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COMMEMORATING THE 100th BIRTHDAY OF TAIICHI OHNOBusinesses worldwide are successfully implementing the Toyota Production System to speed up processes, reduce waste, improve quality, and cut costs. While there is widespread adoption of TPS, there is still much to be learned about its fundamental principles.This unique volume delivers a clear, concise overview of the Toyota Production System and kaizen in the very words of the architect of both of these movements, Taiicho Ohno, published to mark what would have been his 100th birthday. Filled with insightful new commentary from global quality visionaries, Taiichi Ohno’s Workplace Management is a classic that shows how Toyota managers were taught to think.Based on a series of interviews with Ohno himself, this timeless work is a tribute to his genius and to the core values that have made, and continue to make, Toyota one of the most successful manufacturers in the world.'

Whatever name you may give our system, there are parts of it that are so far removed from generally accepted ideas (common sense) that if you do it only half way, it can actually make things worse.' 'If you are going to do TPS you must do it all the way.

You also need to change the way you think. You need to change how you look at things.' - Taiichi Ohno'This book brings to us Taiichi Ohno's philosophy of workplace management-the thinking behind the Toyota Production System. I personally get a thrill down my spine to read these thoughts in Ohno’s own words.'

Jeffrey Liker, Director, Japan Technology Management Program, University of Michigan, and Author, The Toyota WayBased on a series of interviews with Taiicho Ohno, this unique volume delivers a clear, concise overview of the Toyota Production System and kaizen in the very words of the architect of both of these movements, published to mark what would have been his 100th birthday.INCLUDES INSIGHTFUL NEW COMMENTARY FROM:Fujio Cho, Chairman of Toyota CorporationMasaaki Imai, Founder of the Kaizen InstituteDr. Jeffrey Liker, Director, Japan Technology Management Program, University of Michigan, and authorJohn Shook, Chairman and CEO of the Lean Enterprise InstituteBob Emiliani, Professor, School of Engineering and Technology, Connecticut State UniversityJon Miller, CEO of the Kaizen Institute. PDF, 7.42 MBOHNO’S INSIGHTS ON HUMAN NATURETaiichi Ohno, credited as the architect of Toyota’s Production System (TPS), was concerned that human nature would stand in the way of managers’ ability to understand TPS and achieve continuous flow. In his 1988 book, Toyota Production System (Productivity Press), Ohno noted that people are accustomed to processing work using the batch-and-queue method (p. 10), which means they like to stockpile raw materials, work in process, and finished goods. He said inventories reflect a natural human behavior to hoard things in preparation for bad times, but that we should not get stuck on this way of thinking because it is no longer practical in demand-driven buyers’ markets (pp.

Ohno said it would require a “revolution in consciousness” by business people to overcome their obsession for hoarding. Indeed.While Ohno was no doubt correct, most business leaders do not like revolutions of any kind. Frederick Winslow Taylor said in the early 1900s that his Scientific Management system required a “mental revolution” by managers, particularly with respect to improving relationships between management and labor. Most business leaders did not like Taylor’s “mental revolution” idea.

They were far more comfortable with evolution than revolution. But did they actually evolve when it came to making fundamental process improvements, as Taylor suggested? Some did, but most did not. And most have not since then.Chapter 1 of Workplace Management, “The Wise Mend Their Ways,” describes the need for leaders to avoid mental rigidity, to not fear change, and to be humble as prerequisites for adapting to change.

Since batch-and-queue thinking is so deeply embedded in the human brain, extraordinary effort must be applied to break free of this way of thinking. Normally, when we possess a physical or mental habit that we want to change, we commit ourselves to the daily practice of new routines. If we want to break free of batch-and-queue thinking, we have to learn to see batches and queues of m; aterial and information and engage in new and unfamiliar concepts and processes to reduce or eliminate them. If leaders cannot do this, then they cannot adapt.After many years of effort, the best that most organizations have been able to do is process material and information in a hybrid batch-and-queue/flow way. This outcome illustrates how challenging it is for leaders to adapt.

Continuous flow remains elusive, which underscores Ohno’s point that our basic nature is to hoard things in preparation for bad times.In recent years, attempts to achieve flow have been disrupted by managers who view decoupling of processes in a value stream as a more efficient and lower-cost way to process material and information. Different types of work that were at one time done in close proximity are now distributed across the globe. Design work is done in California; engineering is done in Connecticut; manufacturing is done in China; assembly is done in Mexico; and customer service is done in India.

Human nature does indeed stand in the way of understanding and achieving flow.As an educator, my fundamental objective is to teach managers that leading organizations for flow is different, both broadly and in detail, from leading organizations for batch-and-queue (or hybrid). Ohno understood that managers’ beliefs, behaviors, and competencies are completely different. And he clearly understood that to get good at anything you have to understand the details. This is where most managers fall down with respect to TPS; they do not want to understand the details, and therefore fail to adapt.Chapter 2 of Workplace Management, “If You Are Wrong, Admit It,” describes illusions in leaders’ thinking that prevent them from trying new things and making mistakes, which, in turn, helps them avoid having to admit they are wrong. For many years I have taught managers how to lead TPS and have learned quite a few interesting things, some of which are listed next.

They reflect an aversion by managers to making mistakes (or the possibility thereof), admitting they are wrong, or conceding that they do not know or understand something—especially to subordinates.image: Image If details about leading TPS are provided in ways that are easy to understand, some managers will say, “I already know that.” But they surely do not; they think they know it because it has been presented in an easy-to-understand way. They confuse knowing with doing.

They do not know or do flow.image: Image If details about leading TPS are provided in ways that are challenging to understand, some managers will say, “That’s too much detail.” The details, of course, are critical to TPS success. Ask any professional musician, golfer, visual artist, opera singer, etc., about the importance of details.Chapter 4 of Workplace Management says, “Confirm Failures with Your Own Eyes.” Managers who are serious about improvement are not afraid to experiment and observe what happens.image: Image If insufficient details are provided, then some managers will say, “That’s too high-level. Give me more specifics.” However, the specifics are what managers must learn through their own daily application of Toyota Way principles and TPS practices. I cannot do it for them. An old and renowned piano teacher once told his most accomplished young student, “Now you must make the piano sing.” Just that; nothing more specific. For serious students, that advice is more than sufficient for them discover the next level of detail. Similarly, Ohno would say to his most accomplished students, “You must think for yourself.” Just that; nothing more specific.image: Image If insufficient details are provided, then some managers will say, “That’s theory.” Managers misuse the word theory to describe something that they are not familiar with.

Theory, of course, is an explanation for an experimentally testable hypothesis that others can replicate via experiments. TPS is not theory.As Ohno says in Chapter 5, “misconceptions easily turn into common sense.” Avoid stasis by going beyond common sense and trying new things.image: Image Even if I can absolutely, unquestionably, irrefutably, categorically, infallibly, and conclusively prove, with God in total agreement, that leading TPS will do great things for an organization, most managers will say, “No thanks.” They will get the business to where it needs to be by other means. They do not want to understand the details. They do not want to let go of their batch-and-queue (hoarding) mentality.Chapter 21 of Workplace Management says, “‘Rationalization’ Is to Do What Is Rational.” Leaders often refuse to break down their misconceptions and do what is rational.Ohno taught us that TPS is a completely different way of thinking and doing things. He also taught us that TPS must be led by managers because if managers do not lead, then TPS will have no chance as an overall management system. Instead, it will instead exist ephemerally as an assortment of tools, often used incorrectly, to cut costs and improve productivity (mainly in operations). And it will invariably result in bad outcome for workers.This is what we see in most organizations.

It is the popular version of TPS—fake TPS—which is formulaic and incomplete, and does nothing to challenge the hoarding status quo. Ohno would be shocked to see how abundant fake TPS is today, and disappointed with the performance of so many people in leadership positions.

Their inability to try new things and make mistakes, admit they are wrong, or concede that they do not know or understand something means they are unwilling to “change the way they think” and do TPS “all the way” (see Afterword).image: ImageProfessor Bob EmilianiConnecticut State UniversitySchool of Engineering and TechnologyNew Britain, Connecticut14 When Japanese rice cakes are made, a lot of flour is used to keep the sticky rice from sticking to the wooden bowl in which the rice is pounded. Ohno is making an analogy between the cost of the flour to make the rice cakes and the cost of the pallets, carts, etc., to make parts.15 This is similar to “an empty sack cannot stand upright.”CHAPTER 4Confirm Failures with Your Own EyesIt is relatively easy to persuade people on the gemba with examples like these, but away from the gemba there is not always a way to prove one’s point, so many times each side ends up thinking their idea is a good one. Perhaps the hardest thing is for managers, senior managers, and supervisors to persuade each other.For example, it can be difficult when an area manager must persuade a team leader, who is a factory floor supervisor, to try something. If the team leader is not persuaded, they will not instruct their workers to try it. Even if they think that the other person’s idea has value, they cannot tell in their minds who is right and who has the misconception.They become caught in endless debate, the gemba remains stuck in their old ways, and the productivity of that workplace does not improve. So just try it. Try it, and if there are two opinions, let them each try it their way for one day.

Or try out the idea of a supervisor from another area.To exaggerate a little, each person should be tenacious when testing their ideas and checking the results until everyone is persuaded that they have found the one better way.This is not the same as stubbornly holding on to your ideas. If it is something you said or an idea you had, there is something good about it.

You may have misconceptions, but you also have good ideas. If your idea fails, then go see what failed with your own eyes. It is important to develop this habit.When managers only hear about the results and think, “Oh, that didn’t work either.

The old man doesn’t know what he’s talking about,” then the result is failure. Even if the result is a success, you must not be satisfied by only hearing about the results. Go see with your own eyes, and you will understand very well what things were tried and what things were not included in your calculations.After seeing that so much time was being spent on sharpening drill bits and cutting tools rather than on getting work done, we started thinking that we needed to set up a centralized grinding operation.When we said we would set up a centralized grinding operation, one experienced worker said, “No, we tried that during the war, but it failed.

That’s why we do things the way we do now.”“I did not see it fail during the war. Show me again how it fails. If I am persuaded by this, I will let you continue doing it the way you do it now.”I said, “I think the reason it failed was because something went wrong. In those days our products were treated as military supplies.“It failed because people from the army came and forced you to do centralized grinding, and you did it reluctantly. There is no way the results could have been good. Now I am asking you to do it, so let me see with my own eyes how it fails.” We tried it, and it did not fail.While we tried this, the experts sharpening the tools would try to tell me all sorts of things I did not know, such as how the number two tool must be sharpened for castings or what to do in the case of iron. But all of that is irrelevant to me, and has no effect on centralized grinding.

The important thing is to make it clear to the person doing the grinding what the cutting tool is used for, at what machine and for what material it is used, and therefore what angle the cutting edge should be ground to and what material the cutting tools should be made of. These are documented as standards, and people need to follow the standards. If you think that each one of the hundreds of workers must be able to sharpen their own tools in order to be fully competent, this makes efficiency very poor.We saw what caused failure, or what was about to cause failure, and took action ahead of time to prevent these things. As a result we avoided failure and multiplied production output by many times. The workers themselves could make good products without proprietary techniques or special skills.This happened shortly after the war, so it is a very old story. I doubt that there are any workplaces today that do things that way.Assuming that we each have misconceptions in our minds, it makes me think that the ability of people to relate to each other will become a significant strength.39 The Showa era lasted from 1925 to 1989.CHAPTER 6The Blind Spot in Mathematical CalculationsWhen financial people do simple mathematical calculations and think that costs must have been reduced, leaving out the question of the actual quantity that will be sold, this is a large mental misconception.We produce only what we sell. We often tell people they must not produce what they will not sell, but this seems like nonsense according to mathematical calculations, and people think it costs less to produce 20 than to produce 10.Perhaps this is very difficult for people to understand.

It seems there are many who do not see that just because the results from calculations of strange mathematical formulas are correct, this only means that the answer to that formula is correct and not that costs will actually be reduced.There are three formulas:1. Price – Cost = Profit2. Profit = Price – Cost3.

Price = Cost + ProfitMaybe the financial people cannot understand that each of these formulas means something different.The first formula is based on the thinking that the product will be sold at a certain sales price. The cost to produce it is subtracted from the price and the balance is profit. You might think the second simply flips the first formula, since it says the profit is the result of the sales price minus cost. The third formula is a bit different, saying that the sales price is the sum of the cost and the profit. When you look at it like this, the formulas may all seem to be the same. Intellectuals seem to have particular trouble seeing that these three formulas have different meanings.The first formula applies when you are in competition with other firms selling the same product and the sales price is set by a third party, the customer, based on the value of the product. If it takes 80 yen to produce and the sales price is 100 yen, the profit remaining is 20 yen.The second formula is based on the thinking that we must have a profit of 20 yen, and that as long as we do, things are all right.

If the sales price is 100 yen and your cost is 100 yen, this does not leave 20 yen profit. Under this formula, the self-serving answer might be to add gold lining and sell it for 120 yen.The third formula is not mathematically incorrect. When you move the minus sign to the other side of the equation, it becomes a plus sign, so the sum of the profit and cost is the sales price. However, this means something totally different than the other two formulas. The price is set by the producer at 120 yen because the cost is 100 yen and the producer believes that 20 yen is a fair profit.

This fair profit is not gained unless the sales price is 120 yen. Now even if the producer says that this is the correct price, the customer may say, “No fool would pay 120 yen for that” or “Other companies sell the same thing for 100 yen,” and so the thinking behind formula number three will not give you a profit if the cost is 100 yen and the sales price is 100 yen.My interpretation of “cost” in these formulas is that costs exist to be reduced, not to be calculated. The third formula only requires that cost is calculated accurately. In the third formula, profit may be set by what is acceptable to the government so that if the producer needs a profit of 20 yen and the cost is 100 yen, then the price is set at 120 yen, even if the customers are not convinced.The second formula is the trickiest one.

The profit is moved to the other side of the equal sign and the sales price and cost are on the other side. The thinking here is that the costs cannot be reduced, so the value added must be increased, making a profit by producing luxury goods. The idea in the second formula is to shift to producing luxury products. This shift to producing higher-value-added products is a typical philosophy of economists.The first formula says that the sales price is already set.

So the producer must reduce cost, no matter what. The cost that is reduced is the profit that is generated. As a result, if a product that was costing 80 yen to produce can be produced with 50 yen and the sales price is 100 yen, you have earned a profit of 50 yen through your effort. You may be widely criticized if your profit is too great, but I think the first formula is the way to think about cost.But if you ask a mathematics teacher they will tell you that all three of these formulas are the same, and things will get confusing. Back in 1974 or 1975 an economics professor advised us, “Instead of producing such a high volume of cheap cars and being criticized by the United States, would it not be better to make luxury vehicles that could be more value added and possibly ten times more profitable? You could produce one-tenth the number of cars and still have greater profit.”My thought at the time was, “Economists sure do have a relaxed view of things.” His thinking was the second formula, not that the sales price is set by a third party, but that it is more profitable to sell a smaller number of a higher-priced products rather than a large volume of lower-priced products.

I suppose you can make an argument for anything and that you can use the same formula to come up with all kinds of ideas.We at Toyota, and particularly people involved in industrial engineering, use the thinking behind the first formula. We think, “How can we reduce cost?” Costs do not exist to be calculated; costs exist to be reduced. So the most important issue is to try various methods to see which ones reduce cost and which ones do not reduce cost.In our company we work hard at reducing labor hours. However, many people have the misconception that if you reduce labor hours, you reduce cost. This is a very common mistake for equipment investment, and this is a struggle for us. It is very difficult to persuade people to understand this.CHAPTER 13Improve Productivity Even with Reduced VolumesThese days in Japan, we have quite a surplus of rice. Since having too much rice was a problem and rice production needed to be decreased, a policy of acreage reduction was introduced.

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Recently rice paddies were also converted to other uses. The government paid farmers to plant things like reeds in the rice paddies so rice will not grow there. As a result farmers have money to spend on trips overseas, and Japan’s Agricultural Cooperative tour groups have become good customers for tourist industries in places like London and Paris.However, even after converting rice paddies there was still too much rice so cultivated acreage was reduced. This meant that the government instructed farmers not to use, for example, 10 percent of the rice paddy cultivated acreage.

The farmers were expected to produce 10 percent less rice, but the productivity of the remaining acreage actually increased by 10 percent and the actual production of rice did not change. They said, “We did not reduce enough cultivated acreage,” but they must have used pure mathematical calculations and ignored the idea of productivity. They wanted to reduce another 10 percent. They should have instructed the farms to reduce their output by 10 percent, regardless of what acreage they used to produce it, since the point was that there was too much rice being produced. But instead, since they instructed the farmers not to plant rice in some of their rice paddies, the farmers used the leftover rice seedlings to plant rice more densely in their rice paddies. So, of course, the productivity of their acreage increased.

This is proof that bureaucrats are not really concerned with productivity. Whether it is the Ministry of Agriculture, Forestry, and Fisheries or the Ministry of International Trade and Industry, they are all Japanese and they all think alike.The ministries say that structurally depressed industries should scrap the excess machinery. They say the excess machine capacity results in overproduction. Julia michaels album download. But if these companies scrap 10 percent of their bad machines and turn around to replace even half of these machines with new machines that can produce twice as much as the old machines, they are back to doing overproduction.The top executives in Japanese industry are all descendants of agricultural people, so this makes me think that I should be able to communicate with them.

There is no use in complaining quietly about this here, but we need to think more deeply about productivity. It is important to get rid of ideas such as “our productivity now is as good as it will get” and “cost will be reduced if we produce enough volume.”There is a cause and effect relationship between productivity and production volume that just cannot be cut off. There are many cases when the productivity improves because production volumes increase.

It may be getting difficult to improve productivity even with reduced volumes. When production volumes increase by 10 percent and you do the work with the same number of people, your productivity improves by 10 percent. Or if demand increases by 20 percent and you increase staffing by 10 percent and you sell 20 percent more, in effect you have increased your productivity by 10 percent. There are people all over the world who are able to do this, not just in Japan.Is there a way to improve productivity when we have zero growth and production volumes do not increase? In Japan we have full employment and cannot fire people so our hands are tied. It is only natural that when production volume decreases by 10 percent the productivity also decreases by 10 percent.Anyone can do what is natural.

Those companies that can do what is not natural, to improve productivity even with reduced volumes, or the companies that have these people with the eyes to find ways to do this, will be the companies that survive through recessions.I do not know if this is a good example, but let’s say that production volume is reduced by 10 percent. What would happen if we reduced the speed of our machines by 10 percent? The speed of the machines and the rotations of the motors have a relationship with electric power consumption such that the energy consumption is the square of the rotation of the motor. In general, they say that if you reduce the speed by 10 percent you will save energy by 20 percent. Or the reverse: if you increase the speed by 10 percent you will use 20 percent more energy. While this may be common knowledge, we all continue running the machines at the same speed even when volumes have been reduced.

When the volume has been reduced by 10 percent, if you can produce enough parts while reducing the machine speed by 10 percent, of course the electric power you need to pay for is reduced as a square of the speed reduced. Through efforts like these you can keep the costs from increasing, even if you keep the same number of people employed.Although unlike the United States we cannot easily lay people off and we keep our people employed, factories in Japan, depending on their size, have installed many labor-saving machines and equipment.

The forklift is a useful device. One of the Toyota group companies builds these products, so we would like people to buy many of them. Even many small companies today have one or two forklifts. Forklifts are advertised as allowing one person to move such and such kilograms or move products so many meters within so many minutes, or that young women can use them to stack items to a great height.Despite these benefits, if they are battery operated you need to charge these batteries, and if they have gasoline engines they need fuel. If you drive the forklifts the tires will wear.

So if you have reduced production volumes you should stop using forklifts and let the people who are idle due to the reduced volumes move materials by hand. Then you will save the maintenance and operating expense of the forklift and this will reduce cost.

This cost is much less than labor cost so there is less of a cost reduction than from a layoff, but if you fail to take advantage of these ideas because they are small, you are not being resourceful.One of these days, even automobiles may not sell so well. We realized this in 1974 so we began thinking about making the transportation lot sizes smaller. The demand for automobiles decreased a little in 1974 and then began growing again very strongly so no harm was done, but in today’s environment you never know when production volumes will be cut back. Believing that these years of reduced demand would come again, we began reducing the transportation lot size for materials. You can transport large pallets if you use forklifts, but in a weak economy you should not use them for transportation.

Containers should be changed to boxes that one person can transport. The container should be the size that can be transported manually on a push cart. Or, we can use the pallets we have today, but instead of unpacking and placing items on the pallet, we should stack the boxes on the pallet, only as many as one person can transport. We can use the pallets for the moment, and when the economy becomes weak we should stop using pallets and forklifts and instead carry the materials by hand.Even the pneumatic chucks that close when you turn a valve can be replaced by an idle worker who can turn a wrench by hand.

Using pneumatics requires an air compressor, which uses electricity, and if you shut it off, this will keep costs from rising. These types of small efforts will keep costs from going up even with reduced volumes.CHAPTER 16Old Man Sakichi Toyoda’s Jidoka 18 IdeaI graduated from Nagoya Technical High School in 1932.

This was shortly after the Manchurian Incident19 and the economy was extremely poor and there were not many places to find employment. As luck would have it Toyoda Boshoku20 hired me. This company made thread. Cotton thread was the most popular industry in Japan in those days, and as an export-oriented industry the competition was fierce.Toyoda Boshoku was a very tough employer and for the first three years of employment they paid hourly wages, making me do the same job as the workers in the factory.

After the third year I was put in charge of one of the spinning operations, with the title of kakari,21 as in head of maintenance or head of operations, and these were positions just below section manager.It just so happened that next door to Toyoda Boshoku was a company called Toyoda Automatic Loom Works where they built a machine they had invented. We used this machine to weave cloth. I worked in spinning and had never worked at building looms, but I realized the greatness of the invention of the automatic loom more and more as time went on.

Back in those days I thought it was not such a great invention, but I was new and working in entry-level positions so I was ignorant. That great invention was misused by the people of those times. There are some very good things about that invention, but they really did not use it well.We can say the same thing about the conveyors at the Ford Motor Company, but looking back these highly productive machines were used to make tremendous improvements in productivity using motor power for work that was done with our hands and feet prior to this invention. The most important part of this invention was that there was a device that automatically stopped the machine when the thread broke or ran out. Old Man Sakichi Toyoda called this device “jido,”22 or automation with the human element added.In the past, motorized looms were powered by belts turned by pulleys attached to one large motor or engine.

As small motors such as the five-horsepower or three-horsepower motor were invented, these motors were attached to the loom, one per machine. We used to call these “independent motors.” I think these somehow developed into the automatic looms, without the human element. Each loom has a power source and would keep spinning thread as long as the motor was running.The critical part of Old Man Sakichi’s invention was that the machine stopped when the thread broke, because when the thread breaks, the loom produces defects. Even if the thread broke, a machine will keep on spinning defective cloth if no action was taken. This cloth would be defective product. Although we now understand “automation with a human element” to be the avoidance of making defects, back in those days people only saw that it improved productivity tremendously and used it as a way to whip workers into making more product. They saw only that they could not make money unless they hurried to the machines that had stopped to connect the thread again.Since the machine would stop by itself and avoid making bad product, they should have thought about how to make thread that would not break.