Supply Chain View

A lengthy post today that’s been in the pipeline for a while. The Lean Enterprise Institute have published an English translation of The Birth of Lean, recounting the experiences of the early Toyota practitioners, and how their experiences shaped what became Lean methods and thinking. The introduction and first chapter are available as a free download, and they are well worth looking at.

The review below is based entirely on that first chapter, an interview with Taiichi Ohno. I found it enlightening and thought-provoking, and it raises issues that are still relevant for improvement programmes today.

Kanban serendipity

Pull production by capping WIP is such a neat concept with far-reaching and consequences that I’ve often wondered whether it’s creation was something of an accident. Taiichi Ohno makes some comments that confirm my suspicion. At one point he places Kanban in the context of a general visual management approach: “We developed kanban … as a means of making the flow of work visible.”

He mentions another of the inspirations for using Kanban:

“A big reason for adopting kanban was our desire to reduce the administrative burden of running a factory. We were looking for ways to reduce paperwork.”

Flexibility in production planning was important too. The following sounds like something the Toyota team realised after they had got Kanban working:

“Here’s an example. Let’s say you need to revise your production plan. Working out all the necessary changes on a computer would take a couple of weeks, and you’d fall behind in your production control. Even if the computer could handle all the calculations in an instant, you’d still fall behind because accommodating the changes in the workplace would take time.

“With kanban, all you need to do is adjust the number of kanban in circulation in accordance with your needs. When kanban start arriving slower than people had expected, they understand immediately that the company has reduced the production plan. As long as you keep your production leveled, changes in the production plan will take effect the next day.”

Note that there’s nothing here about the prevention of WIP explosion and reduction of cycle times, the novel benefits of Pull. It’s just speculation, but I don’t think they played a part in the invention of the system. The only hint of something like that comes when Taiichi Ohno says that he “told people that the kanban were like money and that anyone who withdrew parts without depositing a kanban was a thief”.

Tax office, audit trails and kanban

Kanban was almost the system that never was. Toyota first introduced it around 1955, and it only got it’s name when the company was preparing for a Deming Prize audit in 1964. But as early as 1949 the desire to reduce paperwork was there, but the Japanese Tax Office told Toyota they could not remove their paper audit-trail. It was only later when the rules were relaxed that kanban was introduced, and even then Taiichi Ohno says “if Toyota had introduced computers two or three years earlier, we might never have developed the kanban system.”

Pre-TWI influences at Toyoda Boshoku

It was interesting to see that the roots of Lean at Toyota stretched back before WW2. Already as a foreman at Toyoda Boshoku (Toyoda Spinning and Weaving), Taiichi Ohno was well acquainted with the precepts of the Quality Movement. For example, he emphasises “the concept of making sure the front-end processes delivered consistently high-quality work to the following processes”. Training Within Industry (justly, I think) gets credit for seeding ideas in Japan that would become Lean, but Birth of Lean makes it clear that the Japanese already had considerable exposure to and practice in these methods.

Overproduction and Pull

I have a post brewing about definitions and understandings of Pull, after a very interesting and heated discussion on the LinkedIn boards. For now, I’d just like to note that Taiichi Ohno, talking about his time in charge of vehicle production at the Koromo (Honsha) Plant, was clearly very concerned about management methods that matched production to demand. Here’s what he says:

“We devoted ourselves to raising efficiency in every way possible in the first five years after the war. We raised productivity five- or six-fold and positioned ourselves to turn out 1,000 trucks a month. Unfortunately, we couldn’t sell all those trucks, and we ended up with a heap of unsold vehicles. The company was on the verge of collapse…

“We discovered the importance of raising productivity and reducing costs while limiting production to the kinds of products sold, in the amounts they are sold, and at the time they are sold.”

Craftsmen and Standard Work

I am always interested in people’s views on this. On the one hand, there’s the John Seddon view that (in the service industries at least), standardisation and deskilling prevent an operation from being able to “absorb variety in the line”. Deming wanted to “remove barriers that rob the hourly worker of his right to pride of workmanship” (#11 of his 14 Points). Here’s Taiichi Ohno’s uncompromising view:

“Another lesson we learned at Toyoda Boshoku was the importance of not relying on craftsmen. We learned to design systems that could be operated by anyone amateurs—with a minimum of training. That’s what standardized work is all about.”

Later he talks about resistance from the workforce to some of his changes:

“Our moves ran into resistance from the old-school craftsmen among the workers, but we had a high worker turnover rate at the time, so measures for reducing manpower requirements went fairly smoothly.”

Work Pacing and Taylorism

It is clear, though, that there was a great deal of respect for people from the very beginning. This is what he says about work pacing:

“As for the pace of work, we set a pace that an average worker can maintain for a full day. That means a pace that is maintainable without undue strain, and the team leader personally verifies the feasibility of the pace. You mustn’t establish a pace based on the hand and foot speed of your most experienced personnel. Taylorism called for setting targets based on the speed of the fastest workers, but that’s exploiting labor.”

Multiprocess handling

I found this very interesting, given some critiques of, for example, the Lean implementations in UK public services. “Multiprocess handling means letting operators move from task to task in step with the flow of work.” Taiichi Ohno is describing a production method that minimises hand-offs and keeps the worker with the product along the value stream. Lean in UK public services has been criticised for creating hand-offs and removing ownership of calls/cases from individuals.

Product variety and demand spikes

Finally, a misapprehension that seems to turn up all over supply chain literature is that Lean is ideally suited to situations where there is low product variety and stable demand, and not to other environments (Martin Christopher’s Agile critique of Lean, John Gattorna’s Living Supply Chains, among others).

Taiichi Ohno makes it clear that Toyota were looking for an operational approach that would allow them to compete precisely on the grounds of variety and agility:

“We needed to make a variety of products, all of which were subject to sharp fluctuations in demand. Offering diverse products in small quantities was an unavoidable condition for doing business in Japan at that time.”

That’s all for now. If I can get a copy shipped to the UK, I may provide a full review of the whole volume.

Finally, thanks to Mark Graban for the post on his blog that originally alerted me to the book.

Links

Lean Enterprise Institute: http://www.lean.org/

The Birth of Lean free download chapter: http://www.lean.org/Bookstore/ProductDetails.cfm?SelectedProductID=251