by Rother, Mike
Whenever we alter any one thing in a process, we create, in effect, a new process with possibly new and different characteristics. This means that once we have implemented one or two items from an action-item list, then the rest of the items on that predefined list may no longer suit the new situation and new priorities at the process. Are you beginning to see how making scattershot lists of action items is a waste of time?
Multifactor experiments (known as Design of Experiments, or DOE) where multiple variables are changed at once are sometimes necessary, but only a small group of specialists is qualified to conduct them. Ideally we want everyone in the organization involved in continuous improvement, and single-factor experiments are something that anyone can understand and carry out.
If I tell you that you should, if possible, only change one thing at a time in a process, how does that make you feel?
Yes, it seems way too slow.
Yet we know that Toyota is improving faster than other companies. So what does this mean for our cycles in an only-change-one-thing-at-a-time approach?
They must be fast!
In other words, with Toyota’s approach, we cannot wait for the next scheduled weekly or biweekly review cycle to come around. If we wait that long to check, then our progress will be too slow. By the time we do check the process, the parameters may have shifted. We should check the results of a change as soon as possible and then, based on what we learn, consider the next steps. Unlike our current workshop and list-oriented approach to process improvement, this one does have implications for how managers, engineers, and executives slice up their work days.
Improvement is hard work, but it doesn’t have to be too complicated. After studying Toyota’s improvement kata in Part III, you are likely to call a stop to and reorient any improvement effort that relies on the list approach. Instead you will know that there is a better way to proceed and lead.
Chapter 3
Philosophy and Direction
To understand Toyota’s improvement kata and coaching kata we need to consider two aspects of the context within which they operate: the business philosophy, or purpose, of the company; and its overall sense of direction.
The Company’s Business Philosophy
The business philosophy of a company does much to define the thoughts and actions of everyone in the organization. However, by “business philosophy” I do not mean those nice, generic statements printed on the poster in the lobby. I mean if you stood in the factory for a day and observed what people do—what is important to them, what gets measured—then what would you conclude is important to this company? As they say at Toyota, “The shop floor is a reflection of management.”
For many manufacturers the company philosophy or purpose would boil down to something like the statement in Figure 3-1.
Figure 3-1. A typical company philosophy
Figure 3-2. Toyota philosophy
And this is not bad by any means. But consider Toyota’s philosophy in comparison (Figure 3-2).
While this sounds similar to the first philosophy, there is a significant difference. Notice the position of improvement and adaptation in each case. In the first philosophy, improvement and adaptation are an add-on; something we do when there is time or a special need. In the second philosophy, improvement and adaptation move to the center. They are what we do.
Along these lines, here are a few questions to help you think about the position of improvement in your organization. Only you can answer them for yourself:
Do I view improvement as legitimate work, or as an add-on to my real job?
Is improvement a periodic, add-on project (a campaign), or the core activity?
Is it acceptable in our company to work on improvement occasionally?
The last question, in particular, can make things clear. Imagine you were to walk into a manager’s office and say, “We made a nice improvement in process X . . . and next month we will take another look at improving that process further.” That would probably be acceptable. Now imagine that you said, “We produced 400 pieces of product at process X today . . . and next month we will take a look at producing some more product at that process.” That would not be acceptable at all! And so we can see the relative position that improvement has in our company. If your business philosophy is to improve, then periodic improvement projects or kaizen workshops are okay but not enough. You would only be working on your organization’s core objective occasionally, during periodic events.
At Toyota, improving and managing are one and the same. The improvement kata in Part III is to a considerable degree how Toyota manages its processes and people from day to day. In comparison, non-Toyota companies tend to see managing as a unique and separate activity. Improvement is something extra, added on to managing.
An interesting point is that many of us would probably be afraid to focus so heavily on the second philosophy, improvement, at the expense of the first philosophy, make production. We would feel we were letting go of something we currently try very hard to control, because we’re accustomed to focusing on outcomes, not process details. In our current management approach we concentrate on outcome targets and consequences. In contrast, as depicted in Figure 3-3, Toyota puts considerable emphasis on how people tackle the details of a process, which is what generates the outcomes.
Outcome targets, such as the desired production quantity, are of course necessary. But if you focus on continuously improving the process—systematically, through the improvement kata, rather than just random improvement—then the desired outcomes will come. Making the desired production quantity, for example, will happen automatically when you focus on the details of a process through correct application of the improvement kata.
Figure 3-3. Focusing on means in order to achieve desired results
The following story from before the Second World War, when Toyota made weaving looms, provides an example of this way of thinking. It comes from a Toyota booklet about the spirit and ideas that created the company, and relates how Kiichiro Toyoda (1894–1952), founder of the Toyota Motor Corporation and son of Toyoda Automatic Loom Works founder Sakichi Toyoda, supposedly responded when someone once stole the design plans for a loom from the Toyoda loom works:
Certainly the thieves may be able to follow the design plans and produce a loom. But we are modifying and improving our looms every day. So by the time the thieves have produced a loom from the plans they stole, we will have already advanced well beyond that point. And because they do not have the expertise gained from the failures it took to produce the original, they will waste a great deal more time than us as they move to improve their loom. We need not be concerned about what happened. We need only continue as always, making our improvements.1
Does a lean value stream equal lean manufacturing?
Many years ago I visited a small automobile-component factory that ostensibly operated with a lean strategy. And, in fact, the plant sported a fairly short lead time through its value stream. Its strategy involved the following elements:
Hire recent high school graduates. The turnover rate was high, but the labor was young and inexpensive.
Staff processes with about 40 percent extra operators, which was possible because of the low hourly wage. This was done so that despite problems and stoppages, each process could still produce the required quantity every day with little or no help from indirect staff or management. With extra operators in the line, the operators could dispense with problems themselves (but not eliminate the causes) and still achieve the target output. Autonomous teams, if you will.
A flat organization, that is, one with few levels of management.
Inventory levels were kept low, since each process was generally able to produce the required quantity, which is why the lead time through the value stream was short. Only a little over one day of finished goods, for example, was kept on hand.
The low inventory levels, flat organization, and short value stream, sound “lean,” but here’s the problem: from
day to day and week to week the same problems would arise and the operators would simply work around them. This meant that the plant was standing still—not continuously making progress or improving—and that is quite possibly what Toyota fears most of all.
Honesty Required
We are considering business purpose or philosophy early in this book because this is where many companies trying to copy Toyota are, from the start, already on a different path. At this point some honesty is required from you. What is the true business philosophy of your company?
While we talk about the importance of providing value for the customer and continuous improvement, more than a few of us are, in truth, focused narrowly on short-term profit margin. The unspoken business philosophy at some companies is simply to produce and sell more. Or it is about exercising rank and privilege, and thus avoiding mistakes, hiding problems, and getting promoted, which become more important than performance, achievement, and continuous improvement.
Direction
Having an improvement philosophy and an improvement kata is important, but not quite enough. Ideally, action would have both form (a routine or kata) and direction. For example, many of us would say that improvement—or “lean”—equals “eliminating waste.” Although this popular statement is basically correct, it is by itself too simple. The negative result of “improvement equals eliminate waste” thinking is twofold: we cannot discern what is important to improve, and we tend to maximize the efficiency of one area at the expense of another, shifting wastes from one to another rather than optimizing and synchronizing the whole.
A classic example of this involves material handling. In the quest to eliminate waste, we often come upon the idea of presenting parts and components to production operators in small containers. The small containers reduce waste at the process because they can be placed close to the operator’s fingertips (less reaching and walking to get parts), and more part varieties can be kept within the operator’s reach (no changeover is necessary for producing different products). Of course, those parts currently arrive from the supplier in large containers on pallets, which are dropped off in the general vicinity of the production operators with a fork truck.
At this point a logistics manager will usually speak up and say, “Wait a minute, let me get this straight. My department is evaluated on its productivity, and you want my people to take parts out of the large containers and repack them into small containers. Then you want my people to get off the fork truck and place those containers near the operator’s fingertips. And since the quantity of delivered parts will now be smaller—because fewer parts can be stored so close to the operator—my people will have to deliver several times a shift, rather than only once or twice per shift. Now we all know that ‘lean’ means eliminating waste. All those extra non-value-added activities would obviously be waste, so this cannot be the right solution.”
I have observed this type of debate many times, and it always goes around and around the same way. Whoever is most persuasive wins and sets the direction for a while, until someone else brings up a different persuasive argument or idea. Or we use a voting technique to make it seem that we’re being systematic and scientific about choosing the direction. What in fact is happening is that the organization is essentially flailing about and frequently shifting direction as it hunts for the “right” solution to implement, and jumps from one potential solution to another. Sometimes an external consultant will be brought in to provide a seemingly clear answer and be the tie breaker, or to be the person to blame in case the choice does not work out.
So who is correct in this situation: the production manager who wants small containers, or the logistics manager who wants to avoid extra handling? Under the simple concept of lean equals eliminate waste, everyone is. What is missing here is a sense of direction. Although we may think of adaptation as essentially a reactive activity, it is actually what happens on the way to somewhere. Evolution in nature may not be heading in any particular predefined direction or have any particular boundaries, but for a human organization to be consciously adaptive, it helps to have a long-range vision of where we want to be. That is something we can choose or define, while the adaptation that will take place between here and there is not. By long range I mean a vision that may extend beyond one working lifetime, perhaps even to 50 years or more (Figure 3-4).
Note that a vision, or direction giver, is not simply a quantitative target. It is a broad description of a condition we would like to have achieved in the future. To repeat, the definition of continuous improvement and adaptation I am using in this book is: moving toward a desired state through an unclear territory by being sensitive to and responding to actual conditions on the ground.
Figure 3-4. A vision is a direction-giver
You’ve got to think about big things while you’re doing small things, so that all the small things go in the right direction.
—Alvin Toffler
A long-term vision or direction helps focus our thinking and doing, because without it proposals are evaluated independently, instead of as part of striving toward something.
Defining longer-term direction/vision can be tricky, and even dangerous, however. For example:
Although we cannot see what is coming, a vision based exclusively on current paradigms, competencies, products, or technologies can limit the future range of our adaptation too much. Toward that end, a vision should probably focus more on the customer, and broad-scale customer needs, than on ourselves.
Visions developed in a way that seeks to protect current sacred cows are often so watered down that they are essentially useless for providing direction.
An example of a useful but not overly confining long-term vision is Toyota Motor Corporation’s early vision of “Better cars for more people.”2 What would this vision, this direction, lead an automobile manufacturer to do? Consider Toyota’s current market position, global presence, and product mix with this old vision statement in mind.
Toyota’s Vision for Its Production Operations
As depicted in Figure 3-5, in its production operations, Toyota has for several decades been pursuing a long-term vision that consists of:3
Zero defects
100 percent value added
One-piece flow, in sequence, on demand
Security for people
Toyota sees this particular ideal-state condition—if it were achieved through an entire value stream—as the way of manufacturing with the highest quality, at the lowest cost, with the shortest lead time. In recent years Toyota began referring to this as its “true north” for production. You can think of this production vision as “a synchronized one-by-one (1×1) flow from A to Z at the lowest possible cost” or as “one contiguous flow.” Note that Toyota’s production vision also describes a condition, not just a financial or accounting number.
Figure 3-5. Toyota’s vision for production operations
What is a one-piece flow? In its ideal, one-piece flow means that parts move from one value-adding processing step directly to the next value-adding processing step, and then to the customer, without any waiting time or batching between those steps. For many years we called this “continuous flow production.” Toyota now refers to it as “one-by-one production,” perhaps because many manufacturers will point to a moving production line with parts in queue between the value-adding steps and erroneously say, “We have continuous flow, because everything is moving.” Such a misinterpretation is more difficult to make when we use the phrase “one-by-one production.”
Toyota’s production vision, which will be the example of a vision that we use throughout this book, is actually an old concept and it does not come from Toyota or Japan. The advantages of sequential and 1×1 flows have been known for a long time, and in one form or another the flow ideal has been pursued on and off again for centuries. Some examples:
During the mid-1500s the Venetian arsenal developed a system for mass production of warships, and could produce nearly one ship a day w
ith standardized parts on a sequential, production-line basis.
In the late 1700s Oliver Evans developed a sequence of machines and conveyance devices that connected all parts of the flour milling process into one continuous system. Grain was poured in at one end of the mill and flour came out the other, without sacks of material (batches) being moved around between the processing steps inside the mill.
In the 1820s at the Springfield Armory in Massachusetts, Thomas Blanchard developed a sequence of 13 or 14 machines to process gun stocks.
My colleague Gerd Aulinger takes a perhaps even more insightful and universal view on the quest to move closer to 1×1 flow, with examples such as the following:
In the nineteenth century if you wanted to hear Strauss play a waltz, you had to invite him to your court. Later we could go to the store to buy records and CDs. Today, music plays on your mp3 player, downloaded from the Internet. Payment for that music file is made without paper money through an automatic charge to your credit card.
