in Talent Management 69

Take-Aways

The Lean production system evolved out of necessity. In Japan in 1950, mass auto production was not feasible.
Lean production means doing more with less while still satisfying customers.
Stability is not possible without standards.
“Just-in-time” (“JIT”) production means producing the “right item at the right time in the right quantity.”
Jidoka translates as “automation with a human mind” and ensures a “defect-free” workplace.
Kaizen events involve workers to solve problems and make incremental improvements.
Hoshin planning aligns resources toward goals, with better knowledge sharing to strengthen the workforce.
Lean culture is intense because its standards are high and perfection is its goal.

Summary

The Lean production system evolved out of necessity. In Japan in 1950, mass auto production was not feasible.

Manufacturers built the first automobiles to customer specifications. They were expensive. Frederick Winslow Taylor introduced mass production in the early 20th century. It relied on standardization and measurement that focused on continuous improvement. Henry Ford took this further with the assembly line and interchangeability of parts. Workers had to adapt to the new mechanisms, resulting in pointless, soul-destroying repetition, which encouraged the union labor movement. Accounting systems in mass production depended on the wasteful practice of keeping inventory instead of satisfying customer demand. This system suited neither Japanese markets nor budgets.

“There are some possibilities to improve the production system.” (Engineer Eiji Toyoda, 1950)

Taiichi Ohno, the great sensei of the Toyota Production System, spent 50 years perfecting it. Toyota had to produce a variety of car models to suit a segmented buying public. It contended with fixed and falling prices and tough competition. Cost for capital was rising, and workers demanded more involvement. After radical downsizing and cost cutting, Toyota, in exchange for loyalty and commitment to improvements, would provide the remaining workers amenities and employment for their productive lifetimes. Workers became a “fixed cost” and integral to Toyota’s success. Ohno created the “Operations Management Consulting Division” (“OMCD”) to nourish the Lean attitude in Toyota manufacturing centers and among their stakeholders. The Lean system remains revolutionary, and proves more necessary now than ever.

Lean production means doing more with less while still satisfying customers.

One goal drives Lean production: reducing muda, or waste, while still delighting customers. Today, the old economic formula of Cost + Profit Margin = Price is obsolete. Now, the equation is Price (Fixed) – Cost = Profit. To sustain profitability without weakening your company in the long term by cutting workers and maintenance budgets, apply “systems thinking” to address and reduce waste.

The “house” model illustrates the Lean system. At its base lie stability and standardization. Its walls are “just-in-time” and jidoka – “automation with a human mind.” Its roof is customer focus. The interior, or “heart” of the system, is involvement: workers and leaders working together to continuously learn and improve.

“The great challenge of the 21st century is not information technology. It is cost reduction.”

Toyota’s core goal is to make the highest-quality cars at the lowest price in the shortest time by eliminating muda, whichis anything that detracts from value. Muda includes: motion, waiting, conveyance, correction, over processing, overproduction, inventory, and knowledge disconnection.

Overproduction is the source of the other muda (motion, waiting, conveyance, correction and inventory) for products no one orders and no one needs. The positive side of Lean production system creates flow. Before flow can exist, however, production must attain stability.

Stability is not possible without standards.

Stability supports the standard. It starts with the “5S” system, which supports standardized work and “total productive maintenance” (“TPM”), and optimizes “visual management.” The factors that comprise the 5S system are:

“Sort” – Go through “red-tag” items that may not be useful. “If in doubt, throw it out.”
“Set in order” – A place for everything and everything in its place.
“Shine (and inspect)” –After you remove clutter and assign locations for items, clean the area thoroughly.
“Standardize” – To maintain the order above, strong visual signs should model the standard to follow.
“Sustain” – Everyone participates in the 5S system. Promotions, communication and training encourage employees.

“The performance standard is zero breakdowns.”

The 5S system created a “visual workplace” to identify and rectify “out-of-standard” practices. The system leads naturally to TPM, in which everyone has a role in keeping machinery in good order. Workers who operate machinery maintain it, while other maintenance staff members perform upgrades and training. This helps eliminate the “six big losses” that impair machinery – breakdowns, setup and adjustment delays, reduced speed and idling, and defects, which reduce yield.

Just-in-time (“JIT”) production means producing the “right item at the right time in the right quantity.”

JIT is among the most famous innovations in auto manufacturing and one of the hardest to implement. The objective is to create “continuous flow” so the customer can “pull” from the production process. The old “push” method – building inventory – is wasteful. A JIT system has simple rules:

Don’t produce a product unless a customer orders it.
Level demand on the production line (heijunka), so it moves smoothly.
Link all processes using visual markers (kanban).
Maximize flexibility on the line for machinery and people.

“The essence of JIT: Make value flow so that the customer can pull.”

A manufacturer or service should make what the customer values as the highest priority. Timeliness and quality are two values customers recognize. In a pull system, an interior or exterior customer orders a part and, through a chain of information sharing, creates a cascade effect. This generates far less “work-in-process” (“WIP”) and far less inventory to track. It also reduces operating expenses and minimizes conveyance.

Heijunka and kanban are integral to the pull process. Heijunka, or leveling, eliminates the peaks and valleys in production by working at the same pace, every day. This standardization allows for variety and enables quick changeovers. No batch processing exists. Kanban, or visual tools, synchronize production with instructions to internal and external “customers.” To ensure continuous improvement, workers participate in kaizen events. They contribute knowledge and experience to make small adjustments.

Jidoka translates as “automation with a human mind” and ensures a “defect-free” workplace.

You cannot have JIT without quality assurance. Jidoka has three rules: 1) Don’t accept defects, 2) don’t make them and 3) don’t pass them on.

Toyota trains workers to stop the line when they encounter a problem or defect, because allowing defects is costly to the smooth operation or “flow” on the shop floor – and to the bottom line. The mass production philosophy is “make your numbers,” while the Lean mental model is “don’t ship junk.” To save workers from having to pay constant attention to a machine, Toyota invented poka-yoke – simple, low-cost devices that automatically shut down the line when an error occurs. With these devices, workers can discover errors and find out what caused them.

“Stop production – so that production never stops.”

Involving team members, and giving them the power to assess problems and suggest solutions, confers “pride of workmanship.” To implement jidoka successfully, leaders seek a long-term strategy. They must train workers with the right knowledge to make poka-yokes, and link the jidoka practice to the 5S system, standardized work and TMP. Jidoka could benefit health care, financial services, education and public services, among other sectors. For example, hospitals use simple poka-yokes such as buzzers and flashing lights to alert staff when they fail to wash their hands. Jidoka can help create an “error-free” workplace, but everyone must be on board.

Kaizen events involve workers to solve problems and make incremental improvements.

At the heart of the Lean house model is worker involvement. Workers today have better educations and are more creative problem solvers. They are on the front lines, and their expertise and input prove crucial to the company vision. Successful worker involvement requires mutual trust and respect. Improvements cannot necessarily lead to job losses. The explicit goal of involvement is to increase productivity, quality, cost, time, safety, environment and morale, but the deeper goal is to “improve team-member capability.”

“Fear makes us stupid.”

Kaizen events bring workers together to solve problems. You can hold “quick” kaizen meetings for simple solutions, such as improved visual management in a work station. For bigger or systemic issues, embrace “Kaizen Circle Activities” (“KCA”). Workers must possess the skills to contribute, such as administrative abilities, brainstorming, problem-solving and presentation skills.

How can you motivate workers to want to change and improve? Promise that the kaizen events support them in their work. Remind them that they participate in something bigger than themselves. With “practical kaizen training,” workers learn to produce and interpret standardized work charts, new processes, and physical changes on the floor, as necessary.

The supervisor plays a crucial leadership role in kaizen, and has four levels: 1) Tell workers what to do, 2) show workers how it is done, 3) do it with them, and 4) let workers perform the activity alone, and encourage questions.

Kaizen should be hassle-free, fair and efficient. You should promote it throughout the organization and reward it.

Hoshinplanning aligns resources toward goals, with better knowledge sharing to strengthen the workforce.

If involvement is the heart of the Lean house model, hoshin is its nervous system. It translates as a “ship in a storm on the right path.” Hoshin is the bigger planning process that aligns resources in support of worthwhile objectives. It starts with a vision and articulates itself in a plan. Planning takes stock of strengths and weaknesses, and compels the team to not be complacent. Yet even with much planning, companies struggle to achieve their goals because they take on too much, lack clarity and don’t communicate those goals effectively throughout the organization. Hoshin, by contrast, tackles a few “large boulders,” develops corresponding strategies and involves the entire team in the process.

“The most important word in hoshin planning is No.”

The hoshin planning system has several elements:

“PDCA” – This stands for “Plan-Do-Check-Act,” in which you produce daily status reports, and hold weekly management meetings and shop floor “process reviews.” Create visual management systems to exhibit and share data.
“Nemawashi”– This translates as “preparing a tree for transplanting” and refers to the consensus hoshin implementation requires.
“Catchball” – From the top leaders to the floor, hoshins are tossed and “caught” between levels to create a “cascade effect” for change.
“Control department concept” – Cross-functional activities facilitate communication and collaboration between departments.
“A3 thinking” – This is a one-page document that “tells the story” of the strategy. It starts with “Background” and moves through time, assessing and analyzing before recommending a “Future Action.”

At Toyota, the “Five Whys” is an essential analytical and problem-solving tool for revealing root causes, which almost always spring from planning being inadequate or from people not adhering to it. After deploying a hoshin plan, review its success by asking “why” five times to drill down to the “root cause.” If the plan failed, ask “why” five times. That is how you learn. Put the plan into the company “Book of Knowledge” for future reference.

Lean culture is intense because its standards are high and perfection is its goal.

People in large corporations might understand what it means to be in the trap of “the fog” of unclear goals, processes and outputs. PDCA combats this, starting with “grasping the situation” (“GTS”) to discover what is really happening and to determine what to do next. The results of PDCA should create the new standard. Standards enable identifying an “out-of-standard” practice, but the cause may remain obscure.

“Change is nobody’s constituency, whereas the status quo is everyone’s.”

A central paradox of Lean production is that while perfection is always the goal, everyone understands that nobody can achieve it. For Lean adherents, the work is never done. It starts with intensity, because eliminating waste is difficult. Once people and companies adopt the Lean do (“path”), it connects to their whole being. Approach Lean with humility, a learning mind-set and respect for people. The Lean culture is disciplined but also carefree, warm but indomitable. For leaders in Lean, the journey never ends, because it demands constant assessment and reflection. It rejects definition. Lean simply asks: “What is the need?”