VIDEO: The Origins of Toyota

Two part video series showing the origins of Toyota. A must see for Innovation fans and Lean Manufacturing Fans.

It contains great anecdotes on automation, Poka Yoke, waste elimination, JIT, value added, Kanban, NUMMI, and the birth of Taiichi Ohno’s “Go to Gemba”.

These videos will do away with any thought that Lean is to blame for Toyota's current quality problems.

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Think outside the box, or inside the Silo?

I recently read some very interesting discussion points answering “How to get employees to be more innovative and creative?” in the Operational Excellence Group on LinkedIn. One of the points that was brought up, and that I’ve witnessed myself, is that in organizations that do not subscribe to lean philosophies, management in these organizations tend to build their organizations with silo structures.

There seems to be a utopian view of silos by some managers where assigning resources to a specific function and ensuring they only focus on that function brings a certain level of control. In fact, it can be said that the silo structure is a very good way of controlling and knowing what everyone in an organization is doing. In general, managing silos is easier because functions are dedicated and thus knowing where an additional resource is needed or not needed is relatively easy to identify. This makes for ease at work-load balancing.

We’ve all heard the terms: “you have a job to do”, or “don’t color outside the box”. The big problem I have seen with Silos, and I’ve experienced this first hand, is that the spirit of cooperation between groups is limited to working and improving deliverables from one silo to another. Because the nature of silos is to ensure resources are used to the max, individuals have little lee-way in experimenting with extracurricular tasks. The goal is to do the job that’s been assigned. Even the attempt to assist or make an unsolicited suggestion to improve another silo is viewed as interference.

Lean organizations, by nature, break with the silo mentality and thus require a different kind of management team. They require one that is engaged with and spends time at Gemba. Because resource allocation is not black and white, they need to coach and foster a cross-functional culture. They understand that 80% of an individual’s work load is to complete a specific job, but the other 20% is to engage in extracurricular functions. These functions, in general come down to cross-departmental training or participating in kaizen activities. These managers understand the value of giving individuals flexibility to learn and observe. They provide the tools and time to allow them to engage functions outside the box.

The benefit of lean is that individuals are encouraged to work outside the box, and think outside the box. The very nature of lean requires everyone to continually improve. It’s not about delivering the task you’ve been assigned, but going one step further and improving it. Teamwork and idea sharing (yokoten) is a key component here, and thus individuals are welcome to participate and collaborate in problem solving cross-functional teams.

This type of functional cross pollination results in what is termed a ‘learning organization’. The ultimate benefit is that teams and individuals are not only trained on their tasks, but also have good knowledge of other functions of the organization. This allows them to improve and innovate more effectively because they have an understanding of upstream and downstream processes. They no longer innovate to improve their work areas, as they would in silos, but rather innovate to improve not only their area, but other’s areas. Often, workers in lean organizations are referred to as "engineers" because they are in a position to not only identify problems but solve them too.

Ultimately, for managers, this gives them a different kind of control. Even though they must spend more hands-on time at gemba, they are given the benefit of the agile organization. One that is more adaptable to rapidly changing situations.

So what how does this translate to that original discussion on LinkedIn? In silo based organizations it is hard for individuals to be innovative because the encouragement is not there. They are constantly being reminded to “do their jobs”, and that usually does not mean to engage in improvement activities. In a lean organization individuals are encouraged to improve. In fact “do your job” has a different meaning in lean… it includes not only performing you main functions but also working to improve the organization as a whole. At the center of “the house of lean” is people, teamwork and Kaizen… and Kaizen is innovation (albeit, incremental innovation).

Thinking outside the box is a byproduct of lean.

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Are you able to improve your Business Processes effectively?

Organizations are always striving to be better, meet their customer’s ever-rising demands, and remain competitive. There are many methods, practices, and philosophies in which they engage to achieve this (Innovation Management, Continuous Improvement, Lean Manufacturing, 6-sigma etc.), and organizations invest heavily in tools and consultants to implement these effectively.

One of the often overlooked methodologies is BPM (Business Process Management). Organizations, when asked, will normally state that they feel their processes are under control, but if asked how they make sure they are constantly improved and modified to meet changing needs; their answers get a little blurry.

It turns out; most organizations do improve their business processes, but usually as a reaction to a problem. Even though they engage in some of the above mentioned improvement methodologies, they are usually product and service centric, and not Business Process centric. They lack the tools and culture to proactively engage in Business Process improvement like they would in their manufacturing and service delivery processes.

If we follow the WikiPedia definition for BPM (Business process management is a holistic management approach focused on aligning all aspects of an organization with the wants and needs of clients), we realize that Business Processes actually govern all other processes engaged in by organizations. We actually need business processes to accomplish all other processes in the business cycle.

Most organizations will have tools and procedures to enable their team members to identify and execute on improvement opportunities in their products and services. This is because of tangible gains (normally reflected in the bottom line) to be had with the execution of improvements. The tools used will ensure the improvement is captured (process flows, instructions and standards are updated in central repositories), communicated, and translated to the bottom line. The tools and processes used ensure teams impacted upstream and downstream are in-the-loop.

However, organizations seldom invest in tools and expertise to effectively manage and improve their business processes. A major reason for this is that they do not look at business processes as being equal to, or more important than a manufacturing process.

The benefits of improving these don’t automatically translate to the bottom line, and thus organizations usually do not take a proactive approach to improvement. Problems with poor business processes are usually reflected in wasted time (usually made up by employees working overtime), and are normally not addressed unless they have an adverse and measurable effect on the bottom line – sometimes leading to a real line-stoppage (i.e.: someone did not place an order for parts using the ‘new process’).

These types of line-stopping (and consequently very expensive) events are usually a result of not having well defined standards and procedures to manage the business process lifecycle. This can be quickly identified by two critical missing elements:

a) Business Process Maps:
Just like a manufacturing process flow-chart maps the flow of material and value-add activities at each station in the process, the Business Process Map shows the flow of objects (Usually Information) and activities performed at each step. There are specific sets of instructions, standards, documents, roles and resources related to each process step. The business process map becomes the standard baseline from which change can be made.

The result of not having Process Maps can be illustrated by team members having poor knowledge of upstream and downstream processes and how they fit into them. This in turn makes it hard to identify upstream/downstream areas that will be impacted by change, as well limits the ability to measure and justify change (specially improvements). This normally means Status-Quo is the rule, and change is only initiated after a business ‘catastrophe’ occurs.

b) Effective communication tools;
We have all experienced the occasion when we followed a known procedure, to later find out from a downstream process that we did not follow the ‘new’ process, or used an outdated document, thus resulting in repeating the work. (This specific scenario probably causes billions of Dollars in wasted effort every year.)

In a manufacturing process, where a line stoppage can lead to enormous costs, it is imperative to communicate changes to ensure downstream stations are prepared and don’t receive a ‘line-stopping’ surprise. Business processes should be no different, however, seldom are business processes tied to exact execution times, and thus communication is not given high importance. In fact, it is typical to see communication happen reactively like this:

• Dept. B changed a form, and everyone in Dept. B. knows. 
• Mr. X from Dept. A. uses the old form and submits to Dept. B. 
• Mr. X is told the form is outdated and has to resubmit it to Dept. B. 
• Mr. X now warns his Dept. A. colleagues to make sure they use the new form. 

Effective communication tools and methods are critical to ensure everyone relevant to a change is instantly made aware of the change and the impact to their work.

In conclusion, when looking to improve your business processes ask yourself this: Do I have a documented process standard (typically process maps), and the right communication tools in place to ensure changes and their impact are immediately known across the organization?

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Definition of an Idea Management System.

An idea management system is simply defined as a wholistic methodology for collecting, filtering, and implementing ideas. Traditionally, these systems were paper based and required great manual effort to manage.

In the 1990s organizations began using spreadsheets and databases to help record and catalog ideas, however these early "digital" methods did not allow many people to interact with the data. It wasn't until recently, and really in the last 5 years, that web 2.0 technologies helped propel idea management into a new dimension.

The modern systems enable users to interact with ideas through it's entire lifecycle. What's better is the fact that with modern web based systems every user can search through the database to learn which ideas have worked and which ones haven't. This makes idea management systems like Eureka unique best-practice reservoirs which are ideal and necessary in every organization.

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Many heads are better than one.

I came across this article on crowdsourcing, and how the old saying “two heads are better than one” is as true as ever. “The more heads, the better” is probably the modern day version of this. In the past, and innovation experts will agree, too many heads created too much useless information and idea clutter (aka – noise), so limiting brainstorming to a select few was the best way to conduct business.

Today, however, technology helps us filter that noise. Crowdsourcing tools like Eureka, and others on the market help remove it through its voting, scoring and gamification algorithms. Along with expert scoring, it’s easy to find the best ideas. The crowd does the heavy lifting, and the more of it, the better!

What’ better, is that these idea management systems are easy to setup and use, and most of them on the market offer a free version or a trial period. Eureka’s free version is a fully functional system limited to one challenge – enough to run a pilot and determine if the paid versions are worth investing in (my opinion – They Are!).

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The Best Engineers (Your innovation goldmine)

It is sometimes said that your best engineers are the workers running your production lines every day. Most of these engineers don’t have engineering degrees or for that matter college degrees, but they can probably solve some of the biggest problems facing your organization.

If not asked, the knowledge of these ‘engineers’ will be invisible and they will do their required work as directed, but at the very moment they are challenged, the ingenuity of these ‘engineers’ could surprise even Einstein.

Their ability to eliminate waste and make processes more effective, as well as think-up new product ideas and improvements, is mostly due to the amount of time they spend at their given tasks. They literally earn PhDs in those tasks and products, and thus have the ability to identify every possible improvement opportunity.

Unfortunately, many organizations fail to place the challenge squarely on their employees’ shoulders. Their fear of Employee Suggestion Programs, due to the well known and documented problems arising from poorly managed ones, is one of the main reasons they do not formally solicit employee input and thus shut out their greatest asset… their brain trust.

Employee Suggestion Programs don’t have to be difficult-to-manage resource hogs. In fact, today's web technology has given birth to a new breed of software designed for Innovation and Idea Management. The tools contained in these systems place ‘controls’ on the pitfalls and problems associated with the traditional employee suggestion program:

· Web-based suggestion forms which can be routed electronically and thus eliminate the manual transportation of paper based ideas.
· Ideas are stored in a central repository (database) thus making them accessible and searchable by the entire team.
· Live reporting functions make program status transparent to all the stake holders.
· Automated email follow-up of stake holders with open tasks.

Furthermore, these tools have made it possible to bring all members in the organization into the innovation loop – an area previously reserved to marketing, engineering, and management teams. The ability for all members to bring forth their ideas and collaborate with each other is a benefit that no organization wishing to remain competitive can afford to ignore.

Harnessing the knowledge of the ‘best engineers’ is key to making your organization’s current processes as efficient as possible and allowing it to continue inventing its future.

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Capture Lean Manufacturing ROI.

Recently I came across this article in Plastic News that struck me as odd, but offered an opportunity to communicate the importance of a solid idea management system in order to maximize the benefits of your continuous improvement process.

But first, I must add that I was a bit baffled by the inclusion of Six-Sigma in the whole ‘ROI’ question since true Six-Sigma projects always look to answer “How much will this save?”, or “How much will this reduce our scrap costs by?” … clearly ROI centric questions.

Lean, on the other hand, is a different story. A good lean program will yield thousands of small ideas. In fact, one of the main reasons ideas are seldom documented beyond the Kaizen Card, is that a program administrator would be immediately overwhelmed by having to input each idea into a database or spreadsheet. A further reason is that fact that these databases are accessible by few (usually management), and thus the true benefit of documenting the data beyond having a catalog of ideas for reporting purposes at times does not justify the effort.

Enter idea management software: Web based idea management software solves this problem. Instead of one person documenting the ideas, every member of the organization is responsible for recording their ideas. The system catalogs and helps administrators to manage the workflow and even assign ‘rewards’. But the greatest benefit is the fact that these ideas are searchable by everyone. Users can look to see if solutions have been found for similar problems, and that in itself helps propagate solutions across the organization (Yokoten).

Once ideas reside in the database, it is easy to calculate the ROI from actual cost figures or even reductions in processing time (Yes, although process time savings are not immediately visible, they become tangible once lines are re-balanced.)

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Still having doubts about the Toyota Production System’s benefits?

Several years ago Toyota went through one of the worst stages of its history. Just as the world was in the midst of a financial crisis, we all started to hear about runaway Toyotas and brake failures. TPS and Lean Manufacturing came under the microscope like never before, and many, specially the media, opportunists, the U.S. government (trying everything they could to hurt the competition to prop up U.S. automakers), and many started to doubt the benefits of a system previously lauded for delivering exceptional quality.

It was only after several years, millions of vehicle recalls, a humbling apology by Akio Toyoda (in front of a hostile US Congress), and a joint NHTSA / NASA investigation into the issue to really show that TPS was doing what it had to do! After the investigations concluded, the data showed that the majority of the accidents occurred due to drivers not pressing the brakes.

Of course, while everyone blamed bad accelerators, and even electronics, Toyota did what it did best… it used real world data to perform its root cause analysis. In late 2009, and before the runaway problem really exploded, Toyota was already recalling and fixing the mat interference issue. It realized the danger of the situation and took action. 

(There is no justifying any death or injuries due to poor designs and/or quality… and the mat issue did contribute to these. However, the fact that the Media and Government went to such great extents to damage Toyota’s image – in order to prop up GM and Chrysler – makes me wonder if they perpetuated the problem. If anything, that witch hunt probably forced Toyota to commit resources to a wild goose chase and likely lose focus on the real issue… the floor mats.) 

This year’s JD Power ratings were released and Toyota claimed the top spot in 8 of the segments. It is also interesting to note that these ratings concern 2009 models, the bulk of which went under the microscope due to the ‘runaway’ issue. This not only confirms Toyota’s commitment to quality, but that in the wake of the ‘fiasco’, they continue to do what they do best… learn and continuously improve.

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Yokoten – Finding the holy grail of the Continuous Improvement process.

Yokoten , (loosely defined) is the reapplication of a solution to similar problems in different areas. This essentially boils down to a ‘teaching’ process, and how solutions are ‘taught’ across an organization so that team members can apply and improve upon the acquired knowledge. To me, the holy grail of the continuous improvement process is simply this – the ability to quickly apply learned solutions to other areas (vertically and horizontally in an organization).

But how do organizations ensure that learned solutions are effectively communicated? This is usually answered by the different teaching and communication avenues found in effective lean organizations -such as Toyota - that attempt to maximize the exposure of a solution to their team members. In a typical CI process, Kaizen are communicated via the Kaizen card. Normally placed at the location where change is occurring as well as common bulletin boards across the organization, this allows team members to see the before and after conditions and learn how a particular problem was resolved. The theory here is that team members can carry that knowledge to their work areas and implement similar or improved solutions.

As in most organizations, this process is paper-based, and although ideas receive great visibility (if the CI program is well designed), once they are removed from the bulletin boards, the learning stops, and unless there is a common repository accessible to all, the solutions are no longer available to those who were never made aware of it (and yes…, there are still those who just go to work and don’t read the bulletin boards!)

This fact leads to what I call the “Re-inventing the wheel” syndrome that is usually observed in lean organizations. Although everyone agrees that someone who is solving a problem (even though the solution exists) is actually learning, it is evident that this effort in “reinventing the wheel” can be viewed as non-value-added. The work is being re-done, and therefore time and ‘testing’ resources are being invested in the effort.

So the question this brings up is how to maximize the benefits of a solution across an entire organization? To me the answer is simple – adopt the use of tools and methods that not only enhance the communication of solutions across an organization, but also do so perpetually. In other words, make solutions readily available to team members looking to solve problems!

Eureka, our Idea Management Software addresses that question and is designed to help organizations maximize yokoten. Our system allows users to not only document their Kaizen, but more importantly allows them to search through ALL the kaizen that have been documented to find potential solutions to their particular problems.

Of course there are a myriad of other benefits of using Idea Management software - such as greater process transparency, accounting of benefits, and greater collaboration amongst users who may not necessarily be in the same location – but we’ll leave those for another discussion.
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Make sure Continuous Improvement and Innovation are never ending cycles.

No company should be doing business if they don’t ensure Continuous Improvement and Innovation initiatives are never ending cycles. In short – never ending cycle – means that a company needs to do what it can to out-do itself!

A recent article in Bloomberg highlights the predicament BlackBerry got into by not doing this. They disrupted the market with a product called the Blackberry messaging device, and were in the lead of the smartphone market until Apple disrupted them.

RIM fell into complacency thinking that no-one would be able to compete with the appeal their products had for corporate clients. After all the security features, I will admit, were above and beyond anything on the market. However, what this meant was that RIM would continue to build ‘clunky’ hardware and less than friendly software believing corporate clients would continue to flock to their products.

• (Note: I purchased a Blackberry Storm 2 over two years ago when RIM got into the touchscreen smartphone market thinking they would compete effectively with Apple. I was dead WRONG! Not only was the hardware subpar, it couldn’t be upgraded to the newer OS6 and OS7. In fact, RIM stopped updating their OS5 over a year ago (at least I never saw a newer version) which still carried Storm related bugs. To make things worse, it wasn’t until last fall that BB released a replacement for the Storm on Verizon’s network. Believe it or not they kept selling the device at full price with a very outdated OS! In my opinion, RIM did not care about the user experience!)

In the meantime Apple (and then Google) got into the market delivering devices with extremely user-friendly features. The none-corporate users started buying these by the tons and the application eco-system started to bloom.  The underlying theme with these two was the fact that they catered to the user experience and needs while RIM di not cater to users but rather corporate IT departments. The majority of BB users had the phones ‘forced’ on them because of their jobs.

The very eco-systems that Apple and Google created have now delivered security applications that can start competing with RIM.  In fact, RIM, late last year, decided to givein and communicated its intent to provide software to integrate iPhone andAndroid users into corporate Blackberry networks. This further reduced the Blackberry’s market relevance, but it was a necessary evil knowing that if they didn’t do this, their other business line – Blackberry Enterprise Servers –would eventually succumb to the competing services from Apple and Google.

This move is just another indication that Blackberry is in ‘reactive’ mode and still failing to engage the never-ending Continuous Improvement and Innovation cycles.

My prediction with this recent move is that RIM will either a) Exit the hardware market and become strictly a service provider, or b) give up its Blackberry OS and adopt the Android or Windows Phone OS (I hardly believe Apple will ever put their OS on another device.)  Either way, for RIM to become relevant again they will need to become disruptive again, but it won’t happen in the smartphone market!  (Perhaps they should consider space exploration!)

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