Management

Lean versus Toyota

Jan 24 2012

Lean versus the Toyota Production System

Is there a difference between Lean and the Toyota Production System (TPS)? This is a recurring question. The short answer is yes, but, when you look deeper, it is an issue of packaging as well as of substance.

If you are working in a car company, you cannot openly say that you are using Toyota‘s production system. How could you borrow such things from a competitor, especially if you have been in the business 50 years longer? It is embarrassing to employees, and a weak marketing message. So, regardless of how much you actually use from TPS, you must call it your own “Production Way” or “Operating System,” or…

It is even worse if you are not in car manufacturing. If you maintain aircraft for an airline, applying tools from car production will not appear to make any sense. And, likewise, patients in a hospital may not take kindly to the idea that they are treated like cars on an assembly line.
Company-specific names serve a purpose, but we also need a generic name around which to organize literature, public training, professional conferences, blogs, etc. Several were tried in the early 1980s, such as Just-In-Time, Demand Flow Technology, or World Class Manufacturing, but John Krafcik’s Lean Production, introduced in the late 1980s by the book The Machine that Changed the World, swept all aside and, to my astonishment, is still current after more than 20 years.

A generic name like Lean clearly has many practical advantages over TPS. This being said, the minute Lean branched out from Toyota, divergence was to be expected. Major tools of Lean, like Value-Stream Mapping or Kaizen Events are either minor or non-existent in TPS, while the jidoka column of TPS is largely ignored or misunderstood in Lean. See Art Smalley’s presentation at the 2006 Shingo Prize conference, or Working with Machines. The combination of Lean with Six Sigma is also popular in the US, even though Toyota evaluated and passed on Six Sigma.

The umbilical cord, however, was never broken, and the promoters of Lean still use Toyota as a reference. Clearly, nobody would be interested in Lean if it weren’t backed up by the Toyota story, and this raises the question of how far Lean can drift from TPS and still retain this vital link.

The following two comments in the Leadership and Lean The Top 5% discussion group on LinkedIn, highlight the issues. This is what Allison Corabatir has to say, based on her experience at Magna:

There is a lot in a name…. When one says they are implementing TPS, it usually means they are taking a cookie cutter approach and assuming what worked well for Toyota would work well for them too. Obviously, there is no denying that their tools are great and we should learn from Toyota, but in reality, some of the tools need to be tailored to the culture and operation of the company we are working for. […] some tools like VSM does not get enough attention with TPS ( I am a big fan of VSM) and some approaches are totally missing (We put a lot of importance to employee recognisition and rewards). I prefer using the term “lean” and making the system our own.

Who would argue with that?  Anna Johnson,  on the other hand, describes a very different experience:

My experience with TPS has been that there is a greater emphasis on retention, and lowering of costs through collaboration and teamwork and attrition, whereas while lean equally emphasizes cost cutting, headcount reduction seems more acceptable through RIFs…

When Anna says that Lean “emphasizes cost cutting, headcount reduction,” she describes a 180-degrees turn away from TPS. This version of “Lean” isn’t just a watering down but a betrayal. It is taking the approach with which financial managers have hurt US Manufacturing from the 50s to the 70s, and calling it Lean to mislead audiences into believing that it is Toyota’s approach.

Anybody can slap the Lean label on anything, and it is only a matter of time until this free-for-all makes it worthless. It results in implementations that are best described as L.A.M.E. (Lean As Mistakenly Excecuted) or L.I.N.O (Lean In Name Only). To avoid this, you have to start from the underlying principles of TPS and deploy them in an context-appropriate fashion, but it is easier said than done, because Toyota didn’t do a great job of articulating these principles and we have to reverse-engineer them from TPS.

Lists of principles can be long, abstract, vague and toothless like the UN’s Universal Declaration of Human Rights, or short, specific, and actionable, like the US Bill of Rights. In The Toyota Way, Jeffrey Liker spells out specific and actionable principles, but there are 14 of them, which is too many to remember. The Lean Enterprise Institute has 5 principles,  easier to remember but focused exclusively on the flow of materials. They say nothing, for example about human resources. You could claim to follow these principles while practicing yo-yo staffing, hiring massively in boom times and laying off in recessions.

The HBR article on Lean Knowledge Work summarizes Lean principles as follows:

  1. Relentless attention to detail
  2. Commitment to data-driven experimentation
  3. Charging workers with the ongoing task of increasing efficiency and eliminating waste in their jobs.
This is short and specific, and covers ground that the LEI list omits, but it includes no mention of flow.
Following is my own, manufacturing-centric list:
  1. Focus on people are the main driver of performance.
  2. Look for profits in the details of shop floor operations.
  3. All manufacturing is repetitive at some level, even where it doesn’t appear to be.
  4. Make materials, information, and people flow.
  5. Make it easy to do what you do often.
  6. Improve, don’t optimize. Optimization comes to a full stop; improvements never end.

There are good reasons to use the word Lean rather than TPS to designate what we do. Lean evolves in many different directions as it inspires people in different industries to pursue improvement in ways that work in their context, and it is healthy that they should do so. But there will always be bandwagon jumpers just using the label to sell products or services.

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Wealth of nations board game

Jan 17 2012

Manufacturing and Wealth

When you are engaged in an activity, it is easy to endow it in your mind with qualities an outsider would not see. Manufacturing produces tangible, physical goods, things that you can see, touch, use, and express your social status with. It is a necessary sector of the world economy and, as manufacturing professionals, we have the privilege of working in it. But we have no grounds to claim that it is the only true way to create wealth.

What is wealth, anyway? To accountants, it is the difference between the totals of what you own and what you owe, synonymous  with net worth;  it is expressed in money and easily quantified. To others, it is how long you could survive if all your sources of income dried up, and expressed in time, however it might be measured. To others yet, it is related to human relations and happiness.

In none of these meanings does it make sense to assert that  the production of material goods is the only source of wealth. This leaves out movie making, health care, tourism, or software development, just to name a few activities that generate wealth for many. As much as I personally like manufacturing, reality is that converting materials into products is only one of many ways of getting other people to pay. Making things is necessary, and somebody needs to do it. But immaterial goods or services are equally valuable creations, that can be exchanged for material goods.

18th century physiocrats thought that agriculture was the only true wealth creation. They were deluded because agriculture was the dominant sector of the economy of their day. Just because manufacturing was dominant for, say, 150 years doesn’t mean that sector has special virtues. In advanced economies, I see it headed in the same direction as agriculture : a vital and important sector, but employing a small, highly skilled fraction of the work force. It has been moving slowly and steadily in this direction since 1960, and I don’t think it can be reversed, no matter what politicians may say.

On the other hand, the human and social consequences can be anticipated. A production operator with 15 years of experience on the same machine is vulnerable; a multi-skilled machinist is much more likely to be retained and to find a rewarding alternative job if necessary. Schools can train young people wishing to make a career in manufacturing to meet the rising requirements.

Like agriculture, manufacturing matters because we need the goods, not because it provides jobs. Whether we make the goods or buy them is a decision that should not be based on direct labor cost alone but instead on all the relevant issues, including engineering, quality,  logistics, intellectual property, the skills base, customer communications, public relations, taxes, etc.

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Lean certificate

Jan 11 2012

Certification, shmertification!

Several of the comments on Six Sigma R.I.P.   touched on certification. With the belt system, this issue is of course central to Six Sigma, and, with Six Sigma on the Lean bandwagon, is merging with that of Lean certification, as evidenced in plant Lean champions who introduce themselves as Black Belts.

In his comment, R. Kester said the following:

Certification is the accepted way to communicate to others that you have successfully studied and can apply the concepts and tools of your profession (CPA, MD, RN, PE, etc.).

It is true that you want a Certified Public Accountant to help with your taxes, and that, if you go to a clinic, you don’t want anyone to mess with your health who doesn’t have the proper credentials posted on the wall. On the other hand, if you buy a painting, you usually don’t care whether the artist learned the craft in a school of fine arts or by spraying city walls: the paintings tell you all you need to know. There are also fields where certification exists but is not necessarily sought by all. For example, many university engineering departments seek ABET (Accreditation Board for Engineering and Technology) certification, but some don’t, such as Electrical Engineering at MIT, UC Berkeley, or Stanford. Their own brands are more prestigious and better known than ABET.

In the continuum of certifiable human activities, where does Lean sit between MDs and CPAs on one side and artists on the other? Lean experts sell their services to businesses, not consumers, and the primary use of certification is as a job applicant filter. To a recruiter with no personal knowledge of Lean and 100 resumes to review, the absence of a Lean certification is quick way to dispose of 80%. But what guarantee does the Lean certification give  that the surviving 20% are the best candidates?

For a certification process to achieve this result, there has to be a consensus on a body of knowledge (BOK) and on institutions qualified to certify proficiency in its application. Having doubled life expectancy in 200 years, modern medicine is a credible BOK. We know its theories are sound because they prevent, cure or control many diseases. Tax law is different, in that it is a set of rules defined by people for people to follow, like the rules of poker.  Outside of a specific human society, there is no corresponding physical reality. The difference between the two was dramatized in the library scene in  The Day After Tomorrow: the coming of a new ice age had made the tax code fit for burning, but medicine had retained its relevance, as seen when the heroes used a medical book to save one their own (See Figure 1.).

Figure 1. Burning the tax code to survive in a new ice age

In that it affects the physical reality of factories, Lean is more like medicine than tax law. However, besides the absence of consensus on a  BOK, Lean manufacturing differs from medicine is in the role of institutions, and academia in particular. Most medical discoveries are made in university medical schools; nearly all breakthroughs in manufacturing, on the other hand, have been made by self-taught practitioners in factories, with no academic affiliation. I am thinking of high school graduates like Taiichi Ohno, Frank Gilbreth, Charles Sorensen, or Frederick Taylor. Whatever consensus eventually emerges on a Lean BOK, it will not have come from universities. This leaves professional societies and for-profit training companies, and no answer to the question of who certifies the certifiers.

By requiring certifications, company recruiters are making them valuable to applicants, and are generating business both for genuine training organizations and for diploma mills. However, what these recruiters are not doing is their job, because  the next Taiichi Ohno won’t make it past their initial review.

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Jan 7 2012

Why people don’t learn Lean Management — Question from Nicolas Stampf on LinkedIn

You might as well ask why people keep behaving in self-destructive ways when they know better, for example overeating and not exercising. The rewards of changing behavior are obvious and they know it, yet they don’t do it until a significant event happens. Getting seriously ill will do it, but so will running for president.
In your question, you also treat the adoption of Lean as an personal choice. It’s not. Organizations choose to implement Lean, not individuals. It is a decision made by top managers, and they must communicate to all levels why they are doing it and that they are dead serious, which means that participation in the effort is a condition for continued membership in the organization.
Also, as Tom Berghan said “Lean isn’t Feng Shui on the business, it is the business.” In other words, if you want to be successful in implementing Lean, you cannot cherry-pick elements of it. Your question is centered on continuous improvement, performance management, and problem-solving, which won’t make much of a difference if they are all you do. In Manufacturing, the core of Lean includes specific approaches to production line design, operator job design, production control and logistics, quality assurance, maintenance, human resource management, accounting, strategy deployment, etc. I understand your work in Banking, where many of these approaches are not directly relevant, which means that you have to invent their equivalent for banking operations.

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A3 sample

Jan 2 2012

What is an A3?

Many discussions of A3 reports in Lean omit one basic fact: A3 is a paper format. In millimeters, a A3 sheet is 297X420, roughly equivalent to 11×17 in inches. It is the size of two A4 sheets side-by-side, and half of an A2 sheet. The A-series of  paper sizes is used all over the world, except in the US…

An A3 report is not just a story on one sheet of paper, but on one sheet of paper of this particular size, which has been found right to tell a manufacturing story with just enough details without turning into a victorian novel.

It can be posted on bulletin boards or above operator workstations. Operator instruction sheets are actually supposed to be on A3 paper.

Size does matter. If you shrink an A3 to A4 or letter size, it is no longer works as an A3, because the print will be too small for viewing on a board. If you show it on a PowerPoint slide, it is not an A3 either, because it does not have the permanence of hardcopy and, unless you have really advanced IT, you cannot annotate it manually.

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elephant

Dec 22 2011

The Lean Body of Knowledge

Efforts at implementing Lean have become pervasive in manufacturing, branching out from the automotive industry to electronics, aerospace, and even food and cosmetics, not to mention efforts to adapt it to construction, health care, or services. As a consequence, the knowledge of Lean, proficiency in its tools, and skills in its implementation are highly marketable in many industries.

There is, however, no consensus on a body of knowledge (BOK) for education in the field, and my review of existing BOKs and university courses confirms it.  A consensus is elusive because Lean emerged as the accumulation of point solutions developed at Toyota over time, rather than as the implementation of a coherent strategy.

As Takahiro Fujimoto explains, there was no individual thinker whose theories started the company down this path. Decades later, we are left with the task of reverse-engineering underlying principles from actual plant practices. Those who have attempted it produced inconsistent results because they have gone at it like the six blind men with the elephant: their personal backgrounds, mostly in business school education, management, or even psychology allowed them to see different slivers of the Toyota system but not the whole, giving, in particular, short shrift to its engineering dimension.

In the following paragraphs, first I explain what I think the Lean BOK should be. Then I review five programs offered in the US by universities and professional societies and highlight where they differ.

My view of the Lean BOK

A well-rounded program for manufacturing professionals would provide Lean skills to all the professionals involved in designing and operating manufacturing plants. Organizations that are successful at Lean do not rely on one department to “do Lean” for everybody else. Instead, Lean is part of everybody’s job. There are basics that everybody needs to know, and then there are different subsets of skills that are useful depending on where you work in the plant.

Beyond the common background, the knowledge should be organized around functions performed by people. In this way of thinking, Visual Management, for example, would not be a stand-alone subject, because factories don’t have “visibility managers.” On the other hand, plants have assembly lines, machining or fabrication shops, shipping and receiving departments all in need of visual management. As a consequence, visual management is part of the training of professionals in assembly, machining, fabrication, logistics, quality, maintenance, etc. And each one only needs to know visual management as it is relevant to his or her position.

Over time, Lean should  migrate into the mainstream of manufacturing and industrial engineering, and lose its separate identity, both in industrial practice and in engineering and management education. This has been the fate of successful innovations in manufacturing in the past. For example, the “American system of manufacture” to which we owe interchangeable parts is now only a subject for historians. It is not the object of a standard or certification, and nobody explicitly undertakes to implement it. That is because its components — engineering drawings, tolerances, allowances, routings, special-purpose machines, etc. — have all become an integral part of how we make things. Likewise, in Japan, TQC is no longer a topic, as its most useful components have just fused into the manufacturing culture 30 years ago. This is what must happen to Lean in the next 30 years.

Lean proficiency should be built around manufacturing functions, not Lean tools. From foundation to superstructure, we see the following hierarchy — originally defined by Crispin Vincenti-Brown — and structure the body of knowledge accordingly:

  1. Manufacturing and industrial engineering of production lines is the foundation, covering every aspect of the physical transformation of materials and components into finished goods. This is about the design and operation of a production lines using different technologies and working at different paces.
  2. Logistics and production control build on top of this foundation, covering both the physical distribution and the information processing required to make materials available to production and deliver finished goods.
  3. Organization and people covers both what an implementer needs to know in order to lead the Lean transformation of an organization, and to manage it once it is underway. The first part is about Lean project and program management; the second, about the alignment of operator team structures  to the production lines, continuous improvement and skills development, and support from production control, quality assurance, maintenance, engineering, and HR.
  4. Metrics and accountability. This is about appropriate metrics for quality, cost, delivery, safety, and morale. In routine operations, this also means collecting the data needed, computing the metrics, and communicating the results in a way that provides useful feedback. On projects, this means estimating improvements. In both cases, metrics in the language of things need to be translated into the language of money for top management.

A hypothetical participant who would master all  of the above  would understand both the philosophy and the tools of Lean, their range of applicability, and their implementation methods. He or she would possess the following skills:

  1. How to read a plant, assess its performance potential, set strategic directions, and start it moving in these directions. This entails the following:
    • Characterizing the demand the plant is expected to respond to.
    • Mapping its current, ideal and future value streams and processes and detect waste.
    • Assessing its technical and human capabilities.
    • Setting strategic directions for improvement.
    • Identifying appropriate improvement projects for current conditions and skill levels.
  2. How to generate or evaluate micro-level designs for takt-driven production lines or cells in assembly, fabrication, or machining by focusing on flows of materials and movements of people. The tools include spreadsheet calculations with Yamazumi and work-combination charts, jidoka, board game simulations, full-size mockups, and software simulations as needed.
  3. How to generate or evaluate macro-level designs for plants and supply chains, involving the organization of:
    • Internal and external logistics.
    • Milk runs.
    • Water spiders.
    • Heijunka and Kanbans.
    • Lean inventory management.
    • …
  4. How to apply the right tools for quality improvement, addressing:
    • Process capability issues with statistical methods/Six Sigma
    • Early detection and resolution of problems through one-piece flow and systematic problem-solving.
    • Human-error prevention through poka-yoke/mistake-proofing.
    • Planned responses to common problems through Change Point Management (CPM), embedded tests and other tools of JKK.
  5. How to organize people to execute and support takt-driven production, and in particular:
    • Set up a systems of small teams, team and group leaders, to carry out daily production as well as continuous improvement activities.
    • Set up a Lean daily management system with performance boards and management follow-up routines.
    • Generate and maintain a system of posted standard work instructions.
    • Apply Training-Within-Industry (TWI).
    • Set up and dimension appropriately a support structure for logistics/production control, maintenance, quality assurance, engineering, human resources, supply chain management and customer service.
  6. How to manage the Lean transformation of a plant from pilot projects to full deployment.
  7. How to select and deploy relevant metrics to monitor manufacturing performance and estimate the impact of improvement projects both in the language of things and in the language of money.

This BOK is dauntingly large, and new wrinkles are added daily.  Fortunately, you don’t need to master all of it in order to be effective.

Review of existing BOKs

I took a look at a few of the existing training programs offered by various institution, for the purpose of identifying the underlying BOKs. Table 1 shows the list. My comments follow.

Table 1: A few Lean training programs in the US
University of Kentucky Lean Systems Certification
University of Michigan Lean Manufacturing Training
SME Lean Certification
University of Dayton Get Lean
Auburn University Lean Certificate Series

The University of Kentucky program

The University of Kentucky’s program includes Core Courses — a train-the-trainer program — and Specialty Courses — for professionals outside of production operations. Some but not all the specialty courses are targeted at functions within the organization but others are about tools. Just the core courses add up to three one-week training sessions, while each specialty course is typically a one- or two-day workshop.

From the University’s web site, however, I cannot tell when, or if, participants ever learn how to design a machining cell, or an assembly line, or how to reduce setup times. In the core courses, it’s great to talk about mindsets, culture, and transformational leadership, but where is the engineering red meat?

The specialty courses address planning, improvement methods, logistics, supplier development, and other unquestionably important topics, but offer nothing about manufacturing or industrial engineering.

The University of Michigan program

The University of Michigan has a program of two one-week sessions with three-week gaps between sessions. This program does cover cell design, materials handling and factory layout,  and even rapid plant assessment, that are certainly relevant engineering topics, but I didn’t see anything about the design of lines that are not cells, autonomation, or the Lean approach to quality. There is a module about integrating Six Sigma with Lean, but there is a lot to Lean Quality that has nothing to do with Six Sigma, such as mistake-proofing.

There is also some coverage of logistics, organization, and accountability, but not as much as in the University of Kentucky program.

The SME

The SME has published a document entitled Lean Certification Body of Knowledge, in which the major headers are:

  1. Cultural Enablers
  2. Continuous Process Improvement
  3. Consistent Lean Enterprise Culture
  4. Business Results

Organization and People issues are treated in 1. and 3. The first two line items under Cultural Enablers are “Respect for the individual” and “Humility.” I am not sure how you can teach this or test for it, particularly humility. It is followed by techniques that have to do with implementation. The topics  in 3. have more to do with management once Lean is started, but it doesn’t say it in so many words.

All Engineering and Logistics is lumped under Continuous Improvement, which is clearly a misnomer because many of the Lean techniques in these areas are radical innovations that have nothing to do with continuous improvement. Inside this section, the choice of topics and their structure is surprising. For example, the only method of data collection considered is the check sheet, and it ranks as high in the hierarchy of topics as poka-yoke or one-piece flow.

As the name suggests, Business Results covers metrics and accountability.

The weight of the different areas varies with the level of certification. At the Bronze level, for example, Continuous Improvement counts for 60%; at the Gold level, only for 15%.

The University of Dayton

I have ties with this institution from having taught courses there  for many years, and I am still listed among their Experts. But I am not involved with their GetLean Certification program. It is an 8 to 10-day curriculum with a core of 5 days on the following topics:

  • Introduction to the Lean Tools
  • How to Develop New Metrics in a Lean Culture
  • Human Error Reduction: Root Cause Analysis
  • Fundamentals of Negotiation
  • Strengthening Your Business Services using LEAN Tools
  • Managing Projects in a LEAN or Six Sigma Environment
  • Managing an Efficient Supply Chain

The choice of topics may seem odd. For example, you might wonder what Fundamentals of Negotiation is doing in a Lean training program, or why Root Cause Analysis only appears under Human Error Reduction. What about root cause analysis of process capability problems?

Auburn University

Of all the Lean programs reviewed here, Auburn University’s probably has the deepest roots, through the influence of JT Black, whose passion for Lean goes back to the late 1970s.

The list of subjects they cover is as follows:

  • Principles of Lean
  • Value Stream Mapping
  • 5s
  • Total Productive Maintenance (TPM)
  • Quick Changeover
  • Pull / Kanban / Cellular Flow
  • Sustaining Continuous Improvement
  • Lean Office
  • Lean Accounting
  • Rapid Improvement Event
  • Problem Solving

If anything, this program has too much of the red meat that is lacking in some of the others. It could, without harm, emphasize Logistics and Management a bit more.

Conclusion: no consensus

Even when considering the programs solely on the basis of their published syllabi, it is clear that their graduates will have received vastly different instruction, and that the designers of these programs have no common view of what the Lean Body of Knowledge is.

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