Gemba Panta Rei

A Washington Street Journal article on May 31, 2006 reports that once again, Toyota Recalls Some Prius Cars. That's some 170,000 Prius vehicles. If you include the other models it's nearly a million cars recalled for parts not strong enough and at risk of cracking under stress.

What's going on at Toyota? It seems like nearly every month or two there is another wave of recalls. Is Toyota, famed for built-in quality losing its quality edge? Not likely.

The recall numbers are getting bigger because Toyota is doing design kaizen to reduce cost. As they move increasingly towards common designs for parts and the sharing of parts across a wider range of vehicles in an effort to drive down cost, recalls are increasing.

With common parts you have one part serving millions of vehicles instead of a dozen parts each serving hundreds of thousands. When more parts are affected, the recalls numbers will be bigger.

Parts designed for use across a range of vehicles pushes the limits of what the parts can do. Parts designed for one model of vehicle are more robust since it was designed and tested for that particular model. When a single part design is needed to perform for a variety of vehicles, it may not function so well for all models that use it.

Toyota is pursuing aggressive cost reduction through common platform vehicles and common parts. Just like the parts themselves are cracking under stress, the drive to reduce cost by design kaizen is showing cracks under stress. Toyota will weather these recalls as they learn from them and solve these design problems. Long-term it's a winning strategy.

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Taiichi Ohno starts the chapter by telling the story of when the President of Toyota, Mr. Ishida, was summoned to the National Diet and scolded by politicians for building passenger cars that were too expensive. Back then even the head of the Bank of Japan said that cars should not be built in Japan but they should be imported at a lower cost from the United States, according to Ohno. The most important thing in those days was to produce cars at the lowest possible cost.

Taiichi Ohno says it was common sense in Japan in the 1940s and 1950s that Japan could not be competitive making cars. It was not their core competency, and should be outsourced, in today’s language. How ironic.

The focus was on improving productivity tenfold so that labor cost would be at the same level as automobiles built in the United States.

Toyota could not take the high volume production path to profitability. Indeed, Toyota tried this and nearly went bankrupt in 1949-1950, says Ohno. Toyota built 1,000 cars per month but could not sell them. Their turnaround plan was to be profitable building 900 cars per month, but the Korean War came along and rescued Toyota with military orders.

When President Kamiya of Toyota Motor sales gave the challenge of selling to the United States market in the mid-1950s, this required a production volume of thousands. At the time Ohno wondered “How will we do it?” but then reflects “today we build a thousand cars in a matter of minutes.”

At the beginning the Toyota Production System was very effective. During the years with the rapid increase in production volumes, the Toyota Production System was unknown to the world. Only after the oil shock and the news that Toyota was still profitable did people take notice of the Toyota Production System. This was in 1973-1974.

“Without those challenging years, the Toyota Production System may have been much more like the American system based on monthly volumes in the tens of thousands and model changes every 3 years, and plenty of reason to make capital investment.”

Ohno then tells a story of a trainee from Daihatsu working at Toyota. He taught the trainee “You must only produce what you need.”

The trainee replied “But I have spare time. And we have more materials. Isn’t it better to make as many as possible?”

“No. We make only what is needed. If we only need 100, but you make 120 just because we have the materials, this is a loss to the company.” said Ohno.

The workers were taught to be multi-process handlers so that they could be responsible for many operations, completing a total of 100 pieces even if it took them all shift.

Ohno says “Once during the war, we finished our daily requirements by noon so I sent everyone home. I got into big trouble that time.” Presumably the army procurement officers did not share Ohno’s views on overproduction.

Taiichi Ohno says the key is to produce what you need at the lowest possible cost. This means giving people a full work load through multi-process handling, rather than building more work in process and using up materials just because you have time. This is the key to producing at the lowest possible cost.

One of the fundamentals of the Toyota Production System is to produce “what is needed, in the right amount, when it is needed”. But people often forget to add “at the lowest possible cost”.

Taiichi Ohno admits that this last part is not written down. Many people think it just means that when you’re done with the day’s work you go home. “The Toyota Production System is producing what you need, in the right amount, when you need it at the lowest possible cost” says Ohno.

Taiichi Ohno warns against reversing the order and putting “producing at the lowest possible cost” first, before “”what is needed, in the right amount, when it is needed”. He says there are many ways to produce at a low cost, but if you don’t put Just in Time first, supposedly low cost production actually costs more.

Producing just what you need at the lowest possible cost is the most difficult part of the Toyota Production System and the reason people need to study Just in Time carefully, says Ohno.

If you place “producing at the lowest possible cost” first, you may overproduce or not make enough, or not produce at the right time. If you chase the lowest cost there is no end. Combining work most effectively to minimize wasted time is the way to avoid high costs. Taiichi Ohno emphasizes that this thinking comes from reduced volume production and if you attempt to lower cost through increased volumes you are going against the grain of the Toyota Production System.

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I visited the 35th annual Seattle Folklife Festival yesterday, enjoying a couple of hours with my family before diving into a very busy couple of weeks. There was great music, passable weather and more hippies than you can shake a stick at. There was also a lesson to be had in kaizen and Lean thinking among all of the jugglers and jug bands.

But first, I want to help out a few great bands who were kind enough to contribute their time and gas money for this community event.

At the Johnny Cash tribute many bands took the stage, each delivering 2 or 3 wonderful and unique renditions of the Man in Black’s songs.

A slide guitar and upright bass duo from Canada that called themselves the Derelictones were a hybrid between Johnny Cash and Tom Waits. They performed a convincing and original Long Black Veil.

Hank Angel and the Island Devils are a group of young guys who looked like the Stray Cats but played like nobody's business and did justice to Johnny Cash’s songs.

One of the many street performers called Below the Salt played eerie and melancholy music on a accordion, washboard, a saw, banjo and washtub bass. The washtub bass (an instrument made of an aluminum washtub, rope and broomstick) caught my eye as an example of low cost, just-good-enough-to-get-the-job-done technology.

You don’t come here to read my reviews of not-so-well-known bands, you say? Where’s the lesson in kaizen and Lean manufacturing? I’m getting there. But let’s go back to the washtub. A large bumper sticker on the washtub asked “If you had enough, would you know?”

While this was clearly a political statement against rampant consumerism and possibly other things (my clue was washtub bass player’s bare feet and borderline hobo outfit), it’s also a central question in Lean manufacturing, Lean healthcare or Lean administration. After all, kaizen is about doing more with less.

The idea of Just in Time, one of the pillars of the Toyota Production System and a driving force in Toyota’s economic model, is to deliver just what the customer wants, just when they want it, just in the right amount at the lowest possible cost. In other words, it is doing just enough.

Most businesses that are going concerns will deliver what the customers want when the customers want it, usually in the right amount. The big difference with one that is practicing Lean principles is that this most business do this through “Just in Case” business practices while Lean companies do it Just in Time. If you don’t know what “enough” is to your ultimate customer and each downstream process before them, you costs are higher than they need to be.

At a more concrete level, all a kanban system does is to provide an answer to the question “if you had enough, would you know?” In a true pull system you would know because the kanban quantities limit the amount of material in process to the bare minimum. When you have enough, you have no production kanban returning to you. You do not produce. If you do not have enough, a production kanban signal that you need to make more.

The reason why kaizen can generate real savings year after year is because most of what we do is waste. When we implement Lean manufacturing, we start out by stabilizing the process so that we have a safe process that gives the customer the right what is needed, on time. Then we cut out waste so that we can do it with less resources, or just “enough” and no more.

Of course “enough” now under ideal conditions may not be “enough” tomorrow when the machine breaks or Jimmy doesn’t show up on second shift. This is where you do TPM on the machine or begin cross-training others in Jimmy’s standard work. Most managers in companies that do not have a kaizen culture based on PDCA problem solving are never asked “If you had enough, would you know?” by their bosses because job #1 is to make sure you have more than enough so that you’re never caught holding the bag when the machine breaks and the customer calls to complain.

People often think that kaizen is anti-automation or anti-computers or anti-ERP systems. Not so. Kaizen simply abhors spending money to automate a process before it has been reduced as close to "enough" as possible and no more. Too often this is not the case.

Speaking of enough, the Lean manufacturing and process improvement toolbox probably does not need another three letter acronym or a “number-letter” combination. But there is one that has been neglected. Most Lean thinkers have 4M, 5S, 5 Big Losses, 7 wastes, 7 QC Tool, 7 New Tools, 8D, 10 commandments, etc. in their kaizen glossary. Most are missing what we call the “3 Sets”. This is a translation from Japanese “san tei” where san = the number three and tei = “to fix” or “to set” as in to make a decision.

The 3 Sets discipline is a matter of “setting” and following rules for the three conditions of “where, how many, what” or “where, how many, what direction" or “where, how many, when” depending on what business you are in or what process you are attempting to “set”.

The 3 Sets is much more basic than even 5S, though if you do 3 Sets properly you take care of most of your 5S needs. If you apply 3 Sets to all of your processes I guarantee you will save at least 5 years in your Lean transformation (though forever minus five years is still a long journey).

At a fundamental level, those who can answer “yes” to “If you had enough, would you know?” are the ones who will compete and win long-term based on a superior operational model, whether you call it a kaizen culture, Lean thinking or just good management.

So save yourself some time. Before you embark on your next breakthrough kaizen event, six sigma project, culture change initiative, value stream-based transformation, or whatever you choose to call it, hit the pause button and ask “If you you had enough, would you know?”

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Larry Davis, president of Daman Products Co. Inc. of Mishawaka, Indiana wants schools to teach the fundamentals of Lean management and kaizen-style problem solving from kindergarteners to high school students. Daman Products has been pursuing Lean manufacturing since 1997. Today they struggle to hire people who fit into their Lean culture and bring the soft skills needed to function on the team, according to the interview in the June 1, 2006 issue of IndustryWeek online article. Quoting Mr. Davis:

We also found our people learn best when they had a tangible, real problem they had to solve. Bring them together and teach those soft skills around that tangible problem so that as they're learning these new skills they're not even aware they're learning them. If you can get schools to that level where everybody is engaged in what's going on, and learning is almost an afterthought, that would be pretty powerful.

It would be awesome to teach process improvement. Process improvement is everything we do around here in this company [and] at home. But we as a society don't think in terms of process. And in the lean environment, that's all you're doing is thinking about processes: what the little pieces of the processes are, what can be taken out, what's waste, what's not, what's redundant. And putting them back together in a way that makes more sense.

Bored people don't learn. That makes a lot of sense. I can remember thinking in high school chemistry class "When am I ever going to need to titrate carbon tetrachloride again?" and not giving my teacher or our assignment my full attention. We had an excellent chemistry teacher, but no part of the class was designed to teach us practical problem solving aspects of what knowledge of chemistry had to offer. You could argue that the chemistry class was laying the groundwork for the students who would later pursue a career in chemistry, but for the rest of us there was no "everyday chemistry" or "all you need to know for daily chemistry". Most of us memorized the periodic table, did our labs, crammed for tests, and took away from class "never play with mercury" as a life lesson.

Mr. Davis wrote and posted a 3-page white paper which you can read on the Daman Products website in which he outlines the reasons that Lean management principles should be taught in school. I would be an enthusiastic supporter of adding the "fourth R", problem solving, to the "three Rs" of reading, writing and arithmetic. If only I had not read a book on the chilling underground history of American education a few years ago.

According to the book titled Underground History of American Education, the last time industrialists in the United States redesigned the education system to serve the needs of employers what we ended up with was… the arguably dysfunctional education system we have today. You can now read the book online. I recommend that you do.

The Underground History of American Education was written by John Taylor Gatto, a 30-year veteran New York City public school teacher who won many awards for his teaching. His analysis of the history of the “forced schooling” system as serving the needs of early industrialists to generate a class of laborers and consumers may seem like a mad conspiracy theory until you read the book full of quotes, facts and figures, and his personal testimony from 30 years inside the system.

Reading and reflecting on the IndustryWeek article today, I made the connection between the original design intent of the U.S. public school system, the history of industrial development in the U.S. and the reason Lean manufacturing did not take root until very recently in the U.S. I won’t go into detail here about this, as you should read the book and come to your own conclusions, if you are interested. Or you can Google the author or book title and skim the many articles and discussions online about the subject.

I would be the first in line to add problem solving to reading, writing and arithmetic as a fundamental of the public education system. But first, we need to ask about the design intent of the education system. What problems do we want our education system to solve? The education system we have today was designed to solve the problems of how to guarantee ongoing demand for consumer products and the problem of young minds not wanting to work in menial factory and service jobs, if you accept the central tenet of Mr. Gatto's book.

Albert Einstein was a problem solver who did not let a failed education system stop him. Einstein said "The problems that exist in the world today cannot be solved by the level of thinking that created them."

While I am prepared to believe that Mr. Davis' motivations are more pure than those of the 20th century captains of industry credited in Mr. Gatto's book with giving us the U.S. public education system of today, in the decades ahead we will have far more pressing problems for the next generation of problem solvers than how to turn a wrench or solve process problems in a factory. If we build in Lean thinking, kaizen and problem solving into our education system it should not be for the purpose of providing a steady stream of employees to follow the Lean management philosophies of the Daman Products of the world.

Whether it is enlightened leadership in government, the needs of employers, or citizens who demand a better education system for their children, we need to use kaizen principles to design it. First, define the problems that will need fixing by the young people we are educating, then identify the thinking skills skills we need to teach them for problem solving, and then build an education process that serves this purpose. Then step back, look at the problems in the new education system, and kaizen it again and again.

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From time to time we post articles about our Lean manufacturing benchmarking trips and travelogues of doing kaizen in interesting places around the world. Today I want to point you to the Reforming Project Management blog and an article titled Construction Executive Lessons from the Toyota Visit.

Our friends Hal Macomber and Norman Bodek took a group of construction executives on a tour through Toyota Motor Manufacturing Kentucky to study their kaizen and production management methods. They share a summary of 23 lessons these construction executives learned from Toyota, plus 3 lessons each from Hal and Norman.

Highlights from their visit to Toyota in Kentucky include excellent use of visual management, the "stop and fix" jidoka philosophy, job rotation during each day, cleaning and organizing as part of a daily routine, communicating metrics and mottos, small team kaizen activity, customer involvement, standard work, and more.

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I took typing classes before it was called “keyboarding”. The first manual typewriter I used was a fascinating and alien collection of metal eyes and teeth, a beautiful piece of industrial design like the one below.

The march of progress soon replaced this with electrical models of questionable value, and then swiftly with the personal computer loaded with considerably more powerful word processing software. Today I can connect through something called the internet to a place called a blog on a thing called a laptop to make words appear here.

My typing has not yet been reduced to the two-thumb variety that results from one of those ever-so-convenient and thoroughly distracting palmtop computing device. What do we call it these days? Thumbing? Texting? I don’t know.

As much as I love the bells and whistles of modern day word processing, there are built-in interruptions and flow-stoppers on my laptop that make me wonder if we wouldn’t be better off going back to our manual typewriters, telephones, and other examples of pre-21st century office productivity tools. In a word, my laptop PC does not support Lean work flow.

Much of what we do in teaching people how to design and improve work in a Lean office has to do with identifying customers, connecting tasks and keeping the work flowing. I didn’t realize how interrupt-driven and how much like traditional batch-and-queue production working on a PC was until a recent security vulnerability found on our network caused us to disable internet access by browsers while connected to the network via VPN (virtual private network) tunnel.

In plain language this means that our network security guy made it impossible to read e-mail and browse the internet at the same time when I am out of the office. This was revolutionary. I found myself reading web pages to completion and finishing my research work flow without being reminded how full my e-mail inbox was becoming. I was completing entire e-mail messages without being interrupted by an interesting link in an incoming e-mail sending me on an internet treasure hunt. Productivity soared.

My humble laptop allows me to multi-task between the internet, spreadsheets, graphics programs, internet telephones, e-mail, document creation software, you name it. It lets me build work in process inventory to my heart’s content.

But this is somewhat abstract. What does it mean in the world of typewriters? Let’s say I had a telephone built in to my manual typewriter. Let’s also say that I could read today's newspaper on my typewriter. I could also use it as a drafting table and record player. How many pages do you think I would get typed?

Economist use statistics to tell us that information technology has vastly improved productivity. Perhaps. There are times like this week when I wonder if a single-function machine wouldn’t serve me better.

Richard Powers nails this sentiment in his contribution titled Literary Devices in the collection Living with the Genie: Essays on Technology and the Quest for Human Mastery when he says:

"The subdividing of all human tasks into ever-shorter switching cycles across the task bar may be the greatest impact of computers upon our lives.”

We design our work around computers and the software in them because they are the prevailing technological standard, not because they are built for the work that needs to be completed in a flow, one at a time with built-in quality. We know what happens when we design human work around inherited processes and equipment in factories. Bad things. Much of Lean manufacturing is redesigning and improving work to suit the natural workflow as defined by customer needs and the laws of physics. I hope the typewriter of the future is designed by someone who understands kaizen and Lean office principles.

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Taiichi Ohno starts by explaining the difference between an automatic loom “working” and “moving” or “running”. Working implies that jidoka prevents it from making defects. A machine “running” and producing defects is not a machine “working”. If the machine makes a defect, it should stop. The difference between automation and jidoka (autonomation) is that in the former the machine is “running” and in the latter it is “working”.

According to Ohno the definition of autonomation (jidoka) is as follows: “A machine that incorporates an automatic stop device is called autonomation.” His schooling was in mechanical engineering at a polytechnic high school, and during a class on textile manufacturing he was taught the definition of autonomation (jidoka).

“For decades I believed that for a machine ‘to work’ meant to have an automatic stop device, such as sensors, built in to shut the machines off” says Taiichi Ohno. He explains that his polytechnic high school was near Kariya, which is the location of Toyota Loom Works. “My teacher on textile manufacturing must have studied their autonomation (jidoka). There were probably no other schools teaching this definition.”

Ohno explains that this thinking led to the idea of having operators stop the lines manually when it was difficult or impractical to attach sensors to a manual operation. This also resulted in moving conveyors with "stop the line" pull cords and andon lights built in.

He relates the story of a President of one of the companies he was instructing in kaizen who complained that Ohno would only teach them how to stop making things, not how to make things. What a simple yet powerful lesson in built-in quality!

The whole point of stopping is to make problems visible. The first step is to instruct the workers when to stop the line. The idea of jidoka with built-in quality through the autonomous stop capability begins with making it easy for workers to shut the machines off.

Once the workers begin to shut the machines off frequently, managers and engineers will think harder about how to prevent workers from stopping the machines. This leads to quality kaizen by reducing the reasons that workers need to stop the lines.

Taiichi Ohno observes that this style of assembly line is rare in the world, and even in Japan. One of the first things that Daihatsu and Hino (Toyota group companies building trucks) were told to do was to install stop buttons on the lines. The next step was to make the lines stop without human intervention.

Taiichi Ohno says that to do kaizen you have to think of ways to keep the worker from stopping the line. This is not to be confused with preventing the worker from stopping the line when they should, but rather it is to eliminate why workers would stop the line for reasons of quality, safety or inability to complete the task within takt time.

In the 1950s the kaizen and cost reduction efforts at Toyota led by Ohno focused on the fundamentals of quality and safety. Quality defects are pure cost, and any improvement in quality defects led directly to cost reduction.

Taiichi Ohno says “When we first started doing this I used to tell the workers on the assembly lines at the Motomachi factory ‘If you feel tired, shut the machines off!’ That way the team leader or supervisor would have to think of ways to prevent the worker from getting tired.” That is the humanistic way to do kaizen.

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Having completed the second day of the Hoshin Kanri (Policy Management) session with LEI, I can say that I learned that no plan goes according to plan. Our instructor Pascal Dennis used this phrase several times over two days to drive home the point that it’s okay if things don’t go according to plan, so long as you take corrective action to adjust your course back to “true north” or your plan objectives.

After two hours of good lecture we finished the day with a case study exercise. This three and a half hour small group exercise consisted of brainstorming, affinity diagrams, tree diagrams, and A3 Report writing. This was not very Lean for me personally, since it was practice which I did not need. No plan goes according to plan so I adjusted course and reflected on what I was learning. Next time I will read the LEI training agenda more carefully.

The biggest surprise was that our instructor Pascal Dennis really does not like the x-matrix. He showed us several ugly examples of the x-matrix, demonstrating that it is complex and scary, to be avoided. Pascal has seen them used for “command & control” by an executive who made up everyone else’s x-matrix. When confronted (by me) whether this was an issue of the tool or the user of the tool, he admitted that it was not a weakness of the tool but rather the person using it. Here's what I've used effectively.

Pascal also cited “Garbage in – garbage out” as a risk of the x-matrix but I don’t see how that’s any different for dashboards (Pascal's favorite) or balanced scorecards. Pascal says he’s never seen the x-matrix at Toyota so that worth noting. I’ve found the x-matrix quite adequate, and I have doubts that dashboards can be used like the x-matrix to visualize cascading objectives. I will keep an open mind to limitations with the x-matrix and keep my eyes out for better ways to do Hoshin Kanri.

As a follow up to one of yesterday’s comments, Pascal did show a few photos of kamishibai boards and explain how they were used. From what I can tell they are display boards where check sheet cards are placed to make it very visual whether certain standards were being followed and checks performed.

David LaHote, one of the LEI staffers, happened to join our table during lunch. Another person at our table asked about LEI and their business activity. Mr. LaHote explained that LEI does research and publishing of books. LEI doesn’t do consulting, or training. They do seminars for education and awareness, and to support publishing.

I thought the statement that LEI does seminars but not training was an interesting distinction. Perhaps I heard wrong, as there is a button on the LEI website that reads "Training". This didn't occur to me as odd until the end of the day. Perhaps seminars for education and awareness have a different purpose than training sessions.

My plan going into this two-day session on Hoshin Kanri was to get some answers (or eliminate excuses) about doing Hoshin Kanri for small, fast-growing enterprises like our own. I can see how it applies well to large, professionally managed organizations with stable or modestly growth. But how to set a few breakthrough objectives when you are a start up or a small firms growing rapidly, meeting objectives by sheer market potential rather than effort?

I learned that “no plan goes according to plan” so you don’t worry about the fact that your strategic plan may be nonsense after 3 months, as long as you are doing PDCA and following the process to root cause corrective action and continuous improvement. Hoshin Kanri is simply good management based on disciplined Plan, Do, Check Act/Adjust and visualizing the current state. These things apply to any business.

Our instructor closed the session with the valuable advice, "Go. Do."

Overall I was satisfied with the experience, would recommend the class to a beginner in Hoshin Kanri. I would take another LEI class again. I’m glad that there’s an organization like LEI out there spreading the word about Lean and going city to city educating people about Lean manufacturing and problem solving.

Posted by Jon Miller at 6:41 AM | Permalink | Comments (3) | TrackBacks (0)

I've taught Hoshin Kanri half a dozen times to clients but I struggle to put it into practice at Gemba. You won't be interested in hearing my excuses, and it's my fault that we've had Hoshin Kanri annual plans in place for each of the last two years but not properly deployed them. My team finally sent me back to school this week to remove any final mental obstacles (excuses) I may have. The LEI road show is in town and I am taking their 2-day class on Hoshin Kanri. This is my first LEI class and I finished day 1 yesterday.

Hoshin Kanri is what happened when the Japanese took Peter Drucker’s MBO (Management By Objectives) and added TQC (Total Quality Control) to it to make it much more fact based and structured. Since then it’s been called Policy Deployment, Strategy Deployment, Hoshin Planning and now thanks to the naming wizards at LEI, Policy Management.

In essence Hoshin Kanri aims to have the leadership of an organization identify what are the vital few (3 to 5) breakthrough objectives and subordinate all other goals or projects to achieving those goals. Then a process called “catch ball” is used to make sure that these goals are SMART (Simple, Measurable, Attainable, Realistic, Time based) and most important, that resources are available. This catch ball goes on back and forth between different levels of the organization until there is alignment and agreement that the stretch goals are not out of sight.

Twenty people attending the 2 day training class on Hoshin Kanri represent Alaska Airlines, The Boeing Company, Brinks, California Box, CMTC, Esco Corporation, Cummins Engine, Group Health Cooperative, Johnson & Johnson, MD Helicopter and the U.S. Air Force.

Our trainer is Pascal Dennis. He is author of Andy & Me and is working on a book due out in 2006 titled Getting the Right Things Done. Pascal is an energetic and convincing teacher and I would recommend taking his class for anyone fortunate enough to have a management team willing to commit to implementing Hoshin Kanri.

We spent a lot of time today on PDCA, A3 Reports, and a high-level overview of Hoshin Kanri. Lean professionals might take it for granted that people understand PDCA and the A3 thinking process. I think Pascal spent as much time as he did on it today because people need to "know why" more than to know how or what. By going back again and again to the importance of PDCA and the problem solving discipline, it makes Hoshin Kanri much easier to do.

There were some good case studies and small group discussions and practice sessions. Pascal's stories of his experiences at Toyota in Cambridge, Ontario were particularly entertaining and effective means of teaching. We covered a lot of information in one day, possibly a bit too much for people who were new to the subject.

In the spirit of kaizen, and without being asked, I have two improvement suggestions for this class. First, time management was a weak point. We had 2 breaks during the 4-hour morning session and 2 in the afternoon 4-hour session. Not bad if you are doing physical work, but tough for sit-down training. The 5 and 10 minute breaks were never kept to that short. No start time after the lunch break was specified, so we lost some time starting back up. Pascal asked and received permission to extend for 30 minutes past the end time, but exceeded that by 20 minutes.

Second, all trainers (and Lean trainers particularly) should avoid using jargon without explaining it first. Pascal introduced kamishibai boards but did not explain it. This term will probably be new to just about everyone except for folks on the line at Toyota North America, or to people who spent their childhood in Japan. I have never heard this word used in a Lean context before. Kamishibai is Japanese for "paper theatre" or a series of color drawings that tell a story, usually a children's folk tale or a moral lesson like "here's what happens when you play with matches". I remember the kamishibai of the ant and the grasshopper making a big impression on me when I was young.

When I was very young and living in Japan, itinerant entertainers would gather children in a public space like a park and use these visuals to tell a story (and collect money from us usually by selling us candy at inflated prices). They were also sometimes used in kindergarten or elementary school for storytelling. They are still in use for early education and storytelling at schools in Japan. In a kaizen context I think kamishibai boards are essentially visual storyboards to explain problem solving activity.

Unless I'm mistaken and there's a lot more to these kamishibai boards at Toyota, "storyboard" is completely sufficient, and there is absolutely no reason to use this Japanese term unless you want to demonstrate that you know a Japanese Lean term that your listener does not.

Pascal says it took him 5 annual Hoshin Kanri cycles to "get it" and see how all of the pieces connect. With the valuable insights he is sharing with us, it should take everyone else half of that time or less.

My question going into day 2 remains: How to practically apply Hoshin Kanri in a small, fast growing company? It's not so hard in a large, relatively stable organization. I've found it's harder to set the "hard goals" (revenue, profitability) and work towards them (due to rapid growth) and also hard to keep focused on the objectives set in the annual plan when opportunities which appear much greater emerge. I look forward to day 2.

Posted by Jon Miller at 5:52 AM | Permalink | Comments (0) | TrackBacks (0)

Eric Sander
Senior Operations Consultant

I have recently had the pleasure of working with a young business owner who has discovered the potential of Lean Principles in an industry very much in need of improvement, the building trades. Shone Freeman is the owner of S. R. Freeman Inc., a small company that employs about 45 carpenters. The company frames upscale homes.

The home building process has not changed much during the last century. Although the materials, designs, and technologies in the homes represent the twenty-first century, the sticks and bricks generally go up the same way. In addition, anyone who has built a home has suffered the delays of scheduling independent tradesmen, bad weather, late deliveries of materials, and rework of the structure. According to industry sources, less than 40% of projects are completed on time. An Orlando Sentinel study indicated that 95% of homes they had inspected in 2001 had serious defects. Because of the boom in building and the lack of experienced and reliable tradesmen, the quality of the construction labor force is not up to the level it was at fifty years ago. As a result, we are still building homes with the same methods and uncoordinated processes with a labor force that is stretched and under-trained. The environment in which Shone must do business is no exception.

Fortunately, there are a few innovative builders who have learned the benefits of Lean Manufacturing and have begun to apply them to the construction business. Much of the improvement has been in collaborative scheduling with subcontractors. In a Dec. 2002 article in Lean Manufacturing Advisor, Gregory Howell of the Lean Construction Institute points out that through a “pull” type scheduling system, constructions projects can come in 10-30 percent under time and cost. Subcontractors are brought in as part of the scheduling team, and as a result, they are more focused on meeting their own commitments. In addition to cross functional collaboration, Boldt Construction from Milwaukee has also empowered their work teams on the job site to resolve issues rather than to go back to engineering or architecture. Through employing root cause analysis, they find the source of the problems and fix them quickly.

Through such efforts, construction companies applying Lean Principles have shown remarkable results. Boldt has experienced a 22% reduction in construction time with several projects coming in weeks and months ahead of schedule. Linbeck construction of Houston has had an 80-90% on-time completion rate, which is well ahead of the national average.

In a radical departure from construction on site, Bensonwood Homes of Walpole, New Hampshire, has begun assembling major wall and floor components of their custom homes in their shop. These sections are delivered and assembled on site to reduce the construction time and improve quality. This approach is common in Japan. Toyota Homes and Misawa Home prefabricate custom homes in their factory for onsite assembly. Tedd Benson has recognized the advantage of this approach and is attempting a new approach for custom homes in the US.

As a subcontractor in this disjointed home construction network, Shone Freeman is attempting to do the framing phase as efficiently as possible. He, too, has seen the benefits of applying Lean principles to his business and is attempting to challenge the status quo. Shone contacted Gemba Research, and we met with several members of his team. Their initial efforts were to reduce the waste of lost time on the job site. The team first implemented a schedule board, a communication tool that listed each crew member’s assignment and target completion time. The foreman would also encourage the crew to identify problems and list them on a Kaizen Newspaper. The board also provided space to list results of actual production hours against the plan. The schedule board has clarified responsibilities within the crew, given them the responsibility to identify and resolve problems, and given them feedback on the physical and financial progress of the job. In another effort to reduce waste, the crew centralized their supplies to a storage shelf in the center of the structure, which was located 30-40 yards away at the back of the property. This eliminated the waste of motion of making trips to the storage shed. To spread the learning, Freeman is rolling out these practices to all job sites, and bringing in his foremen for training in Lean Principles.

Freeman and his team have also recognized the need for standardization of work methods on the job site. To achieve this, he has developed a training program and conducts weekly training for his work crews on the fundamentals of house framing. In addition, to ensure the crews have learned and practice these fundamentals, they have developed a series of skills tests for the crew to demonstrate their ability to carry out standard work methods.

It has been encouraging to see a relatively small player in the construction business have the foresight to recognize the potential of Lean Principles in his industry. Like the large construction firms of Boldt and Linbeck, Shone Freeman is trying to make his framing business stand out in his area. The Lean Principles he is implementing will make his business even more efficient and reliable. The improved organization and productivity on the jobsite will set his business apart from others, and I am hopeful that his success will spur interest from his customers, the contractors who stand to benefit from Lean even more than Shone.

Eric Sander
Sr. Operations Consultant

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“All the things wrong with hospitals can be fixed.” Narrator Lloyd Dobyns tells us at the beginning of the video program Good News...How Hospitals Heal Themselves

In the video program hospital administrators and clinicians tell us that there is 40% - 50% waste in a hospital system. This can include the familiar waiting time in a hospital to something more serious such as the 2 million people each year who get infections at the hospitals, causing one death every 6 minutes and adding 7 billion dollars to hospital cost.

A lack of training in system thinking, the increasing complexity of patient care due to advanced medical devices and the support staff this requires, and a lack of focus on the patient has resulted in this waste, according to healthcare professionals in the video. Deborah Thompson, RN a quality trainer says “We’ve made a lot of decisions away from the front line of the patient.”

One frightening statistic is the annual increase of salaries in Pennsylvania of 3% and the increase in healthcare costs of 20% to 25%, which by 2008 would cause insurance costs to equal salaries.

PHRI (Pittsburgh Regional Healthcare Initiative) is a group of 40 hospitals plus a few insurance companies and businesses working together to implement TPS in their hospitals. The video gives examples and testimonials of healthcare professionals making data-driven decisions to create patient care standards for doctors and protocols for nurses.

The experience at SSM Health Care in St. Louis, MO emphasizes that healthcare improvement must be a hospital-wide effort and will require culture change. They spell out the three conditions for success:

1. Leadership. Establish goals everyone can relate to.
2. Strive for perfect patient care
3. Use systems thinking

The emphasis on systems thinking, according to the video, is see things with new eyes, seeing the whole hospital system and the processes working together rather than individual tasks. Several testimonials cite the importance of seeing “workarounds” for what they are – problems – rather than normal work and a functional process.

These hospital systems explicitly credit the Toyota Production System as a model used to design and improve work. The video gives excellent examples of 5 why, decision making on the front line, and blame free environment for experimentation and problem solving.

In summary, some of the good news reported in the video from SSM and PRHI:

- Estimated $1.7 million in cost saved from fewer deaths in reduced in coronary bypass problems
- 85% reduction in hospital-acquired infections (at a cost of $40k to $90k each)
- 63% reduction in central line infections since 2001 (half are fatal, the cost is $30k or more to treat)
- Staph infections from 26 out of 1,000 to 8 per 1,000

This video production was funded pro-bono by the producers of the 1980 Deming video on "Japan Can, Why Can't We?" If your organization is making excuses that "we are different" and that TPS does not apply to you, here is a hospital that proves it can. After all, if a hospital can implement TPS, why can't you?

I encourage you to support the important efforts to extend Lean thinking and kaizen into healthcare by purchasing this video (neither Gemba nor I benefit from your purchase).

Here is a list of PBS stations that have committed to airing the program. If yours is not on the list, contact your local PBS (Public Broadcasting Service) station and ask them to broadcast this program so the good news about practical healthcare improvement approaches can reach a wider audience.

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The title of this chapter is somewhat awkward. By another translation you could read it as "Improvement means doing what is rational" or "Kaizen means following reason". But here Taiichi Ohno is engaging in a bit of word play. The Japanese for rationalization, in literal translation means "make it fit with reason" but it is better translated as "consolidation" or "improvement" or in today's words. Theme of the chapter is that kaizen (rationalization) is what appears quite reasonable and rational and nothing particularly spectacular.

"When I was implementing the Ohno System, it was difficult to get people to understand what I was saying." Taiichi Ohno's response to people who didn't understand him ranged from "If you can't do what I say, get out of my sight" to "Just do it. Don't worry. I'll take responsibility.”

Ohno learned that it would take too long for his orders to go from factory manager to section manager to supervisor to team leader. Not only that but his verbal directives could change considerably because managers along the reporting chain would interpret the instructions in ways that suited them. Ohno says he began going directly to the foremen in the factory to give directives, and to go to them for direct feedback

Of course the managers complained quite a bit about being bypassed but the foremen on the front lines were motivated because the factory manager came directly to them with a request to try something new. Ohno made sure that the foremen would tell their managers what Ohno had asked them to do. "This is how we educated the managers both from the top down and from the bottom up" says Taiichi Ohno.

Ohno scolded the managers when they simply reported what the foremen told them. He wanted them to think for themselves and try something in addition to what Ohno had instructed. If Ohno didn't like what they tried, he still scolded them. It wasn't easy being a manager in Ohno's factory in those days.

No other company was implementing the Ohno System and no one knew what it should look like. Ohno would give orders in the morning and change directions by noon if it wasn't working. He found engineers to be most stubborn and unwilling to change. The wise mend their ways so change and become wise, Ohno would tell them.

There was no factory where they could go see the Ohno System. It did not exist in those days. Ohno did have his people visit Nissan to learn about their production system. He would tell them not to copy it because then they would only be as good as Nissan. They must learn from it and make things better. But people would copy it anyway, so he stopped sending them to Nissan. Before long Nissan stopped accepting tours.

Ohno says that Nissan had purchased and moved a factory from the United States and American engineers had helped to set up the factory, so Nissan was probably more advanced than Toyota in those days. During the war, officer from the Japanese military would come with their bamboo spears and give orders to Nissan to produce, threatening "the Americans are coming". The bamboo spears were carried instead of more modern weapons due to the severe lack of raw materials in Japan toward the end of the war.

Ohno says that Nissan was technically very knowledgeable but these experiences made them less willing to listen to the orders from other Japanese. It's a very interesting statement, considering the fact that it took Carlos Ghosn, a French citizen of Lebanese descent born in Brazil, to bring Nissan out of bankruptcy and turn them around.

In 1956 or 1957 Ohno visited factories in the United States. "What they were doing was common sense. It was nothing special" he says. Visiting GM, Ford and American Motors, they all appeared to be doing what was common sense. Ohno observed that the "rationalized" or improved production lines were nothing spectacular and the more rationalized a production line was, the more it looked like common sense. "When you see a factory and think 'wow!' then this is not a very good factory. When you see a factory and think 'this is common sense' and of no value to the observer, I think that may be a sign that they have rationalized rather well" says Ohno.

In other words, if they make it look easy it's probably a sure sign that a lot of hard work went into it.

Ohno says that it is hard for the Japanese to do what is common sense without putting up some resistance. Doing what is simple is difficult for them. "Rationalization is doing what is reasonable or rational, so there should be nothing that makes you say 'wow!'" says Ohno. He gives examples of "rational" improvements such as using the rolling motion to move a round part or putting wheels on something heavy to make it easier to move.

Taiichi Ohno says "When something has been completely rationalized it should appear very simple, but people make the mistake of thinking too hard about it. Even the idea of saying 'reduce inventory and work in process' through rationalization does not make sense. If it's rational there should be no work in process. If you have two pieces when you only need one, this is not rational."

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It’s not easy to read so much about the dark side of Lean. I’ve received e-mails this week from readers who are upset that I would post attacks on Lean manufacturing and kaizen. It’s no fun to learn terrible things about your favorite production system, but growth and learning is not always fun.

Cognitive dissonance is a pair of words used to describe the feeling you get when you have an experience or see evidence that challenges a strongly held belief. The emotional part of your mind fights the rational mind presenting the new information, saying “that can’t be right”. Depending on whether emotion or rationality wins, people either deny the new evidence or come to a new understanding of their belief.

My own experiences with Lean manufacturing and kaizen have been mostly positive. Reflecting on the dark side of Lean this week has made me realize there are at least five practical ways to stay on the sunny side of Lean:

1. Establish basic conditions of a humane workplace.

Before cutting out the slack to increasing the velocity of your business, make sure that safety, stability, and humane working conditions are there first. Just like you can’t ask a patient with a broken leg or breathing problems to run a marathon, you need to take steps to repair the basic conditions. Make sure Lean efforts are built on respect and trust between people. When belt-tightening and so-called “Lean production” is imposed on people who are already in duress, the result can be a disaster. Do this even if you are not implementing Lean.

2. Go see others who are doing Lean extraordinarily well.

Visit a companies that are doing Lean right. No single company will be doing everything right so visit several so that you get as complete a picture as possible. Learn both from what they are doing well and where they are struggling. In many ways Toyota and their suppliers are the benchmark and much can be learned from them.

3. Link Lean to company growth.

Know how Lean enables revenue growth for your organization. If your organization is facing decreasing revenues, and if you can not find a way to link Lean to company growth, your may have more urgent issues to focus on than Lean implementation. Never link Lean to the elimination of jobs or the reduction of job security. Make a clear statement that “Lean does not mean Less Employees Are Needed” and stick by it.

4. Link Lean to personal growth.

In the end people will always tune into radio station WIIFM - “What’s In It For Me?” The goal of most for-profit companies is not to perpetually increase salaries and benefits for workers, but the goal of a worker is to maintain and increase their own well-being and wealth. This conflict needs to be addressed by creating a workplace that allows people to learn, grow and become more valuable as problem solvers, innovators and providers of great customer experiences so that their skills are always increasing and in demand.

5. Find another word for Lean.

Lean is a buzz word. All buzz words have a shelf life. At best Lean will be replaced by a new word that describes TPS and an innovative, respectful, ethical and profitable company better than the current buzz word “Lean enterprise” does. At worst it will compete with a new buzz word such as “outsourcing” or “innovation” which represents not an advancement of Lean but a shift of focus. The word Lean is loaded with other connotations such as “lean and mean” or “the lean years” or being hungry to the point of discomfort. The English word “Lean” has no explicit link to continuous improvement. We should use the term Lean and speak frankly about implementing Lean manufacturing, but it is better to call it “[Your Company Name] Production System” or “[Your Company Name] Business System” or "[Your Company Name] Way".

Items 1, 3 and 4 are pre-conditions to building and sustaining a successful Lean culture long-term. Items 2 and 5 are nice to have and will help with this.

Toyota copied many aspects of the Ford System, combined them with other innovations, and developed TPS according to unique Japanese cultural and social characteristics both good and bad. Toyota took apart the Ford System, kept the good parts and got rid of the parts that were not good and built a better business system. That is the essence of kaizen. Let’s all do the same with TPS.

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Today we continue exploring the dark side of Lean as we interview Darius Mehri, author of Notes from Toyota-land. Darius is an American who spent three years working as an engineer in Japan at a Toyota group company. He changed the name of the company in his book to “Nizumi”. The book is a result of a journal he kept while in Japan and a revealing look at the dark side of Lean.

Darius, welcome.

Thank you.

What is the main message that you wanted to get out to your readers by writing this book?

I wanted people in the Unites States and people outside of Japan to get a different perspective on what Lean work is about. Even though there are a lot of good books out there and some of them make really good points I think they don’t provide a comprehensive picture of what it’s like to work in a Japanese company.

What was your experience with traditional (non-Lean) manufacturing before going to Japan?

Basically none. I graduated with a Master’s Degree in Mechanical Engineering and went to work as an engineer.

How much did you know about Lean manufacturing before going to Japan?

Basically nothing. I didn’t read anything on Lean. I read the popular books on Japan like “Japan is Number One” and other books mostly written in the 1980s, the bubble years. They didn’t talk much about manufacturing but mostly what it’s like in the office.

What was your direct experience with kaizen while in Japan?

One of the real strengths of the system is that as an engineer there was always a focus not only on designing really good products but on improving them. I was really impressed with the level of detail that my colleagues were involved in during the design process. For example there was a product that was produced with some design flaws which were occurring at a site in central Asia. They immediately send an engineer to that country to study what the problems were, they came back with solutions and within 2 or 3 months the problem was fixed. That was really impressive. I think that’s one of the strengths of Japan.

You’ve been back in the U.S. for six years. How did your experience in Japan change how you work today?

I had a much better understanding of products are never perfect but working to perfect those products is very important. I think my experience there made me a highly skilled engineer. One thing they were doing was integrating computer software tools in the design process. They were doing design in a very different way. What I observed was more of an inductive process. They analyze competitors’ products and come up with some of their own ideas to make a product. Also one of the things which I think is very characteristic of what’s going on in the factories is that the Japanese are very visual. You see pictures all over the place instructing the workers how to do things. How to hold a welding torch, etc. I think they do that well. It’s really a very quick way of learning.

Now that you’re back in the United States What has been your experience with Lean manufacturing now that you are back in the United States?

(Laughs) There hasn’t been any. I haven’t observed what’s going on here. I’ve worked in all small software companies here.

Lean hasn’t taken over software yet?

No. Not that I know of. One of the things I did bring back was an understanding of how the Japanese solve problems. A lot of Westerners design software products with a lot of English words on them. If they replaced those words with pictures it would be a lot more accessible.

Toyota today describes TPS as built on the two pillars of “kaizen” and “respect for people”. Based on what you documented in your book about Nizumi, a Toyota company do you think the two pillars there were a total lie or was it a failure of good intentions?

I think the first part, kaizen, is definitely there. I think the answer has as much to do with the structure of the organization and commitment of the managers to implement as with the political economy of the country. One of the things about managers in Japan is that they aren’t concerned about short term profits. They don’t have to worry about stock market values. They think long-term. Their whole focus is on designing good products. There are limitations on owning stock if you are a manager in your company. But as far as “respect for workers” goes I think it’s a myth. Working in Japan I experienced very long working hours. One of the things I observed was that Lean also means cutting back on personnel and overloading workers. So there’s another side to what Lean is about. I think a lot of people, particularly academics who write about Lean, are either unaware of the problems or are aware of this but don’t write about it.

Many people have criticized the current literature praising Lean manufacturing as a partial and flawed view. Do you think your perspective on Lean manufacturing as a dysfunctional and harmful system is a more complete view or just a different view?

I think it’s a more complete view. I was able to meet a lot of different people in a lot of different companies. I joined some foreign worker professional organizations with people working in various Japanese companies and they had all very similar stories. They had very long working hours. For example the academics don’t talk about “service overtime”. That is a rule in Japanese companies for workers to work overtime, such as staying in their office late and you do overtime for free. That’s something they don’t write about yet it’s part of the working culture at most if not all Japanese companies. In the factory they will pay workers for overtime but they have to come to work early to clean machines and they don’t pay you for that. There’s also compulsory overtime and you don’t know when you’ll do overtime. So these are the things that are not mentioned or glossed over about Japanese companies.

In the introduction to your book you set out to “demolish the myth of the generous, paternalistic Japanese company.” I think you did a good job of that. You also say “Above all, this book shows how the famous Toyota production system has been devastating to its employees.” Do you think you achieved the second goal in your book, and if not do you still support this position?

It’s a two-edged sword. Japanese companies do things very effectively. I don’t think most Americans could survive in something like that. We’re not used to working that amount of hours. I think the Japanese don’t have the choice. There’s very limited labor mobility for the Japanese worker. You can’t move to another large company so the management isn’t incentivized to try to keep you at the company by improving the work environment. On the other hand, seeing restructuring in the United States and the talk of closing many factories I have second thoughts. Japanese managers don’t close factories as readily as in the U.S. because I think it’s related to economic nationalism. They see their national security directly correlated to industrial strength where in this country we view our national security directly correlated to our military strength. I think there are all sorts of rules and laws that are in place in Japan to keep factories open. For example even though restructuring is very, very hard and people don’t have a say at all in industrial policies, in Japan they don’t close any of the factories if they can get by with cutbacks. Looking from an organizational level it’s very effective.

On your website you say that your book was reviewed by “world-renowned experts on lean work” including Paul Adler, Professor at the Marshall School of Business of the University of Southern California and Steve Babson, labor scholar at Wayne State University. You also mention Ronald Dore, Professor at the London School of Economics, as well as Purdue University Professor Robert Perrucci who is a noted critic of corporate America and a strong union supporter. How do you think your conclusions about your experiences in Japan would have been different if your advisors had been Professors in Business, Operations Management or even Industrial Engineering?

It’s interesting that you ask that. When I went to Japan I had no intention of writing this book. I wrote a book because I wanted people to learn about the Toyota Production System. I had no angle or ideological focus, either pro-management or pro-union. I read a book by Robert Perrucci’s student Laurie Graham who had written a book on Japan that I thought was very accurate and that’s how I got hooked up with Robert Perrucci. If I had gone there with a different ideological perspective I may have seen things differently, but no.

You describe the factory work at Nizumi as dangerous, dirty and difficult. You write that Nizumi was number three from the bottom in the number of accidents per year in Japan, and that Nizumi talked about kaizen but didn’t do kaizen on the shop floor. This doesn’t sound very Lean to me. Is it possible that Nizumi is a not a good example of Lean production, and that truly Lean firms are much better places to work?

I don’t know. The whole issue about Lean work is basically a description of work at companies like the one I worked at, like working at Toyota. A graduate student at MIT went over there, studied it and coined the word Lean. From what I understand Nizumi used all of the same techniques on the factory such as kanban and the reduction of waste. Kaizen can be very useful and very productive. It’s the way it’s used, focusing on what the organization wants to do. You can use kaizen to get rid of waste, but Kaizen can negatively impact safety. My impression was that it was a Lean factory based on criteria defined by Western scholars.

Given the opportunity, would you work at a Toyota group company in Japan again?

(Laughs) Do you think they would hire me? I doubt that. No, I wouldn’t want to go back. At the time I was there it was a different time in my life where I could do something like that. I was single at the time. I was curious about what was going on in the world. I’m married now. Working those really long hours is not really appealing to me.

Even though the work life at a Toyota company in your experience is racist, sexist, bullying, causes death from overwork, death from being chewed up by machines running at dangerous speeds, and is highly dysfunctional, Toyota is building factories around the world while GM and Ford area shutting them down. Should we be concerned?

Oh yeah, absolutely. Even when the Japanese economy was tanking and they were going through very difficult times I always told people that there was no way that Japan was out of the picture. I saw for myself that they were committed to manufacturing and that they were improving their products, they were restructuring. But with that said if America did the right thing we could beat the pants off of Japan. One of the things we don’t have that Japanese don’t have is creativity. A lot of Japanese engineers told me that one of the problems they have is a lack of creativity. We have the innovation in America. I really strongly believe that American companies can take back lost market share if we reorganize and restructure.

With as popular as Lean manufacturing is today, are you concerned about the dark side of Lean taking over American work life?

Yes and no. I don’t think that would happen in the United States. There are a number of reasons why. First reason, there are very strong trade unions in the United States compared to Japan. There is the treat of organizing. The second reason is that there is also a very active, for lack of a better word, “legal culture” here. Japanese companies would be threatened by class action suits if they treated people here that way. Third, there’s a lot more labor mobility so that companies are incentivized to improve the work environment to keep the workers at the company. I just can’t see that a factory built by Toyota would be the same kind of oppressive workplace in America as it is in Japan.

You conclude you book by saying your journal testifies to “the bitter realities of the Toyota Production System”. What you’ve described in your book is the worst of the Japanese labor management system and perhaps the one practiced by Toyota but hardly a description the Toyota Production System as a whole. Do you disagree?

I think that Lean work and the Toyota Production System, if humanized, would be a really good thing. But they would have to do things like slowing down line speed, making sure that kaizen was implemented in a positive way, not just to improve production but to also improve the work environment. I think a lot of American companies are probably doing that, more so than in Japan. I attended a lecture at MIT with a professor who is working with Lean in of all places El Salvador. There’s tremendous competition with China. They’re in the garment industry. They used Lean to turn the company around and make it very profitable. But after implementing Lean work the turnover rate was 100%. So his job is now to humanize it. I think Lean work is here to stay. It would be good if people sat down to start thinking of ways to make it more humanistic.

You were at Nizumi during a bad time in Japan’s economy. In the last several years Japan’s economy has come roaring back largely due to government reforms and exports of equipment to China. How do you think this has changed manufacturing working life in Japan?

Only that people are getting more money now. Their bonuses are a lot higher. Other than that I don’t think it’s changed.

Have you shared your experiences with Japanese people since you’ve returned to the United States?

Yes.

What was their reaction?

Very good. I made a lot of contacts in Japan. They like exchanging views. They liked hearing what I had to say.

Have you thought about translating your book into Japanese and publishing it there?

That’s up to the publisher.

Would you like to see your book published in Japanese?

Yes, if possible. Sure. I don’t know how it would be received. I think there would be a lot of people happy that it was published there, especially at my old company in Japan. A lot of people were very angry about how things were with the working life.

If you could ask the Lean implementers and Lean promoters reading right now to one thing differently in promoting Lean, what would it be?

Cut the workers more slack. Slow down line speed and improve working conditions. Make sure it’s not too hot in the factory, make the work environment healthier. Things like that. I think you need to put in a system where you get a lot of feedback from workers about the work environment. I may be naïve but I think that workers want to be more productive. I think Lean implementers would benefit a lot form reading my book and understanding the background of Lean and what’s going on in Japan. For example in the United States there’s a lot more labor mobility. Here they can get up and leave. If you miss that point Lean could be a disaster for your company. It’s a good idea to keep these things in mind if you’re consulting.

You have an article coming out this month from the Academy of Management Perspectives. Can you give our readers a brief summary of your new article?

It’s basically a synopsis of my book. I believe Jeffrey Liker has an article coming out in the same issue. So it’s exposing the other side of Lean work. Jeffrey Liker has some very good points but he’s exaggerating the benefits.

Do you plan to continue your work with exposing the dark side of Lean?

No, I’ve already done that. I plan to do some comparative work in the States if possible, compare what’s going on in the United States with what is going on in Japan. I’m going to be in a PhD program at the University of California at Berkeley.

Darius, I want to thank you very much for your time today.

You’re welcome.

Learn more about Darius Mehri, his book and his work at his his website. You can buy his book online.

Tomorrow: Five Practical Ways to Stay on the Sunny Side of Lean

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Many of those exposing the dark side of Lean production take aim at “Lean production” as defined in the book The Machine that Changed the World. This book compares the Japanese and U.S. automotive industries and identifies best practices. It claims that it is inevitable that all manufacturing eventually become Lean manufacturing.

Some find this prospect, and the claim that Lean is good for people, hard to accept. An essay by Christian Berggren titled Lean Production: the End of History? is a well-reasoned rebuttal of some of the central claims made in The Machine that Changed the World.

As an example of how Lean production does not respect people, Mr. Berggren compares the pace of work at General Motors and at Japanese transplant factories:

With the help of kaizen all slack is eliminated. In the GM car factories, even those that have achieved high productivity and quality like Buick City, the work pace is relatively relaxed. People have time to talk to visitors and do some reading at their workstations. These things are unthinkable at Japanese transplants. According to their view, if workers are occasionally able to read a magazine at work, that does not only signify waste (muda), but also that workers will lack the motive force to continually make proposals for improvements.

Lean production does not respect people’s right to talk to visitors and do some reading at work stations. Taking broader aim at the blind spots in The Machine that Changed the World Mr. Berggren points out:

The book has been sharply criticised by JAW on account of the authors' total neglect of the long working hours Japanese employees are forced to work year after year. The just-in-time production system has also been criticized for its detrimental social effects, and has been blamed for traffic congestion, labour problems and pollution.

Being a manufacturing consultant and having seen lines run at dangerously fast line speeds of less than 10 seconds all over the world, I was puzzled by Darius Mehri’s characterization of the line speed at Nizumi and Toyota in the 60 second range as being “very fast” in his book Notes from Toyota-land. But I think people working at fast line speeds may be the appropriate metaphor for the dangers of TPS.

The Toyota Production System is known for being fragile. If machines break, the line stops. If materials do not arrive just in time, the line stops. If there is a defect, the line stops. This is why kaizen is important and why people at Toyota work furiously on problem solving, root cause countermeasures, and shoring up their system against future breaks. Without this, a “fake” or “display” Lean manufacturing can not only hurt the performance of a company, it can hurt people. Lean production is fragile, as people are.

It is very easy to implement “display Lean” with all of the surface similarities but not the supporting human resource development and management problem solving disciplines built in. Even when it does have these things, a Lean workplace is fraught with tension. Ideally it should be a healthy tension that focuses the mind on solving problems and serving the customer. When people lack respect between one another, or when working conditions do not meet the basic needs of people this tension becomes unhealthy.

If Lean production does not respect peope, improvement professionals may need to recognize that working in a Lean enterprise is not for everybody. I can think of several specific examples of this.

In a Lean workplace the work you do will be watched while the process is studied for the sake of kaizen. Anyone who has watched a worker slow down in the presence of a stopwatch knows that without respect for people, kaizen does not work. In the book Notes from Toyota-land the factory worker from Africa named Kofi is in a rage one day because a video camera was set up in the Japanese factory to tape him working, presumably to make him work faster. He felt that Lean production did not respect him, yet being videotaped was part of his job description as an employee at a Toyota group company.

In a Lean workplace you will be in an open, collaborative environment constantly being challenged (pressured) to do better. An anonymous reader on our blog last week posted a comment that expressed horror at my advocating a Lean office layout for engineers. The stress of constantly being monitored would be too much for this person. This person could not work in a Lean office.

This may be similar to a woman in our office who is terrified of giving presentations or speeches. She is otherwise completely functional and performs her job well. But she could not work as a public speaker, Lean or otherwise. A Lean workplace has certain requirements, just as public speaking does.

I will give a personal example of another reason that a Lean workplace does not respect people. At a small, money-losing furniture manufacturer in Seattle about 7 years ago we were asked to help implement Lean manufacturing and help turn them around financially. We set to work, and mid-way through the first week they lost one of their builders. He was young, skilled, and quiet but polite. Prior to our arrival and Lean manufacturing being introduced he had worked happily hidden behind his fortress of work in process inventory of entertainment centers.

Working now in the open (in absolutely safer, cleaner and more ergonomic working conditions) in close proximity to the upstream and downstream process, he had a breakdown. It turns out he was a refugee from a Middle Eastern country. As a child he had watched members of his family being killed during a war. He needed the protection of losing himself in his work, in isolation. Lean production did not respect this.

Shortly after this incident, this company fired Gemba. Was it us or was it the product? We never asked, but it was probably both. Lean manufacturing was not for some of their people, and as consultants we failed to see this.

Lean production does not respect people. Of course it doesn't. Production systems do not have feelings or the ability to respect human beings. Production systems are a set of rules and principles that describe effective ways to make money based on following certain laws of physics and economics.

But Lean is not capable of being mean either, unlike people are. When people criticize Lean production as “lean and mean” what they are really saying is that the people in charge of implementing Lean care less about the livelihoods of the workers as they do for themselves. This is one side of human nature. Lean production used by people who care less about people can be brutal while Lean production used by people who care about people can be a wonderful thing.

Tomorrow: Interview with Darius Mehri, Author of Notes from Toyota-land

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Kanban is a material and information flow management tool. They are typically cards attached to containers of parts. The cards contain information about the parts and these cards are reused, traveling with parts. Kanban are used to control the minimal amount of inventory in the system. It is based on a formula that takes into account usage, lead-time to replenish, and a safety factory based on known or probable breakdowns in the system.

Quantities of cards are added or removed based on seasonal changes in demand. Quantities of cards are also removed to make it harder to meet deliveries if there are problems, in effect exposing weaknesses. Kanban is used as an improvement tool with the aim of removing all slack from the system by eliminating the need for a safety factory through root cause countermeasures of the breakdowns in the system.

The paper ”Human Kanban” and its Countermeasures in the Toyota Production System” by Hiroaki Satake, Professor of Economics at the Fukui Prefecture University addresses the problem of the rapid increase in temporary labor in the Japanese manufacturing industry. The Japanese title is “ningen kanban to Toyota seisan houshiki no taiousaku” in The March 2005 issue of the Ohara Social Problem Resarch Center Magazine No. 556 (Ohara Shakai Mondai Kenkyuujo Zasshi No. 556 2005.3)

Satake cites a 1995 Nikkeiren report that credits the increase in part time and temporary labor to the rising cost of labor in Japan and the challenge for Japanese industries to remain competitive. In Japan there is a 30% difference in labor cost between a regular employee and a non-regular or temporary employee due to taxes and social insurance.

Satake also cites the magazine Economist May 11, 2004 issue that there are 4,500,000 Japanese workers between the ages of 15 and 34 who work in contract or temporary labor. The gap in lifetime earnings (to age 60) between this type of worker and a regular employee is estimated as approximately $1,400,000 (160,000,000 yen).

Doing a bit of my own research, I was found that over 25% of the Japanese workforce was engaged in part-time employment in 2004 according to the OECD (Organization for Economic Cooperation and Development) statistics. Only the Netherlands and Australia have a higher percentages though the absolute number is less and neither of these are the industrial powerhouse that Japan is. This number is 13.2% for the United States.

Multi-process handling and moving workers from not only production line to production line based on demand fluctuations is a feature of the Toyota Production System and Lean manufacturing. In the 1970s due to Toyota’s product strategy and swings in demand, this system required the movement of workers from one factory to another based on demand. Satake says this was criticized as “human kanban” in those days due to the disruption this caused to people’s lives.

The human kanban system at Toyota was to move people from low demand production lines to high demand production lines. In Toyota’s words, quoted from Satake’s paper, it was to move people “when needed, where needed, as many as needed”. This is a direct application of the production control principle of just in time manufacturing to manpower allocation.

According to Satake the criticism of the human kanban system was limited to the movement of people between factories, not between production lines in a factory. This included both regular and term labor. Toyota recognized this as a problem and made efforts to level their labor requirements through heijunka in order to stabilize the lives of their employees’ families.

He says that today the Japanese area no longer as critical of the “human kanban system” as they were in the 1970s. Yet Satake concludes that in Japan today the manufacturing work force is comprised of more term and contract labor. “To put it bluntly, they are seen as disposable” says Satake.

Satake asks what is the value of reducing inventory to become just in time if this only eliminates the cushioning effect inventory has on demand variation, resulting in job instability. He calls on people in production control positions to make further efforts at heijunka in order to minimize the impact of swings in customer demand on demand for labor.

Investigative journalist Satoshi Kamata provides a more personal view of the dark side of Lean and how labor is viewed as disposable. Kamata worked for six months in 1973 as a "term laborer" assembling transmissions at Toyota and wrote and wrote about it in a book called Jidosha zetsubo kojo--Aru kisetsuko no nikki (Auto Factory of Despair: The Diary of a Seasonal Worker). This book was translated in English as Japan in the Passing Lane

Toyota has been improving quality, cost, delivery, safety and working conditions steadily for 50 years. What would today’s investigative journalist learn from term laborers? Kamata returned to Toyota City and wrote an article titled November 1, 2004 Shukan Kinyobi magazine Toyota: Suicide and Worker Depression at the World's Most Profitable Manufacturer. Kamata is critical of how Toyota’s drive to profitability through reduced labor cost was then and still is dehumanizing.

Kamata makes some comparisons between 1973 and 2004:

1973: Toyota had 41,000 employees and 3,000 term laborers.
2004: Toyota had 65,000 employees, and 10,000 term laborers

1973: Monthly wage including overtime and night shift allowance was 79,000 yen (approx. $720) a month.
2004: Monthly wage was 254,430 yen (approx. $2,300) according to a newspaper ads Toyota runs for "term employees".

2004: Toyota’s profits had increased more than 30-fold since 1973.

Kamata is critical of the union and Toyota, claiming that a typical response to wage complains to the union local is "Find me a company that will hire you for the wages you're being paid now" and that Toyota constantly uses the language of crisis and competition as reasons they do not raise wages. Results of wage 2006 negotiations between Toyota and the workers’ union is consistent with this.

Quoting Kamata:

“The conversation among my friends turned to an accident one early morning in May, where a 33-year old worker was crushed to death in a metal press, followed by talk of suicides, some from overwork, among elite technicians in the development division and among leaders of the labor union. Over the last decade, they said, they've seen a dramatic increase in depression among their coworkers.”

In the United States labor unions are still strong enough to prevent abusive of contract workers who are de facto full-time employees. The Wash Tech union’s victory over Microsoft is a recent example. In Japan the company unions largely have no teeth, an unlike the United States it is not easy for a workers to switch from one full-time job to another several times in their career.

The human kanban system in Japan supports the profitability of Toyota. As more industries emulate Toyota and adopt TPS in Japan, this style of non-regular, part-time and term employment will become more common. In Japan today the reduced job security and economic stability of families due to just in time labor and the human kanban system are social ills resulting from the dark side of Lean.

Tomorrow: Lean Production Does Not Respect People

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Each day this week we will examine aspects of The Dark Side of Lean. Today’s theme is “War, Oil and Lean Production” – admittedly an extreme Left perspective based on Marxist thought and the examination of a murder-suicide at a Jeep factory in January 2005.

Why should we spend any time reading extreme opinions which we disagree with? Because I believe that kaizen is truly a good thing both for individuals, organizations and society as a whole, and I want to understand what misconceptions exist and how they come about.

An online dialogue in political newsletter Counter Punch titled Blood on the Upholstery of Jeep Liberty between Marxist activist Manuel Yang and author and University of Toledo lecturer Peter Linebaugh discusses the murder-suicide at the DaimlerChrysler Stickney Avenue plant in Toledo, Ohio on Wednesday January 26, 2005. A 54 year old worker and 31-year veteran Myles Meyers came to work on second shift with a double-barreled shotgun, shot several others and himself. Mr. Yang and Mr. Linebaugh place the blame squarely on Lean production.

The official Jeep version of the story in the media was of Mr. Meyers who "recently faced disciplinary action by the company because he reportedly argued with a supervisor" as motivation. Mr. Yang cites a fellow worker at Jeep as saying “the bosses Myles shot were those who carried out Daimler-Chrysler's policy of eliminating jobs by headcounts."

According to the article Jeep management harassed Mr. Meyers. “In addition, Management moved him from job to job taking his equipment and continually humiliating him by putting up degrading signs and pictures around his workplace to show him how to do his job.”

One lesson here is that what may appear to a believer in Lean manufacturing as a completely reasonable and benign practice of visual controls, standard work, and job rotation to promote multi-process handling can be humiliating to a veteran worker. Combined with an antagonistic management-labor relationship and a stated policy of eliminating jobs, and the result is a deadly incident and the dark side of Lean.

Mr. Yang makes a leap from this incident to World War II Germany by saying “Daimler-Benz's use of death and terror in its labor camps had critical elements of continuity with what was going in Daimler-Chrysler's Jeep plant in Toledo” and follows with some horrific descriptions of a V-2 factory which I will not repeat here.

Lean production is synonymous with outsourcing and headcount reduction in the minds of the labor union organizer that is cited in this article as saying "lean production led to this working-class killing and suicide" while a Jeep worker called the war in Iraq "a lean production war" because of the U.S. military use of subcontracted torturers.

Comparisons are extended between the evils of Lean production 'at home' quoting another Jeep worker "Lean production is to work longer, harder, faster, for less" and 'Lean warfare in Iraq' as "outsourcing, private mercenaries, private contractors to help with the torture, logistics and laundry and food preparation privatized, shoddy equipment, jerry-built vehicles, the poverty-draft, stinting on safety."

Mr. Yang quotes a worker at Jeep who associates the Lean production terminology used at Jeep "They're calling the teams 'cells'....It suggests working in a prison environment...To a lot of people, working in a factory can be pretty drudgerous. You wake up in the morning, you do your job, and you go home. It's like being in prison. In some of the areas where we work, there are no windows, you don't see the outside, there is very little time to get away from your work, so they think of it in terms of being in a prison”

It was my understanding that the concept of cellular manufacturing and work cells came from the biological concept of a cell. A cell is a functioning unit of life based on a grouping of organelles . Cells perform biological functions. A production cell is a group of processes and a basic functioning unit of production. This does not reduce the validity of this worker’s observation of the failure of Lean production to make work at the Jeep factory any less prison-like.

Mr. Yang makes the connection between the origin of Lean production in Japan and Japan's entry into World War II to secure natural resources such as oil:

"War, oil, and lean production. I believe there is a certain historical logic in this unholy trinity of accumulation. What prompted Japan to enter into World War II was the oil and raw-material embargo that competing Western imperialist countries imposed on Japan in the 1930s."

Mr. Yang points out that Japanese industry effectively pacified the labor movement in post-war Japan. No doubt this enabled Lean production to be implemented more rapidly and smoothly than it ever could have been for example, at a Detroit automobile UAW workforce in the 1950s to 1970s. This is something the prevailing pro-Lean literature rarely touches upon, and he official Toyota PR certainly never advertises.

Mr. Yang describes the 7 wastes of production Lean production and points out that reduction of waste “requires squeezing as much mental and physical powers from the workers' labor process as it is possible to densely pack their working time.”

These are the 7 wastes as he describes them, accurately:

1) waste of overproduction;
2) waste of time on hand (waiting);
3) waste in transportation;
4) waste of processing itself;
5) waste of stock on hand (inventory);
6) waste of movement; and
7) waste of making defective products.

He continues:

“Namely, the imposition of faster, harder, more concentrated work. I believe Iraq and Jeep are a continuation of such a lean production strategy against the working class through the bloody and fiery circuits of war, oil, and terror.”

He fails to point out that value is defined by the customer, or the market, and not by the either the members of the labor class or the ruling class who control the capital. Surely members of the labor class, as consumers, do not want to pay for the 7 wastes, so they should not be paid for them. Making defects, for example, should be universally recognized as wasteful regardless of political or class leanings.

After a discussion of depression, suicide and murder at Toyota (more on this later this week) and within a Lean production environment from a Marxist perspective and the need for class solidarity, Mr. Linebaugh observes:

"What happed at Jeep yesterday represents a vast institutional failure. The plant has failed, the government has failed, the union has failed. The plant has installed lean production."

It is hard to disagree with the first two sentences. It can not agree with the third sentence.

Mr. Linebaugh expands on these concerns in an article in Counter Punch on October 29, 2005.

"On the one hand, increasing ignorance as schools close, more criminality as police and prisons expand, greater insecurity for children and dangers of violence at home, and prospects of war; then on the other hand, mandatory overtime in the plants, destruction of union contracts providing health benefits for the golden years, privatization by sub-contracting, insecurity by employing temporary workers, and speed-up driving some people to death. All this is called "lean production."

Mr. Linebaugh continues, "Lean production drives some workers mad. Some are beginning to kill" and cites death due to industrial accidents, the “grudge violence” at the Toledo Jeep plan, an example of suicidal road violence and another of a domestic violence killing.

Yet he makes no attempt to link these things directly to Lean production that a Lean production implementer and proponent would recognize, other than in the wider context of class struggle. Regardless, the fact that Lean production is susceptible to misuse by some, to misinterpretation by those on the Left, or that companies claiming to be Lean are incapable of contributing more positively to the lives of people working within a Lean workplace is enough of a concern to merit attention.

The dialogue between Mr. Yang and Mr. Linebaugh on the murder-suicide concludes with a call to action:

"The city of Toledo, the State of Ohio, needs to take responsibility for lean production and abolish it! It has proved itself dysfunctional. That's just a start."

The vast majority of popular literature on Lean manufacturing available in English is positive and promotional of Lean manufacturing. People do not buy management books in order to read a full and balanced study of the positives and negatives of an issue. People buy management books because of the words on the cover such as "Banish Waste and Create Wealth in Your Corporation" promise clear, simple and polar messages free of nuance and subtleties requiring careful reflection.

The people who write tracts, articles and books and the dark side of Lean production also are not aiming to present a balanced view of the pros and cons. They are taking an opposing viewpoint to the positive Lean production books. This can result in the negative views appearing to be extreme or one-sided.

These views on the dark side of Lean should not be discredited simply because they seem extreme or because they represent the polar opposite political viewpoint of your own. Only by examining as many sides of the argument as possible and acting on the best available information can we hope to implement a system that I believe engages the workforce, satisfies customers and generates free cash flow successfully – Lean production.

Tomorrow: Human Kanban

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This week started with an article about the top 5 reasons for using 3P. Requests from readers took us deeper into SMED and jidoka – all aspects of Lean manufacturing and machines. Without planning it the theme for the week was the “mechanical side” of Lean manufacturing.

Next week I will be blogging on the theme of The Dark Side of Lean. Monday through Friday we will examine how Lean manufacturing can be bad for people. I will introduce some of my own experiences, as well as perspectives from other people who have examined Lean production critically and found it to less than kind to human beings. I invite all of you to share your views on the dark side of Lean production.

The highlight of the week will be an interview with Darius Mehri, author of Notes from Toyota-land on Thursday May 11th. Darius brings a very different view of TPS from what most of us know. He spent three years in Japan as an American engineer working at a Toyota group company. Darius has many shocking tales to tell. I expect a very interesting discussion.

Join me next week for a brief but terrible journey into The Dark Side of Lean.

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Delving deeper into themes related to Production Preparation Process (3P) today I’ll explain what is meant by the “5 Steps of Jidoka” mentioned number sixteen of the 16 Catch Phrases of 3P.

Fist some background on jidoka. Jidoka is a pillar of the Toyota Production System and an innovation resulting from the invention of the automatic loom by Sakichi Toyoda in 1902. The defect detection mechanism helped enable one-piece flow and multi-process handling lines, improving both quality and productivity. Jidoka is also called "autonomation", but not to be confused with "automation".

Broadly speaking there are two types of jidoka. The first is more general and applied to manual work as well as machine work. This includes the idea of detecting the abnormality and stopping the process to perform root cause analysis for the purpose of acting on a countermeasure. This can be applied to office work and information flow as well, when visuals are used to signal a problem so that people can "stop and fix" rather than let problems linger.

Here’s a link to an article on jidoka by Mark Rosenthal of Genie Industries, published in 2002 by the Society of Manufacturing Engineers’ online journal. It is a good article. He mentions the 4 steps of jidoka (the first type, general application). These 4 steps are for operating jidoka as a problem detection and response system. The 5 steps to building jidoka equipment are for machine process (second type, narrow application).

There’s more. Officially there are 7 steps to implementing jidoka and the 5 steps of jidoka in 3P are adapted from these. The 7 steps are a subset of the 10 steps of full automation. Confused? At this point our graphics department comes to the rescue:

The X symbols represent manual work, the O symbols represent machine work and the yellow highlight indicates jidoka has been implemented in that step. If you go beyond the yellow area of the 7 steps of "jidoka" to full automation then you have a transfter line or perhaps even "lights out" manufacturing where loading and starting are also automated through sensors between the linked machines.

Steps 2 and 7 from the chart above are missing in the 5 steps to building jidoka equipment that are used in 3P. Pokayoke (step 7 in graph above) in both manual and machine operations is addressed in other ways in the Production Preparation Process so it may have been left out as redundant. Why work holding has been left out, I don’t know. Perhaps work holding was considered a given as part of the 3P equipment design exercise known as Process At A Glance.

The “spiral up” concept was taught to me as "take it a step at a time rather than going from step 1 to 4 right away" in order to ensure that the automation was as simple and low cost as possible. There are many catalog solutions for going from step 1 to 4 that are do not support Lean manufacturing, so 3P thinking is “spiral up”. The steps are usually written as:

5. Automatic unloading
4. Automatic return to home position
3. Automatic stop
2. Automatic feed
1. Automatic processing

You have to count from the bottom to the top because you “spiral up”.

Since the Production Preparation Process is concerned with the design of production processes and production lines from an equipment standpoint with a view to ensuring the product design can be produced at the lowest cost, it makes sense that the second type of jidoka is the main focus of the 5 steps of jidoka. Certainly the first type of jidoka or the discipline of “stop and fix” is part the standard operating procedure for people working in the line also and important to 3P.

One of my favorite quotes attributed to Taiichi Ohno is “No problem discovered when stopping the line should wait longer than tomorrow morning to be fixed.” If only we could all live by these words.

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Taiichi Ohno begins the chapter by saying “In order to achieve Just in Time you need to solve your changeover problems and reduce lot sizes. Forging processes are the most difficult.” This chapter should really be titled “Toyota Learned How to Do Forging Changeovers in Brazil”. It’s an interesting story.

Taiichi Ohno continues to describe what happens in a forging process, such as heating the metal, placing it in the die and hitting it. The combination of the right amount of heat, the right amount of metal, the right amount of time and dealing with the scale that results from oxidization all make die adjustment in a forging process challenging.

Because this adjustment is done by trial and error with two or three parts hit and the process adjusted, it takes a lot of time to changeover a forging press. Forging processes had the longest changeovers at Toyota and this caused Toyota to produce large lots of parts at the forging process.

“Back in those days at Toyota do Brasil we had installed one forging press so that we could bring all of our forging work in house” Taiichi Ohno tells us. This one press had to make more than 60 different forgings. They had only one press because they only build 2 or 3 automobiles per day. It was the smallest automobile company in the world, according to Ohno.

Because of the extremely low volumes, no other forging supplier would make the parts for Toyota. Forgings are typically ordered in 2,000 or 3,000 piece orders due to the long changeover times. This would have been many months of inventory at volumes of 2 or 3 cars per day. Toyota’s solution was to install a forging press and make all 60 parts internally.

According to Ohno, the rule was that you couldn’t make more than 10 of any single part at a time. If changeovers took one hour, you would run out of time very quickly in a day doing changeovers because the runs were so short. So the first target was a 15 minute changeover. If the changeover was 15 minutes and the run time was 15 minutes, you could make two different parts each hour.

By that math you could make 16 different forgings in an 8 hour day, and cycle through all 60+ forgings each week. For those of you struggling with kanban quantity reduction, heijunka or how to satisfy a wide variety of customer demands at low volumes, Taiichi Ohno just gave you the answer.

Ohno notes that while attempts to cut forging changeover times at Toyota in Japan would have been strongly resisted, Brazilians were more willing to listen to a Japanese instructor with a mustache who sounded like he knew what he was talking about.

With the efforts of the Brazilian workers at Toyota and the suggestions from Taiichi Ohno such as external changeover and using guides on the dies they were able to reduce the changeovers to less than 10 minutes. Their efforts were so successful that one forging press was able to make more than 60 different parts and never cause part shortages.

Several Japanese employees were sent to Brazil to learn about forging changeover from the Brazilians. As a result changeover reduction at Toyota in Japan became much more active.

Taiichi Ohno says that casting changeover reduction is not nearly so difficult, and goes on to describe the steps in a casting process. Because the volumes were so much higher at Toyota in Japan they did not have the same sensitivity to long changeover times and the need for lot size reduction. Casting runs of 2,000 or 3,000 were considered acceptable. In the case of casting also, Toyota do Brasil came up with innovative ways to reduce changeover time.

Taiichi Ohno gives a lot of credit to Toyota do Brasil as being a good model plant or test case for implementing high mix low volume Toyota Production System. At Toyota in Japan the volumes were so high that many lines were dedicated and practically no changeovers were done. When Ohno says “Toyota do Brasil may be doing TPS better than any other Toyota factory” he seems to be saying that true TPS is high mix, low volume and when you have high volumes and you do not need to implement SMED, you are not really doing TPS.

Ohno notes that when volumes are so much higher, companies can still turn a profit because of sheer volume, without needing to reduce cost and that the amazing thing was that Toyota do Brasil was profitable even as a high mix low volume automobile manufacturer.

“Toyota Production System is an approach that really ought to be used for mid-sized companies since it will be most effective” due to the fact that they will have lower volumes and more variety. TPS may not exist today had Toyota been a high volume manufacturer in the early days when Taiichi Ohno was helping to develop it.

Put on your fake mustache. Fly to an overeas factory. They may be more willing to listen and try kaizen. Then your home office can learn TPS from them.

Posted by Jon Miller at 6:18 PM | Permalink | Comments (2) | TrackBacks (0)

My apologies for introducing a new term with out explaining it yesterday. Thanks for asking Ben. The 16 Catch Phrases of 3P are used as guidelines for designing processes according to Lean manufacturing principles of JIT (Takt, Flow, Pull) and Jidoka. As a result of a successful 3P workshop following the 16 Catch Phrases the equipment and production process you design should take you closer to TPS.

The 16 Catch Phrases are:

1. Production preparation should be lightning fast. Avoid over planning, use what you have, act now.
2. Build & layout equipment for smooth material flow. Flow like a river, not like a dam.
3. Use additive equipment. Buy many speedboats instead of one tanker.
4. Build equipment that is easy to set up. Design in the separation of internal and external tasks.
5. Make equipment easy to move. No roots, no vines, no pits. Put wheels on everything.
6. Use multi-purpose equipment. Simple, "just fast enough" machines that perform one function well.
7. Make operator work stations narrow. Town houses, not ranch houses.
8. Layout equipment for ease of operator movement. Remove obstruction to smooth human motion.
9. Eliminate wasted machine cycle time. Design out 'air cutting' and minimize machine movements.
10. Build equipment for small, swift flow lines. Enable Standard Work (Takt, Work Sequence, SWIP).
11. Use short, vertical flow lines. Vertical = advancing process flow, horizontal = functional.
12. Build equipment for one-piece pull. Machine level. This is probably the most critical one.
13. Build in quick changeover. Design in SMED at the machine level.
14. Link machines for smooth loading and unloading. Line stops when WIP on the line is "full work".
15. Use multiple lines & rectified flows. 'Rectified' is an odd term, electrical engineers will get it.
16. Spiral upwards to jidoka. There are 5 steps to jidoka, which should be pursued a step at a time.

I may have gotten the sequence wrong. Looking over them again more carefully, I think there is a more logical sequence for teaching these concepts. Each one of these simple Catch Phrases is not meant to be self explanatory, but a one-liner to remind you of other fuller Lean manufacturing disciplines such as SMED and jidoka. This is how you design processes to fit Lean manufacturing with 3P.

These are a hodgepodge of machine or process-level guidelines and flow or process-level guidelines. I have seen them written down as 14, 15 or 20 catch phrases. I learned these 16 and they seem to capture the essence of 3P Lean equipment design. If you have found more elegant ways to phrase these in English, if you disagree with my explanation or numbering, post a comment or let me know.

Posted by Jon Miller at 5:38 PM | Permalink | Comments (2) | TrackBacks (0)

Last week we had the opportunity to give an online presentation to an automobile manufacturer on the Production Preparation Process (3P) and the top 5 reasons for using it. We discussed the impact Production Preparation Process can have on cutting total cost out of the supply chain. There is also a supplier development benefit since 3P workshops are hands-on processes to review both the process and product designs. It builds awareness of Lean manufacturing and builds buy in since formerly "off limits" design issues can be addressed.

Before we get to the top 5 reasons for using Production Preparation Process I'll share a quick overview of 3P for those of you to whom it may be new.

Production Preparation Process (3P) is one part of an overall Lean design approach that includes QFD, design reviews, and post-start up monitoring by a cross functional team to kaizen any bugs in the new system. The benefits of Production Preparation Process are a cross-functional team approach, rapid testing of ideas and the embedding of Lean manufacturing principles into process and product design.

In 3P designers work within a team to think through various alternative designs and process options and eliminate the inferior ones. Of course this requires knowledge of certain Lean manufacturing parameters of design based on TPS principles which are summarized as 16 Catch Phrases.

A pen and paper mapping of alternatives called Process At A Glance is used to consider alternative methods, rather than selecting equipment and process solutions out of a catalog. The top alternative process method is then mocked up in 3D using available materials such as wood, cardboard, and duct tape to try it out right away.

The chosen alternative is designed for Lean manufacturing because questions are asked along the way to make sure that Lean concepts are not being violated. Based on this preparations are made for equipment is design and build as well as Standard Work documentation.

This Production Preparation Process is in contrast to the traditional approach of selecting a single design early and "throwing it over the wall" to manufacturing. The result of the traditional design approach is that process capability fails to meet requirements, promised production volumes are not achieved at start up, cells may be designed but material handling process may not be considered, work instructions may be incomplete, target costs are not met after start up, etc.

Most people do 3P to solve one or more of these pains with new product start up. Some do it to minimize equipment cost or to design processes to enable one-piece flow. If you have these pains, you can make a rule to use Production Preparation Process whenever you see one of the top 5 reasons:

1. New product development. Educate designers in Lean as early as possible.
2. Capital expenditure approval. Don't sign a Cap Ex without doing 3P first. Period.
3. Product design changes. Approve no changes without a 3P review.
4. Significant changes in volume. You didn't design the process Lean, but here's your second chance.
5. Relocation of processes. If you're going to pick it up and move it anyway, you might as well Lean it out first.

There's time for a bonus question from the audience: What types of parts or products are most suited for Production Preparation Process (3P)?

The answer to this is nearly identical to "what types of parts or products are most suited for Lean?" Anything that has a lot of complexity in it is a good candidate. The more components, materials, processes, transactions, etc. that are required to produce and deliver a part, the more opportunity there is to make drastic improvements through 3P by reconsidering alternative methods to do it the Lean way.

Another way to put this is that the closer you are to "basic science" or a simple process such as injection molding, the less opportunity you have to consider new methods. A stamped, machined, painted and welded assembly on the other hand offers more opportunity to consider alternative process options and cut out waste. Last but not least, the best product or process to apply 3P is where there is a high running cost. Kaizen must make money.

Posted by Jon Miller at 5:40 PM | Permalink | Comments (6) | TrackBacks (0)