A summary of mistakes about Lean

In an invitation to the Lean Enterprise Academy 's Lean Summit 2014, David Brunt included the following summary of Lean since 1990:

"Early implementations focused on empowered teams and continuous improvement (kaizen) or attempts to replicate a pre-defined box of tools such as 5S, SMED, SPC and kanban. For others lean became synonymous with kaizen events - that were actually kaikaku - radically reconfiguring individual operations. For some, this led to them developing their version of Toyota’s famed Production System (TPS) including their own schematic 'house' or 'temple' of lean along with departments of continuous improvement specialists."

It is a pretty accurate account of what happened -- the only major omission being the omnipresent VSMs -- and it goes a long way towards explaining why the vast majority of these efforts failed. They were limited at best to superficial details of TPS, included elements that were not part of TPS, and misjudged implementation priorities. Let's us go through the list:

  1. "Empowered teams."  As a manager you have a team to work with. What decisions should you allow this team to make on its own? This is best subjected to the sleep-at-night test. Knowing that you are responsible for the outcome, what can you delegate to the team and still sleep at night? It obviously depends on the team. If it is a team of production operators with 10 years of TPS practice behind it, the answer will not be the same as if they are beginners. Implementations that start with empowering teams put the cart before the horse.
  2. "Continuous improvement (kaizen)." Lean, or TPS, are often described as approaches to continuous improvement (CI), when CI is in fact only one component of the system. You cannot convert a plant from mass production to Lean manufacturing by continuous improvement, because it is not about tweaking details. For example, if you have implemented cells in machining or assembly, you can make them perform better with CI, but you have to have cells first, and that is beyond the scope of CI.
  3. "Replicate a pre-defined box of tools." It can work, if your situation is sufficiently similar to the one you are copying, you really know what the tools are, and you master them.
    • SMED and Kanban are tools of TPS but often misunderstood. For example, you often see SMED used to try to increase equipment utilization instead of flexibility, and Kanban is often confused with the two-bin system or even reorder-point.
    • SPC is not part of TPS. This is so shocking to American and European professionals trained by the Quality establishment that they just inserted it back in, regardless of what Toyota actually did. The latest examples of SPC control charts at Toyota are from the 1950s.
    • 5S is part of TPS, but is mistakenly assumed easy to implement because its technical content is trivial. In fact, the absence of technical content is what makes it difficult to implement and certainly unfit for an initial project.
  4. "Kaizen events" are an American invention and not part of TPS. As Brunt points out, the name is misleading, because what they do is not Kaizen. The popularity of this method over the past 25 years and the confusion created by the name have in effect prevented Lean implementation from including the real Kaizen.
  5. "Departments of continuous improvement specialists." The creation of these departments has often made Lean implementation into a function alongside Production Control, Maintenance, or Quality Assurance, with the result of making it a professional specialty instead of part of everybody's job. It works to make a good show for outside visitors, but not for much else. This department cannot be large enough to have the capacity to do all that needs to be done. Even if it did, it does not have the authority to make the changes take root in daily operations.

These efforts failed because the approach was simplistic. Both the technical and managerial content of TPS are deeper and take a while to learn. A successful implementation, particularly is a different industry, is not based on copying tools but on understanding underlying principles and deploying them as appropriate to the new context.

VSM Pitfall: unnecessary process | Chris Hohmann

Value Stream Mapping (VSM) is probably the main analysis tool and the most used in the lean toolbox. Easy to understand and handle, VSM is the starting point of improvement workshops and kaizen eve...

Source: hohmannchris.wordpress.com

Michel Baudin's comments:

Thoughtful comments, as usual from Chris Hohmann.

However, we need to go further and question the wisdom of reducing Lean implementation to Value-Stream Mapping and kaizen events when neither tool is central to the Toyota Production System.

"Value-Stream Mapping," which is really materials and information flow mapping, is a minor tool at Toyota, used only with suppliers who have delivery problems. And "kaizen events" don't exist at Toyota.

See on Scoop.it - lean manufacturing

Toyota Cutting the Fabled Andon Cord, Symbol of Toyota Way | Automotive News

Toyota is retiring the fabled “andon cord,” the emergency cable strung above assembly lines that came to symbolize the built-in quality of the Toyota Way and was widely copied through the auto industry and beyond.

Source: www.autonews.com

 

Michel Baudin's comments:
The point of having a cord rather than buttons was that the cord could be pulled from anywhere along the line, whereas buttons require you to be where they are. It is the same reason many buses have cords for passengers to request stops rather than buttons.

Toyota's rationale for moving to buttons, according to the article, is the desire to clear the overhead space. Another advantage, not stated in the article, is that the alarm from a button is more location-specific than from a cord.

Another reason to use a cord was that you didn't have to change it when you rearranged the line, whereas relocating buttons required rewiring. But the wireless button technology has made this a moot point.

See on Scoop.it - lean manufacturing

What is "Operational Excellence"?

Who would not want something called "Operational Excellence"? "Excellence" is superlative goodness, and "Operational" suggests a scope that includes not only production, logistics, and maintenance in Manufacturing, but also administrative transaction processing like issuing car rental contracts or marriage licenses. The boundaries are fuzzy, but Marketing and R&D are not usually considered part of Operations.

Hearing "Operational Excellence" for the first time, everybody takes it to mean whatever they think is the best way to run operations, which makes it unlikely that any two people will have the same perception. If marketers of consulting services can prevail upon a profession to accept such a vague and generic term as a brand, they can sell pretty much anything under this label. By contrast, the Toyota Production System (TPS) specifically refers to the principles, approaches, methods, and tools that Toyota uses to make cars. When you first hear it, you may not know what those are, but you know that you don't know. Another difference between "Operational Excellence" -- also known as "OpEx' or "OE" -- and TPS, is that the first is a goal, while the second one is a means to achieve the unmentioned but obvious goal of thriving in the car industry.

Chevron OE

OE at Chevron

It is an increasingly popular term, perhaps because of its very lack of precision. Google it, and you find, for example, that, Chevron "has spent more than 20 years expanding systems that support a culture of safety and environmental stewardship that strives to achieve world-class performance and prevent all incidents. We call this Operational Excellence (OE),..."  So, at Chevron, OE is about avoiding accidents that directly hurt people and oil spills that ruin the environment.

It is certainly not what it means to the  Institute for Operational Excellence. Its website has a glossary that contains exclusively terms from TPS or Lean, like Andon, Cell, Chaku-Chaku, 5S, Kanban,..., which strongly suggests that Operational Excellence is just the latest avatar of TPS when applied outside of Toyota. For 25 years, "Lean" has reigned supreme in this role but may finally be getting stale after so many botched implementations.

Shingo Prize for OpExThe Utah State University website, on its Jon M. Huntsman School of Business page, has a directory entry for The Shingo Prize for Operational Excellence. The Shingo Prize site itself, however, while using "excellence" in almost every sentence, does not refer to operational excellence. The theme of this year's Shingo Prize conference, in Sandusky, OH in May, was "Enterprise Excellence," which sounds like a further generalization. But, digging deeper, you find that the Shingo Model Handbook contains "operational excellence" 31 times, "Lean" 7 times,  "Toyota"  twice, and "TPS" never.

 

Shigeo Shingo

Shigeo Shingo

stuck_gear-teeth

Stuck gears on the Shingo Prize page

The Shingo Prize page uses as a banner a picture of three gears with the teeth enmeshed in such a way that they can't move, a picture that would have seemed odd to an engineer like  Shigeo Shingo. His legacy is primarily contributions to production engineering like SMED, Poka-Yoke, and line/work station design. On these subjects, you cannot see daylight between Shingo's work and the Toyota Production System (TPS). Therefore, when you see a document called "Shingo Model Handbook" that refers repeatedly to Operational Excellence and never to TPS, you can't help but conclude that Operational Excellence is just another name for TPS.

UC Berkeley OE Program Office Team

UC Berkeley OE Program Office Team

UC Berkeley has an Operational Excellence (OE) Program Office. Based on the family picture in its Spring 2014 Progress Report, it has 12 members. UC Berkeley has a total workforce of 29,000, of which 2,000 are full and part-time faculty members, and about 36,000 students. It works out to 1 member of the OE Program Office for every 2,417 members of the work force and 3,000 students. They present themselves as  internal consultants, with access to funding and expertise in "project management, change management, strategic planning, campus engagement, financial analysis and planning, business and data analysis, and communications." The director of the office has been on the administrative staff for 13 years and reports to the university's chief administrative officer. This is yet another take on it.

Do the proponents of Operational Excellence do a better job of capturing the essence of TPS than their predecessors in Lean, World-Class Manufacturing,  Synchronous Manufacturing, or Agile Manufacturing? The above-mentioned institute has a page defining Operational Excellence as "the point at which 'Each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.'” 

At first, it sounds like another version of True North, as explained by Art Smalley. Taking a closer look, as a general statement, it does not make much sense. It implies that every employee of every organization is involved in something that can, at least metaphorically, by described as a "flow of value" to customers. It is no stretch to see how this applies to a hot dog street vendor, but how does it work for, say, a firefighter? A firefighter serves the public by putting out fires, but the value of a firefighter resides in the ability to put out fires when they occur, not in the number of fires put out. A firefighter "seeing a flow of value to customers" is a head scratcher. As for "fixing the flow before it breaks down," it conjures up the image of a plumber repairing a pipe that doesn't leak.

Even Wikipedia editors are uncomfortable with their article on Operational Excellence. They denounce it as "promoting the subject in a subjective manner without imparting real information." The definition is indeed short and confused:

Operational Excellence is an element of organizational leadership that stresses the application of a variety of principles, systems, and tools toward the sustainable improvement of key performance metrics.

Much of this management philosophy is based on earlier continuous improvement methodologies, such as Lean Manufacturing, Six Sigma, and Scientific Management. The focus of Operational Excellence goes beyond the traditional event-based model of improvement toward a long-term change in organizational culture.

It says what Operational Excellence is an element of, what it is based on, and what it goes beyond, but not what it is. And much of what these few words say raises eyebrows:

  1. The emphasis on metrics is a throwback to Management-By-Objectives, an approach that has historically not led to excellence at anything but gaming metrics.
  2. Lean Manufacturing, Six Sigma, and Scientific Management are emphatically not continuous improvement methodologies. Continuous improvement is a component of Lean but by no means all of it. Six Sigma is not continuous improvement at all, and Taylor's "scientific" management was about preventing operators from colluding to curtail output, not improving processes.
  3. Continuous improvement is not event-based.  Contrary to what the name suggests, "Kaizen events" don't do continuous improvement. This format was actually developed in the AME in the 1990s based on the realization that just continuous improvement could not accomplish changes of the scope that was needed.
  4. TPS/Lean, when correctly implemented, has always been about a long-term change in organizational culture.

Next frontiers for lean | McKinsey

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"...Quietly, though, in Nagoya, Japan, Taiichi Ohno and his engineering colleagues at Toyota were perfecting what they came to call the Toyota production system, which we now know as lean production. Initially, lean was best known in the West by its tools: for example, kaizen workshops, where frontline workers solve knotty problems; kanban, the scheduling system for just-in-time production; and the andon cord, which, when pulled by any worker, causes a production line to stop..."

Michel Baudin's comments:

This article implies that the "Kaizen workshop" is a tool of the Toyota Production System, when in fact it is an American invention from the 1990s and what it does is not what is meant by Kaizen in Japan

Then the article describes Kanban as "the scheduling system for just-in-time production." It is really only a a tool of scheduling among many, including heijunka, just-in-sequence, consignment... The last example, Andon cords, had been observed at Ford in 1931.

Even if this choice of examples is unfortunate, Toyota people invented many tools while adopting and refining existing ones, and it is true that each tool, taken out of context, is of limited value. Toyota's merit is to have deployed them in a uniquely effective way as part of a system of production.

This is, however, not what the article says. It jumps instead to management disciplines, like "putting customers first," an idea that bazaar merchants worldwide have had for millenia.

"Enabling workers to contribute to their fullest potential" and "constantly searching for better ways of working" is in fact something that Toyota has done better than its competitors. And these are sound management objectives, but you could pursue them and still not be competitive.

The article implies that the technical content of the Toyota production system is a detail. All that matters is focusing on customers and treating people right. Is it? I don't think so.

This attitude is the root cause  of the failure of so many "Lean implementations." Until the technical content of the Toyota Production System is understood and properly valued, the Lean movement cannot claim "Mission Accomplished" in manufacturing.

See on www.mckinsey.com

Business Intelligence and Jidoka | Toyota's Simon Dorrat | PEX

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Simon Dorrat is Manager of Toyota’s Business Intelligence function where he is responsible for defining and delivering all services relating to Business Intelligence and Data Warehousing including BI, ETL, Data Quality, Master Data and OLAP. [...] Simon shares his thoughts on how Business Intelligence fits with the Toyota Way, suggests three ways for IT to provide better value to the business and even explains why doing a kitchen renovation helped some illuminate important aspects of software development.

Michel Baudin's insight:

For the IT-phobic, a Data Warehouse is a database that makes historical data from multiple sources accessible for analytics. It is commonly used to provide management with Business Intelligence (BI). The process of periodically feeding a data warehouse is called Extract, Transfer and Load (ETL).

Of course, analysis is only worth doing on data that is complete and accurate, hence the need for tools to ensure Data Quality. The different sources usually have different nomenclatures for products, processes, or facilities, and you need your Master Data to integrate them in a single, consistent model. Finally, "OLAP" stands for Online Analytical Processing.

The first sentence in the article describes Toyota as "creating the precursor to Lean Manufacturing" and nearly made me stop reading further. It would have been a mistake.

See on www.processexcellencenetwork.com

Are Silos The Root of All Evil? | Bill Waddell thinks so

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"Functional silos – the idea that all engineers have to work in an engineering department, all sales people have to work in a sales department and all procurement people have to work in a purchasing department – represent the over-arching deficiency in just about all companies.  They are at the root of enormous amounts of wasted time and money and they are at the root of most lousy cultures. "

Michel Baudin's comments:

We all know bureaucratic horror stories associated with functional silos, like the manufacturing company where Sales, Engineering, Manufacturing and Accounting all had different product nomenclatures. Not only did they have multiple names for the same products, but they grouped them into families differently, so that it was impossible to get aggregate measures of anything.

In light of this, it is tempting to just dissolve these departments and reorganize along the lines of what Wickham Skinner called "focused factories," Hammer and Champy "business processes," and Womack "Value Streams." The idea has been around a while.

1996 Ford Taurus

1996 Ford Taurus

According to Mary Walton's account of the development of the Taurus 1996 in Car, this is what Ford did at the time.  and it cut the development time down to 30 months. According to Sobek, Liker, and Ward, however, this is NOT what Toyota did, and it was developing cars in 24 months with functional departments exchanging memos!

1996 Toyota Camry

1996 Toyota Camry

In addition, the Taurus 1996, while undeniably an artistically unique design,  did not set the market on fire and included body parts that were difficult to stamp out of sheet metal, Walton's book suggests that the marketing and manufacturing members of the team, having completely transferred their allegiance to the team , failed to make it give due considerations to the needs of the groups they came from.

This suggests that, while often a good idea, collocating all the participants in a business endeavor and breaking all the functional departments is not a panacea.

Sometimes it is technically impossible, because, for example,  the functional department is operating a monumental machine that you don't know how to break down into smaller units that could be distributed among different "value streams."

Sometimes, you can't do it for operational reasons. For example, you don't distribute Shipping and Receiving among the different production lines in the same building, because it would require more docks and access roads, and it would make truck drivers deliver to different organizations at multiple points around the same building.

Sometimes, you end up having specialists report to managers who have no understanding of what they need to be effective, and can't evaluate their requests for equipment, training, or permission to attend a conference.

Sometimes, you locate an engineer who needs a quiet space to concentrate on technical issues next to a boisterous sales rep who speaks on the phone all day...

Unfortunately, I don't think all evil has just one root. It's a bit more complicated.

See on www.idatix.com

The GM Toyota Rating Scale | Bill Waddell

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"In a survey of suppliers on their working relationships with the six major U.S. auto makers – Toyota, Honda, Nissan, Ford, Chrysler and GM – GM scored the worst.  But of course they did.  They are GM and we can always count on such results from them. [...] Toyota scored highest with a ranking of 318, followed by Honda at 295, Nissan at 273, Ford at 267, Chrysler at 245, with GM trotting along behind the rest with an embarrassing 244."

 

Michel Baudin's comments:

While I am not overly surprised at the outcome, I am concerned about the analysis method. The scores are weighted counts of subjective assessments, with people being asked to rate, for example, the "Supplier-Company overall working relationship" or "Suppliers' opportunity to make acceptable returns over the long term."

This is not exactly like the length of a rod after cutting or the sales of Model X last month. There is no objective yardstick, and two individuals might rate the same company behavior differently.

It is not overly difficult to think of more objective metrics, such as, for example, the "divorce rate" within a supplier network. What is the rate at which existing suppliers disappear from the network and others come in? The friction within a given Supplier-Customer relationship could be assessed from the number of incidents like the customer paying late or the supplier missing deliveries...

Such data is more challenging to collect, but supports more solid inferences than opinions.

See on www.idatix.com

13 pillars of the Toyota Production System |Toyota UK corporate blog

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"Underpinned by thirteen core processes and philosophies, The Toyota Production System pioneered modern manufacturing as we know it. Here's what each one is and how each one works. The Toyota Production System is the blueprint for modern manufacturing, and is employed in Britain to build the Toyota Auris and Avensis models. Here, we take a look at the thirteen philosophies that underpin it."

Michel Baudin's comments:

Thanks to Mark Graban for drawing my attention to this blog from Toyota UK and this article in particular. It is always useful to know Toyota's official line about its own system. Corporate blogs are perversions of the concept of a blog, which is intended to be a conversation between an individual human and the rest of the world. When you read a post, you know who stands behind it and who will respond to your comments. Corporate blogs lack this authorial voice, and are a public relations exercise.

The first "pillar" in this article is the Konnyaku stone. I had never heard of it The only kind of Konnyaku I am familiar with is gelatinous slabs found in Japanese dishes. I didn't know the name was used in polishing sheet metal, and I am still not sure what kind of a pillar of a production system it may be.

The picture illustrating the Andon paragraph does not appear related to the subject. An Andon board, on the other hand, is shown as an illustration of Kanban.

The picture on Jidoka shows automatic welding by robots, but the text only describes equipment "designed to detect problems and stop automatically when required," without saying that it happens to be automatic. The paragraph also describes operators stopping production "the moment they spy something untoward," which, while important, is not jidoka per se.

"Kaizen" is described as "a mantra for continuous improvement." I thought it was just continuous improvement, not a mantra for it. The paragraph also states that it achieves "efficiency optimization." If it did, however, you would be at an optimum, and continuous improvement would no longer be possible.

See on blog.toyota.co.uk