The Toyota Production System (TPS) -- What Are the Misconceptions?

Earlier this month, Sarah K. Womack published a very interesting new book entitled Toyota's Improvement Thinking from the Inside: From Personal Transformation to Organizational Transformation, which describes how Toyota, through its coaches and leaders, develops its members’ capabilities through a series of continuous improvement (kaizen and problem-solving) activities. For many members of Toyota, this process results in a personal transformation that ultimately leads to organizational transformation.

When I spoke with Sarah this past week, I asked her: "What are the biggest misconceptions about Toyota’s continuous improvement methods and management system?” Here is her complete response:

The biggest misconception I personally had about Toyota’s continuous improvement methods and management system was a degree of personal development and deliberate challenge required to learn how to improve.  It was a journey of mastery of improvement tools, business needs, and how to work with members of your team to accomplish daily objectives.  For most members, that mastery was deeply personal and demanded humility and continuous reflection to transform our mindsets.  And, while there was some talk about Toyota’s philosophy of respect for people, respect is a social construct and difficult to understand from outside of the group.  Once I was inside, I saw how much emphasis there was on reducing team member burden towards the end of reducing waste and creating value for customers. 

More generally speaking of the field, I find many misconceptions about how the entire system works together.  Organizations tend to over-emphasize or de-emphasize the Toyota Production System (TPS) tools for improvement when a successful approach lands at a healthy balance.  The TPS tools are good entry points for people development and continuous improvement.  Value stream mapping, for example, is a tool to chart how material and information flows within a system, show waste, and tell a kaizen story (of waste reduction).  Even if a system is not very complex, learning it through deep study then articulating that learning visually is a special skill set developed over time.  You can feel confident in your skill set when you are able to use such a tool to tell the story of your improvement work.

Finally, I would highlight the misconception around standardization.  Many organizations, within and outside of manufacturing, think it is too rigid to work successfully.  However, Toyota and others have shown that by deeply studying processes and standardizing them, continuous improvements in safety, quality, and other performance outcomes are achievable.

What do you think about Sarah's experience? Has your company implemented a Lean initiative based on the Toyota Production System? Was is transformative?

Can Lean Principles Be Applied to the Process Industries?

Peter King just published a second edition of his groundbreaking book Lean for the Process Industries: Dealing with Complexity this past June -- just about 10 years after the first edition was released. Since the publication of the first edition, Peter has been busy consulting with food, beverage, gasoline additive, and nutraceutical companies -- these new experiences have broadened his perspectives on certain Lean processes and have given him a richer set of examples to discuss in this new edition. I spoke with him this month and asked him: “Why do Lean improvement efforts lag within the process industries?” Here is his complete answer:

That is a question that puzzled me for a long time.  During the last 18 years of my DuPont career, while we were having much success applying Lean concepts to process operations, I saw nothing in the literature and heard nothing at conferences about others in similar industries applying Lean.  So, I decided to do a little research.

What I learned is that there was some Lean activity in process operations, but it was not being talked about. Process companies can tend to be very “camera shy” – That is, secretive about their process details and methods.  Because the companies doing very effective Lean work were having success but being relatively quiet about it, it didn’t spread among other process companies due to lack of role models or documented success stories.

The  success stories that were documented were almost all in discrete parts manufacturing and assembly – automobiles, refrigerators, microwave ovens, computer keyboards, etc., which created the feeling among process companies that “I’m different – my processes just don’t look like that.”  Those differences are real, but it doesn’t mean that the Lean philosophies and concepts don’t apply; it just means that you have to think about them in a different context. 

The latter part of my DuPont career was spent doing just that: understanding Lean concepts and tools and then figuring out how to adapt them to improve chemical, food, fiber, and synthetic rubber processes.

A very pertinent example is cellular manufacturing. Many have concluded that this tool, very useful in parts assembly, has no place in process manufacturing because the equipment is generally too large to be relocated to move into a cellular configuration.  But we proved a long time ago that by thinking beyond physical arrangements to understand the real benefits of cells, cells could provide very significant value without any relocation.

After leaving my 42-year DuPont career, I decided to write Lean for the Process Industries to provide documented examples of Lean success in process operations, with guidance on how to adapt the concepts and tools and a clear roadmap on how to meet the challenges.

The positive reaction that book received has led me to believe I met that objective. 

About a year ago, based on the success of the first edition, I was offered the opportunity to write a second edition.  I enthusiastically seized that opportunity.  The first edition had been written largely based on my Lean experiences with various DuPont processes.  In the intervening 10 years, I have consulted with companies covering a much broader array of process operations: transmission and brake fluids, vitamin tablets, biological materials for human implant, salad dressings, puddings, potato chips and others, and have faced new challenges that have broadened my perspectives on how to apply the concepts, all of which are captured in the new edition.

Thus, I feel that the second edition meets the objectives I had for the first edition even more completely and thoroughly, and will reduce the gap referred to in the initial question.

What do you think of Peter King’s viewpoint? Have any readers who have been using the first edition of the book read this new edition? What are your thoughts?

On the Quest for a Lean Office

Back in January, Timothy Schipper published an important new book about transforming workplace culture entitled The Highly Effective Office: Creating a Successful Lean Culture in Any Workplace. I spoke with him on the phone recently and asked him: “How can Lean work just as well in the office as it does in manufacturing?” Here is his complete response:

When David Mann (author of Creating a Lean Culture) suggested to me to write a book about how Lean could be successfully applied in the office, I was a bit reluctant at first. The scale of the project was daunting.  He encouraged me, however, and said if I don’t tell the story of how it was being done in organizations, the story wouldn’t be told. 

The story begins with wondering if Lean concepts could be transferred from manufacturing and be applied effectively in the office?  And could Lean principles be applied to build a culture of continuous improvement in any workplace?  It turns out that the transfer of Lean principles from the concrete floors of manufacturing to the carpeted areas of the office required some fresh approaches and counter-intuitive ideas. 

As the story unfolds, it turns out that Lean does transfer from manufacturing to the office. While the principles of wastes eliminate and flow through a value stream apply, “some translation is required."  The wastes in the office value stream are hidden from view and not in plain site as is inventory between machines in the manufacturing. Because of this, wastes must be exposed. Mapping the informational value streams of office work reveals the waste in the system.  Once the wastes are in plain view, then work can be done to improve what are typically push systems with pull systems that are more visual.

The opportunities for removing wastes from the information value streams in the office can yield dramatic improvements in flow.  To build the practice of making these improvements into the culture requires employee involvement with the support of the leaders.   

The Highly Effective Office describes a road map for the journey of building a Lean culture in the workplace by providing methods to build a workplace that engages both the knowledge worker and the leader in continuous improvement. 

What do you think of  Tim's perspective? Have you applied Lean in the office environment and mapped the value stream?

Lean Initiatives in the Construction Industry -- Can they succeed?

Just this month, Gary Santorella published a new edition of his forward-thinking book, Lean Culture for the Construction Industry: Building Responsible and Committed Project Teams. Much has changed in the construction industry since Gary published the first edition of his book back in 2010, so I contacted him to discuss what he has observed and learned working with professionals in this industry during the past seven years. One of the questions I asked was:“What are the main obstacles to a Lean initiative in a construction environment?” Here is his very candid and insightful answer:

The main obstacle is not an intellectual one, but psychological. In an industry that relies heavily on a multitude of personalities and companies, all of whom have competing interests, there is a natural tendency to resist tools that were developed in a controlled manufacturing environment. When you allow people to talk freely, there is a sense of skepticism that Lean practitioners “just don’t get us or what we do.” And, in many ways, they are right. Many of those trying to implement Lean in the construction industry are a bit tone deaf. They hear resistance as an intellectual challenge, and therefore counter it by generating copious amounts of data, imposing weighty (and sometimes faulty) measurements, and implementing Lean tools in such a way that is cumbersome – all of which only serves to justify the divide.

Given that most Lean practitioners are engineers by training, I understand the inclination to go straight for the analytics rather than attend to interpersonal struggles and issues influencing workplace culture, but in doing so, they ignore the realities of our industry. On any given day, the average Project Manager interacts with scores of individuals, each of whom comes from a variety of different backgrounds. From owners, architects, and city planners, to inspectors, workers and various employees and departments within their own company,  managers in construction, more than any other industry, have to be able to navigate the murky waters of human dynamics and interpersonal politics. That’s not to say that there aren’t ample opportunities for measurement and Lean tool implementation. Pull-planning, Value Stream Mapping, 5S and Kanbans have literally transformed businesses that were bleeding money in the form of waste. We know the flow stoppages that are the result of people choosing to store information idiosyncratically on their personal hard drives rather than using the standard practice of uploading to a common share drive. But when we emphasize data, and measurement, and tools we are taking Lean out of its proper context and missing the most transformative element of Lean – it’s ability to transform a culture.

The construction industry is, unfortunately, fraught with blame, finger-pointing, and self-protective cover-your-butt behaviors. The average Owner-Architect-Contractor meeting is more of an exercise of the fine art of attack and counter attack than productive waste identification and problem solving. Teaching people to use Lean tools in the context of their interactional realities is far more productive than measuring everything. When all of the competing parties understand that there is far more to be gained – financially and psychologically - by viewing problems as opportunities to improve, rather than as weapons, that’s when people start to understand the true power of Lean.

As Lean practitioners, we need be as interested in helping people to embrace the concerns of all of the parties, as we are in implementing the tools. To me, this is the true power of Lean. I love the framework because if implemented properly, it melds process and measurement with the psychological realities of human interest, and embodies the true meaning of the word teamwork by empowering people to change their working environment for the better. It’s exciting and humbling to see people come to the realization that they are far better off as a united whole, than a bunch of separate competing interests who are resigned to doing battle with each other. To me, this is the true power of Lean. The tools should be a means to get there, rather than the end result. 

What do you think of Gary's comments? For those working in the construction industry, do you agree with his observation of behaviors and habits?

Global Lean -- When the Gemba is All Over the World

For many organizations, manufacturing processes were once contained within specific areas and defined locations, and most managers and supervisors could see and observe the entire work area -- the gemba -- by merely taking a walk.

Currently, however, with globalization, many manufacturing processes have been dispersed over thousands of miles, across oceans, and different time zones. Sam Yankelevitch, in his new book -- Global Lean: Seeing the New Waste Rooted in Communication, Distance, and Culture -- demonstrates how to use Lean thinking to uncover and reduce waste in the interactions required in today's global organizations.

During a recent conversation with Sam Yankelevitch, I asked him: "To succeed globally, what are the substantially new obstacles organization now face?"

Here is his response:

Many companies try to copy and paste the success they’ve had in their natural, local environments when they expand their operations internationally. My experience managing global companies, has shown me otherwise and, in my new book, I’ve tried to share some key items companies and their leaders should be aware of to avoid financial losses.

As the title of the book suggests, communication, distance and culture should be taken seriously. Just labeling these factors as “soft” will not make them go away. “Soft” can have very “hard” impact on your execution and results. A positive point is that Lean thinking applies just as well to reducing or removing these obstacles.

Starting with distance, this is a factor that is related to trust and cause and effect. It is hard enough to establish trust with some of the local stakeholders and being physically separated also creates a mental distance. Furthermore, when cause and effect happen with a longer interval,  problems might not be easy to solve because the source is tough to pinpoint.

Culture is, of course, a very abstract topic, but it affects the way your requests and expectations are perceived by someone outside of your normal circle. One point is sure:  “our way” is not always the best way or the only way when dealing with people from a different culture.

And then there’s communication. Distance and culture are of course factors that influence how a message is sent and received. But it is evident that because communication precedes action, it’s best to figure out how to do this effectively across continents to improve your chances of success.

Success in the past can sometimes turn out to be a big obstacle because circumstances that helped and hastened success previously have significantly changed. It's important for leaders to see new situations in a new light and not be trapped by routine.

Here's a short video of Sam Yankelevitch speaking about the topics covered in his new book:

What is Operational Excellence in the Office?

Kevin Duggan, with Tim Healey, recently published an important new book that expands on, and transcends, the topic of value stream mapping titled Operational Excellence in Your Office: A Guide to Achieving Autonomous Value Stream Flow with Lean Techniques. I asked Kevin to specifically tell me: “What separates this book from all the others on value stream mapping?” Here is his complete answer:

Operational Excellence in Your Office is much different than previous value stream mapping books. The subject matter of this book is achieving true Operational Excellence in the office, and not ways to merely eliminate waste in the office. True Operational Excellence is defined as “when each and every employee can see the flow of value to the customer, and fix that flow when it breaks down.” This means we establish “self-healing value streams” that run autonomously day in and day out without management intervention.

The book provides a detailed overview of exactly what Operational Excellence is and how it applies in the office. The book does not teach how to create value stream maps, but it uses value stream maps to show how to design self-healing flow in the office. 

The word design here is key. In many value stream mapping techniques, we have been taught to make a current state map, look for waste, and think of an ideal state, or use brainstorming tools to try and develop a future state. However, in Operational Excellence, it’s different. In Operational Excellence, we create a current state; however, we then put it on the wall and just leave it there. The next step is to learn the nine guidelines of office flow. These guideline teach us how to handle high variation in customer demand (as the concept of traditional takt time just won’t work in the office), how to sequence work, where we can possibly do a one-piece processing cell, how to move work through the office using workflow cycles, how to move large amounts of information from one area of the company to another, where we can initialize work and at what points can we re-sequence work, how to tell if the office flows are on time, and what to do when the customer changes their demand or new demand comes in that exceeds what the value stream was designed to do. 

The key to these guidelines is that they provide a method to design what we will then consider to be normal flow. And by establishing normal flow, we have then established what abnormal flow is. 

Understanding and reacting to abnormal flow is a state that very few companies achieve. However, this is exactly the goal of Operational Excellence: seeing, understanding, and correcting abnormal flow without the need for any management intervention. Without the need for management to direct and control information flow in the office with status meetings, update meetings, or meetings to fix abnormal conditions, management can now spend their time on activities that grow the business, or offense activities. 

What separates this book from other value stream mapping books is that we are not teaching value stream mapping in this book; we are teaching how to design value streams that achieve Operational Excellence in your office. Value streams designed using the guidelines in the book can then become self-healing, and deliver the service day in and day out autonomously, without the need for management intervention, freeing up time for management to spend on growing the business. 

Are there any readers familiar with "self-healing value streams"? If so, what have been your experiences?

The Second Edition of “The Complete Lean Enterprise: Value Stream Mapping for Office and Services” -- Why Is It Needed?

It has been 10 years since the publication of the award-winning, best-selling book called The Complete Lean Enterprise: Value Stream Mapping for Office and Services. This book brought value stream mapping and Lean thinking out of the factory and into office and service environments in all industries. The authors, Beau Keyte and Drew Locher, have just published a second edition of this book, and I recently asked them: “Why is a second edition of this book needed?” Here is Drew Locher's complete response:

During this time, my co-author, Beau Keyte, and I have continued to deeply learn about the application of this powerful methodology in our work with a wide variety of organizations and industries, including financial institutions, healthcare, hospitality, the “back office” in manufacturers, and engineering firms. Beyond the “mechanics” of the use of the tool, we have come to better appreciate the “social” benefits of the approach to any organization. The second edition represents our collective experiences over during those 10 years and captures many key lessons.

The collaboration that the methodology ignites between departments and functions (that have traditionally not worked effectively together) is nothing short of stunning in most cases. Through the process, they learn from each other, develop a common vision going forward, and form a true team that is critical to the successful implementation of the "future state" that provides breakthrough results for their organization. In addition, we learned many other success factors. For example, it is not solely the objective to implement the tools and techniques envisioned in the future state that fundamentally change the way work is processed and flows -- a new way to manage the value stream is needed. Only then will sustainable change occur and continuous improvement be practiced beyond the first future state – the true objective of Lean Thinking.

The new content includes an entire chapter dedicated to the “management process,” and “learning your way to the future state.” In addition, during the past 10 years, we have observed many individuals and organizations practice their own use of the methodology, often with mixed results. Most commonly, we have seen current state maps without proper future state designs. Value stream mapping should result in radical improvement resulting in significant improvement in key metrics; greater than 50% reduction in lead time, up to 90% improvement in information or service quality, and the like. Very often, however, the projected results are modest and represent incremental improvement. Other times the future state is nothing more than the current state with up to 100 ideas for improvement noted. Long “to-do” lists are created and responsibilities and dates assigned. This represents a “waste war" or a ”drive-by kaizen” approach rather than the thoughtful redesign of the value stream based on the key principles of Lean that will achieve the aforementioned breakthrough results.

We have honed our messaging and teaching with regard to future state design in the second edition. The future state questions have been revised and applied to a new case study so the reader will find them easier to put into actual practice.

We feel that even seasoned practitioners will benefit from the second edition if they are open to honing their skills in the powerful value stream mapping methodology. And for those who are new to the subject, here is the opportunity to learn the current thinking from the original leaders on the application of value stream mapping and Lean to office and services. 

What do readers of this book think? Do you feel the second edition of this book is a welcome addition to the Lean literature currently available?

Lean, Value Stream Mapping, and Process Industries

I spoke with Peter L. King this past week about his new book, Value Stream Mapping for the Process Industries: Creating a Roadmap for Lean Transformation. This book is Peter's the third book on how Lean concepts apply to process operations, so I asked him: "What fuels this interest?" Here is his complete reply:

Actually, it’s much more of a passion than an interest -- a passion created during my 18 years applying Lean concepts to DuPont’s operations. I found it very frustrating that none of the available literature nor any of the courses I took could put Lean in a context that was appropriate to the kinds of processes I was working on, such as synthetic rubber extrusion, sheet goods manufacture, household and automotive paints, bulk chemicals, food and beverages, and carpet manufacture. These processes were quite different from the discrete processes, such as bolting sheet metal together to make refrigerators or automobiles, discussed in the then current books. I wanted to share my experiences with others in similar process industries to help them climb the Lean learning curve much faster than I did.

Value Stream Mapping (VSM), the subject of the latest book, is a very good example. While the format presented in Learning To See is very appropriate to both parts assembly and process operations, it must be expanded and adapted to completely describe the wastes and flow barriers found in process operations. Because the number of material types tends to expand significantly as material moves through a process operation, the VSM must clearly illustrate this diverging product flow. Traditional Lean deals with takt (customer demand) as a time factor, whereas in processes it is much more effective as a rate factor. While the assumption is often that takt is constant throughout the operation, in process manufacturing, however, it often must increase as you move back through the process to accommodate yield losses. And, the fact that key pieces of equipment are often shared across several product families presents a challenge on how to balance the need to clearly and simply illustrate flow with the need to be thorough and complete; bad choices in this area can understate utilization and hide bottlenecks. These are just a few of the issues I faced in creating effective VSMs for DuPont’s processes which are all described in the book.

A well-constructed VSM can be the blueprint that a Lean architect uses to guide a complete Lean transformation, as the examples in the book demonstrate. 

Do you have experience applying value stream mapping to the process industries? What have been the challenges?

Creating a Lean Product Portfolio

Chris Harris recently co-authored a book titled Capitalizing on Lean Production Systems to Win New Business: Creating a Lean and Profitable New Product Portfolio, which can help an organization take its current Lean knowledge and translate it into a step-by-step methodology to win and launch new business. I asked Chris: “Why is it necessary to plan for new products in the context of a Lean enterprise system?” Here’s his answer:

Production facilities that have had success implementing their Lean enterprise systems may have more to gain by utilizing their Lean thought process to quote and win new business; planning in a Lean context can take place before the new product ever hits the production floor. Common questions can now be answered in the context of a facilities’ current Lean enterprise system.

 For example, those in a Lean facility have likely gained an effective understanding of their machine capacity through the optimization of their equipment utilizing small batch production. They may have an efficiently run plan based upon the most efficient changeover sequence. If they do, when a new product comes about, they must investigate how that new product would fit into the sequence to effectively know how the new product will fit into their production system.

There are other issues to consider, such as:

• How will this new product flow through the current production system? A rough value stream map may help with this question.
• Where will the purchased parts be purchased, how much will they cost, and how much inventory is needed? The Plan For Every Part (PFEP) may help to determine location, cost, and delivery frequencies leading to an answer to this question.
• Will people need to be hired or will the current amount of labor be sufficient? Standardized work for the new product before it is ever produced may help with this question.
• How will the final assembly areas and work-in-process (WIP) areas receive their material for production and be scheduled for production in the current production system. Understanding the importance of a timed delivery route utilizing a tugger and how a new product fits into that route may help in answering this question.
• How will you ensure that the new product is launched successfully on time? Constructing a plan with a three-team approach to develop a new product acquisition and launch plan may help in this area.

These are certainly not all of the areas that must be considered when attempting to win new business, but they do offer some insight in to how a Lean enterprise system can systematically plan -- not only how to win new business, but how that new business will fit into their current system and be profitable! 

What do you think of Chris's ideas on creating a new product portfolio? How do you think an effectively running Lean system within an organization can help secure new business?

Understanding the Whole Enterprise

Last week, I spent some time on the phone with Jerry Harbour discussing his latest book titled The Performance Mapping and Measurement Handbook, and I asked him this question: In The Performance Mapping and Measurement Handbook, you talk about the need to develop performance maps and measures at multiple levels, starting at the higher enterprise level. Why is better understanding of the entire enterprise or the “whole thing,” as it were, so important? Here is Jerry's complete response:

Most organizations do an effective job in the “how to” of performance improvement. Where I often see them falter is in the “what to” improve part of the performance equation. This is why performance mapping and measurement is so important. Performance maps and measures, especially when developed at multiple levels, represent a systematic and objective way of identifying and prioritizing areas for improvement. Sometimes performance gains garnered at the local process level fail to translate into real improvements at the higher enterprise level. A common reason for this observed failure is the presence of unidentified throughput constraints and bottlenecks within the higher enterprise materials flow network. For example, one company implemented a very successful Lean Six Sigma effort at an upstream production site that significantly increased output. Yet at the enterprise level, those gains in productivity could not be realized because an immediate downstream transportation link that connected the production site to a needed export terminal was maxed out in terms of carrying capacity. Because the company couldn’t ship the increased output, it couldn’t sell those newly accrued gains to awaiting customers. Accordingly, the only real result from the company’s local improvement effort was increasing stockpiles of output that couldn’t be shipped or sold. This is why I always advise organizations to first take the time to better understand performance (and especially material flow) at the higher, enterprise-level right at the beginning of any local process improvement effort . As in the presented example, overall, there is very little benefit in making gains or improvements in one part of an enterprise if that gain cannot be realized or “flowed” throughout the entire enterprise.

Do any readers use performance maps? Have any of you run into the types of cross-functional or  hierarchical problems that Jerry describes?

Making the Invisible Visible

In a recent blog post titled Green Money, I requested that readers provide their "thoughts on the tactics used and difficulties faced when mapping electronic value streams." I received an insightful response from Carlos Venegas (author of the book Flow in the Office) explaining how he approaches that subject, so I am presenting it here:

“The key task in improving any electronic or office process is making the invisible visible. In factory environments, you can see what’s happening. We don’t always have that luxury in the office. Too much happens inside computers, inside people’s heads, and between people in conversations and meetings. Luckily, there are ways to make the invisible visible.

Let’s start with value stream mapping (VSM). This tool is excellent for making the invisible visible. Because you are capturing blocks of activity on the value stream map, you are making the invisible visible. It’s really a no-brainer. You must not do anything different if you think of automated processes as blocks of work, just like in a factory process. From the VSM, you can determine which systems are parts of kaizen opportunities.

It’s in these kaizen opportunities that people tend to run into problems. How do you address an office process or computerized process using lean tools and principles? Again, the key challenge is making the invisible visible.

Here’s one way to do it: build a workflow chart. Within the scope/boundaries of the targeted process, print out screen captures of every single screen used in a process. Then put the screen captures up sequentially. Now, draw lines from data element to data element. (Sometimes there are paper forms used in the process; include those, too.) The workflow chart helps the team see the four wastes of the office: information waste, process waste, physical waste, and people inefficiencies.

In factory workshops, teams will often do a process walk to level-set the team concerning the process and the wastes held within. The workflow chart gives the office team the opportunity to have a ‘virtual’ process walk. They can use the workflow chart to understand the process, identify the specific wastes, and design experiments, and then document the solutions.”