Tuesday, January 02, 2007

Book Club: "The Toyota Way" Chapter 8

Chapter 8 of The Toyota Way focuses on Principle #2: Create continuous process flow to bring problems to the surface. This is the first of 7 principles that comprise the Process portion of the 4Ps. Dr. Liker begins this chapter with a quote from Teruyuki Minoura, former President, Toyota Motor Manufacturing, North America:
"If some problem occurs in one-piece flow manufacturing then the whole production line stops. In this sense it is a very bad system of manufacturing. But when production stops everyone is forced to solve the problem immediately. So team members have to think, and through thinking team members grow and become better team members and people."
The author then goes into great detail about the huge amount of waste that exists in most processes, and elaborates on the eight types of process waste:
1) overproduction
2) waiting
3) unnecessary transport
4) overprocessing
5) excess inventory
6) unnecessary movement
7) defects
8) unused employee creativity
Overproduction leads to piles of inventory that has to be stored, moved, re-moved, worked around, and damaged. Flow reduces the amount of inventory in the system, thus eliminating or reducing the other types of waste. This leaves you with a lean process. Dr. Liker uses a great analogy to describe the value of flow:
"A lean expression is that lowering the 'water level' of inventory exposes problems (like rocks in the water) and you have to deal with the problems or sink."
Next, the chapter discusses traditional mass production thinking, whereby people and equipment are grouped together into separate departments. The theory is that groups of similarly skilled people will be able to squeeze a little bit of extra efficiency out of their operation through economies of scale. However, this type of organization creates the need for special departments to coordinate the actions of all of the disconnected operations. Large batches are the norm in this type of environment, due to the need to maximize the efficiency of each department. This overproduction leads to inventory and all of its associated waste. Additionally, defects can be hidden in the big piles of inventory, and nobody will know until a whole big batch has already been produced. Dr. Liker says:
"The reality is that in a large batch operation there are probably weeks of work in process between operations and it can take weeks or even months from the time a defect was caused until it is discovered. By then the trail of cause and effect is cold, making it nearly impossible to track down and identify why the defect occurred."
This echoes the quote from the beginning of the chapter about how a lean process with very few inventory buffers makes people think and improve. This is the true power of flow.

The author then briefly covers "takt time: the heart beat of one-piece flow." Takt is German for rhythm or meter, and in Lean refers to the rate of customer demand. Dr. Liker includes this section here because producing based on takt time is one of the keys to achieving flow. If you're producing at the same rate customers are ordering, then you prevent overproduction, which leads to inventory and all of its associated wastes.

Next, the chapter goes into the benefits of one-piece flow:
1) builds in quality
2) creates real flexibility
3) creates higher productivity
4) frees up floor space
5) improves safety
6) improves morale
7) reduces cost of inventory
All of these benefits are very advantageous, but the real power behind one-piece flow is the fact that to make it work, everybody has to become a thinker and a problem-solver.

The chapter concludes with a section on why creating flow is difficult. Here's a passage:
"When you link operations together in a one-piece flow, your entire cell goes down if any one piece of equipment fails. You sink or swim together as a unit."
The author goes on to say:
"Many companies I have visited make one of two mistakes when implementing flow. The first is that they set up fake flow. The second is that they go backwards from flow as soon as problems occur."
While it's obviously difficult to convert from batch production to one-piece flow, it's even harder to argue with its benefits. Providing product faster, with less lead time, greater variety, and higher quality, while at the same time providing a more empowering and safer work environment for employess, is truly a remarkable achievement. All it takes is an awareness of what waste is, and how to eliminate it continuously.


Anonymous said...

For flow to work most effectively, the line Associates need to be cross trained. I believe that one of the areas we need to focus on is introducing cross-training early in an employee's tenure. People are creatures of habit and fall into a comfort trap. They tend to resist change and the unknown. Exposing them to various job functions early increases the likelihood they will perform more efficiently and effectively.

Mike L said...

I agree. Many of the Lean blogs I read consistently discuss how developing human resources is the most important factor in making a successful transition to Lean. Furthermore, Lean thinkers say that if a company has any kind of turnover problem (10% or more), then long-term implementation of Lean will be difficult. They will perform "intensive care" on the TO problem before trying to implement Lean.

Mike S said...

Toyota does not hire people who know how to build or work on cars. They hire people who test well for problem solving skills and adaptability to change, and then train them to build cars.

Anonymous said...

Cliff R
In response to the turnover problem; Lean training and implementation focuses attention on the associates, providing a greater self-worth for them and their ideas. Over time, this will result in a reduction in turnover. The associates are the key to the success or failure to the lean endeavor in the plant - we need to communicate to them how imprtant they are and how it benefits them.

Mike L said...

I do agree that Lean will help reduce turnover significantly, but I think that the full power of Lean will never be realized unless additional intensive care is applied to the problem. Along with improving the workplace (safer, cleaner, less hassles, etc.) and empowering each employee with problem-solving skills and responsibilities, I believe that the overall approach to developing human resources has to be improved. Does anybody have any ideas about improving in this area?

Craig S said...

I agree completely about the benefits of crosstraining. Not just for the company but for the associate as well. The company wins by creating a more flexible and balanced work force and the associate is provided the opportunity to develop different skill sets that will "round out" their production process knowledge. From a human resources perspective, I think it is vital to ensure employees that the company is committed to each associates professional development and to provide avenues of advancement.

Cindy A said...

Cross training new people would be much easier than trying to cross train the people who have been with the company for a while. We also have to get away from the old way of thinking..."we've always done it this way" mentality. None of this will happen unless you have full support of upper management.

Brian K said...

In our production environment, many employees view crosstraining as a way of "volunteering" for an increased workload and fear that they will carry more of the load than their non-crosstrained counterparts. Possibly in the beginning these individuals may need a little "push". One way to possibly motivate long term employees, as well as newer employees, to crosstrain could be a "reward" of some sort for crosstraining. This could come in the form of extra pay,a monetary award, awarding some sort of certificate, or something as simple as posting those individuals crosstraining accomplishments. When I was a teamleader I maintained (and posted) a "skills matrix" of everyone in the group. Although not my original intention, this simple matrix fueled a competition between the team members such that they started ASKING to be trained on new tasks. Before long they were helping each other on their own and, in the end, they all saw the benefit of crosstraining as it relates to teamwork. When a new person came into the group they were "peer pressured" into crosstraining to maintain the benefits that the rest had already established. Morale was increased, rework and overtime virtually eliminated, no accidents, no turnovers, etc.
Obviously a "skills matrix" will not work to motivate everyone to crosstrain. Each individual is motivated by different things. When I became a Supervisor I tried "The Matrix" again with another group. But with this group it was as effective as trying to put out a forest fire with a water pistol. My point is merely that a little "push" may be required to get people to break away from years of the "don't volunteer for anything" mentality and begin the motivation process to crosstrain.

Mike L said...

Great comment, Brian. In order for it to be sustainable over the long-haul, it would have to become part of the standard procedure for each department. It would also have to be monitored, enforced, and adjusted as necessary. Everybody in a supervisory/management position would need to be hands-on with it; we can't rely on one person to make this type of thing happen division-wide.

If these prerequisites were to be met, I think it would be a great success. As Brian said, it might be an awesome motivator for individual associates. Even if it didn't motivate some people, it would still provide them with additonal skills and give us better manufacturing flexibility.

Bill V. said...

I agree with several of the postings. Rather dealing with a well refined, tuned or crosstrained teams, flow is the infinite means/pattern. An example for us being such as we call it gatekeeping, looking at this from a lean perspective we should have fence mendors creating positive flow.