Tag Archives: toyota production system

Indirect Distortion

When Stan Davis wrote Future Perfect in 1987 (then called the “book of the decade,” and still a good read), he foresaw a reversal in thinking that has since become normal.  For example, the expression “Time is money,” has flipped to “Money is time,” the focus now being on money as the measure of time.  While his book was not specifically a Lean book, it coined the term “mass customization,” that is now a basic customer expectation.  Most impactful for me, however, was his reminder that organization follows strategy, and that as strategy does a 180, we need to modify our organization and policy to support it.  New jobs and entire organizations have sprung up in the last 30 years to support Lean Transformation.  The same is true for Digital Transformation.  New job titles, new reporting structures and new policies all to support technology that was science fiction when I entered the workforce.   These are good changes to embrace. 

What has been more difficult, however, for many organizations, is letting go of the old organization and policy that supported earlier strategies.  These constructs that have been baked into our infrastructure and systems die hard. One example of this is the concept of direct and indirect labor. 

Let’s call it Indirect Distortion, Lean Peeve #4.   

Fifty years ago, when I entered the manufacturing world, roles were very clear: You were either touching the product or not.  Supervisors, material handlers, stock keepers, inspectors all were considered indirect.  But as our shopfloor adopted a Lean strategy, the closer we approached one-piece-flow, the distinction between direct and indirect became more blurred.  For example, when we set-up a cafeteria style stock area adjacent to assembly and rotated assemblers through the material handler role there was initial pushback.  “You can’t have direct folks doing indirect tasks,” I was told.  Why?  It would “mess up our costs.”   Fortunately for me, our V.P. of Finance visited the floor for himself to understand.  The job was reclassified. 

On the other hand, as our stockroom shrank, we redeployed stock keepers to insource production from an external supplier.  Until our standard cost system caught up, this created an illusion that were losing money.  Once again, through some myth-buster heroics from our V.P of Finance we demonstrated that the change was, in fact, super-profitable.  I was fortunate to have this support on site.  Many sites, like one I worked with years later as a consultant, do not have that advantage.  I once visited a division of a medical device manufacturer that was deemed by the corporation to be its productivity leader.  What I learned on my visit was that this site unofficially “borrowed” production workers from the floor to make improvements and solve problems.  This deceptive practice, while highly effective, was hidden from corporate management, lest the borrowed workers be classified as indirect labor at a time when management was taking an ax to that population.  “Doesn’t corporate see this?” I asked.  “No,” replied the site manager, “they never visit.”   

A memorable quote from Jim Womack, our opening keynote at this year’s Northeast L.E.A.N. Conference, comes to mind: “Cost accounting makes liars out of all of us.”    The point is that a Lean strategy is too often thwarted by status quo organization and policy and, in this case, even the language that describes it.  

O.L.D.

Stay tuned. Lean Peeve #5 coming tomorrow. Oh and by the way… there are less than two weeks until my organization’s annual, but inaugural virtual, conference, “The Northeast Lean Conference: 21st Century Lean”.   Send a team and recharge your Lean batteries for 2021.  Here’s the link the program and registration.

Local Efficiency

“What do you do for a living,” a neighbor asks.  As I try to explain about GBMP’s attempts to help customers improve productivity and quality, my neighbor interjects with a smirk, “Oh . . . you’re an efficiency expert.” He thinks I walk around holding a stop watch, trying to find ways to make people work faster.  “Well,” I respond, “we try to improve SYSTEM efficiency, not just local efficiency.”  About this time, he has zoned out, not particularly interested in the distinction I’ve made, and he changes the topic to football (see yesterday’s blog post.)  I’ve written more than a few posts over the years about the difference between local improvement and system improvement. Here’s one more. 

Lean Peeve #3 is Local Efficiency.

Alluding to the stopwatch, I’ll begin with the definition of efficiency: standard time / actual time X 100%.  This is the one you’ll see on your ERP system. Say that I’m machining PARTA with a standard time of 60 seconds.  That standard was measured by someone with a stop watch to determine that fastest repeatable time for the operation. But I actually take  65  seconds each for this lot.  My efficiency is 60/65*100% = 92%.  Simple enough.  However, PARTA is two levels deep on the bill of material of the final product sold to the customer and is therefore essentially decoupled from actual need by weeks or longer.   My efficiency is not based on the ability to provide what the customer needs, but on a standard that rewards me ala Lucy-in-the-chocolate-factory to go as fast possible. Consider the implications of this definition of efficiency in context of the metaphor.   What would happen if each person in the canoe pictured paddled as a fast as he or she could?  (Having been in the Boy Scouts, I know what happens.) That’s classical efficiency, or, as Toyota calls it, local efficiency.  SYSTEM efficiency would have everyone paddle at the same rate (call it Takt time), which is pretty evident in a canoe.

But let’s take this idea back into the factory: I have just completed an order for 360 PARTA’s, built according to my MRP (based on EOQ, fixed lead-time, pan-size, safety stock and a raft of other order modifiers that will be the topic of a later post) with an efficiency of 92%.   These will subsequently be sub-assembled in a different department according their MRP requirements and ultimately built and shipped to the customer in a still different quantity from either upstream process, each department operating at high local efficiencies.  There are no colliding paddles as in the canoe metaphor, just lots of squandered capacity and excess inventory. 

What do you think of the SYSTEM efficiency is in this example?

It turns out that where efficiency is concerned, the whole is not necessarily equal to the sum of its parts.  In fact, in a functionally organized workplace (ironically set-up as such to maximize local efficiency) we can expect system efficiency to be far less than the sum of its parts.   We can all be paddling as fast as possible, thinking we’re doing great – but the boat is going in circles. 

Speaking at a Shingo Conference some years ago, my friend and mentor, Russ Scafede, who was a senior manager at both GM and Toyota during his career, reflected this way on local efficiency: “At General Motors, we use to joke that all of our divisions were making money; it was only the corporation that was losing its shirt.

How do you measure efficiency?  Share a story. 

O.L.D.                                                       

Want to learn more about True Efficiency?   Please tune into the 16th Annual Northeast L.E.A.N. Conference to learn how taking the best thinking from Lean Transformation and Digital Transformation can accelerate your continuous improvement efforts.  Only two weeks to go before opening day. Our three exceptional keynotes (there are also ten breakout sessions and lots of networking opportunities) include Fady Saad, co-founder of MassRobotics, who will discuss the rise of robotics and AI technologies and how their applications will disrupt the way we understand and implement lean methodologies and approaches as we know it today. From applications in manufacturing, logistics, construction, agriculture and healthcare, robotics and AI will change the way we do things. Learn how the lean community can better prepare and adapt to this new era of smart systems.   You can get more information and register here. 

An Ode to a Frontline Supervisor

Wedged between distant decision-makers and the people who do the work.
She is the go-to person for everything: safety, morale, productivity, quality and most of all, schedule attainment,
But has little authority and less support for any of these.
Who thanks the supervisor, as she caroms from crisis to crisis,
From broken equipment to absent employees to material shortages,
Unable to spend more than a few minutes with each of her fifty direct reports? 
Who soothes her frustration and anger? As the master of workarounds, she does what she must to get things done.
Unheralded, unappreciated, and usually blamed for the broken system she is charged to manage, she privately counts the days to her retirement.

Ok, perhaps, I’ve overplayed this a bit, and the last time I wrote an ode was in a 17th century literature class about 50 years ago.  But I was struck last week when teaching a Shingo Institute workshop by a question from one of the participants, as we discussed the principle, RESPECT EVERY INDIVIDUAL.  Referring to an excerpt from a 1952 episode of I Love Lucy, a popular example of autocratic management, my student queried, “What’s the supervisor’s name?”   

(If, by chance you have not seen this video clip, stop for a moment and view it.  Here’s a recently colorized version:  Lucy 2020.)

The excerpt is from a 1952 episode of I Love Lucy, but I recall seeing it first in 1994 when Toyota Production System Support Center (TSSC) played it in a training for my company.  They referred to it as “traditional manufacturing,” and asked our class to identify things that would not be conducive to TPS.  There were many observations of bad practices and bad behavior, which I will not relate at this time. Watch the clip yourself and see how many you can find.

What struck me about the question is that in the many times I’ve shown this video, all attention and empathy by observers is typically devoted to Lucy and Ethel. The supervisor is just a nemesis.   In fact, the supervisor, as we Googled, has no name – she’s just SUPERVISOR.  This new line of questioning led to a productive class discussion regarding the common plight of frontline supervision.  Not excusing her bullying behavior, merely asking her to be more caring and supportive trivializes her problem and disrespects her as well as Lucy and Ethel.  Hence the keyword EVERY in the principle RESPECT EVERY EMPLOYEE.  I’ve often referred to frontline supervision as “most difficult job in the organization.”   What do you think?  And, by the way, how many practices and behaviors can you name that are not conducive to TPS? 

O.L.D.     

Enjoy your summer as best as you can in this crazy pandemic environment.  And if you’re looking for an energizing event to kick off the fall, checkout out our Northeast Lean Conference: 21st Century Lean. Yes, of course, it’s virtual but we have a super line-up of speakers and participants – and all of the engaging activities of our in-person conference: thought leader keynotes, breakouts, Lean Lounge, Silver Toaster Award and Lean after Dark.  Plus – bonus video material for attendees.  Here’s the link:  http://www.northeastleanconference.org. Hope to see you there.   

Culture Change

Shortly after my last post, in which I referred to sowing the “seeds of change,” I enlisted the help of my son, Ben, to reseed a particularly bare area of our yard.  I’d neglected this spot for a few years and it had become sparse and dormant.  Fixing the problem was therefore not merely a matter of spreading new seed.   There was a significant amount of work to be done first to prepare the soil.  This essentially exposed the problem and at the same time made it amenable to improvement.  Had I just sown seed on the thatch and weeds that had infested the grass, the results would have been disappointing.  A seed or two might have taken root, but most would have languished. 

It occurred to me as I watched Ben, fifty years my junior, steadily completing a task that would have been more of a struggle for me, that changing a culture requires sweeping away an accumulation of debris from the past.  Exposing the problems is hard work and not pretty.   “Make problems ugly,” is a popular expression in the Lean world, but exposing problems often elicits criticism from the keepers of the status quo.  At least in this case, exposing the problems fortunately fell to the younger generation.    I got the easy job: sowing the seeds.  Each of us contributed to the change as we were able.  After three months more of creating a favorable environment for the grass, I celebrated with a Sam Adams in the space we planted together.  This time, I think, I will try harder not to take the lawn for granted.  Culture change is after all, not a discrete event, but continuous improvement that engages everyone according to their individual capabilities.  And not to be taken for granted.

Have a relaxing 4th.

O.L.D. 

PS Speaking of Culture Change, my organization is a big proponent of The Shingo Model and Guiding Principles to provide context for Continuous Improvement – the “know why” in the form of principles before the “know-how” which is systems and tools. It develops company culture thru analysis of how principles (along with company vision, mission, and values) inform behavior and how systems reinforce it.  Benefits include a more engaged workforce that understands continuous improvement at a much deeper level and a sustained culture of excellence. When results are achieved through behavior grounded in principles, they are for the long-term. Learn more about it during our upcoming virtual seminar.

And if you’re interested in continuing your Lean tools education during the summer months, GBMP has lots of great virtual workshops to choose from – from value stream mapping to pull systems (kanban) and much more in between. Check them out here. We look forward to “seeing” you soon!

Now, as the economy begins to reopen, two lessons learned

To our customers, suppliers, partners and friends,

For the last four months, GBMP, has of necessity, pivoted to predominantly virtual consulting, training and coaching.   Now, as the economy begins to reopen, I’d like to share with you two lessons that we have learned:

Office space adds limited value to our work.
We have discovered that physical distancing for our team does not necessarily reduce presence or alignment.  In fact, the need for very frequent communication during the pandemic has highlighted the advantages of virtual methods like Zoom and Slack.  The GBMP team has not been able to assemble physically since February, but we have met “face-to-face” virtually nearly every day, something that would not be practical in real space.  While do look forward to a time when can occasionally meet in person, we have come to realize that the “new normal” may not require the expense of an office. 

Virtual is here to stay, as a component of learning.
Like many of you, GBMP has adapted to the pandemic’s reality, and we have learned through this difficult process that there are aspects of virtual learning – particularly the explicit learning – that are actually advantageous to both teacher and learner. This is something I would not have subscribed to personally, had pandemic conditions not demanded it; but response from customers has been overwhelmingly positive.  We are anxious to be back on-site with our customers “in the Gemba” at some point, but we also anticipate that aspects of virtual learning will continue and develop as an improvement to Lean and Six Sigma learning and organizational transformation. 

While timing for recovery from Covid-19 is no less uncertain for me today than several months ago, life goes on, work continues and so does improvement to the work.

GBMP’s mission, to keep good jobs in our region, is stronger than ever and we will continue to adapt to provide value to our community.   We value our many relationships and look forward to bright outcomes for all of us. 

Bruce Hamilton,
June 25, 2020