Category: Lean

I have been thinking about why many lean and six sigma programmes struggle to gain traction. We all know the methods work, you only have to look at people like Toyota and GE to see that. What do they have that others are missing. I have an idea of what causes many of the problems, I would be interested in your views.

Most businesses chase cash investment to grow, sometimes they need cash investment just to survive. At the same time, they deem change to reduce, time, resources and cash used by existing processes too expensive, too difficult or unsustainable! This seems counter productive.

If we now look at how many improvement projects immediately look for reduced workforce overhead for justification we start to see the real problem. Someone recently commented to me that to expect anything else is unrealistic, because there are too many people in most businesses. If a manager has recruited such an excess of people to do the work because they have designed the work ineffectively, perhaps the first headcount reduction should be the manager! I wonder how many managers would enter into a project knowing that at the end one of the management team would be made redundant? I think the answer is none! Yet many of these same people expect their staff to engage in continuous improvement or lean projects, sometimes with a stated aim of headcount reduction, ‘for the good of the business’.

If your business is engaged in a process improvement project that increases capacity, the current perspective of many managers is to say “I can do the same with less resource!”. Is that in the best interests of the business? Wouldn’t the shareholders be more impressed with “I can do more with the same resource!”. This is a more challenging aim, one that places more pressure on sales and management since they are the people who have to find and win the opportunities.

We need to change the mindset of managers from short term ‘protect what we have’ to long term growth and winning new business. Settling for what is there today isn’t what got the business set up and growing. Consider Toyota’s transformation. Ohno Taiichi was not tasked with making better weaving looms, the core business of Toyota, he was tasked with preparing the business for making cars.
The objective of the Toyota Production System was not the product of short term thinking. It was set up to enable the vision of mass car production with limited resources, to allow a weaving loom company to manufacture cars cost effectively. Given that aim, would Ohno Taiichi have been concerned about headcount reduction as he sought process improvement? I can’t see it, I believe he was driven to generate cash and resources for growth by focusing on the customers’ needs, and developing a system of work that involved and engaged all employees in improving the system of work.

So many times I have heard that we have to adopt the TPS and the Toyota Way. Why would you do that if you are not Toyota? The real problem is that we have a consumerist, pick and choose approach to improvement. There are fundamental differences in culture between Japan and the west. It’s not about using this tool or that tool, it’s not even about recruiting the right sort of people. Let’s take a simple example, the attitude to rules. In Japanese society I am told that rules are very important, often more important that principles. Don’t misunderstand me, I am not saying that the Japanese are unprincipled, far from it, this is just about the Japanese attitude to rules. Even if they believe the rule is wrong, they will obey the rule, because they respect authority and the need for order and harmony. Now look at the west, and rules are made for breaking. How could we possibly expect to put in place rules and have them adhered to, no matter what, when our societal attitude is that rules are made for breaking? Principles on the other hand, are adhered to rigidly. So if we agree principles and then try to get someone to act in a way that is not aligned with their principles, they will adhere to the principle, often regardless of the cost.

So how do we compete with companies like Toyota? I don’t believe the answer to is to mimic them, I think the answer is to work out what we want to achieve and the principles we want to operate with along the way. If we treat people as disposable, they will treat the business as disposable. It becomes a marriage of convenience, with commitment until it is no longer fun. Then we move on to the next company. This generates a short term view of employment, success and results that is destructive in the long term. What is the point of a development process that may take 5 years if the people involved at the start will be gone before it delivers? Bear in mind here that Toyota have been developing the Toyota way for 70 years and are still refining their process and thinking. If we implement what Toyota do today without considering how that is supported, initially our organisation won’t be able to cope since the infrastructure and common belief system won’t exist, then we will lose ground on them tomorrow and every day after because improvement won’t be in our ‘business DNA’.

If you want your business to be like Toyota, I believe the first rule is don’t copy them. Copies are often pale imitations of the real thing. They lack authenticity and integrity. Most of all they lack the inherent self belief that what they are doing is right underpinned by a rigorous understanding of why they are doing  it. If you want your business to be like Toyota, first work out what your customers want. Then work out how you can meet that need and make money – what is your business like?. The answer isn’t like Toyota, your business can’t be like Toyota because it isn’t Toyota. Start with understanding what you want to achieve, then move on to the principles of how that will work, then consider if rules are an appropriate way to implement those principles in your society. Don’t demand action from your workforce, first demand that your management understands their role. Then start working through the business processes in a disciplined, scientific way to understand what every part of the business is trying to achieve. Once this is known compare what each department is trying to achieve with what the business objectives are – do they align?

Plan what must be done

Do what has been planned

Check that the activity delivered the expected results

Act on the results, reinforce the practices and activities that yield successful results, change the practices that are not aligned or don’t deliver success.

Then do it again.

Keep doing this until there is nothing that can be improved upon, wither by listening to other thought processes or by applying new knowledge

You see the pattern. If you do this you will develop your own way, tailored to your business and social environment. Then perhaps, if you are very disciplined, one day people will be talking about the {insert your company name here} Way. They may even prefer it to the Toyota Way. Who knows, you might get Toyota coming to learn from you. Toyota had the advantage of learning first hand from Deming, Juran and others. They had the presence of mind to write down much of what they were trying to convey, for which we should be grateful. Their guides are not a buffet of choices, they are hard practical realities, hard to understand and even harder to implement,

Wherever you look in the world of Lean, people are talking about Lean Manufacturing. Lean manufacturing is going to revolutionise your business, even if you don’t manufacture anything, all you must do is apply the tools and you will see improvement. Is it really that simple? Did Toyota just wake up one day and say we will apply these tools and everything will be brilliant, or is there a little more to it?

Anyone who thinks it is just about the tools really hasn’t heard the lean message. You see, Lean is not a set of tools or just about the application of certain techniques, it is an approach to business and way of thinking that is very different to the normal thought processes present in modern business. Given that so many businesses are trying to replicate the work done by Toyota, it is worth taking a few minutes to consider how Toyota apply the concepts that are known as Lean in western manufacturing.

The original work on manufacturing as a process was done by Henry Ford when he moved the product through the production steps instead of moving the process steps to the product, and became the blueprint for automotive manufacturing. At the end of the second world war Ohno Taiichi was tasked by the head of the Toyoda family with changing the manufacturing basis of Toyota from weaving looms to car manufacturing. It was recognised that the existing automotive model of high stock would not work for Toyota, hence Taiichi was tasked with developing a manufacturing process that could deliver the variety of features required without holding massive stock levels. One aspect of this that is often missed is that Ohno Taiichi was tasked with creating a uniquely Japanese model of manufacturing.

This is entirely consistent with the aims of the Meiji restoration, where the Japanese industrial revolution sought to adopt modern thinking, technology and methods that were aligned with Japanese values. In the author’s opinion, this is a vital consideration when trying to understand the Toyota phenomenon. At the end of the second world war, the Japanese had to rebuild their manufacturing base and industrial experts including Deming, Juran and Fiegenbaum went to Japan to help restore their economy, all at the time that Toyota were looking to develop their manufacturing process. This amounts to a powerful opportunity with unprecedented drive for change.

In 2001 Fujio Cho was president of Toyota and he launched ‘The Toyota Way’, which built on the previous work and created a clear structure to explain the concepts and provide a framework for success.

The five core values employed by The Toyota Way are as follows

1. Challenge : to maintain a long term vision and strive to meet all challenges with the courage and creativity needed to realise that vision

2. Kaizen : to strive for continuous improvement. As no process can ever be declared perfect, there is always room for improvement.

3. Genchi Genbutsu : to go to the source to find the facts to make correct decisions, build consensus and achieve goals

4. Respect : to make every effort to understand others, accepts responsibility and does its best to build mutual trust

5. Teamwork : to share opportunities for development and maximise individual and team performance

Is this lean manufacturing? It doesn’t sound like it to me, it sounds more like a management philosophy than a set of process tools, so perhaps we should be thinking more about management than simply manufacturing. The Toyota Way seeks to deploy the thinking well beyond manufacturing, applying the thinking to the whole organisation.

Taking a moment to consider the implications of these values we find that there are certain elements that must be recognised for Toyota’s success to be replicated.

Toyota are looking at a long-term goal with long-term planning. That doesn’t mean that short term needs are ignored, just that there is a difference between short-term or tactical activities and the long-term strategic changes that must be made. Throughout the organisation there is a recognition that long-term improvements are of higher value than short term benefits.

Similarly, there is a focus on continuous improvement of all processes, however the prioritisation of projects is based on a rational assessment of the business needs. The focus of Kaizen is to recognise the opportunity for improvement at both the tactical and strategic level, embracing new ways of thinking and working to achieve long-term benefit for the business.

going to see the problem at source, to find the facts to enable correct decisions to be made. It has been suggested that lean does not encompass systems thinking, however I believe it is clear from the first three values that systems thinking must be at work to enable the values to blend effectively.

Respect is an interesting topic. To whom should we show respect? It seems that often respect is confused with ill-discipline. I disagree with that view, lean teaches respect for the individual, for the supply chain including both customers and suppliers, governmental bodies, and the communities within which we work and live. If someone’s performance is unacceptable, you show them respect by telling them of the fact, not by ignoring their behaviour.

Teamwork does not mean silo behaviour. Teamwork means all aspects of the organisation collaborating to deliver the customer’s needs. I use the word collaborating deliberately. Co-operation results in each party yielding the minimum it can to gain agreement from another party to enable its needs to be delivered. In co-operation, I win you lose. Collaboration on the other hand requires all parties to be open with their needs and then for the team to work together to deliver as many of those requirements as possible.

Spear and Bowen proposed the 4 rules of the Toyota Production System in their Harvard Business Review Article.

Rule 1 : All work shall be highly specified as to content, sequence, timing, and outcome.

Rule 2 : Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses

Rule 3 : The pathway for every product and service must be simple and direct

Rule 4 : Any improvement must be made in accordance with the scientific method under the guidance of a teacher, at the lowest possible level of the organisation.

Now we are starting to see the errors in western implementation. Too often organisations seek to implement so called lean to achieve a reduction in costs and headcount, without a long-term vision of what the organisation wants to achieve.

Organisations then seek to implement lean exactly as the Japanese have done, without recognising the cultural differences, much less addressing them in line with long-term objectives.

The approach is reduced to the application of a series of disconnected tools without a coherent strategy for learning and developing knowledge.

The consequence is a confused piecemeal implementation with no coherent strategy. When this fails, the organisation will often blame the employees who have been diligently trying to implement a series of tools without a recognisable framework or set of common goals. Competition and conflict are commonplace in this environment and everyone strives to deliver disparate objectives and sometimes conflicting requirements all with short-term goals and often under immense pressure to succeed.

There is also intolerance of failure, and no recognition that lean aims to fail better next time rather than to be perfect next time. Implementations are often required in under two years to achieve that which Toyota have taken 50 years to achieve and are still working on.

Six sigma is treated as a different discipline to lean, with its origins in Motorola. It is worth noting Spear and Bowen’s rule 4 above. You cannot implement lean without embracing the scientific method. Scientific method requires data and evidence, to demonstrate improvement there must be clear evidence of a change, to clearly evidence a change one must employ statistical methods to demonstrate a significant change. Why then is there so much animosity between lean and six sigma? They are different approaches to the same objective. Scientific method also requires recognition of the system within which the process operates.

Lean manufacturing then, would seem to be a recipe for disaster, lean management is a vast improvement, however to achieve the most significant benefits from a lean deployment it is necessary to use lean leadership to succeed. Lean leadership also needs to recognise that the culture of both the organisation and the wider society within which it operates is relevant to how lean is developed, implemented and managed. Are you developing a lean implementation which is based on uniquely Japanese cultural values, or are you developing a lean implementation based on the relevant social values for your organisation and location?

In summary, the message for lean leadership seems to be don’t try to copy. Instead, understand the principles upon which Toyota succeeded and adapt them to your social, cultural and business situation. Understand your long-term vision for your organisation, then develop the strategies and make choices that are rigorously aligned with your strategy. Then you have a chance of succeeding if you stay true to your principles and work very hard at adapting the principles to your application.

As Deming has said, you don’t have to change, survival is not compulsory.