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Lean thinking, lean manufacturing, Toyota Production System management and manufacturing thinking. See our lean management portal, inlcuding lean articles (articles by Jim Womack) and online resource.
Terms: continuous flow - kaizen, jidoka, JIT, muda, mistake proofing, takt time, more
Recommended posts: Respect for People - Lean Thinking and Management - The Lion of Lean - Visible Data - Bad Management Results in Layoffs
The practice of stopping (either the machine automatically detecting a problem and stopping or a person stopping) the line when a problem is detected is part of Jidoka. Jidoka is also highlighting and making problems visible. Jidoka and Just in Time are the two pillars of the Toyota Production System. Today Toyota practiced Jidoka on a large scale: Toyota Halts Sales of Eight Models After Recall
Toyota said it would immediately stop selling the Camry, Corolla and Avalon sedans, Matrix wagon, RAV4 crossover, Tundra pickup, and Highlander and Sequoia sport utility vehicles. It will also stop building those models the week of Feb. 1. All of the vehicles are assembled in the United States or Canada, at a total of five plants.
The models affected accounted for more than a million sales in 2009, 57 percent of Toyota’s American total for the year.
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The most recent recalls follow what Toyota insisted was a companywide effort to improve quality that was started by Katsuaki Watanabe, who served as its president before he was replaced last year by Akio Toyoda, grandson of the company’s founder.
My guess is there are quite a few people in Toyota that are getting a frustrated that they continue to have problems that they have been unable to successfully address. This strikes is as the kind of action initiated near the top of the organization chart to remind the organization that problems must be addressed immediately. It is not ok to continue business as usually when problems have not been addressed in the Toyota Production System. Toyota is capable of failing to live up to the principles of lean manufacturing. But they also seem to understand this risk and continue to strive to improve. To succeed though they need to improve results – intentions alone are not enough.
Related: Cease Mass Inspection for Quality – Recalls at Toyota and Sony – Reacting to Product Problems – Workplace Management by Taiichi Ohno
This webcast, from the MIT Open Courseware initiative, shows a simulation (with legos). And in doing so explores the advantages of lean manufacturing methods.
Related: Red Bead Experiment Webcast – one-piece flow – Applied Quality Engineering Education – The Lean MBA
The more you pay for your hotel room the more likely they will charge to provide decent WiFi in your room. Whether a company tries to rip you off with exorbitant prices, or lousy service, is just a function of their lack of respect for customers. Obviously it is cheap to provide decent WiFi (as staying at numerous cheap hotels shows – nearly all offer WiFi completely free).
Most expensive hotels show they do not respect their customers. Some actually do rise to the level of a typical budget, and cheaper, hotels and motels so it isn’t all expensive hotels that fail to meet this low standard. The management of those hotels come from the same school of management thought that produces our bankers.
Jeff Bezos captures one difference between poor managers (prevalent in many spreadsheet focused managers) and lean manufacturing managers with the quote: “There are two kinds of companies, those that work to try to charge more and those that work to charge less.”
Thoughts on: Hotel WiFi Should Be a Right, Not a Luxury
Related: Making Life Difficult for Customers – Verizon Provides Lousy Service = Dog Bites Man – Is Poor Service the Industry Standard?
Mike Wroblewski is hosting the Management Improvement Carnival #82 on the Got Boondoggle? blog, highlights include:
Related: Management Improvement Carnival #64 – Be Careful What You Measure – Do you Read Instructions Carefully Before Assembly?
Low inventory levels do not mean failing to have products available for customers. Now, if you manufacturing in huge batches and can’t respond to customer feedback then it might mean failure to predict customer demand does mean failure to deliver. But lean thinking has shown how to avoid this problem. People need to adopt lean manufacturing practices and gain the benefits of low inventory levels without the costs of failing to deliver what customers want.
Sorry Santa, We’re Out of Stock
That’s when stores hit the markdown panic button, slashing prices upwards of 75 percent. The result was the worst holiday selling season since 1970, according to The International Council of Shopping Centers.
But although leaner inventory levels should drive profit margin gains this holiday, “retailers might not have enough inventory to fully satisfy demand,” said Citigroup retail analyst Deborah Weinswig, in a research note. It is a risk they are willing to take.
“They would rather lose a sale than take the markdowns they had last year,” said Goldman Sachs analyst Adrianne Shapira.
The retailers need to design their systems with lean thinking in mind (not lean – as in cut expenses without thought). And they need to work with suppliers using lean manufacturing principles.
Related: Be Thankful for Lean Thinking – Guess What? Manufacturing in the USA is a Good Idea – Tesco: Lean Provision – Zara Thrives by Ignoring Conventional Wisdom – Operational Excellence – lean manufacturing articles
In response to: Developing Your Lean Education Plan
If you actually let the lean leaders practice lean management you are probably doing more to help them learn than anything else. Reading is great, but 10 times better when reading to find solutions you need to deal with issues you have in place. Same for going to conferences. Consultants can be a huge help, but if you just bring in consultants without allowing the changes needed to improve they are not much use.
Far more damaging than not approving training, or giving the lean leaders any time to learn, is not giving them freedom to adopt lean practices and actually make improvements in your organization. That is what kills learning, and the desire to learn.
A great lean education plan: give them opportunities to apply what they know. As they gain knowledge and have success give them more opportunities. I think often lean leaders (and management improvement leaders) have to spend so much effort fighting the resistance in the organization they don’t have the energy to seek out much new knowledge. If you can reduce the effort they have to spend on fighting the bureaucracy most lean leaders will naturally focus on learning what they need for the current and future challenges.
Related: Building Organizational Capacity – Helping Employees Improve – People are Our Most Important Asset – Respect People by Understanding Psychology
Webcast introduction to lean manufacturing by Ron Pereira. This is a great 9 minute introduction to the topic, for those not familiar with lean thinking. It sets the context for lean thinking and provides some history on how lean manufacturing has developed. Get videos on learning about lean from the Gemba Academy.
Related: Oranges, Pebbles, and Sand – Dr. Russell Ackoff Webcast on Systems Thinking – An Introduction to Deming’s Management Ideas by Peter Scholtes – Eric Schmidt on Management at Google – Management Webcasts – Workplace Management by Taiichi Ohno
The Curious Cat Management Improvement Carnival provide links to recent blog posts for those interesting in improving management of organizations.
How ‘Buy American’ Can Hurt U.S. Firms
Halton Hills, a town of 50,000 people about 25 miles west of Toronto, is one of about a dozen Canadian communities forging ahead with plans to amend their procurement policies to freeze out American companies. “We won’t be taking any products from any country that is discriminating against us,” said Mayor Rick Bonnette.
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Aquarius gets a lot of its parts from abroad, particularly from Canada. Such integration became even tighter after the North American Free Trade Agreement in 1994 joined the U.S., Canada and Mexico in a free flow of goods and services.
Trojan Technologies Inc. of Ontario, North America’s dominant maker of ultraviolet disinfection equipment for treating sewage, is a key supplier to Aquarius and other companies. Because of the Buy American provisions, Trojan has had to shift production to a plant in Valencia, Calif., a move that has resulted in delays and additional costs being passed on to customers, said Trojan executive Christian Williamson.
The challenges of trying to legislate market choices such as what products to buy are difficult. It is understandable to want to direct stimulus funds to improving the economy today in the USA. Creating legislation that can cope with interactions and unintended consequences inherent in such attempts is not easy.
Related: China and the Sugar Industry Tax Consumers – New Look American Manufacturing – Russell Ackoff Webcast on Systems Thinking – Why Congress Won’t Investigate Wall Street
An Introduction to Deming’s Management Teaching and Philosophy by Peter Scholtes – webcast from the Annual W. Edwards Deming Institute conference in Madison, Wisconsin, November 9th, 2008. My previous post on this speech: 6 Leadership Competencies.
Next month, the Annual Deming Institute conference will be held at Purdue on Oct 10th, 2009.
Related: Peter Scholtes’ Life – Curious Cat’s Deming on Management – The Leader’s Handbook – Performance without Appraisal
Unfortunately I cannot actually use the website to watch more than 5 minutes because the site fails to support linux operating system with their solution for longer videos. Google will only allow 10 minute videos without special permission – YouTube has not replied to my request for over 6 months. Update: Twitvid let me upload the whole video.
The W. Edwards Deming Institute has posted Dr. Deming’s 1984 video on the 5 deadly diseases of western management.
Dr. Deming added 2 diseases to reach his famous 7 deadly diseases: excessive medical care costs and excessive legal damage awards swelled by lawyers working on contingency fees.
Personally I believe all 7 of those diseases are still prevalent and causing damage. I do think some progress has been made on longer term thinking but far too many organizations still are extremely short term focused. And I would add two new deadly diseases of management: excessive executive compensation and an outdated intellectual property system.
Related: Deming Companies – Purpose of an Organization – Continual Improvement – Creating Jobs – New Management Truths Sometimes Started as Heresies
One of the reasons my organizations switched to Ruby on Rails for software development was the great integration with automated testing. We always wanted to have good test coverage on our software applications (which are web applications – some used only inside our organization) but didn’t actually find the time to do so. Since we adopted Ruby we have been doing much better in this regard. It isn’t just the switch to Ruby, of course, but the switch to Ruby coincided with the beginning of many improvements to our software development practices that have continually improved over the last couple of years.
Here is a post on How to build quality software by an agile, Ruby, lean software developer
We work in an agile manner, iterating through development with extreme programming practices and Behaviour Driven Development. Facilitating our relationship with the business is Scrum and we utilise kanban principles and systems thinking to maintain a speedy throughput of high-quality work. This mixture allows us to communicate effectively, develop the correct features properly and continuously deploy our work when it is complete, thus maximising business value. I should also mention that we are fortunate enough to have our business people/customer sat across from us.
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Without testers or a QA team there is no wall over which work can be thrown and the responsibility for quality absolved.
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The inspection typically carried out end-of-cycle only yields bugs that were low severity and of no real impact to the end user.
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An agile testing must-have, we use TeamCity to continuously run our unit tests on each check-in. We also execute our Cucumber acceptance tests on scheduled runs. The status of the builds are visible on dedicated monitors around the office as well as a nice 6′ projected screen.
via: @benjaminm
Related: Combinatorial Testing for Software – Checklists in Software Development – Software Supporting Processes Not the Other Way Around – Software Development and Business Process Support – Top Blogs for Software Development – Hexawise: more coverage, fewer tests (my brother’s company)
Making things visible is a key to effective management. And data in computers can be easy to ignore. Don’t forget to make data visible. Paul Levy, CEO of Beth Israel Deaconess Medical Center in Boston recently hosted Hideshi Yokoi, president of the Toyota Production System Support Center and wrote this blog post:
The highlight? At one point, we pointed out a new information system that we were thinking of putting into place to monitor and control the flow of certain inventory. Mr. Yokoi’s wise response, suggesting otherwise, was:
“When you put problem in computer, box hide answer. Problem must be visible!”
The mission of the Toyota Production System Support Center to share Toyota Production System know-how with North American organizations that have a true desire to learn and adopt TPS.
Related: The Importance of Making Problems Visible – Great Visual Instruction Example – Health Care the Toyota Way
The Wall Street Journal has a book review of The Management Myth by Matthew Stewart. The book flushes out the ideas Matthew Stewert explored in a previous article in the Atlantic about the failure of management to mature as a discipline.
I’m not sure about the book, I have not read it but that is a great statement. And I firmly believe managers need to become experts at managing and by and large they have quite a long way to go. Dr. Deming talked about how we “know” what we know in the aspect of his management called the theory of knowledge (which is not included in any other management philosophy I have seen). That area (with interactions in other areas) explores why people often believe what is not so. And management seems to have a surplus of beliefs that are not based on sound theories.
Read this good article I have mentioned before on this topic by Carlie and Christensen: The Cycles of Theory Building in Management Research.
Related: Righter Incentivization – Another Quota Failure Example – Management Advice Failures – Why Extrinsic Motivation Fails – Innovation Strategy – Does the Data Deluge Make the Scientific Method Obsolete? – Data Based Blathering – Doing the Wrong Things Righter – Harvard’s Masters of the Apocalypse
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This lean thinking webcast from India actually does a pretty decent job of providing an overview (for a business TV channel) even if they get some things a bit confused. The discuss TQM in India preceding lean which is an accurate view in my opinion – quality management shared many lean principles. They even talk of lean at Ford doing lean first. But they get the decades for that a bit off. They seem to mash together the “quality is job one” refocus on quality lead by Dr. Deming in the 1980’s with Henry Ford in the early 1900’s.
The webcast includes Jim Womack discussing lean thinking. He mentions the misunderstanding of lean as primarily cost cutting.
Related: Curious Cat Lean Management Resources – 2008 Deming Prize: Tata Steel – Lean management in India – TVS Group Director on India, Manufacturing and the Economy
Once again Toyota shows they are the type of management I want to invest in. In my last post I discussed another: Jeff Bezos at Amazon. Google management is another management system I am glad to invest in. Toyota, Amazon and Google are 3 of my 12 stocks for 10 year portfolio.
Toyota continues to show they are an exceptional company that doesn’t waver due to short term pressures. They know the management system they have in place is excellent. They always try to improve. And they react to evidence that shows they have room to improve. They then access the situation and move forward.
via: Toyoda on Toyota: A New Regime, A New Future
Related: New Toyota CEO’s Views (2005) – Interview with Toyota President (2006) – Deming Companies – “2007 has been a difficult year for Toyota” – No Excessive Senior Executive Pay at Toyota – Webcast on the Toyota Development Process
The Trouble with Performance Reviews by Jeffrey Pfeffer
The most basic problem is that performance appraisals often don’t accurately assess performance. More than two decades ago research done by professor David Schoorman showed that whether or not the supervisor had hired or inherited her employees was a better predictor of evaluation results than actual job performance.
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Possibly the biggest issue, however, is that performance appraisals focus managers’ attention on precisely the wrong thing: individual people. As W. Edwards Deming, the father of the quality movement, taught a long time ago, company performance often results more from variations in systems than from the individuals doing the work. One of the reasons Toyota Motor has been so successful for decades—even as leaders have come and gone and the automobile market has changed—is that the fundamentals of the Toyota management system, which emphasizes quality, continuous improvement, and standardized tasks, provide the advantage. By focusing on the presumed deficiencies or strengths of people, individual performance reviews divert attention from the important task of eliminating the systemic causes, such as inferior technology, behind poor performance.
Another good article pointing out the harm of annual performance reviews. As I have said many times managers need to do better. See chapter 9 of the Leader’s Handbook and previous posts: Don’t Use Performance Appraisals – – Deming and Performance Appraisal – Find the Root Cause Instead of the Person to Blame – Performance Without Appraisal
Toyota has developed a thought-controlled wheelchair (along with Japanese government research institute, RIKEN, and Genesis Research Institute). Honda has also developed a system that allows a person to control a robot through thoughts. Both companies continue to invest in innovation and science and engineering. The story of a bad economy and bad sales for a year or two is what you read in most newspapers. In my opinion the more important story is why Toyota and Honda will be dominant companies 20 years from now. And that story is based on their superior management and focus on long term success instead of short term quarterly results.
Yes Toyota can improve their performance, based on the last few years. Does management understand what they need to do? I think so. Does management understand that the system needs to be improved rather than the numbers on the spreadsheets of various managers have to be made better? I think so. Do I think most companies today, with bad results, understand the difference between bad numbers on spreadsheets that are used to judge various managers and a system that needs to be improved? No.
I do not believe the bad earnings for the last year for Toyota are indicative of a failed system. The results do show a weakness in the Toyota system that allowed them to perform this poorly during this credit crisis. The risk to Toyota’s future is that they become too focused on short term results, mistakenly thinking the problem to be fixed in the bad quarterly results recently. They need to focus on improving the system for the long term. And the recent experience likely shows some areas that need to be improved. But in no way do the fundamental tenants of the management system need to be changed. For many other companies today, changing fundamental aspects of their management is what is needed.
Related: Toyota as Homebuilder – Honda’s Robolegs Help People Walk – Honda has Never had Layoffs and has been Profitable Every Year – Toyota’s Partner Robot – NUMMI, and GM’s Failure to Manage Effectively – Toyota iUnit – Invest in New Management Methods Not a Failing Company by William Hunter, 1986
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How P&G Finds and Keeps a Prized Workforce by Roger O. Crockett
Career education takes place outside the classroom, too. P&G pushes every general manager to log at least one foreign assignment of three to five years. Even high-ranking employees visit the homes of consumers to watch how they cook, clean, and generally live, in a practice dubbed “live it, work it.” Managers also visit retail stores, occasionally even scanning and bagging items at checkout lanes, to learn more about customers.
Going to visit the gemba, the actual place is incredibly important, and far too often ignored by managers today.
The emphasis on life long learning (in practice, not just words) is also very wise. In my experience far to little emphasis is placed on continual improvement of what many companies will say is their most important asset: their people. If you don’t invest in education of your staff that is going to harm your long term success. The investment P&G makes shows a respect for people.
Related: Jeff Bezos Spends a Week Working in Amazon’s Kentucky Distribution Center – Workplace Management by Taiichi Ohno – Respect for People, Understanding Psychology – Ohno Circle
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Great, short, presentation webcast by Jason Yip showing the importance of making problems visible. Anyone interested in software development should watch this, and it is valuable for everyone else, also. Great visuals.
Related: Future Directions for Agile Management – Agile Software Development Slideshow – Leading Lean: Missed Opportunity – Information Technology and Management – Curious Cat Micro-financiers – posts on project management – Toyota Institute for Managers
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