Why do companies fail in copying Toyota?
I think most companies try to copy the “tools” they learn from so many books and classes. There is a belief that if we copy the same tools and techniques Toyota uses, we will get the same outstanding performance that Toyota has. What they may be failing at is in understanding the principles behind those tools. How can we learn and use a tool if we never understood the problem that caused the creation of that tool in the first place? A classic example is a technique called Kanban, one of the most studied and explored choices in the “lean menu.” Many companies are avidly trying to learn and implement this technique since it is regarded to be a synonym of Just-in-Time, essential for anyone who wants to become lean. While they are eager to introduce Kanban in their operations and to improve it with sophisticated hi-tech systems, at Toyota they are continuously seeking ways to eliminate Kanbans from the operations, and in the case they are absolutely needed, then trying to make them as simple as possible. One of my mentors in Japan considered Kanbans as a statement of failure, which is quite the opposite from those companies that proudly display that as a sign of success.
I think the conclusion is that lean is not a tool box or a menu, but a set of principles that, if understood, can bring the right techniques to the right places.
How can lean be implemented in a non production environment?
The core concept of lean is the elimination of waste. It is interesting to see a big shift taking place these past few years. Out of the 300 companies with which I’ve had involvement, almost 200 of them are non production. At least from the organizations I have close relationships with, many of them are now in education, healthcare, finance, military and government. One was a surfing school right here in San Diego.
The approach in lean implementation will vary depending on the industry, but the principle of eliminating waste remains the same. The key is in finding what value is from a customer’s perspective.
I think lean was popularized in manufacturing just because of its earlier exposure as well as its visibility. Sometimes it is easier to see metal moving between processes than knowledge and administrative transitions moving between people’s heads and computers. In a sense lean in manufacturing seems to be easier to understand to most people.
What is new in lean today?
I still work closely with my former mentors and was at one Toyota site in Long Beach early this year. It is reassuring to see that they are not creating anything new toward lean. What they are doing is using the same proven lean techniques to create new processes, new products, and develop their people. Toyota is very focused on making better cars, not better Kanbans. On the other hand, it is intriguing to see how much effort some are putting into creating “new” lean stuff while neglecting the effective usage of existing lean solutions. We have to be careful not to waste all our lives trying to improve the hammer while forgetting that the purpose is to use the hammer to build the house.
At Toyota they are always looking for problems to solve, many of them before they happen. They still rely on the same and simple root-cause analysis technique that they did over 30 years ago when I was just an intern there.
What are the key takeaways from the SDSU Lean class(es)?
I believe that total engagement is essential in any lean implementation. Having at least a critical mass with solid understanding about lean is the baseline to effectively implement it. In my SDSU classes, I teach techniques for this early step, how to create awareness in the leadership, how to create and sustain a lean culture.
Describe classroom activities and group work.
Depending on the class we have different simulations and exercises. I try to be careful not to alienate people from all the diverse industries that come to SDSU. Instead of using car assembly simulations, many of the exercises are around a fictional pizza parlor. Most people can relate to it and translate it to their own realities.
Why do companies need lean?
Up until a couple of decades ago, lean was optional. Companies had a captive market and they were protected by the inability customers had to reach alternative suppliers. Customers just had to accept the quality, cost, delivery time and service that they were offered.
In the information and global age, if a customer doesn’t like the price or quality they get from you they just take another minute and get a better supplier on the other side of the globe. This forces those outdated companies to either improve or slowly disappear. Although there are many ways to improve, I don’t know of any that is as effective and complete as the lean approach.
Tell me something about lean that most people don’t know or realize.
There is a notion that lean is a toolbox or a menu full of options and choices. It is almost like when you go to a restaurant and you choose from the menu what you want to eat. This choice can depend on what you feel like eating, what you ate the day before, the price of the dish, the diet you are on, and so many other factors. Usually the larger the menu, the more difficult it is for people to make their choice.
At Toyota, they take a different approach. Instead of picturing lean as a toolbox, they compare it to a house being built. Instead of choices, there is a strict sequence of techniques and activities that must take place. You don’t implement the technique that you want when you want. For example, you can’t implement the Andon (which would stop production immediately when there is a problem), before you equip your people with problem-solving skills. If people can’t solve problems by addressing their root causes, chances are your Andon will stop your production every hour and for the same reasons each time. The house analogy shows that the foundation always comes first, before you build the walls and way before you put on the roof.
What are some of the biggest misconceptions about Lean?
Some people like to call it “lean and mean,” some others claim that lean makes people lose their jobs. I think lean got a bad name in early years perhaps because it was misused to shrink the workforce.
Although lean opens the possibility of using less people, true lean implementation emphasizes the long-term vision rather than the bottom line at the end of the quarter. Some companies already found out how to use lean to grow, not to shrink. But this thinking is still taking some time for senior leadership to embrace (needless to say Wall Street is not a forgiving institution, it still expects immediate gains).
If I wanted to implement a lean initiative in my organization, how should I go about it? What should I do first?
Regardless of the type of organization, if you are looking for a first step, it will definitely be a lean assessment. This is an A3 (one page) report on the current status of the operations and the vital few initiatives that can be addressed. The A3 report serves to align the findings and recommendations with the leadership objectives. From that point on next steps can range widely from training, guided kaizens, leadership coaching, focused problem-solving and many other activities depending on what the assessment reveals. While you get ready for the first steps, there are some books that truly get into the essence. You can’t go wrong if you read authors such as Pascal Dennis, Art Smalley, John Shook, Mike Hoseus, and Robert Martichenko. They all had deep hands-on exposure into the Toyota Way and their books reflect the importance of the thinking instead of the usage of tools.
How did you get started in lean and what is the story behind your career?
I was hired by Toyota as an electromechanical technologist intern when I was 17. They helped me through university and post-graduate studies and sent me to Toyota city in Japan to learn about TPS (they called it Toyota Production System at that time). After living in Japan for almost three years they sent me to Venezuela to start up a new Toyota factory. I lived there for several months and had to go back there and to Japan several times during my almost 14 years with Toyota. I came to the U.S. in 1996 to finish my masters in technology management, and at that time New United Motor Manufacturing, Inc [or NUMMI] welcomed me to use their site as the subject of many of my studies. I collaborated frequently with NUMMI in California and just came back from Toyota in the Philippines where I taught a couple of lean classes.
Today through organizations such as Honsha.org an alumni association of former Toyota professionals and San Diego State University, I can learn along with other practitioners the essence of lean and share some of my experience.
