Gemba Panta Rei

Scientist, philosopher and author David Bohm presents challenging ideas on the nature of reality. They are challenging not in that they are difficult (if you are patient with the Calculus) but in that they challenge how we perceive, think and believe.

David Bohm makes a case in the book Wholeness and the Implicate Order for reality and knowledge being a process, rather than a thing. In the same way, kaizen is a process and not a thing. High performance is a process and not a thing. Operational Excellence is a process and not a thing.

Quantum theory states that we are part of what we observe and that by observing it we change it. In a similar way we are also a part of the business system that we try to describe, either because we work within it or because we have some indirect, long-term influence as producers or consumers. Making a link from macroeconomics to quantum physics may be a stretch, but stretching is good for you.

After arguing that the prevailing scientific worldview is one that results in fragmentation, and that our language itself causes this fragmentation, Bohm argues for viewing the implicate order of reality in what he calls the Undivided Wholeness in Flowing Movement. I think this is a beautiful phrase, even if "undivided wholeness" seems a bit redundant.

Undivided Wholeness in Flowing Movement for business means that we are all part of a more rational way of doing business that exists a priori, whatever name we choose to give it. Whether we like it or not we are all part of the great supply and demand chain ecosystem. Attempting to observe just a part of it and give it defintion, such as "what happens in a factory" or even in an extended customer-supplier value stream, is limited at best and fragmented at worst, resulting in dangerous local optimization that can not only damage our businesses but destroy our planet.

A term like Undivided Wholeness of Flowing Movement is certainly less precise than the current buzzwords for effective management (ryhmes with "bean"). It is not precisely limited or distinguished, but you can also say it is not fragmented. Flow is an undeniable condition of nature. We are happiest when money, blood, air, electricity, ideas, etc. are in flowing movement.

Bohm makes effective use of the analogy of seeing through a lens versus seeing a hologram or arguing for an undivided wholeness:

As Galileo noted the distinction between a viscous medium and a vacuum and saw that physical law should refer primarily to the order of motion of an object in a vacuum, so we might now note the distinction between a lens and a hologram and consider the possibility that physical law should refer primarily to an order of undivided wholeness of the content of a description similar to that indicated by the hologram rather than to an order of analysis of such content into separate parts indicated by a lens.

As Bohm noted the above, so we can note that what we observe in the work that is done in a business, and rules of the Toyota Production System should recognized to the whole rather than the separate parts. Everything is connected, as part of the implicate order. Lasting success in business is impossible if you go against the order of things. One piece flow and the connecting of processes one-to-one makes sense across an entire value chain, even when at very local levels it may not appear to do so. This appearance of local efficiency is due to the limitations of our measurement systems (traditional accounting) or the fragmented value systems we hold that place economic value on extreme local level phenomena.

Business should take a holistic approach. This means thinking beyond what is good for the shareholders (the explicate order) to what is good for the broader set of stakeholders that includes, employees, the community and the environment (the implicate order). When the pursuit of operational excellence is driven primarily for the profit that goes to a few executives or traders of stock at the expense of the wider community, this divides the flowing movement of the whole. Rather than doing whatever it takes to get the result you want, keep doing the right thing and things will turn out right.

To those rolling their eyes at these diversions from the practical lessons of TPS, the good news: tomorrow is November.

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Hansei is a Japanese word meaning "reflection" as in reflecting on ideas or experiences in order to learn from successes or failures to improve oneself in the future. It is a key step in kaizen, both personal improvement and for process improvement activity in business.

Taiichi Ohno liked to say "Check is hansei". The "check" step of PDCA (Plan, Do, Check, Act) is an opportunity to reflect and learn before the Act / Adjust step in the PDCA cycle.

The quote of the day is attributed to Confucius, that people come to wisdom in three ways:

"First, by reflection, which is noblest; second, by imitation, which is easiest; and third by experience, which is the bitterest."

"Experience is the best teacher" as the saying goes, but the superior student combines imitation and experience with hansei. Experience without hansei can result in the "bitter" repetition of the same lesson.

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"Don't talk to us about Toyota" demanded a new customer recently. Their reasoning was that Toyota's level was unachievable for them. This client does not build cars. But they were asking for world class benchmarks and case studies of the best companies in the world. Without mentioning Toyota. What's a kaizen consulting company to do?

The Toyota Production System has been understood (to varying degrees) for decades. But clearly there must be more than the operating system full of production cells, kanban systems and stop-the-line andons, if global manufacturers like our client mentioned above find Toyota's success "unachievable".

As I think about better ways to describe and talk about the business system by avoiding naming it (rhymes with bean manufacturing) this month , it's worth repeating that success in copying TPS relies on a philosophy, a way of thinking.

It's not what's in the factory, it's what's in the minds of people. It's a will to make things better. It's a will to personally make things better. It's a will to make things better that is absolutely relentless and determined. It's a will to improve quality, customer service, safety, the work environment, cost no matter how challenging.

To say "Don't talk to us about Toyota" is to say "We admit that don't have the will."

This will, this kaizen philosophy, should become a part of each individual. If we spend eight to twelve hours per day at work, this time should be used not only to add value by putting in a full day's work and receive a paycheck but to improve oneself. Thinking, learning, developing skills and using one's abilities to serve should be the natural outcome of working within an organization that follows the kaizen philosophy.

This is why I think it's unfortunate that the mainstream term that describes a Toyota-style operating system comes from a term describing lower inventories, space, and other resources used. There is increasing understanding that the process of making abnormalities visible and improving quality, cost and delivery through pervasive problem solving is the true characteristic of world class organizations (as opposed to how recently the floor was painted, 5S banners hoisted, and value stream maps drawn).

Going even beyond that, having the obsessive will to solve problems, even to the point where you can not leave well enough alone and be satisfied when things are good, this is the hallmark of Toyota-style operational excellence. Can companies succeed in copying the Toyota model without addressing the roles, responsibilities, relationships and underlying mindsets within an organization? For the most part, I think not, so we will have to ask forgiveness from our client after we talk to them about Toyota.

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Here is a quick follow up to yesterday's post on 3P.

Genie Industries is a local company that makes lifts. They have been doing kaizen for several years with great results. I have toured them and spoken to their continuous improvement leaders as well as workers. They deserve kudos.

On their website there is a high quality seven-minute video of Genie's Continuous Imrovement Jouney. In the beginning of the video (0:45 to 1:25) we are introduced to 3P and their method of selecting process alternatives. Genie calls this the "seven ways" practice. It's an excellent 40 second visual narrative of the Production Preparation Process that takes you from concept to cardboard and wood mock up to steel prototype.

The video also shows examples of their moving line, andon and pull chord, visual production status boards, point of use tools, pokayoke, lineside delivery of parts by suppliers, etc.

Thanks to the Genie team for giving us all a peek.

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Apoorva from India asks, "Generally how many alternatives are worked out in 3P?" Production Preparation Process, or 3P as it is known, is the name used to describe the American consulting market's understanding of the Shingijutsu consulting company's understanding of the Toyota Motor Corporation's approach to process development and production preparation. In a previous post we discussed the 16 catch phrases of 3P which are an embedded thought process for this type of production preparation.

The 3P approach involves identifying "alternatives" or options for performing each transformational step in a process. It requires thinking of a process such as high speed drilling as "make hole" so that the essential function performed is the objective, not the current technology used to make the hole (CNC drill). This is not dissimilar to how VA/VE looks at processes.

When you are designing equipment, or a production line that is built from a series of processes and connected equipment, you need to identify alternatives for each step. This can be tedious. Most engineers who are first faced with 3P balk at this exercise when there is a catalog full of solutions. Generating seven alternatives can be like pulling teeth. Plenty of "stupid ideas" are needed. A cross functional team is definitely recommended.

The short answer to Apoorva's question is that you need to come up with seven alternatives, mock up the top three, and then build the top one selected from evaluation criteria. Why seven? Because that's what the great Nakao sensei, co-founder and head of Shingijutsu tells us. Six is too few, eight is too many, perhaps.

After creating a charter for a 3P project to define the scope and desired outcome, a properly trained production preparation team would use the Process At A Glance to develop seven alternatives, evaluate the seven alternatives to select top three, sketch out model operations on Process At A Glance, simulate the three alternatives as and then select top process design.

The simulation can involve building 3D (three dimensional) mock ups using cardboard, wood, duct tape, etc. to get as close to the concept as possible, quickly. Once the size, shape and functions performed are defined actual functioning models can be built and tested. The more simulation you can do, the closer your models will be to the final item.

The main reasons to start "inside out" from value added transformation or feature creation ("make hole") to the fixture, the controls, the box instead of "outside in" by selecting a machine out of a catalog is that it helps avoid buying or building machines with lots of unnecessary accessories.

The idea of 3P is to build bare bones machine with human wisdom and designed for quick changeovers, pokayoke and one piece flow. This requires thinking through several alternatives and then asking the questions which direct your thinking towards kaizen. The following guidelines can be used for evaluating and ranking the alternatives:

Q-1 Pokayoke is built into the process
Q-2 Go/nogo gauging for in-process checks
Q-3 Fewer than 0.03% defects
Q-4 Auto-stop for abnormality (jidoka)
C-1 Low motion waste
C-2 Low capital investment
C-3 Minimal space required
C-4 Known process technology
C-5 Minimal development time required
C-6 Simpler than existing process methods
C-7 Easy autonomous maintenance, or maintenance free
C-8 High ratio of value added time in the process
C-9 Low tooling cost
D-1 Easily scalable up by 400% or down to 25%
D-2 In-house development
D-3 Off-the shelf equipment or components
S-1 Proper guarding and safety devices in place
S-2 Dust, chips, slag, etc. collected by equipment
S-3 High ergonomics evaluation score
S-4 Meets environmental, fire, and health regulations
L-1 Creates one-piece flow
L-2 Meets Takt Time
L-3 Creates a pull system
L-4 Quick changeover
L-5 Operator input
L-6 Chaku-chaku (load load)
L-7 Hanedashi (auto unload)
L-8 Mobile & flexible, on wheels, not roots or vines

That's how to use 3P to work out process design alternatives. Thanks for the question.

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There is an article in the Hindu Business Line on October 23, 2006 titled Smart Ideas at Work. The 3,500 workers at the Nokia factory in Chennai, India gave 1,800 kaizen ideas as part of their suggestion system.

Many kaizen ideas seem to have a quality theme to them. There is an example of a pokayoke device in a board assembly machine, and also a simple yet ingenious wheel that identifies the correct language version keypad with the phone's software.

Jukka Lehtela, Director of India Operations says: "Kaizen is all about incremental improvement. So the changes might seem small but make a world of difference in the long run."

The global market for mobile phones and similar devices is approaching one billion units per year. Nokia has about a third of the global market for mobile phones. That's more than 300 million opportunities not to make a mistake and deliver a defect-free product. The improvement ideas like the 1,800 kaizen ideas that the workers at the Nokia factory in Chennai, India identified will make a world of difference.

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TPS is a system of training. These are the words from an article by Toyota on the TPS. The source escapes me at the moment, if anyone knows of it please add a comment.

It's my personal belief that the thing that sets Toyota apart from other excellent manufacturers is not that Toyota has the best operational excellence model in the world (the Toyota Production System) but that it has a tradition of educating people in their organization that is rooted in their belief system that values monozukuri and long-term thinking. Copying the Toyota Production System is easy. Copying this commitment to developing people is hard.

First it would require a generation of managers and supervisors who are willing and able to be teachers. It may take 5 to 10 years for most companies to develop a generation of managers as teachers. It is not possible to hire all new manager-teachers, since these managers would spend the first five years learning-developing-building the teaching culture from scratch anyway. Not to mention that they would still need to run the business.

Teruyuki Minoura, a Toyota executive who is Senior Managing Director, Chief Officer of Business Development Group & Purchasing Group, sums up that the role of educating people is key to operational excellence in an article on the Toyota Motor Manufacturing Kentucky website.

When an error occurs, the first thing that needs to be done is fix the error. Minoura recalls that Ohno used to order them to ask the question "Why?" five times over because "that way you'll find the root cause, and if you get rid of that it'll never happen again." However, Minoura emphasizes that on-the-spot observation rather than deduction is the only correct way to answer a "Why?" question. "I'm always struck that the five-why method doesn't seem to be working as well as it should be because there's been a lack of practical training. The reason is that they end up falling back on deduction. Yes, deduction. So when I ask them 'Why?' they reel off five causes as quick as a flash by deduction. Then I ask them five whys again for each of the causes they came up with. The result is that they start falling back on deduction again, and so many causes come back that you end up totally confused as to which of them is important."

"Through real training," Minoura says, "you'll be able to discover dozens of problems and also get to their root causes. You'll be able to make dozens of improvements. If you incorporate all the accumulated knowledge of root causes that you've got from always asking 'Why? Why? Why? …' into your equipment, you're going to have something that no one else can come close to. I don't think it's got anything to do with nationality; it all has to do with whether or not you've received the proper training. I feel though that the tendency to give that kind of training and education forms the basis of Toyota's approach to monozukuri."

Monozukuri is the Japanese word for "making things". It could be translated as "manufacturing" but it is not, as monozukuri brings with it a respect and appreciation for the act of making things that "manufacturing" has largely lost.

At Toyota there is an education program for people that starts at year one and includes not only the job-specific knowledge and skills but what it means to think like a Toyota person. This not only includes kaizen, but the philosophy behind how you make improvements (quick and dirty instead of delayed perfection, etc.). A previous post on this blog gives an example of this new employee training in the Toyota Way.

If more organizations educated their people in the basic philosophy of kaizen and TPS (never mind the specific tools) they would have people who see the vast improvement opportunities or "buried treasure" in every gemba.

Educating people in the workplace as part of an operational excellence strategy is more than teaching the production system or the techniques to make improvements. It is also creating a fighting spirit that does not give up when faced with a difficult challenge. Perhaps this is best summed up in a quote by writer and college administrator William Arthur Ward "The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails."

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There are some interesting lessons from Toyota's IT Strategy in the minutes from the Third IT Economics Salon of the Economic and Social Research Institute which is part of the Cabinet Office of the Japanese Government. The guest speaker was Hiroaki Yoshida, a Toyota executive who spoke on the topic of "Toyota Motor's IT Strategy" on May 10, 2001.

Yoshida gives examples of the impact of IT on Toyota's product development process in the reduction in product development lead-time, the digitization of design documents, and the computer simulation capability both of the design of parts as well as the assemblability. There is an interesting discussion of how Toyota viewed (ca 2001) their planned electronic kanban integration with their suppliers as well as applying IT on the customer end.

Here are some excerpts from the meeting minutes that provide lessons from Toyota's IT Strategy:

We recognize that we have to take our traditional global vision and change it based on the influence of IT implementation. Our strategy is to retain the good Toyota DNA and learn what we can from overseas, transform our processes so that we can utilize the internet to the fullest.

On barriers to IT implementation
We think the greatest barriers to IT implementation are rules, culture, traditions and the common sense in our company that "this is the way we've done things."

On the Toyota Production System
The kanban system is a commonly known methodology of the Toyota Production System, but kanban is only a part of the Toyota Production System. The Toyota Production System is a corporate culture that encompasses labor management. Essentially, we place importance on the accumulation of kaizens.

On kaizen and kaikaku
In terms of the difference between kaizen and kaikaku, kaizen is culture. If you don't have that and you attempt kaikaku you will probably fail, and will certainly not sustain. If you improve by 1% each month, this leads to a kaikaku of 300% in 10 years. In the Toyota culture we are brought up t believe that it is a crime to do the same work day after day. We think this accumulation of kaizen creates a foundation that makes kaikaku easier.

On preparation by leadership for IT implementation
In order to be able to use information technology properly at Toyota we had to make certain preparations. We had to commonize our goals and values, standardize our decision making mechanisms, and revisit our management vision.

On information cost
For large scale projects like these, one single large project can cost hundreds of millions of dollars in development. This results in a higher information cost. In Japan an IT investment cost of 2% or 3% of revenue is the limit but in the United States in come cases companies spend as much as 20% or 30% of revenue on IT investment. I wonder whether these companies truly fully utilize their investment. I also wonder how they look at their information cost.

On how to use IT effectively
In order to use IT effectively as a tool, we think that it is important for the top management to not see IT as something that can be applied superficially. First they must see the facts of the business, the facts of the gemba, and on top of this foundation further consider the feelings of people and how to motivate them. Then rules must be written and standardization must be done properly on the basis of the global business framework, before IT is implemented.

The two questions at the end of the meeting minutes were interesting also:

Q) Is it possible for a global company like Toyota to have common values?

A) There are direct and indirect reasons. First there is the problem of language. Next there is the issue of the mobility of people. The problem of the portability of pensions affected the mobility of people. Because of Japan's tradition of employment for life, an analog system was sufficient and there was a delay in creating procedure manuals. Since it was not clear what type of work was being done, this delayed IT implementation for this type of work.

You may wonder why a presentation on Toyota's IT strategy contains so much talk about kaizen, kaikaku, the Toyota Production System and the culture aspect of change. There are several reasons. First, there was more on the business side of IT in the minutes but I found it less interesting and did not post it. Second, it seems to be in the Toyota DNA to talk about things at every opportunity (or at least perhaps in their corporate PR guidelines). Third, remember that this presentation was to a group that included Japanese government officials and no doubt Yoshida took the opportunity to press home some points regarding the importance of kaizen culture to this audience.

More recent news from Toyota's use of IT can be found on blog posts here and here.

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In this chapter Taiichi Ohno introduces another concept that is mixed up by people. It is the difference between operational availability and rate of operation. I introduced this concept in some depth in a previous post on this blog, and Taiichi Ohno does the same in the first few pages of this chapter.

The main learning points of this chapter are the importance of preventive maintenance and other methods to improve equipment availability and to not run equipment when you do not have demand.

Taiichi Ohno says in this chapter “As I often say, the companies that make only the quantity needed and pursue lowest cost production will survive until the end.”

A quick review of the two terms:

Operational availability means that equipment is available to run when needed. This is a measure of the percentage of time that you can run the machines when you want to run the machine. This is supported by kaizen through SMED (Single Minute Exchange of Dies), TPM (Total Productive Maintenance) and other methods to improve equipment uptime. You should strive for this number to be 100%.

Rate of operation is the percentage of operation when the equipment is running profitably. This percentage can be greater than 100% if you run overtime because your demand exceeds capacity of regular hours. Rate of operation applies when equipment is making something that you will sell, rather than simply build in order to absorb cost based on traditional accounting. It is OK for this number to be lower than 100%.

Ohno says that it is better to keep the older machines in good condition and be ready for when business picks up again so that you can be the low cost production leader. Ohno introduces a practice at Toyota Boshoku which he calls “scrap and build” in which the government paid companies to destroy old machines during economic downturns. This money was then used to buy the latest technology machines, presumably to make the company more competitive. This creates an illusion of a high rate of operation, though in fact it is not.

Taiichi Ohno clearly warns that an apparent high rate of operation can be the result of a “keep the machine running” mentality driven by the need to absorb depreciation cost. The old machine, if well-maintained, could have a high operational availability (able to run when needed) and yet these new machines at Toyota Boshoku were run a lot, causing overproduction. The rate of operation was not high, because the machines were run when parts are not needed.

Ohno goes slightly off track at the end of the chapter and makes a surprising statement. First he warns against measuring productivity in terms of direct labor only. Labor productivity may improve but this is only a small part of the overall labor cost (direct and indirect) when there is automation advances. When management and administrative salary raises are given based on direct labor productivity improvement, this raises the costs a lot.

What's so odd is that Ohno ends the chapter by saying "It is difficult enough to raise direct labor productivity by 10%. Raising the productivity of all people in the company by 10% is impossible." He is probably sending a message to the managers at Toyota Boshoku for making a decision that he did not approve of, but his statement goes against both Ohno's philosophy of kaizen and my direct experience with doing kaizen in the office to hear him say that it is impossible to improve productivity by 10% across all areas of a company.

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One of the ways to judge whether a company is succeeding in their journey towards being an organization that embraces continuous improvement based on the Toyota Production System model is how often people ask "why?" as part of the daily management and problem solving dialogue.

The five why process is excellent habit for two reasons. First, the traditional organization tends to ask "who?" five times rather than "why?". Who did this? Who is to blame? Who is responsible for fixing this? Etc. This behavior results in problems being covered up, which only adds to the problem since they don't get fixed. It's a vicious cycle. Avoid this by asking "why?" five times.

Second, the five why process helps people get to the true root cause of a problem by questioning beyond the obvious answer to the first "why?" This is important because many times the first or even second answers to the "why?" question can be a commonly held belief or assumption that is incorrect. These are known as "facts" to the people who hold them and "myths" to people looking in from the outside.

As far as I know there's nothing magical about the number five in ask "why?" five times. So what do you do if you can't find the root cause after five, six seven or eight "why?" questions? When I was interpreting for Japanese sensei the answer was often "Think for yourself! You haven't searched hard enough!" At the time I thought this was a convenient dodge, but now I realize that there is a lot of truth to the idea that "If you haven't found it, you haven't searched hard enough."

Another way I think of this is "Failure is stopping before you succeed."

There's a five why story of a client of ours who had a quality problem. One piece flow could not be achieved, they said, because machine down times were very high. Why? There were too many rush orders to make parts that were damaged at the downstream processes. Why were there so many damaged parts? Parts were being damaged during transportation when they hit other parts. Why did they hit other parts? They were stacked high on a cart that was heavy, hard to move and the material handler could not see where he was pushing the cart. Why were the parts stacked so high? The production lot sizes were large because the machine had a high amount of down time. Why? Wait a minute...

At this point the people I was asking realized the ridiculousness of their situation (the large batch size was causing the defects, which was causing the large batch size) and soon we were flowing one piece at a time. They also saw the power of asking "why?" again and again until you succeed in finding a solution to a problem.

What's your favorite five why story?

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An article titled How Wipro Took a Leaf Out of Toyota’s Book in DNA - Daily News & Analysis on October 15, 2006 talks of how Wipro has successfully implemented the Toyota Production System in an IT business.

Wipro is an Indian firm providing back office operations handling medical claims and human resource policies for customers around the world. I have commented in a previous blog post about their approach such as the use of an assembly line method for transactional office work.

The article reports that Wipro had previously implemented Six Sigma and CMMI, then found TPS from the local Toyota Kirloskar factory in Bangalore. Wipro has implemented 330 kaizen projects over 1,100 processes, involving nearly 7,000 employees.

What success tips can we take away from Wipro’s adaptation of TPS to IT?

Involve everyone
Sambuddha Deb, Wipro’s Chief Quality Officer is quoted:

“We adopted the lean manufacturing practice of Toyota for the IT industry. We chose it because the Japanese were successful in making it participatory even to the last level” This implies total participation, if we presume that by “last level” he means front-liner workers.

Gain a sufficiently deep understanding of what you are trying to do, then do it
The article reports that Wipro took one and a half years to learn the Toyota Production System techniques and how to adapt them to the IT industry. This is in stark contrast to many U.S. firms are restless for short term results, and some consultants who promise a transformation in “weeks not months” don’t help the situation. As Taiichi Ohno said, “Understanding means doing” but doing does not necessarily mean understanding.

Learn together
“There has been no resistance from employees as we have taken them along, improving on their suggestions and learning as we expanded,” says Sambuddha Deb of Wipro.

The book Bangalore Tiger by Steve Hamm claims to explain "how Indian tech upstart Wipro is rewriting the rules of global competition". The Toyota Production System, CMMI and Six Sigma surely play a big part in rewriting these rules. Wipro’s low labor cost in India certainly gives them a big edge that not everyone can copy. Their approach to applying TPS is something we can.

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I spent four nights recently at Quality Inn, an American hotel chain. It was a pleasant stay, and not without its lesson in kaizen. I came back to the hotel one night to notice the following:

I couldn't resist taking them up on their quality policy. Full marks to Quality Inn for living up to their quality policy, for it was fixed within 24 hours.

Their quality policy states (here I am paraphrasing) that they will not charge you for the room if you are not pleased with the room or the service, if you tell the hotel staff about a problem and it is not fixed in a timely manner and to the satisfaction of the customer. This is displayed prominently at the front desk.

That's not a bad policy, but two other quality claims made me wonder about the continuous improvement and problem solving process supporting their quality process.

One morning a person from housekeeping arrived, and as I was still in the room said she would come back later to make the beds, exchange the towels, etc. When I returned in the evening I found this had not been done. This again was corrected within a day, and they kindly provided more towels than I could possibly use. The other claim was a wooden chair in the room which nearly came apart when I leaned back. This too they replaced right away, but it could have hurt someone.

This hotel fulfilled their quality policy and worked to make sure the guests had a pleasant stay and that problems identified by customers were corrected right in a timely manner. But I wondered if perhaps they had become too good at putting out fires, at the expense of efforts to prevent them. Rather than accept that "stuff happens" and training people to fix it quickly, an organization that works to find out why stuff happens and prevent reoccurrence will win out and retain customers.

The role of management should be to train every person from housekeeping to maintenance to the front desk how to solve problems. It can be as simple as PDCA. It can be a matter of asking "Do we have a problem?" and then "What is the root cause?" followed by "What is the countermeasure?" and finally "Was the countermeasure effective?"

Just like they say there is no "I" in "team", we can't have quality without "U". It's a bit corny, but it's true.

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Taiichi Ohno explains in this chapter that there is a correct sequence to kaizen, and it is as follows:

1) Manual work kaizen
2) Equipment kaizen
3) Process kaizen

"Manual work kaizen means thinking of better ways of using the existing equipment. Rather than making tools (equipment), it is important to think of how the work should be done." Quotes Taiichi Ohno. He points out that this gets harder as you introduce more modern, high performance equipment. Another way to say this is that it becomes easier to not think about the manual work, since the new machine seems so much faster and more efficient.

At ten Japanese pages this is the longest chapter in the book. Most chapters are in the five to seven pages range. Taiichi Ohno illustrates his point that there is a correct sequence do kaizen through examples including installing robots, using a high performance camera to take photos, buying and installing machines, multi-process handing, inspection versus built-in quality and seeing the true value added portion of work.

Ohno tells a story of when the Motomachi and Kamigo factories were newly built, and worker were moved to these factories they had new machines. It was actually a challenge to use these machines as effectively as the older machines which had a lot of kaizen (human wisdom) built into them. Ohno points out that it is easy to justify new buying machines that will appear to improve productivity and quality, but in fact this creates a temptation to let less experienced workers run these machines, which can create problems.

One could say that we are seeing some of this phenomenon today in the many recalls of Toyota vehicles, as a result of the rapid expansion, building of new factories, buying of new machines, and employing new workers to run these new and "better" machines.

Ohno points out that a very important part of doing step 2 equipment kaizen is having the skill and ability to kaizen the equipment. This comes from starting at step 1 and doing manual work kaizen, rather than simply specifying the newest machine, or relying on the machine tool manufacturer. This ability of Toyota to modify, specify, build and maintain machines on their own is an often overlooked hidden strength, one aspect of which is discussed in an interview by Art Smalley.

Step 3 Process kaizen is basically the sequencing of processes into an operation so that quality is built in rather than inspected in, features are created in a logical sequence requiring the minimum changes of tools, etc. Ohno says that it is important to start with manual work kaizen, which will result in ideas for equipment kaizen, which will result in ideas for process kaizen. The reality in most companies is that these are separate disciplines and not integrated or sequenced correctly.

Taiichi Ohno observes that outside of Japan the workers watch the machine while puffing on cigarettes, while in Japan the workers are made to do unimportant things just to keep busy. Multi-process handling is preferable to either of these, and that is why there is a correct sequence to kaizen that must be followed. Ohno ends the chapter by saying "Machine cycle time and manual cycle time are still mixed up, all over the world."

Posted by Jon Miller at 8:56 PM | Permalink | Comments (4) | TrackBacks (0)

The Job Schmob blogger gives us (kaizen people) a view from the other side in his (her?) October 2, 2006 post The Business of Change Management and Corporate Propaganda: Part 1. The Job Schmob blog person takes issue with a quote by marketing guru Seth Godin in a December 1999 issue of Fast Company where Seth said:

Competent people resist change. Why? Because change threatens to make them less competent. And competent people like being competent. That's who they are, and sometimes that's all they've got. No wonder they're not in a hurry to rock the boat.

In the face of change, the competent are helpless. Change means a temporary or permanent threat to their competence.

Later in the Fast Company article Seth Godin goes on to equate "incompetent" with a condition in which people are willing to change. Nice and provocative, but we need to be more respectful when approaching people with our change agendas.

The Job Schmob blogger has a rejoinder for Seth Godin: Competent people do not resist competent change.

I've got news for them both: all people resist change. It's just a matter of degree. As we learned in a previous post, resistance to change is a built-in neurological condition of humans, if you believe the researcher results in the Strategy + Business article and the anecdotal evidence of just about anyone who has tried to change anyone.

Based on resistance to change being part of the human condition, let's reposition the conversation from "competent" which implies learned ability, to one that implies an innate condition as suggested in the article mentioned above. Let's replace "competent" with the term "complacent". Competent or incompetent, if you are dissatisfied, you are willing to change (for the better). If you are complacent, you are not likely to change whether you are brilliantly competent or hopelessly incompetent at what you do. It's not your current ability that matters, it's how fast you are improving. It's the vector and velocity of change that matter more than your current position.

The Job Schmobber equates the sort of motivational management guru-spin Seth Godin provides for change management with propaganda. Since propaganda is any media that openly seek to persuade an audience toward the acceptance of a particular belief, this is an accurate description. This blog too is propaganda promoting kaizen.

It's okay to hate change. This is a normal biological reaction for humans. But not changing is not okay. In fact it is impossible. Change happens. If you don't take control of it and direct in the direction of good (kaizen) you will lose. As change agent and propagandist extraordinaire Dr. Edwards Deming said: "It is not necessary to change. Survival is not mandatory."

Part 2 of the "Business of Change Management" blog entry is actually fairly entertaining, though the Job Schmob blogger's outrage appears genuine. How this person would be horrified to learn of our change management propaganda blog and the legions of eager change agents with their $1,000 videos and cheese-moving tricks and tools...

Posted by Jon Miller at 7:50 PM | Permalink | Comments (0) | TrackBacks (0)

You know Toyota Production System has hit the big time in Japan when there's an English language learning book out based on TPS. It's titled "Mastering the Toyota Production System through English Speech Practice" by Matsuzaki Hisazumi. If only it were that easy!

Here are 20 phrases from the book (out of 60 listed) that offer side-by-side Japanese and English TPS vocabulary. Even if you don't speak Japanese you can impress people by writing down these words. I take issue with translations 3, 6 and 8 and 19 we normally call Standard Work in Process. But who will know?

1．トヨタ生産方式　The Toyota Production System
2．多品種少量生産　Production of Many Models in Small Quantities
3．動きと働き　"Non-Value-Added Work" and "Value-Added Work"
4．真因を問う　Finding the Root Cause
5．ジャスト・イン・タイム　Just-In-Time
6．工程の流れ化　Workflow
7．同期化　Synchronization
8．後工程と前工程　Later Process and Earlier Process
9．不必要な在庫　Unnecessary Inventory
10．必要なものを、必要な時に、必要な量だけ Just What Is Needed, Only When Needed, Only in the Quantity Needed
11．平準化　Production Leveling
12．小ロット生産　Small Lot Production
13．段取り替え　Changing Setups
14．多様化　Diversification
15．生産プロセスの合理化　Rationalizing Production Processes
16．標準作業　Standard Work
17．タクトタイム　Takt Time
18．作業順序　Work Sequence
19．標準手持ち　Standard In-Process Stock
20．標準作業票　Standard Work Sheet

Sample phrases used to learn English include "The Toyota production system also strengthens quality assurance in every production process." and "The essence of the Toyota production system can be adapted to the operations of many other industries."

I chuckle to imagine the TPS version of the Monty Python tobacconist sketch happening in a shop in some Midwestern town with a Japanese factory nearby.

Even if you are already fluent in English, these are useful phrases. Now repeat after me, "The essence of the Toyota production system can be adapted..."

Posted by Jon Miller at 9:51 PM | Permalink | Comments (1) | TrackBacks (0)

It started out as a routine one hour flight delay and missed connection. Snowstorms in the winter, thunderstorms in the summer. When you are traveling by air through the Midwest, plans that don't go according to plan are almost a given. We arrive in Minneapolis and the passengers shuffle off of the airplane, collecting their hotel and meal vouchers. Most of us have missed our flights and proceed to collect our bags.

There's a crowd at the baggage carousel. I wait for half an hour, watching it stop and go, stop and go. Giant LCD screens advertise a local casino. Few bags appear, people disappear. After an hour the people dwindle, and the carousel stops. No bag. I join the line of people inquiring as to the whereabouts of their luggage. I overhear the airlines agent say that the remaining bags are here in Minneapolis but somewhere within the baggage handling system. It is time for maintenance of the system, so they can not be retrieved. Our bags are somewhere in the system, unavailable until tomorrow.

At 11PM this strikes me as possibly the stupidest thing I have ever heard. This sort of rigid adherence to a maintenance schedule at the expense of customers betrays common sense. Go get the bags. By the same logic they should maintain aircraft in mid-air if the aircraft reaches the point in its lifecycle while in flight. Hotels should clean rooms at 9AM sharp regardless of whether and how rooms are occupied. The Minneapolis airport baggage handling process needs kaizen.

I'm curious exactly where my bag is in the "system". The agent tells me with great cheer that my bag is actually in the back room on a cart. It's ready to be loaded onto the first Seattle flight in the morning. The airline has done me a service in their mind. My bag was taken care of. I don't even have to pull my suitcase around tonight. They could have sent a barker telling people with bags going to Seattle the situation. They could have posted a sign.

She hands me a bag of toiletries. It's lucky there was nothing in the suitcase I really need, such as medication, as the "system" has no sympathy for such things.

I find my way to the ground transportation center, pick up the courtesy phone and summon the hotel shuttle. It arrives after 10 minutes. The driver gets out, but does not open the door to the shuttle or let me in. He stands there with his radio in his hand. It squawks. He listens. It is a cold night in Minneapolis. I motion toward the door, he looks at me, and pushes it open. I go in and sit down. He tells me the Comfort Inn is not accepting any more vouchers tonight. He can't take me. It was kind of him to drive all the way to the airport to tell me this. Another broken process.

I need another voucher, for a hotel that will take me. It's midnight. The terminal is empty. I look down from the escalators and see a figure in a red cardigan moving slowly down the length of the hall toward an exit. I catch up with her and explain that I need help. She is surly. I can't blame her. It's the end of her shift. As a customer I'm the only thing that stands in her way of making an exit and going home. She finds a supervisor from behind the ticket counter and disappears out the door.

With a new voucher in hand, I return to the ground transportation area. I pick up the phone and call the hotel. A recorded female voice welcomes me to the Days Inn. They look forward to serving me. Instructions follow. I follow the instructions. The message cuts out, the phone rings at the other end. Once. The recorded female voice starts again. This is exactly how I would design a phone system if my was aim to videotape the reaction people had to it and sell the footage for entertainment. I push the zero button. It rings once. And repeats the message. I am surprised when after 12 more pushes of the zero button, each time being welcomed by the female voice, a live voice answers. A shuttle is on its way.

At the hotel over 80 people have checked in tonight diverted in their travels as I have been. This places a strain on their capacity to shuttle people to the airport in the morning. The man at the desk asks me if I prefer the shuttle departing at 4AM, three hours before my flight, or at 6AM, giving me an hour. Since my luck has been improving steadily in the last few minutes, I choose the latter.

Tonight's travel experience process was badly broken. Nobody from the airlines was overseeing the entire value stream of getting customers from the arriving airplane to retrieving luggage to the hotel and back to the airport the next day. What exists is a series of disconnected, non-visual steps with no feedback loop other than the unhappy customer fixing their own problem. These travel experiences are not rare occurrences, but there is no evidence that airline or airport management is learning from them.

Some of the key behaviors of truly great organizations that operate under the kaizen philosophy are making abnormalities visible, taking immediate action to solve problems in a standardized way, and managing through teaching everyone in the organization how to serve the customer and solve problems. In this travel experience the airlines / airport / hotel extended value stream demonstrated a lack of all three.

There is a formula that explains part of Toyota's thinking process and what makes them a great company. It is Profit = Price - Cost. This is in contrast to the traditional Price = Cost + Profit. The customer sets the price based on the value they see in the product or service. The provider of the product or service can make a profit only but cutting cost. The struggling legacy airlines are operating on the second equation. The successful low cost airlines recognize that the price is set by what the customer is willing to pay, and they reduce costs relentlessly to turn a profit.

But there is a third aspect that is often neglected. That is the definition of value by the customer. The price is determined by the customer in proportion to the value. If you increase the value as perceived by the customer, you can increase the price. If you can increase the price and keep costs fixed, you can increase profit. This does not require innovation, just the execution of good service.

As a business traveler, or even a vacationer, how much more would you pay for traveling with an airline that delivered a bullet-proof process for handling the cancellation of flights and adverse changes to your plans? What if they rented a van and took you directly to the hotel? What if they brought your bags to you? If we are only paying to be moved from point A to point B when we travel by air then the two profit equations above work. If we are expecting a service then airlines could set prices in a different way.

Free turnaround advice to all struggling airlines: do kaizen in all processes to reduce cost and improve quality and at the same time understand what aspects of the service customers value and will pay a higher price for. Offer these services.

The bag of toiletries contained a XL size Fruit of the Loom undershirt, and the worst tasting toothpaste I have ever put in my mouth. I'll be home in 10 hours, barring a freak blizzard in Minneapolis or the hotel shuttle blowing a tire on the way to the airport.

Posted by Jon Miller at 10:42 PM | Permalink | Comments (5) | TrackBacks (0)

Congratulations to the Aberdeenshire Council on winning the top Performance Improvement Award from UDITE – The Association of European Local Authority Chief Executives for their kaizen efforts. Read all about it in the Buchan Observer.

Kaizen in the public sector, how sweet the sound...

Posted by Jon Miller at 8:23 PM | Permalink | Comments (0) | TrackBacks (0)

Kaizen is easy. Respect for people is hard. I don't know why. I just don't see a lot of companies talking about and doing the latter. Talking about only, perhaps. What does respect for people really mean, anyway? At Toyota it is interesting to note that the clearest way respect for people is visible is through their commitment to development of people.

In fact I wonder if respect for people isn't just a euphemism for development of people. Respect for people sounds better, less self-serving, less demanding of people, more of a catch all. Can a corporation as represented by executives who see themselves as primarily answering to shareholders truly respect the people who work in the company and place them before profit (and indirectly, before the shareholders)? Developing people (as opposed to the more vague respect for people) achieves both ends of profit generation and humanizing repetitive work.

The flow chart showing cost reduction and people development as the end goals of the Toyota Production System is something I sketched on one of the many trips I've taken to Japan. It wasn't Toyota but a company in a different industry that had an ex-Toyota manager teach them TPS. It's another good way of showing what this TPS-based operational excellence business is all about.

At Toyota they say 物づくりは人づくり or "making things is making people" (monozukuri wa hitozukuri) or "develop people and then build products". Their commitment to developing people is clear and they take this seriously. It's part of the culture and management system, and a massive competitive advantage. Since they depend on this to build in quality and maintain productivity, it's also a possible weakness if they attempt to grow faster than they can develop people.

As a historical question I wonder whether Toyota had this idea before the union requested that they start a supervisor training and development program in 1950 when they researched, found and adopted TWI. Was people development a founding value or one that evolved along the way?

Back to respect for people. Whether that means development of people like at Toyota or something else, what does it take for other organizations to get it? Perhaps love? Love is not an angle that from which we often approach this issue. The Loving Organzation - perhaps that could be a replacement for the unmentionable phrase of the month. It's certainly an appropriate place for this discussion.

Posted by Jon Miller at 9:22 PM | Permalink | Comments (2) | TrackBacks (0)

There is a new working paper by Michael Balle, author of The Gold Mine, that addresses how the Toyota Production System is in fact a learning system, using a hospital in France as a case study. The first page of the article contains a notice that it is a working paper and that quoting, duplicating or distributing without the author's permission is prohibited. So I will do none of that, but provide a link to the article.

The working paper and the work at this French hospital builds on the ideas of several other papers by consultants and authors of TPS. There is nothing new here per se in terms of process improvement tools or techniques and how they apply to hospitals, but that is not the point. The paper provides a good perspective of TPS as a learning system. There are a few good examples with photos and descriptions of problem solving, establishing basic stability as foundation for continuous improvement.

There are a couple of good quotes also, which I will not duplicate here but rephrase as I have heard them said. One is the idea of "making things is making people" at Toyota, meaning you must first develop your people before you can make good products. The second is that it's better to apply a 60% solution systematically rather than a 100% solution only sporadically. Another variant of this is "quick and dirty improvement is better than delayed perfection".

The article raises an interesting question about stability as a necessary foundation for continuous improvement, particularly for hospitals. This issue may be addressed later when the working paper is further developed, but it may not. This is the issue of workforce stability. At least in the United States the turnover of nurses is a serious problem in many hospitals. The shortage of nurses is exacerbated with the fact that the changeover of personnel at the nursing level can be high. This will get worse over the next 5 to 10 years as a large number of nurses who reach retirement age leave the workforce.

Papers like this one that raise these issues in general terms will certainly help hospitals who are attempting to implement the Toyota Production System get a better handle on what they need to do to succeed.

Posted by Jon Miller at 8:35 PM | Permalink | Comments (3) | TrackBacks (0)

I'm thinking of phrases to replace the one we are avoiding this month...

Contiunously Improving Operation, Rational Manufacturing, Intelligent Operations, Smart Production, Holistic Production, Adaptive Manufacturing, Non-local Optimization, Nimble Manufacturing, Organic Manufacturing, Demand Supply Execution, Flow Production, Customer Vectored Operation, Sane Management, Clear Stream System, Visualized Production, Operational Synchronization, Flexible Yet Rigorous Operations, People Process System, Streamlined Production, Harmonious Manufacturing, Full Day's Work, Linked Reflex System, Dynamic Positive Operation, Superlative Production System

...and this is probably a hollow exercise since all words are descriptions from a point of view, and all points of views are partial by nature.

So for now we will have to make do with the pair of "respect for people" and the 6-letter word "kaizen" which insures that whatever system you are describing it will be better than the last time you viewed it.

Posted by Jon Miller at 1:18 AM | Permalink | Comments (5) | TrackBacks (0)

Here's my understanding of one of the winning behaviors of Toyota, namely copying and improving on kaizen ideas that work. We'll call this yokoten since it's more precise than "copy" or "horizontal deployment" or "sideways expansion".

It's not a vertical (top-down) requirement to copy as Intel might deploy it in their "copy exactly" model. It's not a "best practices" or benchmarking approach per se. Yokoten is horizonal, or more peer-to-peer, with the expectation that people go see for themselves and learn how another area did kaizen. In yokoten at Toyota there is an expectation that copying a good idea will be followed by some added kaizen to that idea.

One thing that we often hear is that communication and exchange of accurate information horizontally in an organization is important. These would be cross-functional exchanges of information or across business units and value streams that may not have formal channels of communication.

Rather than waiting for the kaizen information to go up the chain of command where it can be sent back down to another area to copy or learn from, as I understand it Toyota people are encouraged to go see for themselves, and return to their own area to add their own wisdom and ideas to the knowledge they gained.

The role of the senior managers is to make people aware of the existence of these good kaizen examples so that they can go see for themselves, gain the knowledge and improve upon it further. Simply telling subordinates to copy it may be kaizen of a sort but it would not serve the second important aspect of the Toyota Production System, the respect for and development of people.

Posted by Jon Miller at 12:19 PM | Permalink | Comments (2) | TrackBacks (0)

To a person who is not "up" with the latest high tech terminology, a phrase like How AMD Bakes its 65 Nano Barcelona Cakes seems almost like nonsense. Giving near-nonsense a chance can pay off at times, and this article in technology journal The Inquirer contained a neat case study in two very different approaches to operational excellence taken by Intel and AMD.

Intel is the giant of the semiconductor world and AMD is the challenger chasing it. Being the incumbent with resources and market share, Intel dominates through momentum while AMD is more nimble. Says the article:

Intel has a strategy of copy exact. Basically, whatever the technology is, it is rolled out to the relevant fabs exactly the same way. AMD has a more "on the fly" approach and experiments in real time on the production lines.

Intel has many fabs, while AMD has one. Fabs cost billions to build, so neither firm is fab-building their way to operational excellence.

AMD has no luxuries, it has to produce stuff with what it has.

That's a great reason to do kaizen. In an echo of the definition of Just in Time and doing more with less, the manufacturing system called APM allowed AMD to [...]make only the chips needed and continuously tweak them. When your back is to the wall, and any mistake means death, you can do amazing things.

Describing the wafer manufacturing process like baking a cake, the article summarizes the difference between AMD and Intel as one in which AMD has the ability to make changes to settings during the baking process and perform experiments while Intel can not. The quicker, more flexible system that responds to feedback improves faster than a system based on scale. It's a classic case of the fast taking a bite out of the slow.

The article calls this an approach a "continuous small scale improvement program". I can spell it in five letters: kaizen.

The AMD operational excellence strategy lets them make what they need, when they need it in the right quantity (as much as their forecasting is "right"). The article says:

AMD claims it does not start a wafer without an order in hand, if you sell something before you make it, you almost never end up with depreciating parts in the warehouse.

Pretty impressive if their definition of an "order" is an actual paying OEM or end customer rather than something that exists in the production planning cyberworld.

This strategy of speed and flexibility for achieving operational excellence has helped AMD increase productivity by 31% and start 1,000 more wafers per week while lowering time through the process. Stock has fallen 40% also according to the article.

Intel didn't get to be as successful as they are by doing production poorly. But that it doesn't matter how good you are. Time flows and how fast you can improve is the key to survival. Intel's operational excellence strategy of "copy exactly" would be excellent if what you was copied had been through kaizen recently.

Posted by Jon Miller at 12:20 PM | Permalink | Comments (5) | TrackBacks (0)

I'm fond of the 80-20 principle. Any time an understanding of statistics, laws of physics or human biology can make day to day decision making easier, it's a welcome thing. The same is true in applying the 80-20 rule to kaizen.

For what it's worth, and in a completely unscientific manner, I've found these things to be true:

20% theory, 80% gemba
Limit the time spent in the class room. Avoid overuse of PowerPoint. Keep training interactive and hands on. Make your base of operations on the shop floor (gemba) and spend most of your time there. Find the wastes, listen to the people who do the job, and make physical changes.

20% thinking, 80% doing
If you're spending more time thinking than doing during a kaizen event or the "do" phase of a kaizen project of longer than a week, you probably haven't scoped the kaizen project properly or done your homework in the appropriate Toyota Production System tools or kaizen methodologies. More time spent on theory or more time on the gemba collecting the facts may help.

20% kaizen week, 80% preparation & follow-up
If you think the kaizen week itself is where most of the work is, think again. Preparation and follow-up are the make-or-break factors for kaizen activity. Proper logisitics planning, making arrangements, defining a scope and objectives, collecting the data and making sure the team is free of interruptions are all key. And of course even though you might get 80% of the new condition implemented during the week, the remaining 20% of the kaizen ideas need to be complete before you star the next project.

20% of the remaining action items will take 80% of the completion lead-time
This is a very useful thing to remember when planning resources and completion dates, creating project timelines etc. to clean up remaining action items and bring the new condition after kaizen to a high level of completion. Once you recognize this you'll be able to load up on more resources to get the critical path items done and out of the way sooner, speeding up the total implementation.

20% celebration, 80% reflection
In order to do kaizen right you have to celebrate your victories over waste. You need to make it fun. Beware not to let this get out of hand, or start doing kaizen presentations and celebrations for the sake of the free pizza. Take time at the end of every kaizen to ask "what worked and why?" and also "what can we do better?" If you're not too giddy from the celebration, try to convince others that now things are actually worse than ever.

Also keep in mind that 20% of the team members / managers will require 80% of your attention during kaizen or any time of major continuous improvement initiative. I could go on but it's late where I am.

Posted by Jon Miller at 3:01 PM | Permalink | Comments (5) | TrackBacks (0)

One of the expressions I've come across working with and reading the writings of Toyota people is "Protect your own castle" 「自分の城は自分で守れ」. You could also say "You are responsible for protecting your castle." At first this sounded like a bit of common sense advice on taking personal responsibility until I checked with one of my teachers one day and he corrected my understanding.

Like in many companies, Toyota will send people to assist a department that is struggling to keep up with the workload or having problems. In this situation would you send the best performer from your unit to help? Would you send your worst performer? Someone in between?

At Toyota the idea of "Protect your own castle" means sending the best performer to another department to assist. The result of this is that the remaining team is "weaker" if you will, and they all need to band together, come up with ideas and "protect their own castle" during the absence of their best performer. In this way it creates an opportunity for people to develop their skills.

In the long view, sending the best performer probably solves the problem quicker and reduces the impact on other departments (since we are all serving internal and external customers) so that you prevent the negative spiral that can happen if problems persist too long.

In addition, the department that receives the help from your department will be glad to return the favor in the future and send their best performer to help you. This is quite a different way of thinking about management and problem solving than the typical approach where everyone is looking after their own interests. Instead of a silo or stove pipe mentality of doing what's best for my department it creates a flow-oriented or value stream mentality of doing what's best for the overall process all the way to the customer.

Posted by Jon Miller at 3:47 AM | Permalink | Comments (5) | TrackBacks (0)