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Evolving Excellence -Lessons from Japan

Piyush 2010-08-07

Reflecting on the Lessons from Japan – Part 1

By Kevin Meyer

It’s been a bit over eighteen months since I went on the Gemba Research Japan Kaikaku Experience, where I visited four companies to learn about their lean efforts. Quite a bit of highway driving over the last few days has given me a chance to reflect back on that experience to see what I learned and took away.

A link to all of the original detailed tour reports and some initial discussion on lessons is here.  Over the next few days I’m going to reflect on each tour, what I learned, and what I’ve managed to take away and implement.

Today let’s revisit Saishunkan Cosmetics (tour report).

This was an incredible place – a $250M specialty cosmetics company – with just about every one of the 1,000+ employees in one single large room.  No cubicle walls, all of the furniture was movable and reconfigurable, a significant portion of the employees were part of a call center – yet it was very quiet.  Very high ceilings, a glass wall looking out on a bucolic country setting, calming colors.  The president and his staff sat at a large table near the center of the room, with large video monitors above them displaying key metrics in real time.  A handful of small conference rooms on the perimeter are available for the rare confidential discussion.  The large room was so intriguing that we never got around to diving into their manufacturing operation!

In the center of the room on a raised podium was a “conductor” – someone who kept an eye on what was happening throughout the room which held pretty much the entire company – and could marshal resources when necessary.  A product complaint?  An team was instantly created from various functions and they went to one of the white boards surrounding the room to come up with a solution.  An earthquake in southern Japan?  A gong was sounded to alert others that they should let their customers know of potential shipping delays.

The call center processes over 8,000 calls a day, all manually logged as they believe the manual method creates more human interpretation of issues and patterns.  Those logs are reviewed daily, with over 400 improvement suggestions created and acted on – daily.

So what were the big takeaways?  Along the lines of what Dan Markovitz wrotethe other day, co-location and proximity matters.  Putting everyone in one room may be a bit of an extreme, but the more functions and people that work together, the better the communication and collaboration.  Think about that in the context of global supply chains.  That’s one reason Saishunkan only sells in Japan and actually tries to limit growth.

The concept stuck with me and a few months later I relocated my entire staff to a large office trailer while our new additional building was being constructed.  Previously we had been in three separate buildings and interaction between staff members was sporadic and usually via phone.  Now we see each other constantly and have a five minute stand up accountability meeting each morning. That meeting is even videoconferenced to our other facilities around the country.  Unfortunately I wasn’t able (yes, even as the boss) to get everyone to give up their offices for one large room.  Small steps I suppose.

The impact has been dramatic.  We’ve learned, and even decided to dedicate time to, learning how we communicate differently.  Decisions happen much faster.  Information flows much faster and more effectively – sometimes via unintended channels such as through the thin office walls – but that’s not a bad thing.  The increased communication has almost eliminated the need for formal staff meetings – or especially waiting for a staff meeting to make decisions.  We’ve even decided to duplicate the same layout in our new building.  Taking my staff away from their operational areas also helped their own management teams develop by not having a nearby senior member around to make smaller decisions.  That has let my staff focus forward on longer term strategy instead of the day-to-day operations.

Kaizen has always been a struggle for us, and the concept of dealing with 400, or even 10, improvement suggestions a day is unfathomable.  However we seem to have a found a new way forward via a Bodek style “quick and easy kaizen” augmented by the job methods (JM) portion of our strong TWI program.  The key is that nothing is too small, and the important concept is to simply be aware of looking for improvements.

The “conductor” concept still intrigues me, perhaps for larger visually-driven production floors, perhaps for entire organizations.  I believe there’s an important distinction to be made between “conductor” and “director” – creating a symbiosis and clarity of action as opposed just telling people what to do.  I’ve been in too many factories where the boss sits in a glass room overlooking the shop floor, keeping a watchful eye instead of looking for ways to improve how brains are being leveraged.  It’s not the same thing.  Respect for people – the oft-forgotten second pillar of lean.

Take some time to read the original Saishunkan tour report – and stretch you imagination a bit.  Saishunkan has.

Coming up over the next few days will be a reflection on the other tours:

Reflecting on the Lessons from Japan – Part 2

This week I’m taking a little time to look back on the factories I toured in Japan nearly two years ago as part of the Gemba Research Japan Kaikaku Experience, thinking about what I learned and took away, and comparing that to what I’ve done with the new knowledge.

Today we’ll look back on the tour of Toyota’s Kyushu facility which makes various Lexus and Toyota models.  The original tour report is here, and a listing of all the factory tour reports and discussions on the lessons learned ishere.  Yesterday’s reflection on the Saishunkan Cosmetics tour is here.

Toyota’s Kyushu facility was running at about a 1,200 vehicle per day clip when I visited.  What was really astounding was this same assembly operation doesn’t just make a vehicle with different colors, or even a vehicle with different options, or even a vehicle with radically different technology (like conventional versus hybrid models), it makes completely different vehicles.  Continually, constantly changing, units of one.  Thousands of permutations, many as radical as completely different vehicle chassis.  Every sixty seconds.  A car to an SUV to a hybrid version of that SUV back to a car… think about the material flows, line balancing, standard work required to keep such a line humming along.  That should give pause to anyone believing that Toyota doesn’t do mixed model production, or that quick changeover is a pipe dream.

Sounds complex, and it is.  And there’s not a computer in sight.  Manual kanbans drive all parts availability to the right places at the right time.  Still think you need that overly complex computerized shop floor scheduling system?  I’m sure your product is more complex than mixing a Lexus car with a Toyota Highlander, and all the permutations within each vehicle, randomly and every 60 seconds.  Yeah, right.  Keep believing that.

The second major takeaway was that this (at least at the time) is Toyota’s most profitable plant from a dollar/vehicle standpoint.  It is not the best in terms of labor productivity.  That simple fact should immediately throw some cold water on the “hours per unit” type metrics commonly used in multiple industries.  More time not applied to work can lead to improvements in plant productivity that increase profitability.  They understand that labor is a value, not a cost.  So about all those robots… especially the ones GM disrespects?  Hmmm…!  And Japan isn’t exactly a low labor cost country.

That human value is present everywhere.  Changes and innovations are evident at every work station.  The employees use PVC pipe to create their own ways of presenting parts in the exact location needed for efficiency.  These contraptions follow them as they move with the car to do their operation.  Every movement is choreographed and improved.  You have to stand and watch each person for several cycles to see just how choreographed.  Each movement has a purpose and is designed to minimize movement for the current and next operation.  A manufacturing ballet.

If the operator has a problem, he pulls a cord that sounds a chime.  Another person in white gloves comes running.  The problem escalation method is something many of us struggle with, and the Toyota solution is to create very simple decisions and multiple decision points.  The operator begins with “is there a problem, yes/no”.  If “yes” he pulls the cord.  The guy in white gloves comes running and has another simple decision “is it really a problem, yes/no”.  The two of them have literally under a minute, one takt, to make that call.  If “yes” then the line stops and the supervisor comes running.  He has a simple decision of “can the problem be fixed within two takts (about two minutes), yes/no”.  If “no” then the decision goes one more level to “shut the factory down”.  Within three minutes a problem has been identified, attacked, almost always resolved, but potentially a decision has been made to shut down an entire factory.  How often does the chime sound?  About once a minute throughout the factory.

So what were my takeaways and what have I done?

First, always keep in mind the value of the human brain, not just the cost of the hands.  Automation, although necessary in some cases, sacrifices the value of the brain – and may just speed up an inherently wasteful process.  Respect for people – the oft-forgotten second pillar of lean.  Have I said that before?  Yep, just yesterday.  Can we assume it’s a core component of real lean organizations?  I bet so.  If you jump to the knee-jerk reaction of cutting the cost of the pair of hands during a business downturn, what are you also cutting in terms of brainpower?  One part is on a P&L and balance sheet, one part isn’t.  Is it any less real?  It takes real guts to stand up to a P&L!

Second, identify problems very concisely, escalate quickly, and find the root cause of every problem so it doesn’t haunt you further.  That’s a toughie.  We have implemented a very defined escalation procedure, all the way up to the President within a few hours, but we struggle with killing the root cause every time.  It takes time which is hard for all of us – even when we know repairing the problem over and over will take far more time in the future. We have become much better at using defined methods to find the root cause, and it is slowly becoming part of the culture.  Where does it work best?  Investigating safety issues – and seeing the results of those investigations helps propel the methods into the culture.

Over the next few days I’ll take a look back on the other two tours, TOTO and an electronics manufacturer.

Reflecting on the Lessons from Japan – Part 3

This week I’m taking a little time to look back on the factories I toured in Japan nearly two years ago as part of the Gemba Research Japan Kaikaku Experience, thinking about what I learned and took away, and comparing that to what I’ve done with the new knowledge.

Today we’ll look back on the tour of an electronics manufacturer that wished to remain anonymous as it’s lean efforts created quite the competitive advantage.  The original tour report is here, and a listing of all the factory tour reports and discussions on the lessons learned is here.  Wednesday’s reflection on the Saishunkan Cosmetics tour is here and yesterday’s revisiting of the Toyota Kyushu tour is here.

I’ve been asked to protect the confidentiality of this company so I’ll just say they’re a contract manufacturer of low volume high variety electronics boards, with sales a little shy of $100 million. Established in the early 1980s, they now have over 200 employees working on a single shift.  Customers range from low tech appliances to large multinational technology companies.  They successfully compete with companies that have lower costs as measured by traditional balance sheets.

In the 90s this company ran into some severe difficulties and decided, out of desperation, to try something radically different.  That radical idea was 3S – a subset of 5S.  And 3S they did to a most radical extreme.  You see everything… everything… is on wheels so it can be moved out of the way to be cleaned.  Desks, workstations, plants, magazine racks.  And everything is labeled – even coat racks and doorknobs.  The entire operation is scrubbed clean every day by everyone, and on the original tour report there’s a photo of the company president (remember, a $100M company!) on his hands and knees scrubbing the office floor.

Yes it’s a bit over the top, but it changed the culture of this company and eventually made it very successful.  It created a culture of change, which then led to operational improvements such as visual management and work cells.

And standing up.  Everyone stands, and there are virtually no walls and no offices.  The president and his staff stand together in one room, somewhat similar to what we described at Saishunkan a couple days ago.

Although the incredible 3S was impressive, my primary lessons from this visit were:

A crisis can be leveraged for change.  Who said “never let a good crisis go to waste?”  Oh yes, Rahm Emanuel.  Nevermind.  Maybe I’ll rethink this lesson.

But probably my main takeaway from this visit, as simplistic as it sounds, is the power of standing.  Regular readers know I’ve gone a bit nuts on this concept.  Only a week after returning I got rid of the traditional executive spread and simplified to a stand up desk.  After a few days I felt great and decided to dive into the science a bit more.  After a year I was completely sold on the concept as were several of my coworkers.  I even found a wide range offitness accessories for the stand up desk.  And in the spirit of one of my very first blog posts, a single stand up desk has less horizontal surface area, forcing me to be much more organized.

After eighteen months I’m more committed to the concept than ever, and a majority of my staff now stands as well.  To each their own – I may proselytize a bit, but never with any force.  Yes a couple people have even gone back to sitting.  It’s not for everyone.  I do notice that I walk around much, much more.  I am much more focused when I am working at my desk.  The concept itself has helped create an atmosphere of change.  Downsides?  I find it hard to sit – including while driving or flying long distances.  I find myself getting up and cruising the aisles of planes, or stopping at almost any interesting waypoint to get out of the car and walk around a bit.

Try it – perhaps just for a day.  Actually the first few days are a little rough. Try it for a week, perhaps by weaning your way from a chair to a bar stool to standing up for hours.  You’ll probably be surprised at how much more focused you are and how much more you accomplish.

Reflecting on the Lessons from Japan – Part 4

This week I’m taking a little time to look back on the factories I toured in Japan nearly two years ago as part of the Gemba Research Japan Kaikaku Experience, thinking about what I learned and took away, and comparing that to what I’ve done with the new knowledge.

Today we’ll look back on the tour of TOTO, the famous manufacturer of faucets and toilets.  The original tour report is here, and a listing of all the factory tour reports and discussions on the lessons learned is here.  Wednesday’s reflection on the Saishunkan Cosmetics tour is here, Thursday’s revisiting of the Toyota Kyushu tour is here, and Friday’s look back on the tour of an electronics manufacturer is here.

This TOTO facility has 2,300 employees and 1.5 million square feet of space.  Over 3,700 faucet permutations are manufactured at this facility, which includes all operations from casting through distribution and division administration.  They have been on the lean journey for several years, with the most notable aspect of their conversion being a focus on work cells.

What used to be long conveyorized assembly lines have now been converted into over 200 one-person work cells.  These work cells do complete assembly, receiving the finished cast and polished components, performing full assembly, and then packaging and labeling the boxes.  In front of each cell is a metrics chart detailing three things: 1) Quality, 2) New training completed, and 3) “Am I making Money?”  That last item is critical and not the same as “cost”.  It is literally whether the cell has made money after final product sale.

Similar to the other companies we visited, everyone works standing up.  If a problem is detected the area supervisor is alerted.  An immediate root cause analysis activity may be started, but at the very latest it is attacked during the next morning’s group meeting.  There are no work instructions used; after the initial six months of training it is expected that the cell operator knows the job.  All parts for each faucet are kitted in groups of twenty, providing visual indication that all parts are used.  The kits used to be for batches of 100, and they are working to have the batch size reduced from 20 down to 1.  A kanban train delivers parts to each cell, and picks up completed boxes for shipment.

The entire operation is organized around flow, even when it meant putting a dirty casting operation next to a dust-sensitive plating operation.  Once again the value of brains is recognized, with robots only used for dangerous operations, such as moving cast molds through the furnace.  Each department is responsible for cleaning up one part of the factory, including the exterior landscaping.  This creates pride in ownership as well as accountability to each other.  There is no janitorial or landscape service for a 1.5 million square foot factory.

Perhaps most interesting to me was the planning process.  This facility operates to one month plans.  No plans extend out more than one month, and when pressed on this issue the answer was simple: we don’t know what might happen in a month, so why waste time planning if it is probably going to be wrong?  Interesting – and in many respects it aligns with lean accounting.  Traditional “budget to the wall” accounting practices produce tremendous waste in analyzing backwards rather than making decisions on a rolling basis with the best current information.

Takeaways?  Standing up, again.  Eliminating walls, again.  Those two themes were reinforced over and over, which is why I immediately implemented them upon my return.  We were already going down the lean accounting path, so we had already eliminated traditional budgeting and were planning on a rolling forward basis.  However it takes some serious guts to only look out a month, and I’m still not sure that’s really a good idea.  It probably depends on the industry, economic stability, and so forth.

The preponderance of cells was intriguing.  Being in a process industry, we’ve found work cells to be a difficult bugaboo to implement.  We’re getting there by focusing on naturally symbiotic processes and activities, sometimes product based, sometimes grouped around sets of processes.  More importantly is the concept of self-management of segments of workflow, and that has taken root.  Flow is important, but investing in significant advances in technology just so two antagonistic (such as dirty and clean) processes can be physically together probably won’t happy for a while.  There are far too many other low hanging apples.

As a final comment on this series of reflections, I believe it is very important to take off the blinders and see how others are operating.  I believe it is equally if not more important to not assume some other method is better – it must be evaluated within the context of your value creation process.  There is no right way, no best way.  That’s the fallacy and danger of best practices.

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