The Power and Magic of Lean: A Study in Knowledge Transfer

Kaikaku

Authors: Norman Bodek Publisher: PCS Press Date of Publication: 2004 ISBN: 0-9712436-6-2 Number of Pages: 406 pages

About the Author

The Big Idea

The author explains that kaikaku are Chinese characters which mean: 'transformation of the mind,' 'working with others to achieve radical change,' and 'to bring new and vital change to your organization.' The author also defines Lean as an all-out war against waste -- the waste that results from inefficiency, as well as the waste that is brought about by the underutilization of people. This book presents a fresh perspective with respect to keeping only value-adding processes and optimizing the creative capacity of manpower.

Norman Bodek
Norman Bodek is president of PCS Press, a publishing, training, and consulting company. He discovered and published the works of: Dr. Shigeo Shingo and Taiichi Ohno, the inventors of the Toyota Production System. He introduced the west to Kaizen Blitz, SMED, TPM, Poka-Yoke, Visual Factory, Hoshin, and QFD and other methodologies. In 1988 he initiated the Shingo Prize for Manufacturing Excellence with Professor Vern Buehler at Utah State University. Most recently he co-authored a book with Bunji Tozawa titled: The Idea Generator - Quick and Easy Kaizen. Through newsletters, books and 50 industrial study missions to Japan Norman discovered, had translated and popularized many of the Japanese quality tools, techniques, and technologies that transformed American industry in the mid 1980's and 1990's. Norman has been a frequent instructor and speaker for organizations including the American Management Association, President Reagan's Productivity Conference, Institute of Industrial Engineers, American Society for Quality, as well as at hundreds of conferences, seminars, and in plant training events.

Introductions
Even as recently as the 1970's, Japan was perceived by many as a nation capable merely of copying from the first world. As such, Japan was not considered a threat and was left pretty much to itself by more advanced countries. It was in the 1950's that the Toyota Production System was born. It was not long after that Japanese quality and productivity resulted in Honda, Panasonic, Yamaha, Sony, Fujitsu, Hitachi, Toshiba, Fanuc, Kyocera, Nikon, and other manufacturing giants which stunned the world.

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10 Things That Keep CEOs Awake by ElizabethBodek Kaikaku Norman Coffey

The author's intention in writing this book is to share with readers the lessons he has learned in studying these giants. His objective is to highlight the importance of implementing a total system of continuous improvement. He does this through a discussion of the principles of Lean. Lean has been referred to as Just-in-Time, Kaizen, and World Class Manufacturing. Other terms associated with Lean are Cellular Manufacturing, Kanban, SMED, TPM, QFD, Quality Circles, Hoshin Kanri, Poka-yoke, Visual Factory, Quick and Easy Kaizen, Kaizen Blitz. Essentially, Lean is the study and implementation of the Toyota Production System. This is the system which the author is credited with bringing to American awareness and practice. An example of the reach of Lean can be found on the web site of the Northwest Lean Networks at http://www.nwlean.net/

The Journey Begins

In 1979, the author read an article in the New York Times on the decline of productivity in America. This marked the beginning of the author's interest in productivity and manufacturing. This led the author to pursue further studies in the outstanding examples that Japan had to offer. In Japan, the author met Taiichi Ohno and Dr. Shigeo Shingo. Taiichi Ohno, former vice-president of Toyota, had visualized the new production process that had made and continues to make Toyota the international manufacturing success it is. Dr. Shingo invented the tools and techniques that made the new production process possible. Though the terms Toyota Production System and Just-in-Time are often used interchangeably, in Japan, the latter is only a part of the former. Just-in-Time is understood to mean the delivery to the customer of products exactly on time, not before or after, in the right quality and in the right quantity. Lean manufacturing, on the other hand, is just another name for the Toyota Manufacturing System. While in the rest of the world manufacturers had attempted to increase productivity by bringing in new or faster machines, Dr. Shingo realized that productivity was the result of both operations (primarily machines) and process (how things are done). With Dr. Shingo's guidance, Toyota inventories were reduced by over 90%, quality went from plus or minus 3% to Six Sigma ( 3.4 parts per million), manufacturing costs were drastically reduced, and the time line to deliver products was shortened from months to hours to Just-in-Time. Taiichi Ohno, as senior manufacturing officer at Toyota, drove the process through Toyota and through all of Toyota's subcontractors.

Dr. Shigeo Shingo

Dr. Shingo defined process as 'a flow by which an object is transformed from raw material into finished product,' as opposed to operations which is 'the flow of tasks performed by human workers on a product.' Dr. Shingo believed that to improve productivity, focus should be on improving processes and not on improving

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operations. Dr. Shingo and Taiichi Ohno shifted their attention therefore from machine improvements to the elimination of all non-value-adding wastes. This gave Toyota its competitive advantage. According to Dr. Shingo, The job of a manager is to get things done through other people. The manager is not usually able to do the job alone. Management defines the system. Workers work within the system. Only management can change the system and the system must be changed continually if quality is to be improved. Dr. Shingo was convinced that solving a problem just to let it occur again is not enough. He thought it necessary to keep asking why over and over again until the root cause could be found and the problem prevented from occurring again. Dr. Shingo loved to use the Five Whys. He said, We all love to discover for ourselves the causes of problems. When we do discover for ourselves our energy really moves inside us. When we are told the answers we might learn a little, but it is nothing like the magic of discovering things through our own questions. Dr. Shingo believed that the concept of waste is at the heart of Lean manufacturing. He visualized the entire Toyota factory as a one-piece flow that would not work unless all defects were eliminated. The target of Kaizen (continuous improvement) therefore is the complete elimination of all non-value-adding wastes.

Taiichi Ohno
Taiichi Ohno is the co-developer of the Toyota Production System. He changed the structure of the workforce from the traditional foreman/supervisor/worker to a manager/team leader/team member relationship where the supervisor/team leader worked alongside the team members to add value to the end product. These new teams were taught to work at solving the root cause of problems. This dramatically reduced production stoppages. According to http://www.t-san.co.uk/ yields approaching 100% became not uncommon. Ohno believed that automation could institutionalize waste rather than get rid of it. He believed that it was therefore a manager's job to set clear directions, but it was a manager's subordinates' job to figure out how to get there. Ohno had a famous river example. He said, Inventory is like a river of water. As it flows through the plant it hides problems and wastes. It hides the machine problems, quality / defect problems, and many others. All of these problems add to the cost of manufacturing. He believed that the water in the river should be reduced so that As you lower the level of inventory, problems rise to the surface of your awareness, then one by one you solve those problems and eliminate them, then you can lower the river again. As you continue, you eliminate non-value-added wastes. Lowering the river of inventory is the heart of Lean manufacturing. The process of reducing inventory led him to the concept of one-piece flow. Onepiece flow is defined as producing only one part at a time and moving that part immediately to the next machine. The result is that there is virtually no inventory

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build-up between machines. When you cannot get to one-piece flow, you use the kanban system and work with small batch sizes. Kanban means signboard or card, and is used as a signaling or communication device to pull manufactured products through the factory. The kanban creates a pull system -- a process cannot produce a product unless the subsequent process goes back to the previous process and 'pulls,' causing the previous process to produce exactly what is needed. The kanban drives the Lean system and minimizes inventory. Ohno believed that new machines were not always necessary. He believed that Lean starts with customer service and ends with customer service. He believed that fundamental to Lean manufacturing was answering the question, How can I please my customers by delivering to them exactly what they want, exactly when they want it, in the right quantity and in the right quality at the lowest possible cost? Having answered the question, you only use what is needed to get the job done, on time to the customer, and at the lowest possible cost to you.

Defining Waste
Dr. Shingo and Ohno listed seven types of waste: 1. Inventory - wastes of stock - Reduce the production period, reduce the setup times (which then allows a reduction in batch size, which reduces the work-in-process inventory). Level the quantity produced by onepiece flow. Arrange machines into manufacturing cells and adopting small lot production. Inventory is reduced by synchronization of production going backwards from finished goods to the previous process and only pulling forward exactly what is required, when it is required (JIT). In Lean, stock is a liability whereas it is considered an asset in traditional accounting. The old manufacturing system could be called the Just-in-Case system. It allowed manufacturers to build up buffers of inventory to prevent failures from stopping the production flow. When Toyota went to Just-inTime, it forced Toyota to be more efficient. Inventory is the first and most important waste in manufacturing. 2. Motion - Go back to the fundamentals of industrial engineering. Video the process. Watch the video and get the engineers and operators involved in finding ways to improve the movements. Keep repeating the process continuously. Improve motion by improving equipment. Locate tools to facilitate ease of handling. Position required parts near at hand. Only required parts should arrive near or at hand and one by one. 3. Transportation or moving of things - Rearrange the manufacturing process into cells to reduce movement.

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Improve plant layouts; think of how to eliminate transportation. 4. Defects - Apply six sigma techniques, use Total Quality Management (TQM) and reduce defects to zero. Inspect to prevent defective products not to find defects. Do 100% inspection - not sampling - doing self-inspection (operator checks himself), successive inspection (next person checks work done by previous person), develop poka-yoke (mistake-proofing) devices. For m o r e i n f o r m a t i o n o n p o k a - y o k e , v i s i t http://www.campbell.berry.edu/faculty/jgrout/pokayoke.html 5. Waiting time or delays - Install kanban (signboard or signal) to move small batches of finished parts within the factory and set up U-Cells. Switch your thinking - waiting time of workers is more important than operation ratio of machines. Machines can wait, people should not wait and watch machines. 6. Overproduction that is ahead or behind schedule - Do Just-in-Time and deliver the products exactly on time. Eliminate storage between processes (drop the idea of economic lot sizes). Adopt the SMED (Single Minute Exchange of Dies for quick changeover) system. Level quantity and synchronize processes. Adopt one-piece flow and improve the plant layout. 7. Processing - Doing operations inefficiently, incorrectly, using the wrong equipment, having people not properly trained. Consider improvements from the point of view of value engineering and value analysis is this operation required? Why should this processing method be adopted? To the seven, the author adds three more: 8. Inspection inefficiencies - Reduce final inspection through poka-yoke and other defect-preventing techniques. Eliminate in-process inspection. Poka-yoke is a system invented by Dr. Shingo who encouraged all workers to look for opportunities and build very simple devices to prevent defects. 9. Excess costs - including too much overhead Get the accountants to rethink the cost accounting system and find ways to continuously reduce overhead costs. 10.Lack of creativity - underutilization of talents - Find ways to get all employees involved in coming up with improvement ideas to make their

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jobs easier and more interesting. People have been traditionally expected to come to work and leave their brains at home. Use Quick and Easy Kaizen to develop people properly to fully participate in the continuous improvement process through the implementation of their own ideas.

Improving Productivity in Japan

In November 1980, Joji Arai, managing director of the Japan Productivity Center's office in Washington DC, spoke on some of the measures being undertaken in Japan to improve productivity: No person had a private office. This was intended to achieve a feeling of togetherness. Each morning, people held an informal meeting. At Takashimaya department store in Tokyo, before opening for the day, the manager would ask, What can we do today to improve our customer service? Then he listened and cheered his subordinates on to a great day. He did this everyday. Humanization of the work environment - This is putting effort into the human side of Lean - creating ideal working conditions, bringing real quality of work life to factories. Inventory control systems In-house training Lifetime employment system Group decision making Management and employee participation programs Cooperation between design and manufacturing engineers Special emphasis on quality control

In subsequent study tours to Japan, the author was witness to: Selecting key people to drive the Toyota Production System through the top Toyota suppliers Quick changeovers

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SMED stands for Single Minute Exchange of Die. Reduction in changeover time results in reduced inventories, faster throughput, and higher quality since mistakes are detected sooner. Mixed model production - Various products are manufactured on the same assembly line. Takt time - time beat This is defined as the target time that must be met per piece in order to deliver the finished product to the customer exactly on time. Takt time synchronizes the production of many different parts for use in assembly and coordinates their supply to each process on the assembly line at the proper time. This keeps the production on schedule and permits flexible response to changes in sales.

SMED - Quick Changeovers

Value-adding time is the time when materials are being converted, altered by either machines or labor. Time that is not value-adding time is waste. Outside Exchange of Die OED This refers to the things that can be done while the machine is running; e.g., making sure all of the tools and inventory needed are ready and close by; checking to see that the next die is ready with all of the necessary parts, pre-heating of the die if necessary, etc. Inside Exchange of Die IED This refers to the things that can be done only when the machine is not running; e.g., using cranes to lift the die or pneumatics to move the die around; or changing the clamping method to reduce the number of bolts and hoses, etc. Some keys to quick changeover are: The ideal setup change is no setup at all or within seconds. Insure that tools are always ready and in perfect condition. Move whatever resource is available to a bottleneck machine to speed up the changeover. Put scale settings on all parts of the production line that have to be adjusted or moved to a different position for different products / sizes and keep a record of the required settings for the different products. Blow a whistle and have a team of workers respond to each changeover. Establish goals to reduce changeover times, record all changeover times and display them near the machine. Distinguish between external and internal setup activities and try to convert internal to external setup. Visit http://www.swmas.co.uk/Lean_Tools/SMED.php for more information on SMED.

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Japanese Gems
During his study missions to Japan, the author was witness to the following exemplary practices: Continuous improvement - Japan had developed a system for continuous improvement. Since the system was applied everyday, marked leaps were not noticeable to those outside Japan. Long-term vision - Japanese companies made plans for the long-term. Some companies even had hundred-year plans. Kanban - A signboard or card was used to control work-in-progress (WIP) and inventory-flow production. Kanban facilitates a reverse production process. Instead of following work orders to push manufacturing forward throughout a plant, the cards are used as part of a pull system. The subsequent process goes back to the previous process to get only the necessary quantity of parts needed. Kanban is used to stabilize and rationalize the production process. Final assembly determines the quantity and timing for the preceding stations. Daily lot sizes are therefore small. Quality control circles (QCC) - Millions of workers throughout Japan met weekly in small groups to discuss problems on the factory floor. They had been taught how to identify, solve quality problems and use the quality tools: O Check sheet - This is used to record and compile collected observations or historical raw data. It shows patterns or trends which can be detected. You define the problem; describe the types of errors found; and place a check mark everytime an error is detected. O Pareto diagram - takes the check sheets and visually shows the frequencies of problems indicating those with the potential for greatest contribution to improvement. O Histogram - a graph that shows dispersion of the data. From this chart, by analyzing the characteristics shown, you can determine the possible causes of the dispersion. O Control chart - a chart with limit lines which show acceptable ranges of quality. This is very helpful in indicating abnormalities in the process. O Scatter diagrams showing various data points. - The diagrams make it easy to see variations in quality such as items that are expensive but offer poor performance or items that are inexpensive but provide good performance. The diagrams facilitate visualization of the relationship between two variables showing how a change in one may affect the other. O Stratification or segregating possible causes of defects. This is a technique used to analyze or divide data collected about a problem or event from multiple sources into homogeneous groups (strata) that need to be treated separately. It involves looking at process data, splitting them into distinct layers, and doing analysis to notice differences that can lead to an understanding of the key causal factors.

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O Cause and effect diagram - used to record ideas that come from brainstorming sessions to identify possible causes of problems and their possible solutions. O Brainstorming is a technique used by quality circle members to generate a lot of ideas. Total quality control - Everyone in a company was responsible for quality, not just the quality managers and inspectors. The quality effort was led by the CEO who spoke about the subject almost daily. Robotics - Everywhere companies had been experimenting with robotics. The next process was the customer - The customer being the next person to receive a worker's product, the worker got to know whom to serve and received immediate feedback on quality and productivity from him. Lifetime employment - Employees were regarded as long-term investments, to be trained and constantly encouraged to develop new skills. Jidoka - With the factory perceived as an integrated whole, when a defect was detected, the worker had the power to stop the whole factory whenever necessary. Andon - A visual control system that indicated which portion of the system was experiencing trouble. Andon is part of Jidoka. Kaizen - the improvement engine. Every employee was regarded as a real asset with creative ability to solve the problems he faced daily. Manufacturing cells - Machines were organized into manufacturing cells with a worker moving parts from machine to machine. Multi-skilled workers - Many workers were multi-skilled, each running many different types of machines. Each worker had the opportunity to exhibit his talents and intelligence, and to make decisions and implement them. Innovation Profit = Sales Price - Cost - The old formula was sales price = cost + profit. This allowed companies to automatically raise the sales price whenever costs went up. Profit was usually set as a percentage of cost. The new formula implied that the sales price was fixed. The only way to increase profit was to reduce cost. This meant increasing quality and productivity.

On-Error Training
According to Dr. Ryugi Fukuda, The best time to train workers is when an error is first detected. It is also the best time to solve a problem. The five rules of On-ErrorTraining are: Himself / herself rule - The worker who first detects the problem is primarily responsible for finding the root cause of the problem. The root cause must be found to prevent the error from occurring again. Quickly rule - The problem must be dealt with within thirty minutes of

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detection. The problem must be solved immediately, not later at a quality circle meeting. Actually rule - The person plays back the process that transpired before the defect occurred and the defect is re-created if possible in front of the group. Support rule - The person who detected the problem becomes the person primarily responsible for solving it, but he calls over his supervisor and fellow workers. Everyone stops working and extends his support to the process of problem-solving. Don't speak rule - The discoverer of the problem is the person expected to solve it. He or she must be allowed the time to discuss the problem and attempt to solve it. Other workers can help but the supervisor or manager must keep quiet to keep the workers a chance to solve the problem on their own. If the workers cannot solve the problem, then the supervisors can offer their suggestions.

Quality Circles
Kaoru Ishikawa was the genius behind the Japanese quality movement. He developed and created Quality Control Circles. The basic philosophy of QC Circles is: Improve the leadership and management abilities of the foreman and first-line supervisors in the workshop, and encourage improvements by self-development. Increase the level of worker morale and create an environment in which everyone is more conscious about quality, problems and the needs for improvement. Function as a nucleus for company-wide quality control. The three basics of the QC Circle as an integral part of company-wide quality control are: Allow all workers to participate in contributing to the improvement and development of the enterprise. Build in greater respect for humanity at work. Make work more worthwhile for all workers, and create a happy and bright workplace. Display human capabilities to their fullest. Draw out the infinite creative possibilities of each worker. Respect for humanity at the workshop level means that QC Circle activities create a workplace characterized by: People are not treated like machinery. Human beings are engaged in meaningful jobs in which they can display their abilities and be motivated to devote themselves to developing their full potential. People can use their wisdom and creativity in the work they are engaged in. People can develop their abilities as they are given an opportunity to use their brains. People are not isolated from each other. People in the same workshop

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are organized and act as a group. This facilitates harmonious human relations. People can mutually educate themselves by sharing experiences. People are given an opportunity to be recognized by colleagues, superiors, subordinates, people in other workshops, and also by people outside the company.

Epilogue
In the book, the author presents companies and personalities involved in the quality thrust inside and outside Japan. Numerable books and articles are included in the bibliography. Relevant web sites are listed in corresponding chapters. The book traces the author's passage from curiosity to expertise on his quality journey across boundaries of time and geography.

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