Gemba Panta Rei

As Taiichi Ohno said "Check is hansei" when referring to the third step of PDCA. I am doing hansei on the previous blog post on the topic of hansei. I did not think deeply enough about what "hansei" means and what "reflection" means. The more I use the word "reflection" to refer to the Toyota habit of hansei the less adequate it seems.

As a native speaker of English, "reflection" strikes me a a very intellectual exercise. Reflection is when a person considers past experiences or events and the impact they had. After reflection you could say "Hm. That's interesting." But still remain wholly unchanged.

"Han" means to change, turn over, turn upside down. "Sei" is the simplified form of a character meaning to look back upon, review, examine oneself. As a native speaker of Japanese "hansei" strikes me as both an intellectual and emotional exercise. With hansei there is a sense of shame, if that is not too hard of a word. This may come from having been asked to do a lot of hansei as a child, being told "hanse shinasai!" which in English might be "Learn to behave!"

The point is, when you do hansei it is almost never because you are "considering past experience" as if they were happy memories. You are confronting brutal facts about your actions and the impact they had, in hopes that you can learn from this and change your behavior in the future.

In fact, Toyota does hansei even when things go as planned (things go well) but even then they are asking "why?" as if there was something wrong. In fact, there is. At Toyota they say "no problem is a problem". So when doing hansei you must look for the bad.

This reminds me of a story of a North American we'll call Rob working at Toyota in Japan in a marketing function. He told us how his bosses were always asking him "How can you do better next time?" each time he completed a project. "It's like your work is never good enough." Rob said. Then after reflecting for few moments he said "Wait, maybe my work isn't good enough." Uncomfortable laughter filled the room.

Hansei meetings are fairly common in Japan at the end of a project. Where people in the U.S. or Europe might celebrate the completion of a project with an office party, and maybe PowerPointing some lessons learned, the Japanese would have a somber hansei-kai and then drown their hansei sorrows in drink.

Toyota takes hansei to another level by making an explicit part of their day to day management process. This also makes the end-of-project drowning of hansei sorrows less necessary, since you are doing one-piece flow hansei rather than "batch hansei".

So if you want hansei to work for the people in your organization I would strongly suggest that you stop referring to hansei as "reflection" in English. Perhaps "repent" would be a better word., or "learn to behave!"

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What is the ROI (return on investment) of an open office? That was a question some while back by a reader on this blog about to take the leap and convert their office to an open format. It went unanswered (apologies) and I was recently reminded of it. There are several ways you can answer this question.

The standard answer to the question of the ROI of an open office is that an open office saves space, improved productivity as more people have access to information and know what needs to be done. It's knowledge work, after all. There are typically savings in inventory and equipment as office 5S takes a big step forward. The biggest savings may be in quality improvement.

Without doing an assessment of the current condition, setting KPIs and then measuring the after kaizen it's hard to say exactly what your ROI will be. But this is short-term thinking anyway. If you're going to go to an open office you have to do it because you believe it's the right thing to do. It's the right thing to do because the open office makes problems visible.

Visible problems can be addressed before they get to be bigger problems. This is one good reason to move to an open office. On the other hand, if your management culture is to bury newly exposed problems or punish those who exposed them, the open office can result in temporary pandemonium.

Who, other than crazy Lean consultants and true-believer Lean enterprises, are actually doing open office layouts successfully? Let's check with Michael Bloomberg, billionaire entrepreneur and founder of the financial news and information company that bears his name. The October 1995 Fast Company article titled The House that Bloomberg Built starts out Michael Bloomberg's offices are designed to promote pandemonium with a purpose.

Pandemonium is the capital of Hell in John Milton's Paradise Lost. Pandemonium is a chaotic, lawless place. The word was coined by Milton from the Greek pan for "all" and daimonion meaning "evil spirit" or demon. In an open office all of the demons come out. All of the problems become visible. This is a very good thing.

The Lean office behavior of visual management and immediate action to resolve problems requires preparation and change management since chaos can create stress in people. That is not the goal of the open office, but an unintended consequence that must be designed out of the process of converting to a Lean office.

Here is Bloomberg's philosophy:

"The best way to get it faster than anyone else is to create an environment of constant creativity. You have to turn up the volume, make people a little uncomfortable."

Bloomberg's whole office, from the entrance to the elevator to the spiral staircase tot he food court is designed to promote information transfer. The average space per employee is 4 square feet. Inspiring, if a bit extreme. From the article again:

"I like to see people brimming over with ideas, all over the guy next to them," Bloomberg says.

The article warns against copying another company's floor plan or office format. It is important to understand the thinking behind it whenever you copy a Lean idea, so that in the article's words the office space can embody the "spirit" of your enterprise. In a Lean office this means continuously improving and learning by stopping to solve problems when they are first found.

If the best way to deliver great customer service, develop great products, build great teamwork, and generate superior growth and profit is to build walls around people then that's what you should do! The whole point of kaizen is to test a new method to see if it helps get rid of waste. If it doesn't, keep changing it until it does.

A decade later, Michael Bloomberg is the mayor of New York City but the his company still has an open office. From the March 23, 2006 Money.CNN.com article The Corporate Beehive: Use office design to keep the queen in touch with the worker bees (you will need to follow the link, click on Photo Gallery on lower right, hit the HR tab, and then "1" to get to this article):

Modeled after the trading floors where founder Michael Bloomberg got his start, the building is a wide-open expanse of workspaces devoid of private offices and cubicles. Even the conference rooms have glass walls.

CEO Lex Fenwick sits among 125 sales and customer service people. His words from the CNN.com article:

"I know quicker than any piece of damn software when we have a problem. I can see it right in front of me when it happens," Fenwick says. "I watch the phone calls; I see the stress level on faces. Someone can look at me and say, 'We've got a problem.' What does it allow me to do? Get on someone to fix it in seconds. The communication this setup affords is staggering."

In short, the Lean office should be modeled after the qualities that make any process Lean: making problems visible and enabling gemba kaizen by everyone, not just a small team of improvement experts. If what works for your factory is walls between customers and suppliers, functional departments on different floors, individual managers and supervisors in corner offices rather than among the people they are supervising, this might work for your office also. But how would you really know? Just as there is "the hidden factory" within a manufacturing operation, you may be working in, but not see "the hidden office". Unless it's an open office.

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Kent Bradley from Gemba handed me a Dilbert cartoon yesterday poking fun at Six Sigma. Here is the script:

[Point-Haired Boss standing next to "SIX SIGMA" slide] Our company has decided to try something new.

[Dilbert] New? Six Sigma was developed in the 80s.

[Point-Haired Boss] It's new to us.

[Dilbert] Why don't we jump on a fad that hasn't already been widely discredited? That way the false hope might sustain us.

[Point-Haired Boss] There's nothing wrong with Six Sigma. All it does is reduce defects!

[Dilbert checking hand held device] Let's see... Fortune magazine says... Blah, blah... Most companies that used Six Sigma have trailed the S& 500.

[Ashok] Sorry I'm late. What did I miss while I was innovating?

Hilarious, yet painful. And so cynical. Sadly, Scott Adams could replace "Six Sigma" with "Lean manufacturing" in 18 to 24 months and this cartoon would work just as well. The moral of the story is that the Pointy-Haired Boss is right. There's nothing wrong with Six Sigma. It's the people who use it and how they use it that create disillusion. Don't laugh at this Six Sigma cartoon without first reflecting on how you're using Lean manufacturing.

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Kan Higashi was President of the NUMMI company, the joint venture between Toyota and GM, when it was started two decades ago. In the October 16, 2006 issue of Nikkei Business (a Japanese magazine) Mr. Higashi shares his insights in a short article titled The Toyota Way is Total Company Discipline, Partial Learning is GM's Failure.

Mr. Higashi says that in the beginning Toyota feared that GM would learn the Toyota way and catch up quickly. But clearly this is not the case if you see the performance of these two companies in the market today. Mr. Higashi gives a lot of credit to the workers and the GM management who worked to make NUMMI a success, but also says that ultimately the philosophy that "the gemba is important" never spread across GM.

Mr. Higashi credits the efforts of Jack Smith the former Chairman of GM but also criticizes the elitism at GM, including the resistance by executives to such behaviors as wearing work clothes (uniforms) in the factory, rarely going to see the production lines, indulging in luxurious executive lunch rooms, company cars and private offices.

Mr. Higashi explains:

The Toyota way is not only the productivity improvement activity in the factory. What is important is that everyone from the factory to the corporate headquarters all work towards improving quality and efficiency with the same thought process. I think of it as "discipline". Unless discipline is taught from the top people at corporate headquarters, it will not take root as a company culture.

He says it is the constant searching for further areas where kaizen can be done by everyone from the gemba to the executives that creates an "awareness". There is a great quote by Mr. Higashi at the end of this article:

In my six years of working at NUMMI, I was made aware of many things by honestly listening to the voices of the American workers. When they gave me their frank opinions, first I had to humbly accept them. Strength grows from such a position of humility.

Stop the line. Gemba kaizen. Standard Work. Those are some of the things Toyota taught GM at NUMMI. Strength grows from humility. That's what the Americans at NUMMI taught Mr. Higashi from Toyota. Who got the better deal on that exchange?

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Taiichi Ohno begins the chapter by saying "We think of production engineering and manufacturing engineering as distinct things. We distinguish manufacturing engineering as the work to determine the method of manufacturing and production engineering as how to actually accomplish that method of manufacturing."

Ohno uses the example of a scissors to make this distinction. The work of manufacturing engineering is to think of how to use a scissors to cut things effectively, while it is the work of production engineering to recommend the right type of scissors for the cutting to be done. In some cases production engineering will research and develop the appropriate scissors. Without manufacturing engineering however, the scissors could not be put to proper use.

The literal translation of the title of this chapter (see above) could also be The Difference Between Industrial Engineering and Manufacturing Engineering. Production Engineering　（生産技術） in Japanese is also translated as Industrial Engineering, which the Japanese (including Taiichi Ohno) sometimes refer to as simply "IE". But I think there is more to Production Engineering than Industrial Engineering as we know it, so I will leave the title as you see it above.

The word gijutsu （技術）can be translated as "engineering" or "technology" or "technique" in some cases. So the title could also be The Difference Between Production Technology and Manufacturing Technology, but in the English "technology" tends to imply the hardware and software rather than the thinking process to get you there, as "engineering" does. This is an important distinction and we need to spend a few moments understanding the nuances here.

When I first began interpreting with the Shingijutsu consultants 13 years ago, one of the most common questions by these former disciples of Taiichi Ohno and members of the Toyota Autonomous Study Group, after touring the gemba of an American company, was "Where are your Production Engineers?" They saw very little evidence of Production Engineering at these companies. They were not talking about the machines and processes, but the thinking that led to them. This is true in many U.S. manufacturers even today.

Because they were not asking for the IEs (Industrial Engineers) and because I wanted to stay true to the nuance of the sensei's question, I would ask for the production engineers, and we would most be introduced to the manufacturing engineers. In some cases we would meet product engineers, industrial engineers, process engineers, but never production engineers. The Shingijutsu sensei would shake their head and bemoan the lack of production engineering (industrial engineering, equipment design and process design). I have yet to meet a production engineer outside of Japan. I am sure they exist. Holler if you are one.

Back to the book.

Just as computers have hardware and software, Ohno explains that they have been thinking seriously for many years about the differences between production engineering and manufacturing engineering.

Ohno stresses the importance of manufacturing engineering for making kaizen more effective. "We used to call manufacturing engineering "gemba gijutsu" (shop floor engineering or plant engineering)."

Taiichi Ohno relates a story from one of his trips to the U.S. in the 1950s when a plant engineer with the title of "General Plant Engineer" took him on a factory tour. Ohno was impressed by how this person knew what was happening in the gemba, and how easily he communicated with the foremen. Ohno says that he would like to think of the manufacturing engineers at Toyota as plant engineers (with some implication that they are not) and warns against the separation of production engineering from the gemba (factory).

The production engineer must be close to the gemba and understand the process and develop the tools and equipment needed. Ohno tells of how he was disliked by the production engineers at the Toyota Motor Corporation for calling them "catalog engineers" because they would point to equipment in catalogs and ask to buy them rather than developing their own equipment.

"Within a company, production engineering and manufacturing engineering really ought to be a single body." In calling for the integration of both manufacturing engineering and production engineering, Ohno wants both to be closer to the gemba and focused on kaizen. He says that the ideal state is when material selection, equipment design, process design, process improvement, equipment kaizen can all be the work of manufacturing (gemba) engineering.

"This is a most important thing, but people who don't get it just don't get it."

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Reflecting on this Thanksgiving holiday, I have a lot to be thankful for but I am dissatisfied. It has been a challenging year in many ways, both personally and in business. I am thankful that there are so many problems in front of me that need kaizen. I am dissatisfied with myself in that some of these problems are making a second appearance.

I am thankful that I know about kaizen, and that personal and professional integrity requires that I do something about the problems before me. I am dissatisfied at my level of integrity, as it is clear to me that I am clearly not doing enough kaizen in either area.

Some people say "you should be thankful because..." and then proceed to make a comparison between how things are now and how things were in the bad old days, implying that you should stop complaining. It is particularly disappointing when Lean people like Mark Garnder at the TPM Log do this. That's a half-step away from complacency. Complain about the status quo, and then do what you can to fix it. Things get better when enough people speak and act.

Even after kaizen things are still "the worst ever" if you have a kaizen mindset. For some people in the world the perceived reality is not far from being the worst it has ever been. If you perceive that things are going great for you, be very thankful, but don't linger on it, but instead be dissatisfied. Good or bad, things have a way of changing.

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Gary Convis is the senior vice president of manufacturing in North America for Toyota Motor Corporation. In a November 20, 2006 article in the Lexington Herald-Leader titled New Tundra Plant Just Shows that ... Toyota Keeps on Trucking Mr. Convis shared how he communicated to employees what work life at Toyota was all about.

"There's only a couple of ways you get in trouble at Toyota," Convis told employees. "One, you don't come to work. And two, you don't pull the cord when there's a problem. ... Those two things get you in trouble. Anything else, we'll train you."

This simple statement has deep roots. I would go as far as to say that if you can say and mean the paragraph above, you will succeed at Lean manufacturing. Let's examine the two ways you get into trouble with Mr. Convis:

One, you don't come to work. I interpret this to mean more than showing up to work instead of calling in to take Friday off because it's a sunny day. It means coming to work willing to put in a full day's work rather than just punching the clock and filling space until 5 minutes before quitting time. It means having a desire to understand and follow Standard Work. It means asking "How can I help?" and then giving your time, ideas and resources to getting the job done right, and making it better.

And two, you don't pull the cord when there's a problem. It's not acceptible to let things slide. Don't see a problem and walk away. Alert your supervisor to the problem as soon as you find it. There are no exceptions. Even if it means stopping the work you are doing and possibly stopping the work others are doing, it is important to "pull the cord" that identifies the problem.

Lean manufacturing often doesn't work for companies because Just in Time systems are implemented or inventories are reduced without the underlying process problems or human behavior problems being addressed first. This is alright only if the organization has the will and ability to respond to "pull the cord" situations right away. Without this ability to stop and fix, the response is "Lean doesn't work for us" and the build up of inventory (or other types of) buffers again.

Anything else, we'll train you. This is equivalent to saying "We have Standard Work. All of our processes are specified for timing, sequence, and outcome. Everything has a place. Everything is visual. We check everything. And we'll explain all of this to you." How many employers can say that?

Successful companies that reward brilliant people to perform heroically within broken processes and systems, or that follow a lowest-cost labor strategy may find it difficult to invest in developing people who would know how to stay out of trouble with Mr. Convis.

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One of the things that keeps Lean manufacturing from being boring to the amateur linguist is the many odd-sounding words that make up the Lean lexicon. Kamishibai. Heijunka. Pareto. Yamazumi. Takt. Andon. Jidoka. Kaizen. Pokayoke. Gemba. And don't even get me started on the acronyms.

Then there is this thing called the Water Spider. The Water Spider position is often confused with a simple material handler or an entry level "go fetch" person. Far from it, the Water Spider needs to be thoroughly familiar with the materials, tools and methods of the process they are supporting. My teachers used to say the Water Spider role was a "right of passage" to becoming a supervisor. The Water Spider is an honored and critical role in making continuous flow and a smoothly functioning Lean system a reality.

But what's in a name? Why Water Spider? People often think this word comes from the insect that skims the surface of the water (water strider) but technically this is not correct. The water spider is the beetle that moves about inside the water, not on the surface. What makes this confusing is that the word "mizusumashi" in Japanese at times refers to both.

A good way to remember this is that while the water beetle dives into the water (dives into the process, gets close the the cell, even goes into the cell to do occasional relief work for operators) the water strider skims across the surface and does not go under the water (close to the process). The Water Spider in Lean manufacturing must be intimate with the process or cell they support, not just a pick-up-and-drop-off material handler.

Who cares? Is this distinction important? Why are we talking about beetles?

The similarity between the Water Spider (the person who moves about the factory or assembly line) and water beetle (swims under the water) was explained to me as how they move in the water or move about the factory. This explanation by itself might lead to the misunderstanding that the Water Spider is a typical material handler.

But here's another theory. Water spider is “mizusumashi” in Japanese. This is written phonetically as みずすまし or in kanji script as 水澄まし. The word literally means "make water cleaner" or "purify water". I don't know if this little beetle actually cleans the water or not. You would have to ask an entomologist. The water beetle does have little broom-like fibers on its rear legs, so perhaps that's how it "cleans the water". Or perhaps it was noticed that water spiders only lived in the clear water so they were given credit for making it clean.

If we suppose that the water spider (beetle) makes the water clean or keeps it clean, the water spider (human) also keeps the flow in the factory or in the flow line clean and smooth by taking on the occasional tasks (tasks that do not happen every cycle, such as material replenishment or making shipping containers). A clear process flow and defined work sequence (clear flowing water) is also a requirement for designing the workload of the Water Spider position.

So let's have a look at these little clear water bugs. They look a bit like cockroaches so don't follow these links if you are squeamish. Here is a glossy black water spider swimming in the water. Here is a more colorful water spider posing for the camera. This water spider is resting (cockroach alert) on a piece of wood sticking out of the water.

Mike Wroblewski at the Got Boondoggle? blog wrote a great entry a while ago about his personal experience doing the work and doing kaizen of the Water Spider job. Check it out.

The Water Spider role is very important and there is a lot more that could be said about the Water Spider in Lean manufacturing, but perhaps another day.

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Earlier this year I heard the term kamishibai (紙芝居) used in the context of the Toyota Production System for the first time from a Canadian former Toyota manager during a LEI seminar. At the time I thought it was a gratuitous use of a Japanese term for a visual management storyboard in the factory but it seems there's more to it than that.

Looking into the origin of kamishibai it was interesting to learn that the paper theaters of my youth were in fact 12th century Buddhist moral dramas for the illiterate. The audience of the kamishibai could conduct a "self audit", if you like, and learn from the visual presentation whether they were living their life in a moral way.

(A meaningful pause here to contemplate the implications of kamishibai for modern management.)

In the modern day, pre-literate children are told stories or taught important lessons like this one from Toyota on traffic safety titled "Papin and Tirol Go Fishing".

Image source: Toyota website Accelerating Environmental Initiatives as Global Toyota document

In TPS Kamishibai are 21st century equivalent of audits of the kaizen culture. Kamishibai cards are like cue cards or work instructions for auditing a process. Here is an example of a card used in the kamishibai process.

Image source: same as above

If you're familiar with TPM (Total Productive Maintenance) you can make an analogy. Think of kamishibai as Autonomous Maintenance (daily, weekly, monthly checks) performed by the different levels managements and instead of checking places on the machines you are auditing places in the factory, production cell, environmental procedures, etc. Kamishibai prevents "breakdown maintenance" of the Lean system itself through audits, just as in TPM the regular equipment checks prevent machine breakdowns due to machines wearing, overheating, etc.

The kamishibai board is a visual management tool like hour by hour production status boards are for supervisors and line managers. If hour by hour boards are used during the shift and on an hourly or bi-hourly cadence, kamishibai boards are used for weekly, monthly and even quarterly audits.

The kamishibai audit items are placed on a visual board near or at the point of inspection. If a card has not been turned over to indicate "complete" it is obviously an abnormality. Just as taking corrective action based on an end of shift production report is not Lean behavior, auditing based on a book or instruction manual on a bookshelf is not Lean behavior. Kamishibai builds in the genchi gembutsu principle to audits.

The standardized approach of the kamishibai board and audit routine minimizes difference between the individual preference, style or attention to detail between managers. This reduces variability in outcomes of audits between different people. It is another example of Toyota building brilliant processes that anyone can perform flawlessly rather than relying on brilliant people and hero behavior to get things done.

The kamishibai boards also focus the attention of the management on the gemba. In order to do your job properly you need to go to the gemba, go to the boards, take the cards, and follow the instructions. It's quite humbling when you think about it. The kamishibai process standardizes and prescribes the weekly, monthly and quarterly "standard work", if you will, for managers to check and audit. How many directors and VPs of manufacturing in North America would gladly arrange their schedules around making that trip to the kamishibai board?

Here is a link on the Toyota website to a PR piece titled Accelerating Environmental Initiatives as Global Toyota. Page 7 of this article talks about the environmental kaizen efforts and demonstrates the use of the kamishibai process for audits at TMMWV (Toyota Motor Manufacturing West Virginia).

Kamishibai as part of the Toyota Production System clarifies the 5W1H (who, what, where, when, why and how) for auditing and then places the cards on a visual board. Part of the management routine in a Lean organization is to audit existing standards so that any deviation can be addressed and kaizen action is taken. The kamishibai is a way to make adherence to this process visual on the gemba.

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I've said again and again that complacency and being satisfied with the current condition are anathema to kaizen. The article in Fast Company December/January 2006 issue titled "No Satisfaction" is excellent.

Here are some highlights and big ideas from the article:

Restructure a little bit every work shift rather than painfully every few years. Do heijunka with your kaizen, aim for 1% improvement per month rather than 15% per year.

Apply the people you liberate through kaizen to further kaizen, rather than short term cost savings (staffing reduction). There is a great example of this from the paint shop at Toyota Georgetown.

Make things. Make things better. Teach people how to make things better. Make the process of making things better, better.

Words of Mr. Cho to an American manager: "We all know you are a good manager, otherwise we would not have hired you. But please talk to us about your problems so we can all work on them together."

Understand the standard, then suggest an improvement.

Work is improvement, improvement is work. And this zen-like pronouncement from professor, author and consultant John Shook:

"Once you realize that it's the process itself--that you're not seeking a plateau--you can relax. Doing the task and doing the task better become one and the same thing," Shook says. "This is what it means to come to work."

Read it, share it, think about it and be dissatisfied in your work.

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Here are the top five things learned after a productive week in China:

1. You can't overstate the value of respecting another's culture
I gave my rudimentary Chinese a workout this time and the results were interesting. Doors opened more smoothly. Services were rendered more quickly. Smiles appeared on the faces of people making $8 per day. Black car drivers didn't gouge as hard (southern China excepted). Respect for people starts with respect for the person immediately before you. This is true in factories, offices, families or in visiting foreign countries. Observe simple courtesies. Take interest in people, their customs and their language. Remember that we're all in this together.

2. Even at 10PM people will stand in line for 45 minutes for $15

What fascinated me about this was that travelers at Hongqiao airport in Shanghai, from various nationalities, economic classes and ages, all preferred to wait in line late at night for a 32 RMB ($4) taxi ride rather than pay the 150 RMB ($19) being asked by the unlicensed "black car" taxi drivers. Not all of us needed that $15. Some of us could have used the 45 minutes of extra sleep. Was this herd behavior? Do humans have a natural tendency to queue? Perhaps it was on principle, to avoid the black cars than to save $15 (the black car drivers in China - except southern China where they are to be avoided - are the friendliest in the world). What was my reason? Curiosity.

3. Many URLs with "blog" in them are hard to access here
This is no doubt due to the Chinese firewall blocking unmentionable political or religious blogs written by disaffected Chinese people and hosted by Blogger, Blogspot etc. I bet a certain North American political party wishes it had had similar powers prior to a recent election.

4. Eight hundred million people making $400 per year or less can't be wrong
Everyone here seems to be working hard to improve their lot, seven days a week. This is evident in the hours people put in and the patience and persistence they show in their effort to make a buck. Even the best educated people with the best jobs in multinationals who speak English and Chinese who would seem to have it made are taking training, practicing, improving. You don't see a lot of complacency. The lounge of the Ritz in Shanghai is not a "loungey" place. The local people there are not lounging around comfortably. They are improving their lot, or talking about it with others, or scheming about it, or reading about it. When people are given a clear vision for how to improve their lot (hard work), the society is dynamic and there is positive sense of urgency. When this is lacking or when people are paid basically to exist, society stagnates.

5. How not to travel with a computer

This is what happens when rapid development (rising income in China) and Moore's Law (dropping price of computing) meets a lack of clear standards in air travel.

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Genchi gembutsu means that in a Lean organization improvement must be done at the closest point to the value-adding workplace (gemba) following the scientific method based on facts. I've liked genchi gembutsu and management by fact (as opposed to management by statistics) since it is easier to find the root cause when you observe and catch the defect in the act of happening. Facts are observable in real time, while statistics require a bit more patience. And as Mark Twain said, "Facts are stubborn, but statistics are more pliable."

I got a good reality check from a Six Sigma Master Black Belt who was attending one of our Lean master classes last month. In the case of the true root cause being in the design process rather than at the point of occurrence, Six Sigma type of analysis and problem solving via Design of Experiments becomes necessary.

A cosmetic defect (why?) caused by a tool contacting the finished surface (why?) caused by the awkward angle of screw tightening with said tool (why?) caused by the inadequate method design using the existing standard tool (why?) caused by the part design (why?) caused by the design of the mold cavity used to make the part (why?) led to a discussion with designers on various fluid dynamic properties of polymers and cetera. Genchi gembutsu doesn't cut it at this point, in comes Six Sigma.

Six Sigma level quality may not be technically necessary to have a thriving Lean implementation. Five sigma or even four sigma may be sufficient if it is predictable and stable at those levels. You can flow and pull around stable quality, even if it is not high quality. Zero defects is the goal and effort should be directed towards it. In this sense the ultra-Six Sigma culture is essential for a kaizen culture.

Hypothesis testing using the PDCA cycle and "try-storming", if you will, is essential to kaizen. Six Sigma is also built on hypothesis testing through manipulating data into actionable information. The Six Sigma approach when combined with Lean thinking helps answer the questions "Do we have a problem or is this just variation that is part of the distribution?" and also after making improvements "Is it really probable that something has changed or is it just chance?"

The best of the Six Sigma people I have met described Six Sigma not as a set of tools or methodology but as a culture, a way of thinking. Six Sigma is not only for improving quality just as Lean is not just about reducing waste. Lean is also more a way of thinking and behaving than a set of tools or methodology.

What we mean by kaizen is the type of continuous improvement approaches based on values and practices such as "go see", total involvement, small-practical-immediate action and the scientific method. Some kaizen events I've observed have failed to follow all of these. Some Six Sigma work, and even projects done with no particular brand of continuous improvement methodology, but working based on these values I would call kaizen. Kaizen is a spirit and Six Sigma is essential to it.

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Nobel prize winner and Chicago school free market economist and author Milton Friedman has just passed away. The impact of his ideas are huge. It ranks with the impact of the ideas of Henry Ford and Taiichi Ohno.

Like Ohno and Ford, Friedman was uncompromising in his ideas. To follow the prescription of his free market ideas, as when you follow the prescription of Lean manufacturing, is to make a more effective economic model but one that is often accused of leaving people without employment. As I read the November 17, 2006 front page article Wall Street Journal on Milton Friedman's passing, I am seeing the Lean in Milton Friedman's ideas.

Just as push in manufacturing results in waste, government push results in waste. Push should only be attempted when pull needs to get unstuck. Sometimes there is no clear demand for a new technology and a push is needed to get it out on the market. Sometimes governments need to take on large-scale programs that the private sector have neither the vision nor the coordination to undertake (thinking of an example here is harder than I thought - perhaps putting a man on the moon?).

Milton Friedman advocated reducing the money supply to control inflation. I see this as the same principle behind limiting overproduction and inventory. The extra flow of money creates more activity resulting in a feedback loop that raises prices. The overproduction of material or information creates a feedback loop that raises costs. Both are waste.

Friedman's research on the "permanent income" theory is an interesting in that it suggests that people practice heijunka or "smoothing" in their spending habits based on expected long-term incomes. While this might sound like a good thing, the flip side of this type of consumer behavior is that it is based on a forecast of income and you know what they say about forecasts.

Ronald Reagan quoted Milton Friedman as saying "When you start paying people to be poor, you wind up with an awful lot of poor people." Likewise, when you start paying people to be stupid, you get an awful lot of stupid people. Most of us may not think we pay people to be stupid but when we do not pay people to actively think, to question, to learn and to improve, we are in effect paying people to be stupid. Engaged and empowered people will be the customers and suppliers in the free market of good ideas.

Milton Friedman helped shift economic thinking from government intervention to free markets, just as Henry Ford and Taiichi Ohno helped shift production thinking from batch and queue towards flow and pull.

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If Lean for Toyota is "kaizen and respect for people" we need to spend some time understanding what makes people work as well as what makes kaizen work.

To that end, there are some very interesting findings at the Psychology Matters website. The results of the research on a group of New York City seventh-graders suggests that Believing You Can Get Smarter Makes You Smarter.

From the research summary on Psychology Matters:

Thinking about intelligence as changeable and malleable, rather than stable and fixed, results in greater academic achievement, especially for people whose groups bear the burden of negative stereotypes about their intelligence.

Simply telling people that they can get smarter helps people get smarter. By the same token, simply telling people that they can get Lean will help make them Leaner.

The research summary asks:

Can people get smarter? Are some racial or social groups smarter than others? Despite a lot of evidence to the contrary, many people believe that intelligence is fixed, and, moreover, that some racial and social groups are inherently smarter than others.

Despite growing evidence to the contrary, some people believe that Lean really does not apply to their industry, their culture, their region or some other particular unique characteristic. Are some nations or some types of industries inherently more capable of improving their performance?

Nonsense. It's all between your ears. This is why having the kaizen philosophy is more important than having a combined PhD in Industrial Engineering and HR Development.

These are things you can tell people to help them believe they can get Lean, and they will actually get Lean:

- 5S your area and your productivity will increase by 30%

- Give me one practical improvement idea per month and I will help you implement it

- Observe any process for 10 minutes and you can find 10 small things to improve

- Practice makes perfect

- Share your work with someone and you fill finish it more than twice as fast

You can quote me on these.

My father taught choir for many years. He once told me how he was able to help a singer hit a high note even though the singer insisted he could not sing such a high note. My father did this by first telling the singer it was possible and then guiding him note by note. Yet the singer was angry at my father when he learned that he had hit an "impossible" high note.

This reaction may seem odd, but it's one I am familiar with. Sometimes peoples' perceptions about who they are and what they can do is more important that what they can become. Who they are is the result of the years of effort, learning and achievement (or simply living). To have a teacher tell them and show them they can do better can harm a person's self-image. "You've mean I've been doing it the stupid way for 25 years?" is not an uncommon reaction.

In my early days of consulting many factory managers twice my age had a problem when I helped them sing at a higher note than they though was possible. Most people say they are in favor of improvement. Yet few people actually want to be changed. This is also why believing you can get Lean makes you Leaner. It's you that's getting Lean, not me that's making you Lean.

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Like many companies, we make a lot of improvements each month at Gemba. We don't always think to write them down or celebrate them. We will "kaizen the kaizen" by writing them down in an effort to be more mindful about the wonderful kaizen ideas that we all have and implement. In order to celebrate these and stimulate more ideas we will document and post the "kaizen of the month at Gemba" from now on this blog.

This first one is a great office kaizen example, courtesy of Marcie our Office Manager.

Expense Reporting Kaizen
By Marcie MacRae
11/2006

Every Office Manager dreads processing Expense reports and I am no exception. Keeping track of consultants who may be in Mukilteo one day and Mumbai the next is tough enough. Keeping track of their expenses just makes it more challenging. So I made it a goal to try to knock as much waste out of this process as possible. Now my expense reporting is a lot more user friendly for both players – me and the consultants.

The Old Process: Before Kaizen
1. Consultants would collect all of their receipts while on a trip. Upon arrival back at the office they would take these receipts and put them into a detailed expense report. This could take them anywhere from 15 minutes to a half an hour (more if a receipt was misplaced). They would then give it to me to review.

2. Go through all the receipts and make sure that they are listed on the expense sheet properly. This step is needed because some consultants are better than others about keeping receipts (5-10 minutes).

3. Double check the expense report heading to make sure it was filled out correctly (3-5 minutes).

4. Enter in all of the credit card charges (5-10 minutes).

5. Create a check for the reimbursable charges (3-5 minutes).

6. Create an invoice – list the amount charged for expenses (3-5 minutes).

7. Tape the receipts onto blank pieces of paper (5 Minutes).

8. Copy or scan in those receipts to attach to the invoice and mail (3 minutes).

9. Obtain approval on the expense report and file expense report (2 minutes).

On a good day this process took me 25 – 45 minutes hands-on time. Some days, especially if I had to return it to the consultant to correct, it could take me up to a week to complete.

The TOTAL LEAD TIME: 40 minutes to a week.

This had some serious drawbacks, employees would not be reimbursed in a timely manner, invoices were not created in a timely manner and my inbox got really full.

After much thought and a little technology, I have an easier method: After Kaizen

1. The consultants obtain an envelope before they go on their trip. They put all their receipts in there; they fill out the header on the envelope. This takes them about 5 minutes total.

2. I scan the receipts into my NeatReceipts, this calculates the totals of the receipts, I can create an expense report for the invoice, an import file of credit card charges for my QuickBooks and a reimbursable amount for my consultant (5-10 minutes).

3. Create an import file and download credit card charges into QuickBooks (30 seconds).

4. Create a reimbursable expense report and write a check for employee. Attach report to envelope and close with receipts (1-2 minutes).

5. Create the invoice, attach the NeatReceipts report to that, this has a copy of the receipts, mail or e-mail (1-2 minutes).

6. Obtain Approval and file expense report (1-2 minutes).

Total hands-on time: 14-20 minutes!!

TOTAL NEW LEAD TIME: 14-20 minutes!!

Percentage reduction in hands-on time = 44%
Percentage reduction in lead-time = 65%

Cost of new technology = $199.95
Payback time = 2 weeks

Best of all, the consultants now have one place to put all receipts – in the envelope.

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Toyota is great at doing what appear to be common sense things extraordinarily well. They take the time to do preparation, then execute quickly. There is a reference to this in Jeffrey Liker’s The Toyota Way where (I am paraphrasing) he says a typical company will spend three months in preparation, nine months in execution and as much as another year working out the bugs in the system. Toyota will prepare for nine months, execute in three and have worked out the bugs in advance.

Lean manufacturing is built around the Toyota Preparation System whether it is having Standard Work documented and ready when a line is started up, moved or redesigned, the daily discipline of maintaining 5S and being ready to perform the work the next day with the same materials and tools in place, or the production preparation process itself (as the name implies, it is a fast yet thorough preparation approach).

The daily checks that are part of autonomous maintenance and TPM are there so workers are prepared to notice the slow degradation of equipment that leads to accidents or poor quality. These are examples at the micro level but the emphasis place on the five why and root cause analysis that is part of the Plan phase of PDCA is another example of preparation allowing for more rapid and accurate action.

You could call this execution or “back to basics” but it is true. While Toyota has figured out some very good ways of making high quality products in a high mix at high speed, their adaptability as a company comes down to preparation.

Here I will coin a new phrase, the “Bank of Preparation”. Each time we cut a corner we are making a withdrawal from this bank. Each time we check and prepare we are making a deposit. The more prepared you are for when things do not go according to plan, the more reserve you have in the Bank of Preparation to draw from and the quicker and more accurate is your response. If you have been making withdrawals and you are in debt to the Bank of Preparation, you can be sure this bank will collect.

When we tour Toyota factories of companies that have faithfully implemented TPS down the Toyota Preparation System, we see that machines are well-maintained through daily checks and cleaning and aisle markings are clear and respected. When the factory manager walks us across an intersection in the factory, he will look left and right, pointing his finger in each direction, saying “yoshi”. This means “OK” as in it is safe in both directions. This might seem like a simple thing, yet when is the last time you did this?

Compare this to another factory we visited in the U.S. no to so long ago, Japanese owned but not part of the Toyota group and doing Lean manufacturing on the surface, at best. The group that toured us during this assessment walked on both sides of the aisle marking (holding up the forklift in a way that would make time-based material logistics all but impossible) and when crossing the aisle only quickly glancing in each direction, each person trusting that it was safe since others looked for them.

This type of behavior, when multiplied across 900 people in all aspects of the work they do, leads to a lack of preparedness. The habitual, small daily preparation and checks make a huge difference in how people think and work and this is part of what I call the Toyota Preparation System.

On the flip side, you could say that Toyota's recent spike in recalls is a result of the drive to cut down product development and launch times which puts pressure on the traditional value Toyota has placed in preparation. Quality suffers as a result.

Luck is where preparation meets opportunity. He who keeps his axe sharp chops the most wood. You already have an account with the Bank of Preparation. What’s your balance?

Posted by Jon Miller at 12:07 AM | Permalink | Comments (5) | TrackBacks (0)

Nancy Kress is the Head of Bookstacks at the University of Chicago. Nancy says in her libraryassessment.info posting on November 5, 2006:

I like to tell people that what I really do is line operations management. My challenge is to manage forty-plus staff and students to accurately and efficiently maintain five million-plus books.

With that many books going in and out it certainly sounds like a Lean distribution opportunity. Then she goes on to say:

Most recently I have been applying lean manufacturing principles to improve not just daily work processes, but to involve all staff in defining how we can best meet the user’s needs. The critical starting point for lean is to ask how the customer defines value. Libraries are very good at counting and measuring what we do, while not always good at asking if what we do adds value to the user.

How many among us are really "good at asking if what we do adds value to the user"? Not so many.

Actually I have been very well served by libraries over the years and think they do a pretty good job of delivering value to the customer. Applying some Lean thinking and kaizen to libraries is a great idea. Any resources they freed up from kaizen could be re-deployed to teaching people how to read (or motivating literate people to read), thereby increasing demand for their services. Now there's a Lean business model.

I learned a new term called "action research" from the libraryassessment.info blog. Based on a quick search of definitions, action research seems to be type of applied research that is an experience-based, intentional learning done in schools and classrooms involving teachers, aides, principals, and other school staff who act as researchers to systematically reflect on their teaching or other work, collect data and solve problems.

Action research. I like it. It sounds like kaizen.

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While kaizen has been in the English language management vocabulary for a couple of decades, kaikaku is a relative newcomer. Kaizen in its various forms has been very common among Japanese companies for a long-time, kaikaku has been less common. Kaikaku, or specifically transforming the operational model towards the Toyota Production System, has gained popularity in recent years as news of Toyota’s worldwide success has led more companies to re-examine the Toyota model and undertake kaikaku.

Kaizen means “improvement” and is used broadly to refer to continuous improvement that follows the philosophy of genchi gembutsu (go see, hands-on, fact based improvement). There are many ways that you can do kaizen, including kaizen events, jishuken, technical improvements in both processes and equipment, as well as simple improvement ideas of the “everyone everyday” type. The kaizen process applies equally well to any process. Kaizen means “change good” and by definition, must be an improvement over the current condition.

Kaikaku means “transformation” or “reform” and implies a redesign of business processes that is radical and reaches across an entire organization. On a local scale, kaizen activity may result in a kaikaku if a drastic change is made. In general a kaikaku is something that is planned more carefully over a longer period of time, while kaizen can be planned and executed in days or weeks. A “kaikaku” may not always have a positive outcome, since “reforms” or “transformations” may in fact fail.

Both kaizen and kaikaku are essential strategies. Without a culture of kaizen, a kaikaku can not succeed. Successful long-term transformations require a series of short-term successes, the engagement of everyone in the organization and a bias towards practical local improvement. In the worst case kaikaku can be a top-down reform that does not take into consideration the local realities, resulting in surface-level improvement or no improvement, as seen by Japan Post's struggling kaikaku effort.

Likewise without kaikaku, kaizen can be just a series of incremental improvements that do not align with the long-term direction of the business or deliver bottom-line results. Kaizen without kaikaku may lack a re-imagining of what is possible through new technologies, new operational models or new lines of business, and may be insufficient for long-term survival. Kaizen is always an improvement, but without kaikaku it is not be enough.

It’s not either innovation or process. It’s both. But large, complex, holistic messages are not as easy to sell to the fad-driven management audience as are the one-note sambas such as “innovation” or “maverick” or “Lean”. So we fragment the discussion and return to the bits we’ve missed at a later decade. I suppose we have to leave some pickings for the next generation of consultants and management gurus, yet unborn.

Posted by Jon Miller at 9:59 PM | Permalink | Comments (5) | TrackBacks (0)

A Lean service implementation has been in progress for the last three years at Japan Post, the public sector entity that is Japan's postal service. Japan Post is slated to be privatized in 2007, and Toyota executives were involved in launching JPS or "Japan Postal System" a project to do kaizen and streamline the operations there in preparation of privatization.

A front-page splash in the October 29, 2006 Asahi Shimbun titled Japan Post Confused by Toyota System, Auditors Find "Only Superficial Kaizen" (郵政公社、トヨタ式に混乱　指導社員「上辺のみ改善」) suggests that things are not going well with kaizen at Japan Post.

Japan Post announced positive results from their kaizen efforts, including freeing up 1,467 people in the spring of 2006. However Toyota employees who were sent in to 142 post offices between April and June of this year to audit them found that kaizen at post offices was "81% garbage" as well as evidence of "presenting false reports". The feedback from the gemba is that postal workers find work more confusing, productivity is down, and the delivery of culturally important New Year's cards may be delayed.

The Asahi article reports that JPS was launched with the help of Toyota employees in 2003 as a pilot in one post office branch complete with time studies of the postal workers, counting the walking distance, and examining all work processes and procedures. Today the Lean service effort has expanded to 1,000 of the 1,200 regular post offices in Japan.

The focus of productivity improvement at Japan Post was on defining "units of work" to enable measurement, elimination of waste and better utilization of labor. The Asahi article gives several examples of kaizen implemented in the post offices:

- Work was divided into containers that represented 15 minutes of work, making the assignment of labor more visual and less subjective
- Tape markings on the floor identified the shortest walking path within the post office
- Chairs were removed to eliminate time lost in sitting down and standing up

According to the Asahi article, the report by the Toyota auditors identified that only eight post offices were adopting the kaizen methods, 30 were "not doing JPS" and 56 were "not doing JPS at all" and summarized that the system at the post offices was "81% garbage". The conclusion is that the regional post offices were sending false reports and that there is the possibility that the Japan Post results presented were not a reflection of reality.

Furthermore, the Toyota auditors included their personal reactions in the report, such as Toyota auditors saying to the postmasters at some post offices "Get out! You're fired!" and that one auditor felt "I was beyond anger and frustration, I felt pity for them".

The article reports that labor costs have not been reduced, but in fact they have increased since 2005 in spite of JPS implementation. The Asahi article contained some critical voices from the gemba. The criticisms of the "Toyota way" as applied to the Japan Post include:

- "We pretend to be doing JPS only when they come by to check. The postmaster tacitly approves of this."
- "Even the postmaster does not think JPS will succeed."
- "The managers have no choice but to say 'Do JPS' and the workers have no choice but to do it."
-　Automotive parts are standard sizes and types, while postal parcels can be different shapes, sizes or quantities on any given day, making a 'unit of time' to do work not always possible
- Delivery routes were redesigned and reassigned based on delivery quantity and driving distance, but no consideration was given to stairs, hills, or cul de sacs
- Due to cutbacks in staff one person must deliver all parcels to an entire mid-sized apartment block
- Knee and back pain due to the removal of chairs has lead to delays in delivery
- Work conditions are tougher and hiring part time workers is not as easy

This is a typical mix of mis-steps and ignorance of success factors that we see in botched Lean implementations around the world. There is a lack of engagement by the site-level managers. There is a lack of employee input in how to improve their daily work. The variation in products and volume demand seems to have been ignored in the design of the operating system. It is top-down without bottom-up. The postmasters are being held accountable for performance in a system they neither understand nor support.

It is surprising to find Toyota instructors responsible for such a botched Lean implementation. Perhaps some Toyota managers are better at being Toyota managers than being instructors, consultants and change agents.

Or was it asking too much to expect the entrenched bureaucratic culture of a Japanese public sector organization to adopt the true spirit of kaizen? Certainly they deserved more than a few time studies, tape marks, and the removal of chairs in the name of productivity. If they had been given a set of ideas and tools that made sense to them and actually made the work easier, safer and improved quality the result would not have been "81% garbage".

Is it fair to say that Toyota botched the implementation? If they were the teachers, even only in the beginning, it was their responsibility to make sure that the current condition was understood, not only in terms of how packages were moved but in terms of how people were trained, measured, motivated and managed. The managers and supervisors at Japan Post should have been taught new management behaviors to support kaizen.

Toyota has learned through both success and failure what it takes to grow into the largest automobile manufacturer as well as the most efficient and most steadily improving. As Toyota has expanded and built factories in other countries, they have found ways to communicate the Toyota way. Yet they seem to have failed to do so at Japan Post, even though they are in the same country and speak the same language.

So to anyone who has ever faced the objection to Lean manufacturing that "it works in Japan but will not work at this company" because somehow the Japanese are more culturally open to change or working as teams, you can offer back "it fails in Japan, but will not fail here" so long as we learn and apply the lessons from Japan Post.

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Being busy is shameful. What an odd thought. It goes against the workaholic nature of most Americans and our Puritan work ethic. I can't recall exactly where I heard this but it was definitely from one of my sensei who came from the Toyota group. The idea may very well have come from Taiichi Ohno.

I don't completely understand "being busy is shameful". It requires further deep reflection. But it feels true. Why should I be busy? Being fully employed is great but being busy implies having somewhat more things to do than one has time to do them. This is not a good situation. It is a sign of mura (Japanese for variation) and it results in muri (overexertion, overburden) and it creates muda (waste).

Toyota is very busy these days, building plants or announcing the building of plants, making more cars than ever. Yet haste makes waste and their recalls are climbing and senior board members at Toyota are expressing concern at what Toyota is becoming. The idea that "being busy is shameful" rests, I think, on the kaizen philosophy that you should be well-prepared so that you can act quickly and decisively when the moment comes, rather than running around, furiously busy, trying to react.

If preparations are thorough and execution is fast and precise, there is no need to hurry. There is no need to feel busy. You are ready. Take your time, think it through, consider several options and try them out. Then seize the opportunity.

It's RFP season these days at Gemba. Businesses are looking at the new year, new budgets, and suddenly there is renewed need around the world for kaizen and Lean manufacturing consulting. Phones ring. E-mails arrive. The RFP mill churns faster. Our business, like most others, needs heijunka. These days I live in shame.

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Almost two years ago I set out to read Taiichi Ohno's recently reissued book Gemba Keiei (Workplace Management) in Japanese and summarize one chapter per week. My goal was to have all 37 chapters posted here by September 2005. Well no plan goes according to plan and here we are two years later and still five chapters away from that goal.

I wondered what I would do to get my weekly Ohno fix after finishing this project since unlike Shigeo Shingo, Taiichi Ohno did not write many books. To be exact, Ohno did not actually write any books, as The Toyota Production System and Just in Time for Today and Tomorrow were both ghost-written (Toyota Production System) or co-written (Just In Time) by Setsuo Mito. We learned that Gemba Keiei was actually the transcript of a series of interviews rather than a text Ohno wrote, which explains a lot about the warm and familiar tone of the book. More on that later.

We are happy to announce that Taiichi Ohno's Book "Workplace Management" will return to print in 2007. Gemba Research LLC has obtained the translation and publishing rights for this classic. We will make this book available again to students of kaizen, the Toyota Production System, Lean manufacturing and other brands of continuous improvement. I want to give special thanks to the team from Gemba's Japan office for all of their hard work in making it possible to bring Taiichi Ohno's Workplace Management back in print in 2007.

Taiichi Ohno (1912 - 1990) was the architect of the Toyota Production System. Most of what is known as Lean manufacturing today traces its origin through Taiichi Ohno and the work done at Toyota during and immediately after his tenure there.

Taiichi Ohno's book Gemba Keiei (Workplace Management) is a delight because not only does it explain some of the ideas and tools that make up the Toyota Production System, it gives context to the development of some of these ideas, and the basic values and philosophies that underly them. Without the polish of a ghost-writer, the book has the feeling of a raw gem, one that requires that you stare long and hard into it before you can appreciate its true beauty.

Check back here for progress on the translation, details on how to pre-order your copy of Taiichi Ohno's book, and news on other books that we will publish.

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