safe & Lean Hospital Project", a partnership between IBM and the University of Pittsburgh Medical Center to enhance safety and efficiency within healthcare settings.

At the non-profit level, each of the 50 states has what are known as QIOs or Quality Improvement Organizations who are funded in part by CMMS (Center for Medicare & Medicaid Services) and are responsible for improving quality and cost of healthcare services paid for by CMMS and provided by clinics, doctors, etc. Several of these QIOs have been actively seeking out Lean tools such as Value Stream Mapping or leading kaizen activities.

Community colleges have been incorporating Lean into their programs for several years, and there are several significant initiatives, including one in Iowa, related to Lean in hospitals. The non-profit state-level manufacturing support centers (MEP) whose sometimes tenuous funding is a combination of state, federal, and self-generated are also taking a hard look at expanding their definition of "manufacturing" to include healthcare.

More power to everyone! Hospitals are unique businesses with unique challenges for the Lean practitioner. Healthcare is somewhat like death and taxes, and what happens to the cost and quality of healthcare will affect practically everyone at some point in their life.

The total cost of healthcare in 2004 was a staggering $1.7 trillion, about $5,700 per citizen of the U.S. Hospital cost about a third of this, or roughly $500 billion of the total healthcare cost in the U.S. (as of 2004). Critical mass is building, both in terms of growing costs, and the ability of the Lean community to help cut out these costs.

With less than 5,800 registered hospitals in the United States it will be interesting to see how quickly this diverse group of Lean practitioners can bring about meaningful, lasting change to healthcare.

Posted by Jon Miller at 2:05 PM | Permalink | Comments (0)