Kaizen | Six Sigma | Lean Management | Training & Consulting | Operational Excellence

Global Leader & Pioneer in Kaizen/Lean/Operational Excellence domain


1 Comment

Nichijo GEMBA Kanri – 日常 管理 – (Daily Work Management )

NGK or DWM is the most important aspect of sustaining a Kaizen/Lean culture. For e.g. If you go to the gym and work on various methodologies, of course you are able to lose weight. But what would you do to maintain this weight lost? What happens after you have lost weight?

So DWM talks about standardization, it talks about how to maintain the improved state. So it’s a system or a model or a tool/technique by which standards for running the day-to-day business are developed, maintained, controlled and improved on an ongoing basis. And this helps you maintain the lean culture on the shop floor, it helps you maintain standardization on the shop floor, it helps you define standard work for everybody, and this way you are not only able to sustain the improvement but keep it up on the continual improvement journey.

The problems that we all are familiar are:

  • Recurring Problems (Which are solved again and again)
  • Inability to maintain Improvements
  • 5S
  • High Changeover time
  • Operator mistake” or “Operator not trained”
  • Unable to meet previously achieved targets
  • Surprises
  • Month End Pressures

 Assumed results

Image 

 >> But the reality is

 Image

If we do not strengthen the basics, we are probably going to back slide. The organization can deteriorate due to any of these 3 powers:

Image 

The result of above three powers can make organization weak.  So what should be done in order to become strong or competitive?

ImageOrganization should respond to the above given 3 powers/problems so that it can help the organization from becoming weak. What is most important is to Sustain whatever improvements or changes are done.

ImageAs we can clearly see from the above given graph – if we do not sustain whatever improvements are done or whatever our current state is – we are bound to slide back from our current state. Therefore it is very important to focus on DWM in order to achieve our future state or maintain our current state.

The Plan-Do-Check-Act (PDCA) cycle, also known as the Shewhart Cycle or the Deming Cycle, is a popular model for continuous improvement. Similarly the Standardize-Do-Check-Act (SDCA) cycle is a popular model for establishing and stabilizing a process. A process needs to be stabilized through standardization to make it more measurable, predictable, and controllable. Improvements cannot and must not be made to a process unless it is stable.

SDCA

1. Standardization, the definition and documentation of operating procedures, process requirements, and other process specifications to ensure that the process is always executed in a standard and repeatable manner

2. Doing, the defined standards

3. Checking, the act of verifying if conformance to the standards results in process stability

4. Action, which is the response appropriate for the observed effects of the standards.

In step 4, if the process has become stable with implementation of the standards, then the standards are made permanent and even deployed more widely. 

If the effects on process stability are negligible or even negative, the cycle is repeated using a different set of standard specifications.

Image

Most of the abnormality that occurs in an organization is due to Change in 4M. But what is 4M.

1. 4M Standards: Man, Material, Machine, Method

Apart from 4M – what an organization should focus on is

2. Visual Control: Control after visualization. Normal Abnormal judgment made possible.

Visualization : Exposing and visualizing what is expected. Highlighting abnormality.

Display : Data posted on the  board, no PDCA, no targets.

Focus on process: Change habitual focus on results and results. Process produces results Process should be well defined, clearly documented, operating in stable environment, etc. 

The purpose is to focus on process and make it easy to compare expected versus actual performance.

3. Leader standard work: Leader Standard Work should be layered from the Bottom up. In addition to including regular checks on the status of visual controls, leader standard work also includes a process of follow up on the stories told by the visual controls.

Image

4. Daily accountability process: Daily accountability process helps the leaders to scrutinize visual data daily. It helps to determine what steps to be taken by whom, assign resources & set due dates. Daily accountability board and tags should be used as much as possible. 

Image

To conclude, Nichijo Kanri (Daily Management) is the System that provides the ability to manage department, functions, processes wherein processes are defined, standardized, controlled & improved by process owners. It prevents Deterioration by making control and improvement in the norm.

Acknowledgement: Mr.Vinod Grover (Founding Director – Kaizen Institute India)


Leave a comment

Common misconceptions about KAIZEN/Lean

Despite having been fairly main stream for going on three decades now, there are a surprising number of concerns and misconceptions surrounding the concept of Lean Manufacturing.  Often, the fears centers around layoffs and general concerns about change. 

Image

Standard work takes away creativity: Employees may think that standard work may make their job monotonous or make them feel like robots as it limits the flexibility of doing the work. But the fact is our working environment is getting complex and if the standards are used smartly it can actually help to liberate the procedures.

KAIZEN/Lean means getting rid of inventory: Reducing inventory is not the objective of Lean or let’s say reduction in inventory is actually the result of lean, not its method. All lean companies have high inventory turns, but all companies with high inventory turns are not necessarily lean. Reducing inventories without fixing the underlying problems that cause the need for the inventories is not only ‘not lean’ but it is just plain stupid. The main reason of inventory reduction is to expose problems which are hidden due to high inventory. These problems will not be visible unless you reduce the inventory. The skill is once these problems are exposed how fast you respond and resolve these problems. Lean tools can help to resolve them with a speed. Its not only reducing the cycle time but reducing the time to resolve the exposed problems.

Japanese companies are lean: There is nothing inherently Japanese about Lean manufacturing, nor are Japanese people naturally better at Lean than any other people. Japanese companies tend to think long-term, and the system of lifetime employment does tend to support people development and involvement, so it is true to say that many Japanese companies have better groundwork to support Lean.

KAIZEN/Lean is only for manufacturing: The idea of Lean Manufacturing is just as applicable to offices and other work environments as it is to manufacturing plants. It’s helpful to relate words like “inventory,” “customers,” and “production” to whatever you’re processing – data, documents, knowledge, services, and so on.

KAIZEN/Lean is about squeezing more out of people: The fact is if Lean applied correctly can help to double the output for example without working harder. The only thing that may be squeezed out of people is IDEAS. Lean manufacturing means finding efficiencies and removing wasteful steps that don’t add value to the end product and it might actually require less effort to manufacture or deliver service.

KAIZEN/Lean makes work easier: This is what the top management think or use to sell Lean to the people who is going to drive it but the fact that needs to be understand is that the time that is freed upon has to be filled by line balancing or process improvement tasks. 

KAIZEN/Lean is just for cost reduction: The leading cause of Lean Manufacturing failure is failure to change a company’s culture. The fact is if you don’t change your culture, all of your lean-inspired efforts will look merely like management driven cost reduction programs to your employees. Lean manufacturing is about making the work easier and less frustrating so that time at work can be spent on what matters, serving customers and growing as people. Cost reductions will follow.

KAIZEN/Lean means reduction in jobs:  If a leader thinks this there will never, ever be any support for an improvement project. Forget about people taking responsibility people just wont play a role if it will cost them their job. Therefore the best way to avoid layoffs and hiring of additional manpower. 

KAIZEN/Lean is the latest management fad: There are probably some who would automatically switch off at the very mention of Lean Management. It could be dismissed as ‘just another management fad’. But actually there is something to it and it is worth considering the positive aspects of Lean. Lean is predominately about creating a learning organisation with empowered and autonomous workers. Nonetheless, there are some basic principles which can help organizations/people with understanding a lean management way of thinking. The main focus of lean is on finding efficiencies in production through the elimination of all waste for example. This is a useful way of thinking.

There are many more misconceptions which you might come across but this list basically points out or says that KAIZEN/Lean is NOT EASY and requires relentless study and practice to do it well.


Leave a comment >

In any business/organization SALES is the department that generates revenue apart from royalties, payouts from insurance policies, dividend and interest income from financial assets it owns, rental income & capital gains from the sale of owned properties. Many organizations under-invest in their sales effort, treating sales like an afterthought. Sales department is handled after the managers solve all the manufacturing, distribution and financing issues. The best sales forces are professional, well-compensated, supported with a strong sales effort and empowered to act, with support, money and time.

Perhaps you all must have noticed that sales success is getting harder to come by in the era of globalization. The competition is tougher than ever, and the pace is much faster. Customers have become aware and smarter than ever. Many organizations are struggling with the hidden secret of success which is Lead Generation. There are many reasons for this for eg; sales team doesn’t know how to generate leads, organization do not support the sales team, lack of training, non-standard work, etc. What is the need of an hour? The need is to have a systematic approach to find the right kinds of qualified opportunities/prospects. It is time to change, to replace traditional methodologies, to innovate and to spark. Time to analyse the mistakes and processes. Yet, for a variety of reasons, most organizations do not have one.

Traditional/transactional way of selling

 Image

Time has come to remove non value adding activities from the processes and add value to the customer’s needs/wants by selling in the right way and selling right solutions.

KAIZEN can help organization/sales department to identify the problems, address root causes and propose solutions.

BUT WHAT IS KAIZEN?

KAIZEN is a Japanese term that means continuous improvement. “Kai” means change and “Zen” means good or for the better. It is a holistic approach for continuous improvement, requiring initial vision of current state and customer requirements specific to the business. 

Commons Issues: 

  1. Paperwork too complex, no time for discussions with customers
  2. Sales team had their own style, non-standard
  3. No sharing of lessons learned
  4. No progress to sales reports after meetings, etc.

True sales organizations are passionate about proactively helping their customers. Sales people are in the job, because they see opportunities. Opportunities for helping the customers fulfill their dream/needs/wants, and opportunities for closing the deal. An effective sales team/sales person will always try to get rid of inefficient procedures that can take up time. He/She will always want to spend maximum time with current as well as prospective customers. The focus should be to dedicate most time on improving personal sales impacts on matters like:

– How do I approach a new customer in an even better way?
– How do I close the deal, when the customer can’t make up his mind?
– Which questions are better ones in which situations?
– How do I unfold the customers’ dreams in an even better way?
– How can I improve my ability to ask questions instead of presenting product details?
– How can I better structure the questions I ask in the meeting, to reach more in less time?

What is required? 

  1. Remove wastes from daily work in sales and administration
  2. Remove waste from back office work and create capacity to support sales
  3. Remove waste from sales activity and increase capacity to focus on selling
  4. Review and strengthen the sales process, identify the company’s key selling points and strengths
  5. Make the sales process visible and easy to manage
  6. Presentation of results, reflection on the process and learning

Some meetings can be dedicated to improvements of back office processes, to celebrate achievements (both on the results achieved and the activities that led to the results). KAIZEN/Lean for true sales department has to be fun & emotionally engaging. Organization/Leaders should take out some time to reflect upon the sales force in the company. They should check whether the sales team is passionate about selling. Are they passionate about helping customers fulfil their dream/goal

WHAT IS CONSULTATIVE SELLING?

Consultative selling is a complex, long-term process involving collaboration of both buyer and seller, in which the latter must first develop an understanding of the customer’s business, industry, and needs/wants, and then craft a solution to help the customer achieve their objectives. 

  • Build high trust and a high respect relationship with the prospect
  • Have sufficient dialogue with the prospect to understand their business environment, critical business drivers, and high priority initiatives
  • Validate the customer-specific value proposition – not to make an offer that does not fit

Consultative way of selling

Image 

 

BENEFITS OF APPLYING KAIZEN/LEAN IN SALES

Most of the organization/leaders are continuously working to improve the effectiveness of their sales people. KAIZEN/Lean helps the sales team to get involved in Value Selling, Key Account Management and Voice of the Customer initiatives, all focused on driving improvements and staying ahead of the competition.

KAIZEN/Lean enables organizations to collect, use & analyze data and focus on those steps in the sales processes that makes the difference between winning and losing a sale.  Our experience indicate that superior sales people do execute the same set of activities on most sales, using consistent, observable (and therefore transferable) behaviours. KAIZEN/Lean, can, therefore be applied to identify those key behaviours & activities and, link them to measurable outcomes and systematically imbed them in a standardized sales process. Once the critical steps have been identified, observable  or measurable behaviour that represents best in class execution of that step can be identified by interviewing and observing high performing reps.

Image

So how do we introduce KAIZEN/Lean in Sales? 

Here are some questions to get you started:  

  1. What is value in Sales? (Who are our internal & external customers and what do they need from us?)
  2. What is waste?
  3. What are some core mental models in our Sales department?
  4. What are our current processes for delivering this value?
  5. How aligned are they to delivering the value our customers expect?
  6. How do we improve them?
  7. How do we Define and Accept our customers requirement?
  8. How do we prove that our product/service will fulfill the customers requirement?


Leave a comment

10 “game-changing” supply chain ideas

The University of Tennessee (UT) has identified 10 “game-changing” supply chain ideas that can make companies more competitive.

The UT supply chain management faculty surveyed 163 supply chain professionals from 132 companies to develop the list of points to greatly enhance a firm’s shareholder value.

“World-class companies need to revisit these trends on a regular basis to stay abreast in today’s dynamic and rapidly changing environment,” said Paul Dittmann, executive director of UT’s Global Supply Chain Institute. The trends are:

Image

1.  Customer relationship management: Leading companies are segmenting products and customers and developing individual supply chain solutions for respective segments. One firm eliminated 48 per cent of its inventory while improving on-shelf availability from 96 per cent to nearly 100 per cent by doing so.

2.  Collaborative relationships: Collaborations between customer and supplier can produce dramatic effects. OfficeMax collaborated with supplier Avery Dennison to increase revenue by more than 22 per cent, and save more than $11 million (Ј7.2 million) in logistics costs.

3. Transformational strategy: The report claims that only 16 per cent of firms have a documented multi-year supply chain strategy. Whirlpool used a transformational strategy to deliver record-high service levels while decreasing logistics costs by $20 million (Ј13.1 million).

4. Process integration: Integrating processes and eliminating silo walls can have tremendous impact, the survey says.

5. Driver-based metrics: Changing performance measurement and the firm’s goal-setting system.

6. Information sharing and visibility: sharing, linking and interpreting big data using business analytics tools.

7. Demand management: Increasing forecasting accuracy along with integrating the demand and supply functions across the supply chain can drive higher revenue, lower working capital, and decrease costs.

8. Talent management: Critical competencies in hiring top supply chain talent include global orientation, leadership and business skills, and technical savvy.

9. Virtual integration: A fundamental characteristic of a great supply chain is for a company to stick to its core competencies and outsource the rest to world-class service providers, the report says.

10. Value-based management: By delivering outstanding availability of goods and services supply chain excellence is the key to creating shareholder value.

Inputs from: supplymanagement.com

 


Leave a comment

Go-to Gemba: Muda walk

“Muda” in Japanese means waste. Imai san says that in Japan, companies especially noted for implementing Lean, such as Toyota, at all levels of managers are expected to spend one hour a day in the operations are a doing a Muda Walk. This is not really walking around the gemba, but going to the Gemba (work area – real place) to watch the operations.  This is watching for a long time, not passing through. Watching to see how the work process is done. It is watching to see where waste exists in the current processes. The idea of of muda walk is that the problems are visible, and the best improvement ideas will come from going to the gemba. The muda walk, is an activity that takes management to the front lines to look for waste and opportunities to practice gemba kaizen, or practical shopfloor improvement.

Image 

The most important thing to note here is Gemba walks are different from Muda walks. Most lean practioners are confusing Gemba walks with Muda walks while they are quite different. Muda walks purpose is to develop “eyes for waste”. As Shigeo Shingo rightly stated “The most dangerous kind of waste is the waste we do not recognize”. The purpose of Gemba walk is beyond Muda hunt. The purpose of gemba walk is to understand the current condition of your value stream at four levels: purpose, process, people and problem solving. Gemba walks are about continuous improvement which drives waste out of processes. However, it should not be about waste hunting at all. Gemba walks that focus on generating to-do improvement lists.

Kaizen activities would be associated with shop floor owned activities, you may track such issues by leaving a list on a team board on the shop floor. If you identified big issues, such as value stream rearrangement, Jidoka, etc [Kaikaku (radical change) activities], responsibility to resolve/change these issues may sit with higher level management and may require a different management/tracking approach. Medium size issues like Jishuken (Team Learning Activities/Shared knowledge) could use an A3 problem solving report to scope activities, explore possible issues/solutions and drive action.  

Eight types of waste

Defects: Scrap, rework, replacement, inspection

Over-production: Manufacturing in anticipation; producing faster than, before or more than required by your customer-internal and external

Transportation: Carrying WIP to long distances, inefficient transport

Waiting: Stock outs, batch processing delays, equipment downtime, capacity bottlenecks

In appropriate processing: Unnecessary or over processing

Motion: Treasure hunts for tools, materials or information, such as drawings, contracts or reference books.

Inventory: Uncut materials, works in process, finished fabrications, materials not yet installed and being used by the customer including spare parts, unused tools, consumables, forms, copies, employee stashes and personal stockpiles.

Wasted human potential: Skills, creativity, willingness….

The Muda Walk is a simple tool any manager can use. Invest the time in watching what is happening, and it will payback dividends. The challenge with most managers is that they can’t or won’t make the time to go and see what is happening where the work is done. We all have the same 24 hours in a day! Muda walk helps the manager to identify the potential areas of improvement (waste is identified). The important thing is that it drives action and engages the people in the workplace (at all levels) on removing waste from your business by getting down to the Gemba and seeing issues first hand (Go Look See). 


Leave a comment

Creating a Kaizen Culture

The only thing of real importance that leaders do is to create and manage culture.”– Edgar Schein

Organization culture is a double edged sword that can either elevate an organization to world class status or reduce the most brilliant strategy to a recipe for disaster. Superior strategies, technologies and methods such as Lean, Kanban, Six sigma, etc fail without human systems to link effective leader with engaged employees. The Kaizen process when applied mindfully to organizational culture, has been proven to achieve this. Leader who create KAIZEN cultures enable their people to engage, innovate, adapt and sustain high performance.

Image

KAIZEN should become the part of company culture. It emphasizes quality which needs gradual and perpetual improvement toward the pursuit of perfection. The basic principle of KAIZEN is a continuous engagement and continuous improvement of performance, products, and services; thus greater attention is paid toward the requirements of the customer. KAIZEN accentuates the engagement of each worker to the bigger picture concept and vision of the organization, so that they will identify themselves with the company, its culture, and objectives. The teams should believe and practice a KAIZEN working culture despite of industry and environmental change. KAIZEN helps enduring economic highs & lows, political turmoil, global market shifts, and many more potential challenges as it helps to embrace and create change. So if you are looking at Quality, commitment to Cost reduction, or Delivery performance create and manage KAIZEN Culture.

To know more on how to create KAIZEN culture refer Creating a Kaizen Culture book. It explains how to enable an adaptive, excellent, and sustainable organization by leveraging core kaizen values and the behaviours they generate.

Image

The proven methods presented in this book will dramatically increase your chances of success in implementing a kaizen culture by closing the biggest gaps in the correct understanding of:

  • WHAT KAIZEN CULTURE IS AND WHY WE NEED IT
  • HOW EVERYONE, EVERYWHERE CAN PRACTICE KAIZEN EVERY DAY
  • THE LEADER’S ROLE IN TURNING KAIZEN CULTURE INTO COMPETITIVE ADVANTAGE

Real-world examples demonstrate kaizen culture in action at Toyota, Zappos, Virginia Mason, Medtronic, Lockheed Martin, Wiremold, and many other companies. Actionable advice from kaizen-driven CEOs, such as Arthur Byrne, is also included in this unique and practical guide.

Based on more than 50 years of combined experience from experts who have successfully used kaizen to lead real transformation in a wide variety of industries, Creating a Kaizen Culture reveals how to propel rapid and sustainable performance improvement. It provides a detailed and illustrated road map to organized kaizen implementation through kaizen events. Real-world examples demonstrate kaizen culture in action at Toyota, Zappos, Wiremold, and many other companies.

 


3 Comments

Taiichi Ohno’s contribution

Taiichi Ohno (1912-1990) was born in Dalian, in eastern China. He had joined Toyota Automatic Loom Works between the wars. This was the first business of the Toyoda family until it was sold to a British company, Platt Brothers, and the family decided to invest the money that it had gained from the sale in manufacturing motor cars.

Image

Ohno switched to work as a production engineer for Toyota, a car company, towards the end of the second world war, at a time when its productivity was way below that of America’s mighty Detroit industry. Toyota’s boss declared that it “must catch up with America within three years”.

Ohno decided there was no reason other than inefficiency and wastefulness why Toyota’s productivity should be any lower than that of Detroit. Hence he set out to eradicate inefficiency and eliminate waste in the part of the production process that he was responsible for. This became the core of the so-called Toyota Production System (TPS) that he and others subsequently developed between the mid-1940s and the mid-1970s. Several elements of this system have become familiar in the West: for example, muda (the elimination of waste), jidoka (the injection of quality) and kanban (the tags used as part of a system of just-in-time stock control). Three men were especially prominent in creating the Toyota Production System: Sakichi Toyoda; his son, Kiichiro Toyoda; and Taiichi Ohno.

Sakichi Toyoda was the inventor of automatic looms who founded the Toyota Group. He invented a loom in 1902 that would stop automatically if any of the threads snapped. His invention opened the way for automated loomworks where a single operator could handle dozens of looms. The principle of designing equipment to stop automatically and call attention to problems immediately is crucial to the Toyota Production System. It is evident on every production line at Toyota and at other companies that use the system.

When the Toyota Group set up an automobile-manufacturing operation in the 1930s, Sakichi’s son Kiichiro headed the new venture. Kiichiro traveled to the United States to study Henry Ford’s system in operation. He returned with a strong grasp of Ford’s conveyor system and an even stronger determination to adapt that system to the small production volumes of the Japanese market.

Kiichiro’s solution was to provide the different processes in the assembly sequence with only the kinds and quantities of items that they needed and only when they needed them. In his system, each process produced only the kinds and quantities of items that the next process in the sequence needed and only when it needed them.Production and transport took place simultaneously and synchronously throughout the production sequence — inside and between all the processes. Kiichiro thus laid the groundwork for just-in-time production, and he gets credit for coining the term “just in time.”

The man who did the most to structure the Toyota Production System as an integrated framework was Taiichi Ohno. He experimented with various ways of setting up the equipment to produce needed items in a timely manner. But he got a whole new perspective on just-in-time production when he visited the United States in 1956. Ohno went to the United States to visit automobile plants, but his most important U.S. discovery was the supermarket. Japan did not have many self-service stores yet, and Ohno was impressed. He marveled at the way customers chose exactly what they wanted and in the quantities that they wanted. Ohno admired the way the supermarkets supplied merchandise in a simple, efficient, and timely manner.

In later years, Ohno often described his production system in terms of the American supermarket. Each production line arrayed its diverse output for the following line to choose from, like merchandise on supermarket shelves. Each line became the customer for the preceding line. And each line became a supermarket for the following line. The following line would come and choose the items it needed and only those items. The preceding line would produce only the replacement items for the ones that the following line had selected. This format, then, was a pull system, driven by the needs of the following lines. It contrasted with conventional push systems, which were driven by the output of preceding lines. Ohno developed a number of tools for operating his production format in a systematic framework. The best known of those tools is the kanban system, which provides for conveying information in and between processes on instruction cards.

He is now known for being the father of the Toyota Production System. He was the one who drove development and practical application of the TPS. He believed in teaching leadership by example and empowering employees.

Quote from Ohno: “Costs do not exist to be calculated, they exist to be reduced.”

As we all know TPS has two pillars: Continuous Improvement (often referred to as Kaizen) and Respect for People. The word Kaizen is often referred to as Toyota’s basic approach of doing business. The notion of ‘respect for people’ shows that Toyota truly does care about the individuals that work for them and their contributions they can give to the company. Along with continuous improvement, employees should know that they are not only empowered to be involved, they are expected to continue learning and growing as individuals. This in turn not only helps employees have more satisfying careers, but also will help the company use each employees potential of contributing and making the company more successful and profitable through these continuous efforts. By providing an atmosphere such as this, it helps people embrace change, where as traditionally people are resistant to change. 

Where did Toyota get the idea for the TPS?

Soon after WWII had ended and when Taiichi Ohono became the machine shop manager for the Toyoda Group Automotive Operations, they experienced drastic material shortages because of the War. Mr.Ohno gradually developed a more efficient assembly line process and started creating unique ideas which are now known to be key points in the TPS. Ohno credited the TPS to two concepts. One was developed from from Henry Ford’s book ‘Today and Tomorrow’. This helped them understand manufacturing and gave the basis of a production system and what Ford used. Toyota wanted to emulate the Ford assembly and production line. Ford had mastered the conveyor belt system and Toyota knew they could learn a lot that could be used for their production lines. One thing that worried them is Ford was using mass production, but they had the market for it. Toyota could not afford to keep the kind of inventory nor manpower that was necessary for that type of mass production because their market was much smaller. Important to note: Mr. Ohno and his associates took the things they learned from Ford and tailored it to Toyotas needs. 

The second concept as we know was driven by the supermarkets in the United States observed during a visit in the late 50’s. The supermarkets helped them with understanding replenishment and how products were constantly being delivered.

Ohno believed that eliminating waste should be a business’ first objective. Muda is a Japanese term that defines something that is wasteful and does not add value. It is extremely important and a key element to separate all of the value added and non value added activities. Once you reach this point you can clearly see what the customer is paying for and start working on how to minimize waste. The seven wastes of TPS are Overproduction, Waiting, Transporting, Too much machining (Over-processing), Inventories, Moving, Making defective parts and products. Mr. Ohno believed that asking ‘Why’ 5 times should help you define what the root cause of the problem is. Of course you can go further and continue to ask why more than 5 times if it is needed. This concept can often be practiced by using a fishbone diagram a.k.a. The Ishikawa diagram.  Ohno believed there should not be stagnation during any process of the production line. He would get angry and scold others when products were sitting and not being used. Products evolve and change as technology changes. We must eliminate stagnation and keep a continuous flow of products. An example of takt time: in an assembly line a product is moved to different stages after a certain time (takt time). The time to complete each stage must be less than the takt time in order to complete the product in the given lead time and meet the customer demand. Problems hind behind inventory. Ohno helped in implementing the ‘Just-in-time’ concept which in turn would assist with level loading and making a continuous flow within the production line.

What if we are running faster than Takt Time?

  • Inventory increases
  • Lead times increase
  • Demand on suppliers increase
  • Cost increase

What if we are running slower than Takt Time?

  • Overtime needed to meet demand
  • Product increases in cost
  • Shipping costs will increase
  • Customer dissatisfaction
  • Missed shipments

Kanban was one more tool which was prevalent in Toyota. Kanban is a simple and clear way to communicate that something is needed. It is often referred to as a signal. Kanban may help in the long run with continuous improvement and help product flow and production processes. Kanban was developed by Taiichi Ohno, at Toyota, to find a system to improve and maintain a high level of production. Kanban is one method through which JIT is achieved.

Taiichi Ohno stated that to be effective, kanban must follow strict rules of use.[6] Toyota, for example, has six simple rules, and close monitoring of these rules is a never-ending task, thereby ensuring that the kanban does what is required.

Toyota’s Six Rules

  • Do not send defective products to the subsequent process.
  • The subsequent process comes to withdraw only what is needed.
  • Produce only the exact quantity that was withdrawn by the subsequent process.
  • Level the production.
  • Kanban is a means of fine tuning.
  • Stabilize and rationalize the process.

Ohno’s principles influenced areas outside of manufacturing, and have been extended into the service arena. For example, the field of sales process engineering has shown how the concept of Just In Time (JIT) can improve sales, marketing, and customer service processes.

Source: Book on Toyota Production System, Economist, Online article written by Ronald M. Becker, www.toyotageorgetown.com