The Routledge Companion to Lean Management is now available for pre-ordering. It is a compilation of contributions from multiple authors, edited by Torbjorn Netland, and Chapter 8 is my overview of Lean Logistics. The other co-authors include Dan Jones, Jim Womack, John Shook, Jeffrey Liker, Robert Hafey, John Bicheno, Glenn Ballard, Michael Ballé, Mary Poppendieck, and many others whose work I am not familiar with.
Most of the work we do today involves interactions with machines. It is true not only in manufacturing but in many other business processes. The machinist works with machining centers, the pilot with an airplane, the surgeon with a laparoscopy robot, the engineer with a variety of computer systems,…, not to mention the automatic appliances that relieve us of household chores. In fact, I think that being good at working with machines is so essential that I wrote a book about it. For the short version, see the following A3/tabloid infographic. To enlarge it, click on the picture, and then on “View full size” in the bottom right-hand corner.
“Toyota said the move, aimed at cutting development costs by 20%, would start with mid-sized, front-wheel-drive vehicles this year. It wants half of vehicles it sells globally by 2020 to fall under the new platform strategy.”
Specifics are trickling out about Toyota’s plans. It seems that they want to make more different products from fewer components and have plants that are competitive even at low volume.
Readers’ comments on the idea of having fewer platforms and more common parts are focused on the risk of extensive recalls, and the way such recalls can wipe out any savings achieved by the strategy.
It really is a matter of degree and of execution. Having fewer dashboard options might reduce the attractiveness of your products, but using fewer types of proportioning valves will not. Also, it is easier to ensure not only availability but quality as well for fewer components, making recalls less likely.
With regards to volume in a given plant, Toyota’s strategy seems a continuation of their work on the Global Body Line, in which the same infrastructure and fixtures could be used for robotic welding at high volume and manual welding at low volume.
See on Scoop.it – lean manufacturing
“A retired Toyota executive describes how to overcome common management challenges associated with applying lean, and reflects on the ways that Toyota continues to push the boundaries of lean thinking.”
You just can’t pass up an article with the perspectives on Lean of a recently retired Toyota executive, even if it is in the McKinsey Quarterly. Most interesting are his stories about plants outside of Toyota that he visited recently, where he criticizes his hosts for complacency.
Because of the author’s background, when he says “Lean,” he means TPS or the Toyota Way. He also uses Toyota’s own “respect for people.” mistranslation of its “respect for humanity” (人間性尊重) principle. Again, it’s not about saying “please” and “thank you” but about taking full advantage of the unique capabilities people have when compared to other resources.
See on www.mckinsey.com
See on Scoop.it – lean manufacturing
“Lean production is the name given to a group of highly efficient manufacturing techniques developed (mainly by large Japanese companies) in the 1980s and early[…] When a lean-production system is first introduced, stoppages generally increase while problems are ironed out.”
The Economist is a British magazine not known for getting facts wrong, but it did here.
Lean Production is not for the 1980s. The name may be from the late 1980s but the thing itself is a work in progress that started decades earlier. And it is from Toyota, not from generic “large Japanese companies.”
And a competent implementation does not start by making things worse.
See on www.economist.com
This form is of interest because it comes from Toyota. Note that, in Toyota literature, to “add value” means physically changing the product. It is not used in the US Lean sense of something a customer is willing to pay for.
The labels for some of the waste categories are unusual. “Defects” is here labeled “Rework,” which seems to exclude the option that defective products are just scrapped.
This audit form has no checkboxes, but instead blocks of space to enter free text. It is even followed by an overall “Notes” section.
What this says is that the purpose of the form is to prompt teams to observe and record their findings. It is not about scoring areas or lines on any scale. It is to help improvement efforts, not benchmark against others.
See on www.toyotaforklifts.co.uk
“Current physical tar pit” is an expression I first heard when I got involved with the design of information systems for manufacturing in the 1980s. It is a special case of analysis paralysis brought on by digging so deep into the details of existing operations so you cannot extricate yourself from it, and are caught like dinosaurs in a tar pit. The phenomenon was first described by Frederick Brooks in his classic The Mythical Man-Month about software engineering.
The key issues are:
- Current, Ideal and Future States in Manufacturing and Software
- Mapping in Manufacturing versus Software Engineering
- Mapping the Current State: How Far Should You Go?
In setting the requirements for a new system, analyzing the existing one was the first step, and you were supposed to start with the way it physically worked — that is, follow the data from the computer screens, bar code readers, sensors, or paper forms with which it was collected, to the databases in which it was stored, the programs that transformed it, and finally the output produced, whether it was machine controls or instructions and reports for humans.
The next step was to abstract the underlying logic behind the current physical system. Regardless of technology, what was the meaning of what was being done? What information was input and output? What was the system trying to accomplish? What were the concepts? If the system was dysfunctional, was it due to the limitations of its hardware or flaws in its logic? The answers to these questions were the key, first to designing the logic of a new, better system, and then to selecting hardware on which to implement it, with the understanding that all sorts of trade-offs would be needed to keep it affordable and its development time short enough for users not to lose patience.
This was similar in spirit to the current, ideal and future state mapping stages that are commonly recommended with Materials and Information Flow Analysis (MIFA), also known as Value-Stream Mapping (VSM). It should also be noted that, while the mapping of information flows is key is systems analysis for software, it is by no means the only tool. In 2013, you have a kit called Unified Modeling Language (UML), which also includes tools to map database structures and the state transitions of resources like machines, vehicles, materials, or containers.
Whether for information systems or for factories, the approach is intellectually attractive and its rationale unassailable. Practicing it, however, whether in designing software systems or production plants, has been challenging. In manufacturing, at least, the software systems introduced over the past 30 years have been mostly perpetuating old approaches with new technology, and have been more often an obstacle to improvement than a driver of it.
Let us consider a couple of actual examples:
- You have machining centers used to carve batches of identical parts and you want to switch them to making instead sets of mating parts going into the same assembly. This is a typical step in the conversion of a plant to Lean, but I have seen it not done on the grounds that the planning system did not support this mode of operation. In other words, a job could be defined as multiple units of one item, but not multiple items drawn from the bill of materials of an assembled product. It is clearly a case of the tail wagging the dog. Technically, it is not a show stopper in that, given management will, a manual workaround is technically feasible, but it is an embarrassment with a system that has been recently implemented at great expense.
- You bought an automatic storage and retrieval system (AS/RS) for pallets of materials. But, rather than pallet-loads, Production needs parts delivered in bins picked from pallets, and you discover that the AS/RS control system does not support the logic of retrieving a pallet, picking a bin from it, and storing it back with a lower quantity. Since the cost of upgrading the control system for this purpose being prohibitive, you set up a manual warehouse for partial pallets.
When you encounter such situations, it is a clear sign that the analysis process described above has been executed poorly, if at all. It is rarely done well, because is requires a mix of software engineering skills and manufacturing knowledge that is both rare and under-appreciated.
The current state analysis has the following two purposes:
- To let the analysts understand the reality of the starting situation and thereby ensure that proposed ideal and future states solve its problems in a way that is realistic, both from a technical and a human point of view.
- To communicate the need for change inside the organization. Its members are tied up in daily operations and have not had the opportunity to step back and consider the system as a whole.
The analysis should be deep enough to achieve these goals, but no deeper, lest the analysts fall into the current state tar pit. Current state flows are usually convoluted and informal, involving things like favor banks between individuals, and you can spend your entire career getting to the bottom of it without ever making any improvement.
For example, once you have established that the dispatch lists from ERP are not followed on the production floor, you don’t need to figure out the details of what is being used instead. You know you have a scheduling system that doesn’t work and you can focus on figuring out what you should use instead.
Of course, the real current state is more functional than the dispatch lists, and it involves having scheduling decisions made by production supervisors, team leaders, or even operators. The real question is not whether particular individuals do a good job of it, but whether it is a job they should have to do at all. However scheduling is done, whether manually or electronically, it should not require shop floor people to make judgement calls. It should unambiguously tell them what to work on, in such a way that the materials, machines, tools, specs, process programs, and people are available to actually do it.
It would be useful to know all the details of the current state, but it is often impractical because it would take too long and the end result would be an unintelligible tangle of flows. In addition, if you insist on digging too deep, you may end up like the anthropologists to whom tribesmen lie about their culture. It’s like the spaghetti mapping of physical flows. Once you have established in one location how awful it is, and management recognizes it, the team can move on to designing how the flow should be, and not just in the area where it has drawn the map.
If you can dig deeper, and do it quickly, more power to you. What I am cautioning against is getting bogged down. In every organization, there are opponents to change who will be happy to see you stuck. While you are struggling to extricate yourself from the current state tar pit, they can blithely go on with business as usual and wait you out.
Unlike Jeffrey Liker’s 2004 The Toyota Way, The Toyota Way 2001 is not a publication but an internal company document distributed to US employees, who were not supposed to reproduce it. 12 years on, many consultants are quoting it, borrowing its terminology, and describing it as representing the essence of Lean. It is floating around, but it is still not readily available. If you google it, you find plenty of inquiries about it, but the document itself does not pop up. Unlike the Necronomicon, however, it does exist.
I have read it and my reaction was as follows:
- About the document as a whole
- Remarkable quotes
- The risks and benefits of publishing your “way”
It’s only 14 pages long, and probably worked as a “wrapper” for the methods Toyota employees were already using. As a stand-alone document, however, it’s not that useful, as it does not clearly state what is special about the company. Based on its content alone, it would be difficult to tell the Toyota Way apart from other corporate philosophies like the HP way. A manager of a mid-size traditional plant, reading The Toyota Way 2001, would reasonably conclude that all he or she needed to do to emulate Toyota was follow its recommendations. With all the wheels that would have to be reinvented, this approach in such a plant might yield results in, say, 60 years.
In his introduction, Fujio Cho, then president of Toyota, describes the document as a statement of the company’s “DNA” and applicable everywhere in the world. The five major headings that follow — Challenge, Kaizen, Genchi-Genbutsu, Respect, and Teamwork — have come to be often used outside of Toyota, for example as a structure to explain why middle managers don’t practice A3 thinking.
|The Toyoda Precepts||4|
|Robert B. McCurry||3|
|Declaration between TMC and Workers’ Union, 1962||1|
Except for two quotes by Hiroshi Okuda, who was still running the company in 2001, all the authors were either retired or dead; Okuda himself retired in 2006. With the exception of Fujio Cho in the introduction, the document does not reference any current leader. Eiji Toyoda, the most quoted author, is founder Sakichi Toyoda‘s nephew and will turn 100 this September. The second most quoted is Kiichiro Toyoda, who started Toyota in car manufacturing but died in 1952. The man best known outside Toyota as the father of the Toyota Production System, Taiichi Ohno, is only in 3rd place, with nine quotes. 80% of the quotes are from Japanese sources, and 53% are from three generations of the Toyoda family.
Outside of the quotes, the subtitles and the summary paragraphs use terms like “Lean,” “DNA” and “value” that are from the American Lean literature. “Value” is used in multiple senses, sometimes for ethical principles as in “values and beliefs,” and other times as an abstraction of what the company delivers to its stakeholders, listed as “customers, shareholders, associates, business partners and the global community.” The order in the sequence obviously matters, but there is a contrast with the US Lean literature and its exclusive focus on customers.
“Value added” appears once, in a definition of Muda as “no value added.” In the Japanese literature, Muda is not defined, and used in its common, everyday sense of “unnecessary.” “Added value” is used four times, and designates a quantity that can be high or low, as in “goods and services with high added value.” While it is not explicitly stated, this usage is consistent with added value being the difference between sales and the materials, energy and outsourced services consumed in producing the goods sold. This is the metric used to compute productivity, contribution to GDP, and Value-Added Taxes in countries that charge them. There is no reference to “value added” as an attribute of activities that customers are willing to pay for.
There is a reference to “Optimization,” which surprised me, as I see the optimization mindset is antithetical to continuous improvement. Once you have optimized something, then, by definition, no more improvement is possible. I have heard managers say “We’ve optimized this line…” as a way to say that they had moved on to other areas and would not address glaring problems that remained. With continuous improvement, on the other hand, the completion of an improvement step is not an occasion to declare “mission accomplished”; it just sets up the stage for the next step.
Following are comments on a few of the quotes in the document that I found most striking.
Eiji Toyoda is quote as saying: “A person’s life is an accumulation of time – just one hour is equivalent to a person’s life. Employees provide their precious hours of life to the company, so we have to use it effectively, otherwise, we are wasting their life.”
It builds on the famous Benjamin Franklin quote “Dost thou love life? Then do not squander time, for that’s the stuff life is made of.” (‘Poor Richard’s Almanack, June 1746). But Franklin’s exhortation is for individuals and about themselves. The twist Eiji Toyoda adds is that the company should not squander its employees‘ time, and the reason given is not that it is paid for, as Taylor would have said, but that it is a piece of that person’s life. I don’t recall seeing such an expression of respect for humanity in the American management literature.
Taking this further, if we squander an employee’s time, we are also sending a message. We are telling the employee that we can afford to waste his or her time and therefore that it is worthless. And since that is “the stuff life is made of,” the employee’s life is worthless, so that the final message is “You are worthless.” It is difficult to imagine a more disrespectful or insulting stance.
Most discussions of respect for humanity in TPS are about making full use of employees’ skills, and, in particular, their intellectual and creative abilities. What Eiji Toyoda says here is that it is also about their time.
About Kaizen, Eiji Toyoda is quoted as saying “Even a dry towel can produce water when ideas are conceived.”
In Japan, I had heard it said admiringly of Toyota that “they could squeeze water out of a dry rag,” (乾いている雑巾を絞ると水が出る) but I didn’t know it was a quote from Eiji Toyoda. And it was about rags, not towels. I suppose the translator just thought “towel” sounded more professional, but “rag” is more true to life.
“I plan to cut down on the slack time within work processes and in the shipping of parts and materials as much as is possible. As the basic principle in realizing this plan. I will uphold the ‘just·in.time’ approach. The guiding rule is not to have goods shipped too early or too late.”
“The quicker merchandise can be moved from the raw material to the ultimate consumer and the minimum amount of merchandise, of whatever it may consist, involved in the ‘float,’ the more efficient and more stable industry becomes.” Speech to Automobile Editors of American Newspapers, 9/28/1927.
The document includes a quote from Alex Warren that describes standardized work as the best known way to complete a job. Art Smalley and Mike Rother disagree, specifically with the notion that this is the way standardized work is used within Toyota. To Art Smalley, the standard is a basis for comparison; to Mike Rother, a target condition. I consider Standardized Work to be just a set of rules published for the purpose of ensuring that different people perform the same tasks in the same way. Because it has to be enforced, it is more than a basis for comparison, and it cannot be a target. While it may be the best known way, describing it as such is hardly a way to encourage improvement.
A document of this type about the way a company does business gives employees a framework to understand management decisions and business processes.
The challenge in publishing it — even if only for employees — is to actually say something without binding management to courses of action that may become inadequate as business conditions evolve. When crises occur, as it did for Toyota in 2010, management is easily accused of having acted in contradiction to the company’s way by expanding too fast. HP is likewise blamed for having strayed from the “HP way.”
By definition, the Toyota Way is what Toyota says it is. But the Toyota Way 2001 document is intended to serve a specific purpose for the specific audience of Toyota employees in the US. As outsiders, we must consider it on its own merits and see what use we can make of it as a stand-alone document, taken out of context. My read on it is that it is misleading for readers who are just starting their Lean implementation in that they may believe that all they have to do is continuous improvement with respect for people.