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Sweet relief, the books have arrived. Thanks for your patience.
We've set up a flow line to pack and ship, paced at about 90 seconds per order.
Now don't everybody order at once. We value heijunka around here.
There is an apparent conflict between two of the ten commandments of improvement that has been bothering me for a while. It is the kind of problem that goes away as soon as you stop thinking about it. But I think it may represent something that is at the root of the challenges many companies face in implementing Lean management, so I can't stop.
The two particular commandments of kaizen are #4:"Go for the simple solution, not the perfect one" and #9 "Seek ideas from many people."
Both of these are great ideas. The quick and dirty solution is often better than delayed perfection, if only for the fact that you can test the quick and dirty idea and learn from it right away. It also typically costs less money to do the simple thing. The other is looking for "wisdom of many rather than knowledge of the few" and reflects the bias of Lean towards empowering people who do the actual work to come up with solutions, rather than wait for specialist problem solvers.
The conflict is that I think the simple solution may be the one that does not involve getting ideas from many people, but to ask the expert. And the perfect solution in Lean enterprise terms is getting ideas from a broad range of people when solving problems, which is the right thing to do.
A recent example of the apparent conflict between these two great ideas was a layout project that was part of a series of kaizens. The simple solution would have been for the kaizen instructor to tell them "this is the correct layout option in this situation" and the perfect solution would have been to help them arrive at this answer on their own through a combination of Socratic questioning and framing the issue in a way that constrains the layout options they can pursue.
There are many simple solutions to common process problems. The expert, engineer or consultant is eager to give them. That may be the simple solution. Even managers and senior leaders of companies often fall into this pattern. That is often what they are paid to do.
Yet operational excellence is neither achieved nor sustained through dependence on experts, but rather by developing a community of scientists within an organization, to borrow words from Stephen Spear and Kent Bowen.
Nine plus four makes commandment #13: seek the simple solution from many people.
We've written before about the support by the State of Wisconsin for Lean manufacturing efforts for companies in that state, as well as efforts to bring Lean practices into government itself. Lean manufacturing support by government, and for government, has a new champion on Wisconsin: Mary Burke, the Secretary of the Commerce Department.
She announced in May of 2006 a supplier development program for manufacturers in Wisconsin as a partnership betweenOEMs such as Deere & Company, Oshkosh Truck Corp and Harley-Davidson Motor Company as well as the Department of Commerce and local MEPs. The target was to help 100 small and mid-sized manufacturers become Lean. The results of the first year pilot were reported as lead time reduction of an average of 53%.
According to the Milwaukee Journal Sentinel on April 28, 2007, Mary Burke's budget proposal for the year doubles the amount spent on the MEP from $850,000 to $1.7 million. I have mixed feelings whenever more of my tax dollars go to MEPs, allowing them to more effectively compete with private sector companies like ours, by providing subsidized Lean manufacturing support to companies. But it's hard to stay bothered for long when you hear about read news like this.
But the best part of all, according to the article:
Burke has led her department into doing 25 lean events as an example of lean in government. Fewer state workers are doing more work, she said.
We could use people like Mary Burke in government at all level, federal and local.
Chris asked: Are there rules for what goes on a kaizen newspaper so it does not become a massive action item list?
A "massive action item list" should be cause for celebration. A full kaizen newspaper is a good thing. The fact that this is a concern might say something about the quality of the action items rather than the quantity. So here are a few rules of thumb on how to use a kaizen newspaper.
But first a basic introduction to the wonderful tool that is the kaizen newspaper. It is a great visual management tool for any gemba, and an essential part of kaizen activities or Lean management on a daily basis.
The kaizen newspaper is basically a list of improvement actions that contains the following information, at least in the Gemba version:
No (number of item)
7W (type of waste, to include energy, space, safety and environmental losses also)
Problem & Root cause
Solution
Who
When
Status (stage of completion in PDCA cycle)
The inclusion of the Plan, Do, Check, Act in the Status column is critical. The PDCA cycle developed by statistics pioneer Walter Shewhart was taught to the Japanese in the 1950s by quality management guru W. Edwards Deming, becoming part of the essence of kaizen.
The inclusion of the PDCA elements in the kaizen newspaper acts as both a reminder to follow each step and most importantly Check and Act rather than just Plan and Plan and Plan or Do without follow up. It is also a great visual to show status of completion.
The kaizen newspaper is pretty straightforward, so how to avoid Chris's problem of the "massive action list"?
As a general rule, all problems should be identified. The fact that you don't have resources right now to solve the problem is no reason not to make the problem visible and develop a shared understanding and ownership of the issue. That way when you have the resources you can address it quicker.
A task or improvement action should NOT go on the Kaizen Newspaper if:
- The problem is stated as a personal issue rather than a process issue
- You cannot identify what type of waste it is (7W column)
- You are writing down a problem that does not pertain to the gemba where the kaizen newspaper is posted
- It takes longer to write it down than to actually solve the problem
Kaizen newspapers should be posted and managed by zone. If there is no ownership of the kaizen newspaper by the person in that zone, don't bother writing anything on it as it will just become an eyesore.
If the improvement list becomes massive, this is a visual reminder that either there are far too many problems in one area and it needs immediate attention, or that adequate problem solving resources are not being provided. Abnormalities in either case, that need to be addressed.
It's called a newspaper for a reason. Go to the gemba where it is posted and read it daily. Whittle away at it. Don't meet about it weekly. Don't review it away from the gemba. Genchi genbutsu is the best way to complete kaizen newspaper action items.
Make the kaizen newspaper big and don't spend a lot of time making them look pretty. If you don't plan on reading it and doing something with the information there at least once a day, take them down. It's no longer a newspaper, and it's no longer kaizen.
We’re writing today as part of a score of bloggers on the topic of The Top Three issues in sourcing. Here’s is our Top Three:
3. Slow is the New Fast
When faced with the hard way and the easy way, always take the hard way. This is particularly true in Lean sourcing, or as we prefer to call it, supplier development. The most direct route is not always the fastest way to your destination, and likewise the lowest price source is not always the lower cost source.
The quick and easy approach is to switch to buying your commodity from the lowest cost country 5,000 miles away and take the immediate cost reduction. The slow and hard way is to spend tens of months strengthening the higher-priced local supplier so that they can delivery just in time, be an integral part of your new product design team, and never be an intellectual property threat.
Hard choice, and guess which option the sourcing specialist measured on cost reduction results delivered this quarter will choose?
Yet if you're the newly minted number one automotive manufacturer in the world, you choose the hard way. For Toyota the sourcing decision is more like preparing for marriage than for a quick fling, according to a BusinessWeek interview with Yuki Funo who is the chairman and CEO of Toyota Motor Sales USA, in an article on April 26, 2007 titled The Toyota Way to No. 1:
[Question]
I remember a story related to me by a supplier company: They entered into a contract to supply axles for pickup trucks. It was the first contract his company had with Toyota. He said he was awarded the contract with no discussion of price. It was all based on whether his company's processes and quality were acceptable to Toyota. He was flabbergasted. Is that a common way Toyota does business?
[Answer}
Toyota's thinking based on the Toyota Way is teamwork with suppliers. This teamwork is going to be a long-lasting relationship. Price is only one element. Trust is a more important element. The relationship is a sharing concept, and should always be win-win. Price is important, too. But trust is perhaps more so. This is an idea that American business schools have come to preach. IBM (IBM), General Electric (GE), and other companies talk about how important the mission of the company is. Toyota is only doing intelligently what the business schools are teaching.
In the church when you get married, the priest or minister doesn't ask each partner how much each will get from the other in terms of money. You're asked about how well you get along. What is your commitment to one another? Now, in real-life situations, some companies practice this, and some don't. Some practice this in the U.S. Some don't. It's the same in Japan. So there are fantastic achievements in both countries, and there are bankruptcies in both countries. So, it isn't a Japanese issue or an American issue. It's a company-culture issue.
There are many things that make Toyota great. They are dedicated to kaizen. They nurture and respect their people. They have a disciplined approach to planning and to how they design product. They work with their partners (supply chain) by taking the hard way.
I’m reminded of what a sales manager at an automotive parts supplier told me last summer. They were a supplier to Japanese car companies, but previously not Toyota. During the process of setting up sourcing agreements for the first time, the Toyota buyers actually told the supplier “You cannot make money on those parts at this price. Here is what we will pay.” And Toyota raised the price.
But does taking the long view and teaching kaizen to suppliers in a high-cost countries like the U.S. really trump shipping lowest-cost goods by boat from a lowest-cost country, today? Can companies that don’t have lots of profit and who can afford to pay more for building strong sourcing partners for the long-term, as Toyota can, really take the supplier development approach?
A bit of timely news today on ThomasNet.com would lead us to believe that Chinese Textile Shipping Can't Compete with N.J. Mill's Turnaround.
Thanks to state training grants, Absecon Mills was able to respond to customer orders in 14 days as opposed to 10 to 12 weeks from China:
• Workers brainstorm to improve processes;
• Management sees its job as supporting the workers’ improvements;
• The firm uses help from universities;
• The company cuts out wasted steps, wasted motions and wasted materials;
• Workers occasionally use videotapes to see and study their actions;
• Work flow was changed to reduce the set-up time between jobs;
• The workers measure the time it does take and the time it should take to do a task;
• During brainstorming sessions, typically about 48 ideas emerge; sometimes as many as 60 are voiced;
• Ideas are grouped as high- or low-impact and on how soon they can be acted upon; and
• Quality is a top priority.
In whole, the textile firm attributes its success to lean manufacturing.
Taking the time to develop suppliers who are continuously learning and improving their operations will result in the lower cost.
2.The 90-mile Rule
It's awfully hard to develop the capabilities of suppliers who are more than a couple of hours' drive away. Across the ocean? Might as well forget it. If the cost is low enough, we roll the cost of poor quality and late deliveries into the total landed cost and tell ourselves that we are still ahead of the game...
One of the excuses we hear when teaching Lean manufacturing and the TPS is along the lines of “We’re not Toyota” and is based on the fact that Toyota in Japan has something like 14 plants and the vast majority of suppliers all within about a 90 minute drive of Toyota City. “That’s one of the secrets to their success” is followed by the objection “which we can’t copy.”
Quoting Henry Ford, “If you think you can do a thing or think you can't do a thing, you're right.”
Several of our clients think they can. They sourced to lowest cost countries overseas but are now building the capability back in-house or sourcing within 90 miles, due to quality and delivery headaches from lowest cost sourcing. It’s a long slow, road.
In another bit of fortuitous timing, I heard on the radio this morning that Boeing took delivery of the nose cone of the 787 Dreamliner. The nose cone of an airplane is a big piece of composite, so they flew it here in a 747. I am a bit jet-lagged this week, and it was early morning so I may have dreamed this story.
Because they can. Boeing builds 747s, so if they want to use their 747s as a Just in Time conveyance method, why not? They flew one huge airplane part across the ocean in another huge airplane. Sound like sourcing innovation.
Could Boeing have built the nose cone within 90 miles of Seattle? But that would have been so 20th century...
1. DIYS
What is DIYS? Procurement specialists who have landed on this page expecting to find some newfangled get-lowest-cost-sourcing-quick technology will be disappointed by Do-It-Your-Sourcing. It's DIY meets sourcing. Or perhaps we can call it in-sourcing.
Just as one of the wise kaizen teachers that came before us taught that "the best kanban is no kanban" and "the best process improvement is process elimination" I will say that the best sourcing strategy in the world is no sourcing. DIYS is not necessarily making everything yourself, but being able to make everything yourself if needed.
There is a story about Fujio Cho, the current Chairman of Toyota, being severely scolded by Taiichi Ohno some 40 years ago when Cho was in charge of making decisions to outsource parts to suppliers. Ohno’s point was that Toyota should not outsource parts that they could not first make in-house at a lower price and high quality.
Ohno saw the process within Toyota and within the suppliers as essentially connected, and he wanted these processes to be as strong as possible. Sourcing was not a mere commercial transaction to him, it was building a strong link in a supply chain. This idea persists to this day at Toyota.
This is not an easy road to follow, but after 40 years of following the hard road, Toyota has become the number one automobile company in the world.
The Sourcing Innovation blog has organized a group of fellow bloggers in a series of posts on the topic of sourcing over the next week. Each of our 20 or so blogs will raise their Top Three issues in sourcing.
What can a kaizen blog offer on the topic of sourcing? Well, what is sourcing? I think Sourcing is the great-grandson of Purchasing but I'm not 100% sure. The genealogy to me looks something like this:
Purchasing begat Procurement begat Supply Chain Management begat Sourcing.
There might also be a great uncle called Materials in there somewhere. In any case, sourcing as I understand it is about getting the right thing in the right amount at the right quality at the right place at the right time.
This is a lot like the definition of Just in Time. An important distinction between the lowest-cost approach to sourcing in vogue today and what we might call Lean sourcing can be found in Chapter 23 of Taiichi Ohno's Workplace Management in which he gives us added insight into the classic definition of Just in Time:
One of the main fundamentals of the Toyota System is to make “what you need, in the amount you need, by the time you need it,” but to tell the truth there is another part to this and that is “at a lower cost.” But that part is not written down.
I think the key to Ohno's idea is the word "lower". It is not "low" or even "lowest" and although it may seem subtle, the choice of words reflects the thinking that has made Toyota's supply chain so phenomenal. Therefore this blog's contribution of the Top Three topics on sourcing will be:
3. Slow is the New Fast
2. The 90-mile Rule
1. DIYS
Stay tuned to learn more.
Jidoka applied to medical education. What a day. The University of Kentucky News announced that they are Applying Lean Manufacturing to Medical Education.
The article Lessons from Industry: One School's Transformation Towards "Lean" Curricular Governance is one of the most interesting articles on application of Lean manufacturing I have read in a long while. This article is sure to please both Lean junkies and curricular governance junkies both.
Any time the Toyota Production System is examined from a different perspective, re-framed, and made to work in a new context, we can all learn from the result. I highly recommend taking the time to read this article. You are sure to find something you can apply back into your Lean manufacturing, Lean healthcare or Lean administrative efforts.
Rather than insisting that one piece flow will work, we like to ask clients why one piece flow will not work for them. Here are some of the most common reasons we hear, and some ways we respond:
1. We can’t get needed materials in quantity, in quality or in time.
You are absolutely right. Fix this first. If you can’t seem to get this issue the attention it needs, implement one piece flow anyway, watch the line stop, make the problem visible so that you get the attention and resources needed to fix the problem.
2. We have unreliable equipment that may break down, causing downstream processes to run out of parts. See 1 above.
3. Our people will resist this change. So what? That’s what education is for. If the leaders don’t understand and believe in one piece flow enough to take the time to remove resistance through education, don’t bother with one piece flow. This is a weak excuse. Learn about motivation and address this issue as you would a speed bump in the road.
4. Our people are not cross trained to do more than one or two limited tasks. Shame on you for limiting people’s potential to learn and develop to their fullest. Take “boring” out of work by giving people variety, and watch morale soar. People are not motivated to learn new things, you say? See 3 above.
5. Long changeover times prevent us from doing one piece flow. If you are really trying to run one piece lot sizes through 1,000 ton stamping presses, bravo, and see 1 above. Flow one at a time wherever you can. In practice you will find that this is more often than not. When changeovers do present a genuine barrier to one piece flow, reduce the changeover time continuously, all the while reducing lot sizes to approach one piece flow.
6. There is too much distance between processes to move one at a time. This is one I usually let the students figure out for themselves.
7. The process produces defects that will stop the line too frequently if we have no buffer. See 1 above.
8. Process cycle times are unstable or variable, creating imbalance between workers. The first step is to examine your process cycle times through direct process observation, break the work into smaller work elements, take out waste, and recombine them. If chronic variation is still above the 5% to 10% range, see 1 above. If it’s predictable variation, this is only really a problem if you are trying to maximize the utilization of the man-hour, which may result in greater waste such as overproduction, inventory, transportation, defects and processing which adds no value. Proceed with one piece flow and kaizen.
9. Our machines are not designed for one piece flow. This is too true, even in our daily lives. A washing machine is a good example. Need to wash one shirt? You have to wait until you have close to a full load or you waste water and energy. So we batch our dirty clothes. The washboard and basin was the Lean solution, it just needs some jidoka. The same is true with a dryer. You don't dry one wet shirt in the machine, but you might hang it up to dry if you don't need it dry right away. Disciplines like 3P (Production Preparation Process) exist to create one piece flow equipment. If you cannot get equipment planners and designers involved early enough to keep bringing in batch equipment, see 3 above. Failing that, you can manage by using SWIP to “pulley & pail” flow through batch processes.
10. We have occasional work that interrupts the process. There is something in TPS called the Water Spider which acts as a line support function to handle relief work and recurring-but-not-every-cycle tasks such as moving materials in, moving finished goods out, building another cardboard box when the previous one has been packed full of finished product. When it is not practical to have a Water Spider, you can have foremen or team leaders help in these areas. Failing that, create Standard Work to reflect the changing work sequence and work balance every so many pieces for these types of recurring tasks.
Turn these ten reasons why one piece flow will not work by 45 degrees, and you get the Ten Reasons for Poor Cash Flow. Turn them by 90 degrees and you have the Ten Reasons for Long Lead Times. Whichever way you turn them, turn them into competitive advantage by addressing each of them and successfully implementing one piece flow.
One my favorite phrases used by my Japanese teachers’ was “__ ga nakattara dosuru?” or “What would you do if you had no__?” When I heard this I knew we were in for some fun - of watching someone stretch their mind.
"What would you do if you had no__?" was their way of challenging the thinking of the engineer or kaizen team member who had proposed a "catalog solution" to a problem, or to a manger who whose thinking had stopped at the solution that used the wallet but not wits. My teachers had been well taught by Taiichi Ohno, who wrote "Your wits don't work until you feel the squeeze."
Rather than saying “That is a bad idea” to a catalog solution and shutting people down, "What would you do if you had no__?" shifts their perspective. This is very important because it is hard to perform step one of the “10 commandments” of kaizen and abandon fixed ideas. Outside perspectives are a valuable part of improving through cross-functional teams, but we need to develop the skill to seek and challenge assumptions on our own as well.
For example if you said to a team planning a factory layout that involved heavy industrial machinery or involved changing of heavy dies "What would you do if you had no cranes?" this could be terribly frustrating, but at the same time very liberating. At Boeing something very similar to this happened with the innovative way wings to the airplane are built and attached. Many die changes have been reduced from hours to minutes, thanks in part to this question.
Maybe it's something in how the brain works. Just as one of your senses such as hearing can become keener when you lose your sense of sight, constraining your thinking in one area must free you to be open to other possibilities and think more creatively.
When doing kaizen it is a good idea to shut off certain options. "Outsourcing" should not be a solution to a process problem. "Bigger batches" is to be avoided. "Add more conveyor" is right out. You have to do this based on reason, rules and principles. Luckily the TPS is built around these rules and principles (e.g. make only what sells) which take the form of tools and systems (e.g. kanban) when exposed to real-life processes.
The limiting of options actually results in a wider variety of options being considered. Limit your options to expand your options. That is sort of zen, but very true in the case of 3P (Production Preparation Process). By asking "What would you do if you had no conveyors?" or "What would you do if you had not 6-axis machines?" the team is forced to dream up seven or more process methods options, rather than pick equipment from catalogs based on known technologies.
When people learn to see a different solution by stepping away from the catalog solution and reexamining the problem through the prism of rules and principles that govern Lean, a simple yet brilliant approach often emerges. I have experienced this often and it is like watching someone who pokes a finger at the sky see their finger make a hole in the blue and white wall paper of heaven.
Day two of kaizen instruction on the shop floor, I came across the best visual control in the world. All of these years it's been right in front of me. It's the change in the human face known as the smile.
The people that I am working with this week all have different facial expressions. When a person's expression is reserved, it's hard to tell if they understand, are agreeing or disagreeing, would rather be someplace else, or are really excited about what we are doing. But then they smile, or even laugh! Now there's a visual control that feels good. You know you have accomplished something when this happens.
(This image is a cropped screen shot from the Skype software program, a property of Ebay)
Some people are calibrated differently, and may smile less or have a "normal" or "normal-happy" expression that is not the smiley one above. This is OK. Sometimes "good" looks different for visual controls in different processes. The key as an instructor is to actively seek out this visual control and understand what is "normal" but kaizen even that towards a smile.
Those of us with a strong technical mind tend to focus on solving the problem or reveling in the data, forgetting the people. Use the best visual control in the world and you will get more done.
Five reasons why the smile is the best visual control in the world:
1. It's easy to do
2. It's genetically coded into us
3. It's a global standard
4. It's has health benefits
5. It doesn't cost you anything
The lack of smiles during kaizen activity or kaizen instruction is an abnormality, in visual management terms. Even for people who do not smile easily, or in cultures where stoic facial expression is the norm, this is true. No smiles during kaizen is an abnormality because kaizen is fun, creative and empowering to people. If people are not smiling, you are doing something wrong. It's unpleasant change.
Kaizen is not all about the results or dramatic changes to the workplace, it's about people. Smiles are a good indicator of the sustainability of your kaizen results and your entire Lean effort. So during your next kaizen, look for the best visual control in the world.
I need some parenting help. As the A3 report below will show, our young kids are slow at picking up their toys. The older one is old enough to slow down on purpose and play games with us, and the younger one is young enough or has the personality to be oblivious to most scolding.
Either way, yelling at kids is getting old. Here is the A3 titled Pick Up Your Toys! Details of A3 are below the image.
Situation: What is the problem?
Kids not cleaning up toys in the play room quickly enough. This causes stress to their mom who shouts at kids, and Jon gets stressed by kids’ mom shouting. This is a daily occurrence.
The target condition is no shouting about toys.
Root Causes:
Problem: Kids’ mom shouts because kids clean too slowly.
Why? Older kid does not want to clean up all toys quickly.
Why? Older kid thinks it is unfair.
Why? Younger one is not helping even though she got the toys out - she is playing while older one cleans.
Why? Younger kid is just being a kid.
Problem: Older kid says she is too tired or it is too hard to clean all of the toys by herself.
Why? There are too many small toys.
The books are packed into the bookshelf too tight. Some toys need to be put back up on a high shelf (easy to get down, not easy to put back).
Countermeasures: How to fix?
1. Give younger kid other task similar to cleaning that she can do, to keep her away from toys she likes to play with, so she does not play while older kid is cleaning.
2. Give away some toys to make cleaning easier.
3. Reduce the number of books on shelf so they are not packed in so tightly.
4. Make “if it’s left out, we throw it out” a rule
Verification: How will you check?
1. Toys being put away within target time (5 min)
2. No more shouting about toys
Adjustment: What further action is needed?
(Blank since no countermeasures have been tried.)
I created this A3 report while on the road and away from the gemba (kids' play room). I readily admit that my grasp of the current condition is not as strong as it could be. Is the target condition "no shouting" or "toys picked up quickly"? What is a reasonable time for the kids to clean the toys to prevent shouting?
I have not yet done nemawashi with all of the players in my house to develop ownership of one common problem. I am doing early-stage nemawashi with any of you parents out there who might have good tips on how to reduce the shouting at kids because of toys not getting picked up quickly enough.
(Here is the Microsoft Word document A3 report template used to create the one pictured above. It is actually formatted for A4, or 8x11 size due to my poor relationship with printer settings.)
Sometime in the last week the number of pieces about Lean manufacturing and the Toyota Way in this blog exceeded 500.
If even a small number of those pieces have helped others find better ways to teach and do kaizen, the effort will have been worthwhile.
The ideas keep flowing due to the encouragement, questions, disagreements and challenges from people like you who care enough about kaizen to read and comment.
Thanks.
The Elegant Solution: Toyota's Formula for Mastering Innovation by Matthew E. May is a book about many good ideas. It adds relevant and interesting accounts of the author's eight years working closely alongside Toyota people. The book offers a good balance of Toyota-isms examined in a new light, and favorites such as hansei, genchi genbutsu, nemawashi and obeya all make appearances. I can't argue with the message of chapters like "Make Kaizen Mandatory" or "Keep It Lean."
In the "Backstory" chapter some more background into the origin and purpose of the University of Toyota would have been great so we could understand the context for the educational program that was University of Toyota. I appreciate that the author is a fellow consultant who is interested in using this book to promote his consulting business through his writing. The author in fact ends the book with the two words "call me." I have never seen that before. Yet as fellow a student and teacher of Toyota principles, I somehow expected a bit more humility:
"I moved from novice to journeyman to expert. I got to design and deliver the key homegrown University of Toyota programs. I built the original education now used by Toyota associates all over the world to grasp The Toyota Way."
And after a short list of blue chip companies the author states: "Toyota sent me to work with those organizations."
Getting past the first ten pages, the content is very good, but hardly new. I have a stack of Japanese books a foot high on my desk at home that all expose the same ideas and tell similar stories. Matthew May does a good job of livening up these Toyota-ism in many cases through his experiences with companies helped by the University of Toyota.
I was very curious to see how "innovation" fit in with what I know about Toyota. Innovation is a huge business buzzword, not one commonly associated with Toyota. Michael Tracy and Fred Wiersema talk about operational excellence, customer intimacy and product leadership in The Discipline of Market Leaders. Arguably Toyota is known for the former (operational excellence) due to their production system and management philosophy. They have not traditionally been known than the latter two disciplines, which are closer to innovation.
While it's not inaccurate to say that kaizen helps Toyota innovate, the positioning of this as an innovation book about Toyota makes me wonder if there is a "Toyota's Formula for the Millionaire Mind" or "Toyota's Little Red Book of Sales" being written by someone at this moment.
The book is not squarely in the innovation camp, nor squarely in the kaizen camp. The books talks about innovation, but it describes kaizen in many cases. Perhaps we are entering a phase where kaizen and Lean manufacturing will be called "process innovation" or "service innovation" and there's nothing at all wrong with that.
When the book talks about kaizen, it carries the notion of creativity and craft as embodied in Toyota values into the territory of "work as art" which is a bit alien for most of us. I'm certainly willing to be led there, but the book didn't do that for me, and I've already drunk the Kool-aid.
Another interesting idea that is introduced but not developed fully is "dig your own job." Dig your own job - what does this mean? Dig as in dig a hole or dig as a hipster digs something? Create or design your own job? Have fun at what you do? Do Toyota people dig their own job? What's the equivalent phrase in Japanese? 「自分の仕事は自分で掘れ」？ I am genuinely curious.
The author reframes muri, mura, muda as "overload, inconsistency, waste" which sound better than "overburden, variability, waste" as they are often stated. Kudos on the good word choices. The list of wastes is rather disappointing, with a few of the canonical 7 missing, and some redundancies in the others listed (hardly elegant).
Chapter 14 is a great testament to the value of using a consultant to bring a fresh approach and an outside viewpoint to accomplish the difficult task of helping people see the obvious. It tells the story of 5 hours at the LAPD with the author others from Toyota leading a problem solving session. The book would have been more powerful in my opinion if it had been written around this and other stories of problem solving using by the University of Toyota throughout the entire book.
In the afterword "Words of Encouragement" the author states:
"All change demands knowledge. Meaningful change - innovation - demands profound knowledge. Some of that I've tried to impart in this book through the wisdom of Toyota."
Elegance is a fancy word for simple. Profound is a complex word for deep. Deep knowledge doesn't come from a book, but from action and reflection. It requires customer focus, genchi genbutsu, a deep understanding of the current condition. On the final page, the author makes the kaizen classic "get your hands dirty" sound a lot more white collar by saying:
"Finally, you'll accept the singular guiding insight to innovation: To find the elegant solution, you must be inelegant.
I still say get your hands dirty.
See it through. Delay if you must, but don't retreat. Follow up until you get an answer, good or bad. Check again. Get it done. Only then, start the next thing.
I hope everyone who celebrates Easter had a good Easter Sunday, and those of you who don't also had a good weekend. Thanks to a culture change in my throat brought on by some visiting Streptococcus, I didn't have a good weekend. A few amoxicillin pills later, I can reflect on the experience. It was fairly Lean, as healthcare experiences go.
This morning I called up the local clinic at 8AM and they had openings at either 1045AM or 2PM. I picked the earlier time. They asked me to arrive 15 minutes early to get registered as a new patient. There was a PDF on their website to download, print and fill out at home.
The clinic housed eight doctors. There were two more pieces of paper to fill out, mostly to do with details of my medical history and my rights regarding that information. The co-payment was taken upfront, and I waited about another 10 minutes to be seen by a medical assistant.
She took my information on a tablet PC, took my vitals, and left me to wait for not long enough to crack a magazine. When my doctor arrived she also had a tablet PC which she synched with a docking station, asked me a few more questions to make sure she had the right patient, and flashed a light down my throat ("It's really swollen").
She punched a few buttons on the screen with her stylus and told me she'd faxed the prescription to my choice of local pharmacy. If anyone else in my family came down with the same thing, just come in and ask for the prescription, she said "You don't need to go through all of this."
Out of the house at 1033AM, home by 1150AM. Total time = 77 minutes. Value added time = 8 minutes (face time with medical assistant + face time with doctor + face time with pharmacist). Ten point three eight percent value added. Not at all bad, considering the weekend was a total loss. Prevention is still the best healthcare solution.
If you haven't exercised your neck muscles lately, read the first few paragraphs of the article Short-Circuited: Cutting Jobs as Corporate Strategy and shake your head in disbelief as you scratch Circuit City off of your shopping list for a while.
After the story of Circuit City and their egregious approach to layoffs, the article states:
"...we have learned a lot about good practices and bad practices [in eliminating jobs] by watching companies in action."
What did they learn?
Research has shown that if a company announces a downsizing without a broader reference to a strategic plan, its stock price will, on average, drop 5% to 6% over the next several days, according to Useem. By contrast, if large-scale job cuts are announced as part of a broader restructuring, and a strategic plan is laid out, the firm's stock will rise some 4%, on average, in the days following the announcement. Useem says the research shows that, contrary to popular wisdom, Wall Street does not always welcome job cuts for their own sake.
Translation: say "Oops! We screwed up and we're gonna have to let some people go" gets you bad marks with Wall Street while saying "Ooops! We screwed up and we're gonna have to let some people go, but it's part of our strategy!" gets you high marks with those same folks.
The authors conclude that Wall Street isn't rabidly demanding job cuts in the name of improving financial performance:
"The tough-minded, big institutional equity market is actually skittish and worried about downsizings that are simply short-term cost-cutting measures without a broader plan described behind them,"
How can layoffs as a means to reduce cost be anything other than a short-term measures? The laid off workers will only save you money that one time. Choosing to retain, retrain and reduce cost in the other 90% of the cost of goods sold is the true long-term strategy that brings lasting success to Toyota and other organizations focused on building great people and processes, not just product.
Downsizing can also send an important signal to customers, competitors, suppliers and Wall Street. "Years ago, Procter & Gamble cut thousands of jobs," Hrebiniak recalls. "They called it 'cost savings,' but the CEO also said P&G was sending a signal that this was a sign of a cultural revolution at P&G: to eliminate inertia, to wake people up to the focus on new markets and products and innovation, to get rid of dead wood. So layoffs can represent a refocusing."
"Cultural revolution" is an unfortunate analogy, in the light of history. If you can't wake people up except by using the sound of gunshots from the people you are executing, you're really bad at waking people up. Layoffs are not strategy, they are a failure of strategy.
It may be the choice of words by Wharton management professor Lawrence Hrebniak that make it impossible to sympathize with the chief executive of Citibank:
"He's getting pressure from shareholders," Hrebiniak says of Charles Prince, Citigroup's chief executive. "He's feeling no love. He's got to show he's doing something to cut costs, improve margins, make some more money. So it may not primarily be a move to restructure at all; it could be a move to get critics off his back." If Citigroup does decide to cut 15,000 jobs, it would represent nearly 5% of its workforce of about 327,000.
Given such callous ivory tower fare, it is tempting to launch into a 2,000 word proletarian rant. Instead, I'll say it with pictures. Yesterday a new word entered my vocabulary: the bimodal hump. Or bimodal distribution, if you prefer. I prefer the hump.
In the typical scenario the incomes of people who are laid is reduced while the income of people who did the laying off increases. The way layoffs are used to improve stock prices in the short term enriches very few people, while causing disruption to the lives of many. In any case, no process is improved.
When layoffs become common business practice in a society, the distribution of wealth shifts away from the normal towards one that is bimodal.
Let's put a human face on this. The two humps are for the increasingly rich and increasingly poor. When layoffs are done as part of a strategy to increase shareholder value, people who were living in the middle of the normal distribution (the middle class, the working class, etc.) find themselves shifted to the left (less income) even as the number of very rich grows. We might even say that the people who have been laid off have been "humped."
There is nothing wrong with capitalist free market systems rewarding a small number of individuals very well for their superior performance. Layoffs as strategy is not superior performance, or even management but the lack thereof.
In the interest of full disclosure, I have personally terminated and laid off people in to keep a small business viable. That experience does not rank as a "strategy" in my book. It was a failure of strategy and a source of learning, not to be repeated. All of the points the article makes are valid. What is disappointing is that effort was put into writing about layoffs as strategy, rather than strategies to avoid them.
So for all of the CEOs out there shopping for some modern art with the millions pocketed from layoff strategies, here's an artist's rendering of your handiwork titled "The Bimodal Hump".
Bidding is now open on this piece, for the next 30 days or until the reserve price is met, but only from qualified CEOs who have been enriched by their layoff strategies.
About 20 years ago in a catchy pop song Joe Jackson said “You can’t get what you want till you know what you want.” I didn’t think much about those words at the time, but these words seem to contain deeper wisdom as the years go by.
There are two things in my life that I really want right now, have wanted for going on seven years, but have failed to get. After walks on the gemba, discussions with a client and reflecting on how to get them what they want, I have finally realized the answer to “how to get what you want.”
Broken down in four steps, it is basically a problem solving approach I have been using successfully on the shop floor for years (yet to be tested in personal life):
Step 1: Know what you want. Some of you are laughing. That’s okay. This is a lot harder than you think.
Let’s say for example that as a business owner you want more than anything to always deliver to your customer on time. This is a good “what you want” for starters, but if you just tell your organization this is what you want, getting it may result in things you don’t want – e.g. higher costs from inventories, overtime, or outsourcing. So you also need to say what you don’t want.
Step 2: Know what you don’t want. This is easier than the first, but it is not simply stating the opposite of what you want, as in "no late deliveries” in the case above. The trick is to state the other conditions or options that would get you what you want, that you are not willing to consider. You can start by striking out things that are illegal, immoral, or unethical and continue to dirty, difficult, and dangerous if any of these come to mind immediately as easy options.
This frames and constrains how you or your team will get “what you want” by immediately taking some easy “catalog” options off of the table. As Taiichi Ohno said, people’s wits don’t work until they feel the squeeze so defining “what you don’t want” puts the squeeze on your options.
Although Joe Jackson doesn’t sing about how to get what you want, the TPS gives us a basic blueprint to get what we want in terms of operational excellence, continuous improvement and organizational learning. Once you have defined “what you want” the next step is to ask “why don’t I have it?” and ask why again, and again until you get to the root cause. This is the 5 why principle in a nutshell.
Step 3: Ask “Why?” five times or until you get to the root cause of why you can’t get what you want. It may be that you still don’t know what you want, in which case go back to step 1. Cause and effect (fish bone) diagrams can be very useful at this step, in work or life.
Once you know the ‘what’ and the ‘why’, the how should become easier.
Step 4: Think of how to make it possible. This is not a question of inspiration. It is a question of effort. What can you do, today, to move a step closer to your idea, or “what you want”? This may require study, it definitely requires action.
In the case of Lean manufacturing, many have gone before us and left good descriptions of tools to solve problems and paths to follow to get what we want. Try one to see how it works.
As with kaizen, getting what you want is not done in one go. After you have made some progress towards on time delivery, for example, you will find that you “what you want” next is even better performance. Or perhaps progress in on time delivery is not as good as you want. Or perhaps what you want changes. That is okay.
Your “what you want” may be something more narrow and specific like “I want every person in the company to have the same awareness of on time delivery as the people talking to customers every day.”
This will lead you to a different tool or approach. For example take takt time. This is the speed at which work must progress so that you can deliver exactly what the customer wants, when they want it. Meeting takt time is “what you want” as a Lean organization, no matter what you do. It is a fundamental principle.
But even those of us who are nodding our heads in understanding and agreement have probably not visualized and made “what you want” obvious to the people doing the work. We have not given people a successful takt image, in Toyota Production System terms, or some physical or visual way of understanding whether they are meeting takt and getting what they want.
Making the takt, the standard or the “what you want” visual is a way to keep in your mind and in the mind of your entire team. It is not a question of slogan, but a clear “good / not good” definition. It is visual management. The deeper “what you want” is kaizen in response to abnormalities.
The same four steps apply for self-improvement goals and “what you want” items away from work. Why don't I have the two things I want? Because I stopped asking why after two or three times and went to work fixing things. Why? I'll need some time to reflect on that.
We receive a lot of questions on this blog about something called the Skill Matrix and how to use it. It seems to be an area of high interest so I will write about it more regularly.
The Skill Matrix is a very useful visual management tool. It shows at a glance how much cross-training you have in your organization between different people and different tasks.
This blog entry from 2005 talks about how the Skill Matrix enables the suggestion system, but in truth the Skill Matrix enables a lot more than the suggestion system. Since Lean manufacturing a.k.a. the Toyota Production System is all about kaizen and respect for people, and as they say in Japanese "monozukuri wa hitozukuri" or making things starts with developing people, visualizing skills development through the Skill Matrix becomes essential for Lean efforts to succeed.
Whether you are implementing one-piece flow cells that require multi-process handling capability from workers, starting up a TPM or autonomous maintenance program that requires some basic equipment upkeep knowledge from workers, or simply educating everyone in the fundamentals of the Thinking People System, you can use the Skill Matrix to show gaps in skills development (abnormalities) so that you can correct them.
The first step is to establish standards. The basic questions you will need to answer are these:
1. How many levels of competence will we have?
2. What is the description or definition of each level?
3. What are the general criteria for these levels?
4. Who is capable of teaching at instructor level?
5. What is the specific skill or task where the Skill Matrix will be applied?
Creating a simple table like this as a first step, prior to actually filling out a skill matrix, is very handy for clarifying your thinking. The example below shows five levels from zero to four:
I have seen Skill Matrices as simple as two levels (empty circle, full circle) and as complex as having seven sections to the pie. How many sections you will use for the circle is your decision, based on the type of work your are training and how many discreet check points you think you need to get from "cannot do" to "can teach". As with most things, keeping it simple and following one standard across your organization is highly recommended.
So, according to the standard above if I am to maintain my "can teach Skill Matrix" Level 4 instructor status, I will need to post something here on the Skill Matrix or teach it on the gemba at least every 90 days.
Added July 26, 2007: Download free skill matrix template here.
Sonu asks:
"Is zero defects possible? If so, what are the steps. We are dealing with around 300 parameters each having minimum 25 to 30 parameters to be met. We find it difficult to maintain zero defect for all parameters. Any thoughts???"
The first thing I would do is go to gemba. What does the machine, material, method and manpower (4M) for these processes look like? Then I would observe the process until a defect was created. It is always easier to catch the criminal in the act of committing the crime, rather than through detective work later. This in a nutshell is genchi genbutsu.
I would ask experienced people in the organization to share with me what they know about the problem, previous efforts to fix the problem, whether these were effective, and what is being tried currently to reduce defects. Their collective wisdom will inform and frame the issues.
These things would provide me with an intuitive sense of the products and processes.
The next step would be to review several types of Pareto charts of the types of defects, by part, parameter, by frequency and possibly other factors. The top items on the Pareto chart would be studied in further depth in terms of the 4Ms above, on the gemba, using a cause & effect diagram a.k.a. fishbone diagram.
At this point the combination of observed facts, intuition (what looks or sounds wrong, based on experience) and the data lead to the next steps. The next steps would most likely be a combination of things as simple as basic 5S (throwing out unnecessary items, putting all necessary items in the proper place for quick retrieval, and thoroughly cleaning to identify sources of contamination and filth), standardizing methods and procedures, checking whether our gages and measurement systems were capable, and possibly some design of experiment (DOE) type activity to see which parameters and conditions mattered the most.
I will leave the in-depth answer to this question of achieving zero defects to our friends Ron Pereira at the Lean Six Sigma Academy blog, Mike Wroblewski at Got Boondoggle?, and Rob Thompson at Quality Hero, each of whose Six Sigma chops far exceed my own.
Is zero defects possible? What is your experience? If you have sustained a zero defects process, what steps did you follow?