Tag Archives: toyota production system

You’re My #1 Customer

I sat on the phone on hold this morning,  serenaded by Christmas music, interrupted periodically by a recorded message, “Your call is very important to us . . . “  As I waited, I mused on that scene from the Christmas classic, “Jingle All The Way,” where Howard Langdon (Arnold Schwarzenegger) frantically tries to power through the queue of waiting customers.  At the end of each call, he reflexively concludes with the expression “You’re my number 1 customer.”    The scene makes me chuckle because I’ve been on both ends of that queue many times.  I do believe that most of us really want every one of our customers to feel like #1, just as we would like to feel that way when we are on the receiving end.  We want perfect quality and zero hassles; and in the information age, we order today because we want it today.

Alas, while most organizations aspire to create that level of customer experience, their systems and policies make it very difficult.  Like factory inventory, customers must be placed in queues when they cannot be served immediately.   Lines at supermarkets, traffic jams, waiting rooms, and, yes, phone queues.  The invention in 1989 (not so long ago) of the auto-attendant was intended to improve efficiency by automatically directing calls; a job that older folks like me will recall was once done by a person.  Where the desk of receptionist once stood, there is now just a phone with a sign above it:  “If you know your party’s extension, please dial it now.”  

If you are calling from outside there are  further enhancements to improve the waiting experience:

  • A clarifying greeting. (“Please listen carefully to the following options, as our menu has recently changed.”)
  • An explanation. (“All representatives are busy serving other customers.” Or, “ Due to high call volumes. . . .”)
  • An apology. (“We’re sorry.  Someone will be with you shortly.”)
  • Music. (Who chooses that?  Improvement idea: Give the caller the option to choose.)
  • A marketing pitch. (“Rated #1 in service by . . . .” )
  • A message to let you know where you are in the queue.  (“There are 14 callers ahead of you.”)
  • An offer to call you back. (“Dial 1 if you’d like us to call you back . . .” )
  • Or the old standard. (“Please leave a message . . . )

An advanced auto-attendant may, in fact, intermix all of these responses – or you may be encouraged to use an app (“For faster service please contact us at www. . . .”)  Of course, the nano-second capabilities of the Internet do not guarantee an immediate response.  Here’s a screen capture of an online inquiry I made in February 2021 🙂

Shigeo Shingo referred to these enhancements as “superficial improvements” because they automate the waste of waiting rather than eliminating it.   All of the embellishments exist only because the connection is not available.  Ultimately, if the proper party does not pick up, as Eli Goldratt might have noted, we have just moved the bottleneck.    

The original auto-attendant concept was intended to improve the flow of the customer’s inquiry by quickly directing it to the proper party.  If we were to consider only the operational time, that might be true.   But, for a customer faced with a nested process of choices based on 10 phone digits, there are plenty of opportunities for mistakes, rework, and frustration.  For me, there is nothing more surprisingly delightful than to reach a real person like Howard Langdon immediately.  But I will confess, if you try to reach me by phone, you may hear: “That mailbox is full.”  (A little 5S problem.)

In any event, have a Merry Christmas and remember: YOU’RE MY #1 CUSTOMER.  🙂

O.L.D.

Looking for a last minute gift for the passionate Lean practitioner in your life? Look no further than ShopGBMP and our annual Holiday Sale!

The Power of Commitment

As promised in my last post, here is another tribute to Mr. Hajime Oba:  

In 1996, TSSC (Toyota Production System Support Center) began working with my company to create one-by-one production capability in our product assembly. Previous to TSSC’s assistance we’d moved the furniture and machines into cells creating the appearance of flow production, but we  lacked the problem-solving know-how and management discipline to create real flow. Remarkably, after several months of focusing on our pilot line,  it appeared that all of the pieces of the puzzle had been identified and matched, and that impediments to flow had been remediated.  Our Kaizen support team and assemblers had worked daily to simplify, standardize, levelize, balance and mistake-proof assembly operations. Conveyance routes were also standardized, providing material just-in-time at a rate of three kits every twelve minutes to match a customer takt time of four-minutes per assembly.  It was now time for our first live trial of a full production day with a production goal of one product every four minutes – or 120 products by day’s end. 

Background. As an organization that had only several years earlier produced to stock in batches five to ten times greater than customer need, this trial run was a remarkable and exciting milestone.   We had previously been, as we joked, “the kings and queens of over-production”, always busy expediting to fill customer stockouts.  Over-production, sometimes referred to as the worst of the 7 wastes because it creates more of the other six, had once been viewed by us as a hedge against long lead-times.  Now, however, we’d become aware that excess production was actually the cause.   Little by little, with daily Kaizen, we’d whittled down the production queues from twelve weeks to two-weeks. 

Commitment. Then we requested and received TSSC’s assistance.   “We’re satisfying customers’ delivery requirements now,” I told Mr. Oba, TSSC’s General Manager,  “but only through excessive overtime.”   Observing the process, Mr. Oba responded,  “TSSC will assign a consultant to assist you to address your overtime condition.”  “Great,” I said, what do we need to get started?”  “Commitment!” Mr. Oba said.  “Our role at TSSC is to provide information and inspiration to your team, and your role is to be committed to improvement.”    Not entirely clear on what I was agreeing to, I nevertheless nodded affirmatively. 

New Lenses. Working under the guidance of a consultant from TSSC, we (and I) found the process of surfacing and removing problems with flow both energizing and exhausting.  The assemblers emerged as stars – the real knowledge workers.  The rest of us were there to support.  So many “little” problems surfaced every day, and every day we did our best to remove them.  This, I think, was the commitment that Mr. Oba was referring to.  A key learning point for me was that commitment requires understanding; the more I understood, the more committed I was to improvement. 

Hypothesis. During this focus on our model line, we kept extra resources available – people and inventory – to meet customer demand.  Experiments or tinkering that occurred on the model line could not adversely affect customer service.   So, up until our full-day go-live trial, everything was still a hypothesis.  As a hedge for our pilot, we scheduled a full-day on Saturday to “get the kinks out.”   On Friday night, we set up the line with a mixed-model sequence list levelized for best flow, and standard work in process levels for one-by-one assembly.  The inventory safety net was removed.  Nevertheless, I was confident that we would execute one-by-one production, in sequence, at about 80% of plan.  I envisioned a carefully choreographed flow of material, smooth hand-offs and quick remediation of problems.  Our assemblers were less optimistic. 

The Big Day. On Saturday morning, with a full assembly crew and support functions we set out to test our hypothesis.   To this point we had operated with the protection of excess inventory between operations; now there was just one piece of standard work in process between assemblers.  As the test began, we watched with anticipation.   Work was balanced and assemblers were experienced; what could go wrong?  

“Wrong part” declared the group lead, Jose L. about nine minutes into the day.   The line stopped for three minutes while we searched for and replaced the part.  During the day, the same problem recurred with other parts.  Each time, as the line stopped, the assemblers grew more agitated.   Next there were problems with information.  Jose showed me, “The customer drawing does not agree with ours.”    Then the order of jobs on the in-chute did not agree with the sequence list the assemblers were to follow.  The list of problems grew faster than the rate of production.  Missing parts, defective parts, tolerance issues, mistakes, computer glitch, broken tool.  We stopped each time to try to solve problems, but not all could immediately be traced to root cause, and for each problem solved it seemed that two more were discovered. 

Moment of Truth.  By day’s end, after eight-hours of production, out of one-hundred and twenty products planned for assembly, only seventeen had been produced.  One assembler commented, “This the worst system ever. Anytime something goes wrong, we all stop.”  Another declared “We knew this was going to happen; so many little things go wrong and there’s just no way to keep assembling without a few pieces of extra stock.”  Then the material handler spoke up:  “You know, because of all the extra material you have squirreled away, most of the problems with parts delivery were invisible to me until today. Harvey C, former factory foreman and now a member of our Kaizen support team, chimed in. “Our problem is not that we can’t fix problems.  It’s that with all the inventory protection we haven’t been able to see all of them.” I agreed.  “We learned more today about problems with our process than in the previous three months.  We’ve got keep moving forward.” 

Consequences.    The list of problems we discovered that Saturday was not only huge, it was also just the beginning of discovering delays that were only visible during one-by-one production.  Every day for the weeks thereafter we battled new problems, inching toward the goal of one-by-one production that Mr. Oba had assured me would occur if we showed a commitment to continuous improvement.  After six weeks, we hit the production goal along with other significant improvements to productivity.  But, more than that, we had developed a broad enthusiastic base of problem surfacers and solvers: everybody, everyday.

O.L.D. 

BTW – Hope you can make my monthly Teatime with the Toast Dude webinar tomorrow, November 16, at 3:00 p.m. Topic is “The Many Faces of Kaizen.”  It’s free.  Here’s the link to reserve your seat.

And please check out our upcoming GBMP and Shingo Institute workshops at www.shopgbmp.org.  2022 is almost here.  Time to re-energize your commitment to Kaizen.

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.