Gemba Panta Rei

There's a great day-after-Thanksgiving Day piece on Joe Ely's Learning About Lean blog. I missed the sports action over the weekend but Joe caught an American football coach's half-time strategy for doing better in the second half: "We just have to run faster."

This is funny, and it is sad. Joe makes the connection of businesses saying "get more sales" or "boost productivity" without giving specific improvement tactics. It's a laughing matter when it's a sporting event on TV. It's not when it's people, careers and jobs.

There's nothing inherently wrong with running faster or working harder, provided this is to achieve a studied, documented and supported standard. Whenever people are unable to achieve this standard, we do kaizen. To rephrase Taiichi Ohno, where there is not standard there can be no improvement.

Arbitrarily pushing the system harder to achieve performance in the short term too often results in lower performance in the long-term, as you put strains on processes and people. If you see evidence that your organization is operating the "run faster" model successfully you should be very concerned as this is a sign of a culture of heroic fire-fighting and slack day-to-day operations, at a high cost.

One of my favorite Chinese proverbs says "He who strikes the first blow admits that he has run out of ideas". In other words, when you declare war, punch someone in the face or tell people to "run faster" you are admitting defeat as a leader, manager or problem solver. You have run out of ideas.

Basketball coach Phil Jackson famously got his team to meditate and do yoga as a way to focus their minds and bodies and improve performance. I remember reading about (but can't recall the name of) a baseball team whose young owner made extensive use of statistics and six sigma-like experiments to improve player performance. There have been news mentions of sports teams adopting the kaizen philosophy recently.

So why didn't this football team use Lean manufacturing tools such as time and motion studies on the football field to cut out waste rather than tell the boys to run faster? They have video from many angles, dozens of people on the staff available during the game to replay every move, run simulations, cut out waste and radio these instructions to the players rather than just tell the team to "run faster".

Maybe they already did all of these things, and this coach's comments was a result of coming to the conclusion that no further improvement was possible and that all options were exhausted except to "run faster". If my experience in industry is any guide, I doubt this is the case. By and large the same thinking that pervades the coaching of sport teams does so in corporate management.

The tools of Lean manufacturing are well documented. Knowing how to apply Lean principles in real-time every day against live competition is what most teams struggle with. To succeed, you need to practice the fundamentals over and over, and over again. You need good coaches. You need to build a mindset of stopping to see what's not working, and making small improvements. In sports or in business, this is the kaizen culture.

Posted by Jon Miller at 8:19 AM | Permalink | Comments (0)

Taiichi Ohno makes an interesting connection between the Japanese as historically an agricultural people and the fact that Japanese manufacturers seem to like inventory.

Farmers growing rice are at the mercy of the weather. There are droughts and there are typhoons so it痴 best to grow and harvest as much as possible and store it away for a bad season. Today the world is industrialized and modern science and technology has lessened the impact on crops. Ohno asks why industries still behave as if they were farmers affected by the weather.

Ohno admits that even as he scolds people for overproducing in good times because in bad times machines break down and people don't show up for work, something of the "agricultural mind" remains in him and he also wants to have some extra just in case.

Hunters eat what they kill. When you are hungry, you kill one pheasant and eat it. Farmers might kill a pig, but they will not be able to finish the whole pig so they will have to figure out how to store it. So they develop storage techniques and inventory management skills, says Ohno.

Next Taiichi Ohno makes what I think is a very insightful comment. In essence he says "Inventory control is much more popular than production control." Inventory control sells more books than production control. It's easier, and perhaps more fun to be skilled at managing things that somehow got made, rather than managing the process of making things.

Let's think about this. Inventory Management is big business. Today there are a lot of major firms in the logistics, warehousing and distribution business. When is the last time you hear of a global Fortune 1000 Production Control business? A lot of companies make material handling and storage equipment. Who makes production control equipment? Inventory control software is dime a dozen but we're just starting to see usable production control software tools in the last few years.

This might be a topic to delve into deeper at some point in the future, but for now, back to Gemba Keiei.

Taiichi Ohno continues the comparison between farmers and manufacturers with regards to inventory. During Ohno's childhood the expression "good harvest poor" or "bumper crop poor" meant the prices for crops were pushed down due to an oversupply resulting from a good harvest. Farmers made less money as a result.

Price controls on rice in Japan keeps prices relatively constant regardless of oversupply. It is not purely a market based commodity. Ohno points out that this results in rising prices for rice as the farmers use cost accounting and the "cost + profit = price" equation to set the selling price of rice. Costs don't exist to be calculated, Ohno reminds us, and points out that this type of thinking seems to have spread beyond rice farmers all across industry in Japan.

Posted by Jon Miller at 10:05 AM | Permalink | Comments (5)

Why do organizations fail to invest sufficiently in their people?

The term Human Capital was introduced over 40 year ago by University of Chicago Professor Gary Becker. Human capital are the assets a person owns in for form of job skills or knowledge and can be defined even more broadly to include personality, relationships, etc. Human capital is unique in that it doesn't deteriorate with age and use (like machines) but actually improves with experience.

The sum total of a person's assets in the form of "know how", "know who", "know why" etc. is their Human Capital and by extension, people are assets of an organization. This does not mean that corporations and businesses or non-profit entities "own" people in the same way they own fixed assets such as machines. But people create value in the same way that fixed assets do. Yet organizations under-invest and get rid of their people assets much more readily than they get rid of fixed assets.

Why does this happen? I think it's there are three main reasons this happens:

1) People have legs. When you fire them and ask them to go away, people can walk away. Buildings, machines, inventory, and intangible assets like goodwill generally don't go away just because you tell them they are fired.

2) People don't show up on balance sheets as assets. Wall Street frowns when you strike out assets on your balance sheet. It throws off the balance. Wall Street smiles when you get rid of people assets to increase profits. When your short-term reward is tied to the expression on Wall Street's face, you do what makes them smile.

3) You can't sell Human Capital. Most assets have value and can be sold to another organization that wants them. Human Capital becomes the property of the person who was educated or trained. Organizations can't strip you of this and sell it. The only way people make you money is if you continue to gainfully employ them. Where there is a lack of commitment for long-term employment, there is typically a reluctance to invest in people.

With regard to reason #3, or maintaining employment to protect their people assets, a good solution is what Toyota and many major Japanese manufacturers do when times are slow. They shift workers from one factory to another, in some cases one company to another in order to maintain employment and social stability.

A notable example is the transfer of workers between Toyota Home, a manufacturer of beautiful and earthquake-proof steel-frame modular homes and Toyota Motor Corporation. When homebuilding is in the slow season, and automobile production is in high gear, people are sent from the home factory to the car factory. Takt time on the home line is 6 minutes, 60 seconds on the car line. One is carpentry, one is mechanical assembly.

These people are trained to be productive working in a position in a production line that they will hold for 4 to 8 weeks at most. You could argue that the cost of training is very high relative to the payback time. Certainly this would be true if Standard Work, stop-the-line and jidoka, pokayoke and other systems were not in place at Toyota to simplify and error proof induction of new workers. Even then there is certainly a cost.

In some cases this lending of people assets between Japanese firms can extend to shifting production workers between customer and supplier within a keiretsu. Done well, and when the demand peak at one company is the low point in another company, this works beautifully.

But there are challenges. I've heard more than one supplier admit that they don't always need these workers, but accept them to help keep their customers' employment stable. How would it work if your biggest customer sent you dozens or hundreds of workers to work in your factory during their slow season?

Economists will tell you that one of the downsides of this is that this type of commitment to keeping people employed creates artificially low unemployment in a country like Japan. Activist shareholders will demand that executives cut staff to pump up stock prices. Socialists will tell you that the total cost to society of not keeping people employed is greater than the profits returned to shareholders (witness the burning streets of France). But economics on that level is a multi-faceted and complex thing, and is beyond the scope of this posting.

A wise old retired executive in southern Indiana named Basil once told me "In life you do what you want, and you pay for it." Whatever decisions you make, in the end you pay for them one way or another. These are humbling words. The lack of a skilled and ready workforce in U.S. manufacturing is a result of the historical lack of coordinated and comprehensive policies to support and develop Human Capital at the employer, educator, and government levels. This may have worked for America in the past, but it will not continue to serve us in the future.

I am not knocking America and I am not being an apologist for Japan. Both are great countries with great people, and have good and bad things about both economic and social systems.

These are just thoughts that spring up from my mind by triangulating recent news on the ascendancy of Toyota, the decline of GM, and the lack of skilled workers in U.S. manufacturing.

Posted by Jon Miller at 11:06 AM | Permalink | Comments (0)

Triangulation is a process by which you figure out where you are by checking three points or positions. Triangulation can be used to study a phenomenon by comparing three (or more) types of points of view or data sources. Three things came together for me this week on the problem of American manufacturing.

This week the news was GM's announced cuts of 30,000 jobs and closure of 9 more factories by 2008, the projections that Toyota will surpass GM in 2006 in vehicle production based on targets to be announced next month, and an article on November 22, 2005 in the WSJ titled Firms' New Grail: Skilled Workers about U.S. manufacturers facing critical shortages of skilled workers. Let's see how these things triangulate.

In summary the article on skilled worker shortages sites a study by the National Association of Manufacturers and Deloitte Consulting that 81% of U.S. manufacturers face "moderate" or "severe" shortages of skilled labor. This is resulting in lost business opportunity for American manufacturers.

The shortage of job skills goes beyond the scientific, engineering, and technical areas. Richard Kleinert of Deloitte Consulting LLP is quoted in the NAM report, "Manufacturers face the additional challenge of poor skill levels among current employees" and notes that employers cited inadequate training in basic job skills such as problem solving (insufficient in 46% of respondents) and reading, writing and communications skills (insufficient in over a third of respondents).

There is rising awareness of the need for investing in people. The NAM's Skills Gap Report urges government, educators and government to address this problem in a coordinated way.

Not for the first time when faced with a problem, I turn to Toyota. Toyota invests in people. There's a reason they call TPS the "Thinking People System" at Toyota. But even Toyota has been reporting a lack of people experienced in their production system to act as teachers and coaches to train staff in their newly built factories around the world.

One thing they have done to combat this is to turn a part of their Motomachi plant, their oldest automobile assembly plant, into a "teaching factory" or Global Production Center. Here is the PDF version of the same information on Toyota's Global Production Center.

I have some free advice to offer the GM leadership: Take just one of the 12 plants you plan to shut down. Empty it. Redesign it for true Lean manufacturing and use it as a "teaching factory". You have a long partnership with Toyota already, so ask them for help setting this up. This will save you far more money in the long term than the cost of keeping it open.

Toyota's investment in developing the skills of their people is not limited to the shop floor. The same philosophy and principles used to make the factories Lean are being taught to the people working in the front end of the business through the University of Toyota. There is not a whole lot of information on the University of Toyota in the public domain, but you can read about it here, here, here, and here. Please let me know if you have more information about the University of Toyota to share.

Toyota is certainly not unique among global corporations in encouraging ongoing education and skills development among its people. They are noteworthy in that the combination of their operational model's effectiveness and their commitment to people has resulted in decades of uninterrupted profitability and growth.

This reminds me of a Peter Senge quote that I like. He said "The only real competitive advantage a company can enjoy is the ability of their employees to learn faster than the competition." I like this quote because I've always said that kaizen is fundamentally about people learning.

The problem a lack of skilled workers is certainly not unique to American manufacturing. Japan faces a shortage of skilled workers (or just workers period) with their aging and declining population. Certain booming areas of China have problems finding skilled workers.

There's no replacement for human wits when it comes to quickly and practically solving day to day problems. Maybe some day we will have artificial intelligence that is as smart and as flexible as humans' minds, but not yet. Machines don't come up with ideas. ERP systems don't come up with ideas. Products don't come up with ideas. People come up with ideas. So why don't we sped more on people?

Posted by Jon Miller at 12:13 PM | Permalink | Comments (0)

I've known about Norman Bodek for more than a dozen years by reading the books he published. He brought kaizen to the U.S. by founding Productivity, Inc. He has crossed paths with just about every person who has been or is a part of the history of Lean manufacturing. His work made it possible for Lean consulting companies like Gemba to exist.

He has made more than 50 trips across the Pacific to learn from the Japanese. I was lucky enough to go with Norman on one trip. That week was non-stop storytime. In the last three years that I've known him he has told me stories which are unbelievable, until you get to know Norman.

Now Norman has a blog called Kaikaku. Norman writes in a unique voice. He has thousands more fascinating stories of the people he's met and learned from over the years. Some of these he has written some of these down in his books. I hope he will share more gems with us in his new blog.

Posted by Jon Miller at 3:27 PM | Permalink | Comments (0)

I take a lot of people from many companies to Japan to see lean organizations, such as the Toyota Motor Corporation. One of the themes you see and hear in Toyota is the idea of Genchi (actual place) and Gembutsu (actual things). Toyota wants decisions that relate to a certain area made right at that area. One example is a plan to prevent downtime on a machine should be made right by that machine.

Let me show you one reason Genchi Gembutsu is so important. One company I know has their managers flooded with reporting. Decisions about sites are not made on site and therefore require a lot more reporting, planning and detail than would be otherwise necessary.

Let me give you an example. You're a manager of a site and you are supposed to give a report about how everything is going to your Vice President, who is back at headquarters which is off site from the plant. The plant is a dynamic organization and trying to put all aspects of the plant on 3 pieces of 2 dimensional paper is not going to tell the whole story.

Your VP obviously is expected to comment on the report. If she just said "hmmmm, looks good, thanks a lot!" most people would think she's not doing her job, right? So she will ask questions.

The 2 dimensional report cannot show the whole picture. The VP will be asking questions away from the site, so the starting point of her understanding is uncertain to begin with. The value system of corporate America is: Even though you don't understand it completely, ask questions anyway.

You, as the manager, have some options.
a) You can tell the VP, "I don't know," and look incompetent.
b) You can say, "I really can't explain it properly to you here," and appear belligerent, or worse, insinuate that your boss is incompetent.
c) Prepare more reports for anticipated questions. Hopefully the appearance that everything is under control will satisfy your VP.

The best choice is clearly to do more reports. The initial report took one person 4 hours to prepare and you 2 hours to finalize. Now, more reports are needed, which will take another person 8 additional hours to prepare and you another 1-2 hours, not to mention all the other paperwork that goes along with it. It's a vicious cycle.
1. The report won't tell the whole picture.
2. People will ask questions based on an unclear picture of what's happening and on the report that doesn't tell the whole picture.
3. You spend time preparing more reports to back up what the initial report says.
4. You have less time to run the company and start fixing problems.
5. You get a laundry list that you need to complete by the next report which will necessitate more paperwork and more reports
6. Return to #1.

Recently I talked to a manager who said he prepared 5 hours for a monthly report which took 8 hours which he had to give twice! Imagine how many hours the people underneath him prepared. When I asked who the report was for, they told me that person who was in charge of production had not been in the plant for 10 months! Ouch!

He then spent another 4 hours in front of me on a conference call going over action items that would get them back on track on their action plan (It was close to a 500-item action plan) to someone who had not stepped in the doors of the facility in person in almost a year!

The tragedy about this is the amount of muda, or waste, is horrendous because it is wasting the best and brightest minds of the company. If nothing else, it's wasting the most expensive minds of the company.

To those of us who are managers and owners of companies, let's try to make decisions at the Genchi (on site) and with the Gembutsu (actual things). I think we will all be surprised to see how much waste our previous reporting / meetings had in them and how much we can eliminate by trying to emulate Toyota's philosophy of decision making.

Posted by Jon Miller at 3:11 PM | Permalink | Comments (0)

Bill Waddell asks readers to help him out in answering the question "Why should anyone apply for the Shingo Prize?" in a recent blog entry. Bill points out that now bankrupt Delphi spent around $300,000 to win Shingo Prizes for 24 of their factories. And what was the dividend?

This is a question that's been on my mind also. Norman Bodek talks in his book Kaikaku: The Power and Magic of Lean about how he set up the Shingo Prize to honor Shigeo Shingo. The book tells how the board evaluating the applicants for the first award said none of them qualified. So the award was given to the factory that was the least ugly, so to speak.

Looking through some of the prizes awarded in some categories in recent years I wonder if this isn't still the case. In some years the prize has gone to products or companies that were the best entrants in their category, but perhaps not worthy of Shingo's name. It shouldn't be a beauty contest. There's nothing wrong with saying "no one qualified this year".

One of our clients is implementing Lean explicitly with the aim of winning the Shingo Prize. On the positive side following an implementation model such as the Shingo criteria is a good thing. The idea of winning a prize has helped them create appeal to the executives. I'm concerned about the message this sends to the many 50 to 500 person factories that make up this conglomerate.

To say that one of the major milestones for Lean manufacturing implementation, a critical activity for keeping jobs in the local economy, is to check off the boxes in a criteria and win a prize sends the wrong message to the middle managers and workers. There are far better ways to create job pride. The Shingo Prize can come later.

I think today if you can put the words "Toyota supplier" on your business it lends a lot more credibility in terms than all of the prizes, awards, and certificates that purport to qualify and recognize Lean manufacturing achievement.

One of the companies we visited recently on our benchmarking trip to Japan would probably not win the Shingo Prize. They began implementing TPS 20 years ago. They are a foundry, and there痴 a certain amount of acceptance in their culture for dirt and grime. The culture of 5S is there, but it's not spick and span. They are unabashedly a batch production shop, but they can still show high turns, good quality, and on-time delivery. They are a bit of a problem for the traditional Lean thinker. They make fistfuls of money and the people would rather work there than anywhere else.

If there were an Ohno Prize the evaluation criteria question would be short and sweet: "Why do you want to waste your time on this?"

Maybe that's harsh. But I think Taiichi Ohno's only comments to the winners at the Ohno Prize awards ceremony would be "You got the prize. So what? What are you going to do next?"

Posted by Jon Miller at 10:56 AM | Permalink | Comments (0)

It's been a good week for Lean government. First Senator Joseph Lieberman says he will bring a "little of your Kaizen attitude back to the United States Senate" while visiting a factory doing Lean manufacturing in Connecticut.

Then there was the U.S. Navy's renewed commitment to kaizen through a merger of their four AIRSpeed programs.

Now there's news that the infamous bit of Transportation Bill pork called "bridge to nowhere" has been set to the torch. The funds will remain in Alaska and Senator Ted Stevens will not resign as he threatened to.

Thanks to all of you who read my blog entry and took a minute to e-mail their representatives in congress.

In the same San Francisco Chronicle article Republican Representative from Arizona Jeff Flake reminds us in that "there are thousands of earmarks in the bill that are just as excessive" as the one that was successfully stopped. There's more work to do.

Let's remain vigilant against waste of all kinds.

Posted by Jon Miller at 6:10 PM | Permalink | Comments (0)

I've recognized the commitment of the U.S. Navy to to kaizen, six sigma and continuous improvement and their achievements through NAVAIR Airspeed programs before in this blog. I'd like to recognize them again.

The regular postings on the dcmilitary.com site are always a ray of hope for Lean government. Today there was news of plan to merge four AIRSpeed programs into one.

NAVAIR is using kaizen to offset budget reductions of $200 million. This is Lean government. Instead of just increasing taxes and cutting services, the NAVAIR folks are doing the country and all U.S. citizens a great service by cutting out waste. Combining four programs into one is aimed to help make their AIRSpeed programs more effective.

In the article Captain Bob Novak, NAVAIR AIRSpeed program manager is quoted:

"Each Black Belt, Green Belt and Kaizen project has immediate benefits in the form of improved efficiency and quality of work life for employees."

"But the savings, whether from applying manpower resources to other projects, reducing costs or freeing assets, all eventually add up to dollars that can be given back to the fleet."

Rear Admiral Mark Skinner, NAWCWD commander and NAVAIR AIRSpeed command deployment champion is quoted:

"I'm continually impressed with the efforts of our deployment team and our Black Belts and Green Belts - outstanding individuals that are making a difference one process and one project at a time. We still have a lot to do, but we'll get it done."

I can't wait until alumni from these programs take higher office in the U.S. government.

Posted by Jon Miller at 2:27 PM | Permalink | Comments (0)

This is the third and final installation of Eric's report from his Lean manufacturing benchmarking trip to Japan in October.

"Omron Taiyo manufactures electronic parts and employs the handicapped. Omron Taiyo produces various switches, circuit boards, and fastener packages. Many of the participants on this benchmarking trip felt this was the most rewarding stop on our tour."

This visit generated many comments praising the ingenuity and innovation in the work processes as well as the dedication and determination of the workforce. Based on what they saw, the tour participants stated they should never hear any excuse in their own companies that something cannot be done. Omron was both an inspiring and humbling experience. We all left with great admiration for the leadership and workers of the company."

To see this with your own eyes, join us on our next scheduled public Japan Kaikaku Experience or contact Gemba to schedule your private tour.

Posted by Jon Miller at 11:56 AM | Permalink | Comments (1)

An article in today's New Britain Herald brightened what was otherwise a rainy, jet-lagged winter day here in the Puget Sound.

Connecticut is a hotbed of Lean manufacturing and kaizen activity. Many clients of the Shingijutsu consulting company and early adopters of kaizen are based in Connecticut. These include Danaher, United Technologies, Stanley Works and Wiremold. This has helped kaizen trickle down to smaller businesses.

According to the article Peter Pan Electronics is a small business in New Britain that is competing successfully partly due to Lean manufacturing and kaizen. They are also being helped in their efforts by state grants.

Senator Joseph Lieberman was on site presumably to take some of the credit for this $500,000 state grant and get some positive PR in the process, not so much to learn about kaizen and Lean manufacturing. He appears to have learned something about kaizen.

After touring the factory and receiving a Peter Pan Electronics t-shirt, Lieberman is quoted as saying he will "bring a little of your Kaizen attitude back to the United States Senate."

I take this as a hopeful sign. As more and more manufacturers large and small adopt Lean practices in more of the 50 United States, more government officials will hear about it and want to be associated with kaizen as a "good thing". The more Joe Liebermans we have with the word kaizen stuck in their mind the sooner we'll get Lean government.

I'll happily take Senator Lieberman's statement and full value. I will look forward to news of Senator Lieberman working to cut out waste in the U.S. government.

The New Britain Herald, however, could use some kaizen and genchi gembutsu fact-checking. There are two errors in the article, one minor and one major. The minor one is:

"Kaizen" is a Japanese term that means continuous improvement: "Kai" means continuous; "zen" means improvement.

In fact, "kai" means "change" and "zen" means "good".

More importantly, the company name is not "Peter Pan" but Peter Paul Electronics according to our research.

Posted by Jon Miller at 4:13 PM | Permalink | Comments (0)

Oh the irony. I didn't know whether to laugh or cry when I read the first sentence of the Wall Street Journal article General Motors Unveils New Incentive Program.

"Hoping to boost sales, General Motors Corp. announced a new incentives program of "Red Tag" prices on cars and light trucks through Jan. 3."

Lean companies red tag things they don't need as the first step in 5S. In other words red tags signify scrap, obsolete, excess, or unnecessary items. Please don't red tag things you want your customers to think are good products.

I have been conditioned to see things with red tags on them as the result of a 5S sorting activity. I no longer see "red tagged" items in stores as items for sale.

Quick hint to the Lean team at GM: give the marketing & sales folks a clue. Ask them to call the new incentive program something else.

Posted by Jon Miller at 12:51 PM | Permalink | Comments (0)

In this chapter Taiichi Ohno talks about the importance of training your eyes to see the difference between wasted motion and value added work. Another theme is the way the words you use affect how you think and behave. An English example of this may be the difference between saying "it broke" instead of "I broke it". He gives several examples from Japanese and Chinese.

The Japanese use Chinese ideograms as part of their writing. These have different pronunciations originating in Chinese. Thus the ideogram "to move" or "ugoku" can also be read "do" (as in the sound Homer Simpson makes). The ideogram "to work" or "hataraku" has nearly the same ideogram and exactly the same pronunciation of "do".

To digress for a moment, the dual meaning of "do" is where the clever idea of using jidoka to mean "autonomous working" as in "intelligent automation" or "stop the line" and "built in quality" instead of just "automation" originated. The jidoka which is the pillar of TPS uses the "to work" while the jidoka of "automation" means "self-moving". Unfortunately it does not translate very well.

Ohno makes a humorous comment about how in the local dialect of Koromo City the Japanese word "move" which is "ugoku" was used interchangeably with "hataraku" or "work". The translation is a bit awkward, but for instance "She's moving a lot" might mean "She's getting a lot of work done".

Koromo City changed its name to Toyota City. As a result of building the Toyota factories in this city where "to move" means "to work", Toyota people think motion is work and Ohno struggled to convince people that this was wrong. Human motion is only work when you add your wits to what you are doing, says Ohno.

Taiichi Ohno says the only time motion equals work is when animals in the zoo such as bears, elephants, and monkeys move around and attract visitors. You can charge admission. If the bear is tired and there are no visitors, let the bear rest. Otherwise it is wasted motion. Even the motion of elephants doing tricks is motion plus human wits, Ohno points out.

The important thing is for team leaders and supervisors to be able to distinguish what is wasted motion and what is work. They need to train their eyes to identify how the movements are related to the work being done. Taiichi Ohno gives the example of a machine making parts and a worker carefully stacking them in rows five high. The job of a supervisor is to say "Stop it. That's waste."

Ohno gives another Toyota City dialect example of language affecting how you think and behave. When Ohno toured area factories the managers would often use an expression similar to "it was produced" in a passive past tense, rather than saying "we made it" in an active way. The first implies that it happened as a result of some moving about, while the second is a much more deliberate and intentional action.

Whenever Ohno challenged people by asking "Which is it? Did it get made or did you make it?" people generally could not reply, since in either case it was overproduction and they would have to admitted either that they have no control over their factory or that they overproduced knowingly.

Production Control people of this type who can't or don't limit overproduction should hang their head in shame, says Ohno.

Posted by Jon Miller at 12:27 PM | Permalink | Comments (1)

I've been enjoying Bill Waddell's tough-and-straight postings lately on
the Evolving Excellence blog. I had to stop and think awhile after reading last week's posting titled Ohno, Shingo and Bobby Knight.

I have a lot of respect for Fred Rogers, Taiichi Ohno, Shigeo Shingo, and Bobby Knight. There are things I would like and dislike about working under any of these men. Where would I fall under Fred Rogers-Bobby Knight continuum? Somewhere in between, but on the side of Mr. Rogers, I imagine. So Bill's statement about Mr. Rogers that Ohno, Shingo and the early Ford team would have "eaten him alive" caught my attention.

I think the essence of what Bill is saying is that it's not about being nice, it's about giving your team game even if it means some feelings get hurt. Bill makes some important observations.

"But where people really add value in manufacturing is when they can make the right ad hoc decisions in the midst of a rapidly changing shop floor."

I agree that this ability is important in basketball games and other highly changeable environments. However, the last thing I think of when I recall a Toyota shop floor is rapid change. If anything it is the overwhelming sense of calm, stability, and rhythm that is impressive. There is a lot of hard work that goes into building and maintaining this, but it feels more like making 1,000 consecutive free throw shots rather than squaring off against an active opposing team.

Another one of Mr. Ohno's lesser known sayings is "handan saseruna" or "don't have them make decisions". What he meant by this was that everything about the job should be so well planned, the process so well laid out, and workers so well trained that there was no question of what to do. I agree with Bill's assessment that Bobby Knight's team was coached in a similar way.

One distinction bill draws between traditional and Lean manufacturing is that the former has to take time outs to call plays in the last minutes of the game while Lean manufacturing, like Mr. Knight's team, doesn't require this.

The andon light is the "time out" on the Toyota shop floor. When the cord is pulled, the "captain" or team leader is called over. The line continues to run while the team leaders sees to the problem. He is like the captain of the basketball team calling a play. If the issue is resolved the line continues to run. If the moving line reaches the set position before the problem is solved, the line stops and the "coach" (manager or engineer) is called to fix the problem.

"They define the essence of managing people in a lean environment" Bill writes after describing the styles of Ohno, Shingo, and Knight. I think it is important to remember that none of these men managed people, as such, in a Lean environment (with the possible exception of Bobby Knight - I don't know enough about basketball teams to say if the Hoosiers under Knight were Lean).

Shingo was a consultant to Toyota whose job was to help people change. He did not have direct management responsibility over people on a day to day basis. Rather he was an external change agent. The expectations and requirements for someone who is an occasional presence in the factory (consultant) and an everyday presence (manager or leader) is somewhat different.

Taiichi Ohno spearheaded the Lean transformation at Toyota with Shingo's help. He certainly had direct reports at one point in his career at Toyota but he was much more of a guru and internal consultant figure than a manager of people by the time Toyota was in a condition we would recognize as Lean.

Bill writes that Shingo didn't subscribe to the view that "there's no such thing as a stupid question". I've been told I was stupid and I've heard that said to a lot of people by Japanese consultants. It's important to remember that the adage about there being no stupid questions ends with "except the one left unasked".

With the goal of developing a team of independent thinkers and problem solvers, I haven't found a better way than the Socratic method of asking people to think for themselves than to respond to a "stupid" question with a series of questions that makes the questioner realize their misconception.

One of my Japanese teachers shouted a lot while he was teaching Americans about kaizen. He explained to me that there is a difference between shouting in anger and scolding. One is result of a loss of control over your emotions while the other is a deliberate raising of the temperature to make it clear that there is a lesson to be learned. You shout in anger because you care about yourself, you scold because you care about others.

Taiichi Ohno certainly terrified people. He told his students that he was scolding them. No doubt he was probably pretty angry some of the time. Probably angry at himself for not getting people to understand what he was teaching. That's human nature.

I lived for several years in Bloomington, Indiana and I heard of a professor who moved from San Francisco and bought Bobby Knight's old house about dents in the walls where Mr. Knight threw hammers after losing basketball games. This may be an urban legend, but his temper was not. There is no room in a civil society today for managers who behave like Mr. Knight, lacking a public display of respect, regardless of their performance record.

"The point is that lean manufacturing is not about being paternalistic or 'nice' to people in a condescending manner. All management, lean or otherwise, is about being direct and operating by the golden rule."

The Golden Rule, I'll remind the reader, is to treat others the way you want to be treated, what some call mutual respect. Bill continues:

"Treating people with respect is not the key to lean. It is the basic cost of entry that must be paid before you are even allowed to start working on how to empower and energize people to become part of the lean effort."

The question I struggle with when coaching organizational change is "How do people pay this cost of entry if they don't have a mutual respect bank account to draw from?" Gemba is not the "Mr. Rogers" team of consultants who teach managers how to interact with people through mutual respect. Frankly, most companies that come to us who are serious about Lean transformation do not have the time it takes for this. Many times the manager who can not pay Bill's "basic cost of entry" finds that their choice is to change immediately or find employment elsewhere. The latter option is good for the company, but fails to address the issue of improving people.

Bill writes "Treating people with respect and listening to what they have to say about their jobs is not a cornerstone of lean manufacturing. It is a cornerstone of living in a civilized society."

So how do we go about developing this respect between people? I've always said that humility is the key. This is a misunderstood word, and not one that is a defining characteristic of American culture. There is an interesting manifesto by Ira Williams titled Speak Softly at a site called Change This. Download the PDF for some deep thoughts on humility.

Taiichi Ohno spends the first two chapters of his book Workplace Management calling on managers and leaders to have humility when leading people through change. The first chapter is titled "The Wise Mend Their Ways". He wrote this book later in his career. He was looking back and likely had the hindsight of what worked for him and what didn't during his career as a teacher and manager of Lean.

Thank you Bill for bringing a new perspective to this key issue and for making me think.

Posted by Jon Miller at 5:10 AM | Permalink | Comments (0)

We received a call from a kaizen facilitator who was concerned that their suggestion system was losing steam. We went to their Gemba to find out what was going wrong. This company was receiving plenty of suggestions. They had copies of Norman Bodek's Quick & Easy Kaizen workbooks and kept the ideas simple and small.

They are a high volume food processing operation. Many of the suggestions were related to small modifications to the processing lines and equipment to make them safer, easier to operate, cleaner, for pokayoke (mistake proofing) or to enable quick changeover. This made it difficult for the operators to actually implement the ideas themselves, an important aspect of a healthy and sustained suggestion system.

In the case of this company, there were too many things the maintenance team needed to do between kaizen newspaper action items from kaizen events and all of the workers' good suggestions. This resulted in a perception by the workers that the management was not supporting the suggestion system. This was not the case, but management also needed to keep costs down and could not justify hiring additional skilled maintenance workers.

We introduced them to the skill matrix, a simple and visual tool to show who has training and experience in what skill. Here is an example of a skill matrix that is used in our office, and here is a skill matrix template.

They found that certain people had some mechanical skill and even maintenance experience. These people could take on some of the simpler equipment modifications or assist in the maintenance crew on bigger projects. As a resultof using the skill matrix to involve workers in the implementation, they are completing suggestions quicker. The kaizen facilitator reports that the workers are coming up with better (smaller and more practical) kaizen ideas.

This led to further discussion with their management of the need for a full TPM program including Autonomous Maintenance and developing the maintenance skills and mindset of the operators. They have a focus on OEE as a metric but had not yet made the link with a cross-functional Total Productive Maintenance effort.

Once again, investing in people was the key to a sustaining Lean manufacturing results and developing a kaizen culture.

Added July 26, 2007: Download free skill matrix template here.

Posted by Jon Miller at 9:35 PM | Permalink | Comments (38)

New Lean Government Champion in Mesa, Arizona

A new potential Lean government champion hit our radar today with the appointment of Christopher J. Brady as the City Manager of Mesa, Arizona. Based on the azcentral.com article Mr. Brady brings Lean government creds including a pledge to "talk to the 'front-line employees' and ask them how Mesa can do things better" and the fact that he helped San Antonio, Texas land the new Toyota factory there. Mr. Brady is also said to adhere to the kaizen philosophy, according to the article.

We will watch the developments in Mesa, Arizona in regards to kaizen and Lean government with much interest.

Hurricane Katrina No Port Update

After crying shame about our government's failure to kill the bridge to nowhere I filled out a form asking Washington Congressman Jay Inslee and Congresswomen Patty Murray and Maria Cantwell to sign the Hurricane Katrina No Pork Pledge. I have received no response yet form neither Ms. Cantwell nor Ms. Murray.

Mr. Inslee's office was nice enough to send me a response. No mention is made of Mr. Inslee's intention to sign the aforementioned pledge, or that his office appreciates the magnitude of the pork I was calling to his attention. I sent a follow-up e-mail. We'll see if something more than an e-mail robot or an intern reads my latest e-mail.

Partial credit is given for responding to my e-mail, but he is not yet on my list of Lean government champions. Here is the response from Congressman Inslee, in full:

Dear Mr. Miller:

Confirmation # 1991410

Posted by Jon Miller at 5:27 AM | Permalink | Comments (2)

The impressions of what he saw are still strong in Eric's mind several weeks after returning from his Lean manufacturing benchmarking trip to Japan:

"The visit to Toyota was everything I expected, which was amazing. We first visited the showroom and visitor center that had excellent exhibits on TPS and new technology. Of particular interest at this time, because of gas prices, was the exhibit on alternative power sources. In current production, the Prius has a self charging battery to assist powering the car. The battery kicks in certain situations when the normal internal combustion engine is not needed. As a result, fuel mileage is 40-50 miles per gallon. Toyota is also designing cars to run on hydrogen, but fuel availability and range need to be increased."

"On the manufacturing side, we visited the Tsutsumi Plant. The first thing one notices is the train of carts delivering parts to the assembly stations. The key to the assembly is the timely delivery of small lots to the assembly lines. To make the line as short as possible and to allow work to be done in the confined area, parts are presented close to the point of use. In one case, we saw a worker collect an assortment of parts and put them in a box he then placed in the vehicle. Instead of constantly picking parts from racks close to where the work is done, the parts were placed in the car and attached as the car moved further down the line."

"Another technique was the use of a cart loaded with the required tools and parts to be attached. The cart moved beside the vehicle for a number of assembly positions, and then indexed back to the starting position automatically. Both techniques gave assemblers greater flexibility to do their work."

"Another communication tool for which Toyota is well known is the use of andon lights and boards. At each station was an andon light that signaled if things were OK or if there were problems. Over each major section of the line was a board listing each station. If there was a problem, the operator pulled on a cable at their workstation that illuminated the workstation andon and a light on the board. A supervisor or technician responded immediately to the signal."

"Usually the problem was solved quickly. If however, the problem was not solved, the line stopped, a red light signaled the station was down, and an audible signal was sounded. The problem got further attention until it was solved."

"It is interesting to note that Toyota is not perfect in its execution. The andon board indicated they were six units behind Takt time. In addition, the assembly line had a target of 97% productivity. If production was completed early, the line stopped and employees could go home if other work was not available."

"The engine plant was a very similar operation. Again, one is impressed by the orchestration of parts to the production lines. In addition, production instructions and performance results are very visible. In terms of visibility in production, we saw the use of Plexiglas doors on machines so the actual work was more visible."

Eric Sander is a senior consultant with Gemba. This week Eric is helping one of our clients implement part of what he saw at Toyota.

Posted by Jon Miller at 4:25 AM | Permalink | Comments (0)

I had some trans-Pacific airplane time recently so I read China, Inc. by Ted C. Fishman. It's not without flaws but it gives good context and perspective about China to much of the news and views you hear on China in the media today.

Although the author doesn't talk about Lean manufacturing as such, the book is recommended reading for anyone who plans to make a career in anything related to manufacturing. It's an easy read, and not an economics text like it may seem. There are enough human interest sidetracks to disappoint the serious China scholar and entertain or horrify the casual reader.

Several times I had to close the book and just think about the implications of what I was reading for manufacturing in the rest of the world. It may be because the rapid rise of China compressed our experience, but the book offers the kind of hindsight to understand the phenomena of manufacturing in China far more quickly than the West did to the workings of Japan's economy, manufacturing and business culture.

If you're not a reader, skimming the bullet points in the introduction might motivate you to turn a few more pages. If you want the just chapters most relevant to the future of manufacturing read chapters 3, 4 6, 7 and 8. If some of what you read in this book seems far-fetched, you need to go see it to believe it.

The reviews posted on Amazon.com for this book are almost as entertaining as the book itself. It seems the topic of China, or Mr. Fishman's portrayal of it, causes people to take a strong position for or against this book. Do your own research and draw your own conclusions, but don't underestimate China.

Posted by Jon Miller at 7:09 AM | Permalink | Comments (0)

Indonesia was not high on the list of places I thought I would read about an example of Lean government. So I was pleasantly surprised to find an article on the front page of the November 2, 2005 Wall Street Journal titled After the Tsunami, An Aceh Surprise: Good Government.

In an example of "genchi gembutsu" Indonesian government officials are going to the site of the fishing villages devastated by the tsunami and they are asking fishermen their advice on where to build a new dike in order to protect the the village in the future.

"They asked us what we know and what we wanted," a fisherman named Zamzami is quoted. "It's taken time to do the talking, but now we think they are doing the job right." When is the last time you were able to say this about your civil servants?

Those of you who follow the Japanese terminology for Lean manufacturing will recognize genchi gembutsu as literally "actual place, actual thing". This concept places an emphasis on making improvements by going on-site and based on observable facts. A more apt translation may be "go see and get your hands dirty".

William M. Frej, director for the U.S. Agency for International Development in Jakarta, praises the Indonesian government's efforts at spending the $6 billion in reconstruction aid received received from the international community. "One of the positives coming out of this tragedy is that this government is doing things right. There is a strong focus on transparency and accountability."

This new, more transparent, and empowering approach at public works is directed by the Rehabilitation and Reconstruction Agency for Aceh and Nias (or BRR in Indonesian). The approach by BBR of asking the local people (or the "process experts" in Lean terms) for input on improvements is a good example of practical Lean government.

The global consulting firm McKinsey is credited with pushing for this genchi gembutsu aspect of the BBR in seeking local input. McKinsey has had a TPS-style Lean practice in their Production System Design group for a couple years now so there may be a connection.

It may seem like common sense to "ask the customer" what's needed but it's rare in government. Sadly, massive spending happens based on policy, political philosophy, strong beliefs held by a relatively small group of people (as opposed to facts) or based on the assumption that elected civil servants and appointed officials are the experts and don't need to ask the locals (taxpayers) how the money should be spent.

Imagine if we ran our factories, hospitals, and other private enterprises this way. What if decisions on buying assets, hiring people, selecting of suppliers, giving safety training, repairing equipment, etc. were decided based not on the needs of customers and employees and what makes money instead but on what made the managers popular and would get them "elected". Factories wouldn't function very well at all if we ran them like we do our governments.

When private enterprises lose money, they don't have the ability to tax their customers to stay afloat. So they will have to continue doing kaizen by genchi gembutsu. At least they will be ready to teach our government officials how it's done when they come asking.

Posted by Jon Miller at 12:40 AM | Permalink | Comments (0)

Earlier this week I had a chance to join one of our consultants on a follow up visit to one of our clients. We were there for a Lean transformation progress check and to make training and kaizen project plans for 2006.

We reviewed their Lean manufacturing efforts so far and interviewed the managers and supervisors. We asked for their frank feedback and we got it. It's not the first time in history that consultants have been told they were useless, but it's been a while since I faced the heat.

One manager started off the conversations with a series of questions for us. "You started working for us in the beginning of 2004. So why did we lose money last year?" She was very unhappy, and she wanted answers.

She felt that everything we had done so far in the factory was, in her words, "common sense". Her final assessment of the value of our kaizen consulting was blunt: "I think we're wasting our money by paying you."

It was tempting to defend ourselves, explain that the losses at her company would have been greater without the savings achieved through kaizen activity, and clarify the misunderstandings. But we bit our tongue and listened. As a result I think she left the meeting knowing she had been heard. We also learned some valuable things.

This manager had been with the company for 8 years. She had many insights into things that weren't working at her company in terms of communication and information flow. How had we missed her? Why hadn't she spoken up a year ago? Why hadn't we sought her input? How had we failed to address her concerns earlier in the process? These are questions we'll resolve quickly.

She was a case in point about the need to improve communication at her company. Clearly we had failed to make it clear to all corners of the company what the kaizen activity was doing for the company, what it was not going to do, and what was coming next.

This company has lost money for the last two years, despite our Lean manufacturing efforts. This company is in a very seasonal business. They have some of the typical challenges of a small family owned business. In terms of operations and costs they have run a fairly tight ship, and we took on the project knowing there were no "gold mines" of waste that would yield huge bottom-line results right away. While we had told the owners this, not everyone had gotten this message.

Culture change almost always lags behind physical changes in a Lean transformation, except in cases where organizations focuses the first phase of their Lean transformation in education, communication and organizational development. It's tempting to chase cost reductions, at the expense of doing a thorough job of building a kaizen culture. This is doubly true when the business is losing money.

There is a lot of work to do but this company is well on their way to a Lean Enterprise. With managers like this woman who care deeply about the company and who have the courage to face down 'big city' consultants and tell them they are useless, I think they will succeed.

Posted by Jon Miller at 1:20 PM | Permalink | Comments (0)