Lean

Feb 19 2014

When Toyota met e-commerce: Lean at Amazon | Marc Onetto

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“The spirit of lean management was already at Amazon when I arrived in 2007. Since the day he created Amazon, Jeff Bezos has been totally customer-centric. He knew that customers would not pay for waste—and that focus on waste prevention is a fundamental concept of lean. The company’s information technology was always very good at understanding what the customer wanted and passing the right signal down. ”

Michel Baudin‘s comments:

Read this article for a personal account from Amazon’s vice president of worldwide operations and customer service through 2013.

The title is misleading, in that the article is not about any assessment of Amazon by Toyota, and the connection between the Amazon practices Onetto describes and TPS or Lean are tenuous.

For example, a service agent taking a product off the website based on repetitive customer complaints on quality is described as “pulling the Andon cord,” which is a far-fetched metaphor.

An Andon cord, or stop rope, is supposed to be pulled whenever an operator notices anything wrong during the production process. It is not a response to repeated customer complaints and it does not result in pulling the product off the line.

Linking Amazon’s approach to Toyota is unnecessary. Amazon has been doing a great job; it is leading the world in e-commerce, an activity that is outside Toyota’s expertise. It is Amazon’s own approach, and they might as well call it the “Amazon Production System.”

See on www.mckinsey.com

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Feb 14 2014

Ford and Mass Production

In the TPS Principles and Practice group on LinkedIn,  asked about what mass production is and is not. With the loose talk of “Henry Ford’s Lean vision” going around, the confusion is understandable. In fact, the term “mass production” was coined specifically to describe Ford’s production system in an Encyclopedia Britannica article in 1926, and defined as follows:

“Mass production is the focusing upon a manufacturing project of the principles of power, accuracy, economy, system, continuity and speed.”

The article insists that “Mass production is not merely quantity production, for this may be had with none of the requisites of mass production. Nor is it merely machine production, which may exist without any resemblance to mass production.”

The encyclopedia article does not imply that the system was inflexible, but Ford’s system of that era was designed to build Model Ts and nothing else. Even though the following picture is from 1937, a decade after the end of the Model T era, the dense packing of presses makes you wonder how you were supposed to change dies:

Pressed steel building at the Rouge in 1937

Modern automotive press shops have machines arranged in lines, with space on the side for dies. In this shop, a die change had to be a rare event.

In essence, the term “mass production” is to Ford as “lean manufacturing” is to Toyota, a generic term applied to give broader appeal and generalize an approach developed in a specific company. It is not a derogatory term, and many elements of mass production found their way into TPS, along with parts of the “Taktsystem” from the German aircraft industry of the 1930s. To these external inputs, the Toyota people have been adding their own twists since the 1930s.

220px-William_S_Knudsen
William S. Knudsen in World War II

Ford’s system itself evolved as it was adopted by competitors. As Peter Winton pointed out in the LinkedIn discussion, the original mass production was the production of large quantities of the same thing. As early as the 1920s, all the high-speed machines and lines dedicated to making the aging Model T at the River Rouge plant were both the strength and the Achilles heel of the system, giving GM the opportunity to grab market share away from Ford by, as Alfred P. Sloan put it “introducing the laws of Paris dressmakers in the car industry.” Ford alumnus William Knudsen’s “Flexible Mass Production” at Chevrolet made it possible through yearly model changes that could be completed in a few weeks. When Ford finally had to change from the Model T to the Model A in 1927, it required a thorough retooling of the Rouge plant, which took 9 months.

Ford’s system itself changed over the decades, and, at least as Lee Iacocca described its practices,  the financially minded leadership that emerged in the 1950s no longer focussed on improving production. In my review of Deming’s Point 5 of 14 on that topic, I had included the following pictures of the same operation performed the same way 30 years later:

In the 1988 paper in which he introduced the term “Lean production,” John Krafcik makes a distinction between “Pure Fordism” and “Recent Fordism,” the main difference being that “Recent Fordism” involves large inventories, buffers, and repair areas. This, of course, implies nothing about what the Ford people have done since 1988.

The concept of a dedicated production line — effective at making one product and incapable of making anything else — is in fact not obsolete. If you have a product with long-term, stable demand, it is a better solution than a flexible line whose flexibility you don’t need. This is why you do a runner/repeater/stranger analysis of the demand for your products, and then investigate trends and seasonal variations. In the Lean approach, you use a dedicated where it fits and other approaches where it doesn’t; most plants, instead, have a one-size-fits-all approach.

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Feb 12 2014

Working for Anonymous Funds | Bill Waddell

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Vancouver island“There is a company I know well that will remain nameless that has about 300 employees, and they manufacture stuff on Vancouver Island – Just outside of Victoria, British Columbia.  The major markets for their products are gradually shifting from the Northwestern USA and western Canada to the Southeastern USA.  That puts them about 2,400 miles as the crow flies from more and more of their customers, but since crows can’t take their products to market it is actually a lot farther than that.

Closing their plant has never been an option.  They simply accept the fact that manufacturing on an island is never good, and being that far from their customers is a huge disadvantage, so they have no choice (at least no choice they are willing to consider) but to tighten their chinstraps and do that much better to overcome their geographic problems….”

See on www.idatix.com

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Feb 7 2014

What to Expect from Lean Manufacturing Consultants

How to select and use consultants is awkward for consultants to discuss, but it came up in a discussion started by Rey Elbo in the TPS Principles and Practice group on LinkedIn. On this topic, we can always quote third parties and, some years ago, I found the following strip in the pages of the Japanese monthly Kojo Kanri (工場管理, or “Factory Management”):

How to choose and use lean consultants

I understand that some of these recommendations may be surprising, and here are a few explanations from the body of the article:

  1. Do not hire cheap consultants, anymore than you would a cheap surgeon or a cheap lawyer.
  2. Use consultants who talk drills and wrenches and drills  rather than bar and pie charts. There is room in lean manufacturing for analysis resulting in charts, but mostly upfront, in setting a plan with top management, but 95% of the work involves the nitty-gritty details of shop floor life.
  3. Treat the consultant like a god. Follow recommendations rigorously and without challenging them.Defensiveness is self-defeating. If you don’t trust a consultant, replace him or her.
  4. The consultants should not do anything. For skills to take root in the organization, the work needs to be done by in-house personnel. This is the distinction between consulting and engineering services, and the idea is that Lean skills need to be permanently in the company.
  5. Get everything you can from the consultant in terms of ideas and recommendations. Pick the consultant’s brain relentlessly. If it takes being on the shop floor during the night shift, so be it.

By • Management • 10 • Tags: ,

Jan 30 2014

The Limits of Imitating Toyota | Bill Waddell

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From Lisa Abellera’s blog, 6/21/2011

“I recently received an email from a guy challenging the legitimacy of organizing into value streams and lean accounting.  The linchpin of his argument:  ‘I can’t find anything saying Toyota has done any of that.’

[…] Seems to me if we want to get all Toyota-y about things we have to take Shingo’s words to heart when he wrote, ‘We have to grasp not only the Know-How but also Know-Why.’

[…]Using Toyota as the acid test for whether something is lean or not is rather naive and intellectually lazy. In most companies and most plants, asking ‘what would Toyota do?’ is the appropriate question – not ‘what did Toyota do?’”

 

 

Michel Baudin‘s Comments:

 

Learning by imitation

Imitation is effective for learning. We condemn outright plagiarism, despise imitation, and value creativity. Yet even an original and unique artist like Pablo Picasso learned as a child by copying paintings. In Karate, you learn a new kata by following others. As you memorize the sequence of moves, you learn to perform them with speed and power. Then, as Jim Mather teaches,  you learn the underlying self-defense principles embedded in the kata.

Until the 1970s, many Americans and Europeans dismissed “the Japanese” as imitators who copied what they saw and then competed with the original creators through low wages. But I have not heard this in decades. A principle behind the way Japanese traditional arts are taught is that know-how precedes and leads to know-why. Once you have assimilated techniques to the point that they are second-nature to you, your mind suddenly understands how they fit together as a whole and why they are necessary.

While this approach works not just for Karate, but also for sumi-e, sushi, flower arrangement, and even machining, it can be abused. I would not recommend it, for example, to teach math. Sometimes, what you ultimately achieve as a result of going through motions is only an illusion of understanding that rationalizes the years you have invested in training.

For Lean or TPS, there is no alternative to learning by doing. There is no way to gain an understanding of cells or the Kanban system without living through implementation on an actual shop floor. As a consequence, the first time you do it, you are following along and imitating. Once you understand what you are doing, however, it behooves you to add your own twist and adapt the concepts to your needs.

When brute force imitation works

On the scale of an entire company, we should also not forget that brute-force imitation sometimes works. Once I had in one of my Lean classes a student who was a former plant manager in a large, European auto parts company known for its successful implementation of Lean. “Everything you taught,” he told me,”I used in the plant, but I never knew why, until today.” As he explained to me, the company’s top management  issued “guidelines” to plant managers that were specific on which tools to use, regularly audited the plants,  and routinely fired the managers who did not comply, regardless of results.

It sounds wrong, but how do you argue with success? In retrospect, it worked for that company because it was in the industry for which TPS had been developed and, at least initially, creativity was not necessary to improve on the existing system. Where brute force imitation fails is in new and different industries.

How do you know “what Toyota would do”?

Either you are steeped in Toyota’s ways as a result of being an employee of the company for 10 years, and you have an idea of what its management might do outside of its core business —  including the ways it might misunderstand it — or you have studied Toyota’s system from the outside, and you don’t really know what it would do.

On the other hand, you may have a deeper understanding of the challenge at hand than any Toyota manager. Rather than trying to figure out what Toyota would do, I would rather follow Soichiro Honda’s advice to his engineers: “Solve your own problems.” Learn everything relevant that you can, then use your own judgement. You will be responsible for the outcome anyway.

Divergence and accurate representation

The whole Lean movement started from people learning about the Toyota Production System (TPS). That Lean should diverge from TPS was inevitable, but the Toyota connection remains the key reason business professionals pay any attention to Lean.  Given that the vocabulary itself has changed, making the connection on specifics is not always obvious. “Value Stream” or “Lean Accounting,” for example, are not Toyota  terms, which does not make it easy to gauge the extent to which Toyota uses the concepts.

There is nothing wrong with Lean professionals inventing approaches beyond TPS, but it must be clear and the tools must stand on their own merits. Business executives assume that what they are being sold as “Lean” is what Toyota does. Where it is not the case, they must be told upfront.

See on www.idatix.com

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