Tag Archives: toyota production system

My First Lesson

Just a little over a year ago we lost Hajime Oba, one of the great pioneers of TPS learning in the US.  In 1992, he was the founding manager of the  Toyota Production System  Support Center (TSSC), a non-profit affiliate of Toyota Motors of North America (TMNA), established to share TPS knowledge with North American organizations that showed a sincere commitment to learn and apply what he referred to as “true TPS.”   My company, United Electric Controls, submitted a request to TSSC for assistance in 1995, and it was our good fortune to begin our TPS journey with Mr. Oba. In the next several weeks, I’ll share a few stories to honor his rare leadership. Here’s the first, which represented my first meeting with Mr. Oba, just before TSSC agreed to work with us:

On the day of Hajime Oba’s initial visit to our site, I had arranged for a short meeting with our owners to discuss the nature of TSSC’s service and to reaffirm our commitment to actively support the process.  Next, we went to floor to observe.  “Can you take me to shipping,” Mr. Oba requested.   This location, I learned sometime later, was selected because it was the point closest to the customer.   As we stood in an aisle next to the shipping department, Mr. Oba’s eyes traveled to persons working, then to pallets of material and then to the shipping dock.  After a minute, he turned his glance to me for a moment and then back to a scan of the shipping area.  He was sizing up the situation both as a whole and as a series of operations.  I heard a faint murmur as he watched: “Hmm.”

Then, he turned back to me and asked this question:  “Where’s the shipping?”   I responded, “It’s right here, we’re looking at it.”   Unimpressed with my answer, Mr. Oba murmured again as he turned away as if to invite me to watch with him.  As we observed, he declared, “I don’t see anything shipping.” 

“Oh,” I thought to myself.  He was not referring the department.  He was asking why no products were leaving the shipping to dock en route to the customer.  “It’s still early in the day.” I explained, “Our first shipment is not until 10:00 a.m.”   Even as I uttered these words, I realized this was a bad answer.  “Why 10:00 a.m.?” Oba inquired.  “Because that’s when UPS picks up,” I said.

Mr. Oba looked at me with an expression of mild impatience, but as I was waiting for another “why”,  he shifted his line of questioning.  I suspect he felt he’d already made his point.  Instead he walked to a pallet of goods sitting next to the aisle and, pointing to it, asked , “When is this shipping?”  A little frustrated at my ignorance, I explained that I’d have to check with the shipping supervisor to answer that question.  Mr. Oba waited while I went in search of information. 

I returned with an answer that I felt would conclude this line of questioning:  “The supervisor says this order is on credit hold.”  In my mind, the order status was beyond the purview of operations.   But Mr. Oba persisted.  “How long has it been sitting here?”  Once again, I had no answer and had to rely on my shipping supervisor who advised that that order had been sitting complete for nearly a month!  As I related that information to Mr. Oba, his gaze seemed to ask “What kind V.P. of Operations would let a customer order sit in plain site for a month?”  I was embarrassed, but foolishly persisted, “It’s on credit hold and we can’t do anything about that.” 

“Why is it on credit hold?”  Mr. Oba asked.   Flustered, I replied, “I don’t know, but I’ll find out.”   A call to our accounting department yielded a “We’ll have to check into that” response.  I promised Mr. Oba I would find the answer.  

About an hour later, I received an explanation that was both humiliating and illuminating.  The order was on credit hold because one of largest distributors, ABC Sales, had exceeded their credit limit.  “Are they a bad payer?” I asked, Bob, our accounts receivable associate.  “Oh no, they’re just  buying a lot this month,” he said, “and that puts them over their credit limit.”   “Then why don’t you release them from credit hold?”   I asked.   Bob responded, “We will, absolutely, if we are authorized by sales management.”  

My credit hold odyssey continued to the sales department.  “Why haven’t you released ABC Sales’ order from credit hold?”  I asked Charlie, the sales manager.   Charlie explained, “We have no internal visibility of orders on hold.  Unfortunately, we usually find out when customers like ABC Sales call us to complain about a late shipment.” 

Several hours had passed.  Mr. Oba had already departed, but was aware of my investigatory efforts if not the final answer to his question.   Ultimately, that answer led to a process change that would trigger a credit hold inquiry immediately rather than after a customer complaint. 

I asked myself, why had I not seen what Mr. Oba had uncovered in a glance?  I missed the details and I also could not see the big picture.  Perhaps that was Oba’s first lesson for me.

What do you see when you go to the floor?   Please share a comment or story.

O.L.D. 

BTW —  TSSC will be joining us on October 6-7 at our 17th annual Northeast L.E.A.N. Conference, as will the Shingo Institute, the Lean Enterprise Institute, MEP’s from New England, AME, SME, MHLN and a host of great presenters.  What a great opportunity to get out in a safe CDC-compliant environment to re-energize your Lean journeys and establish new relationships with other passionate Lean organizations. 

But – if distance or company policy prevent you from traveling this year, we’ll not only be live and in-person we’ll also be live streaming for virtual attendees – and recording  all sessions for all attendees!  Check out the outstanding agenda at this link:  Getting Back to the Future.  Hope to see you at the MassMutual Center in Springfield MA this October. 

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!