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.