Saturday, December 5, 2015

Did Ohno Miss Something?

“The basis of the Toyota production system is the absolute elimination of waste.” – Taiichi Ohno

Every now and then, I like to go back and reread books I’ve read in the past to be reminded of important points that I’ve either forgotten or just missed the first time around.  This is particularly true of books by, or related to W. Edwards Deming, Peter Drucker, and Taiichi Ohno.  Recently, I reread Ohno’s The Toyota Production System: Beyond Large-Scale Production.  Each time I read this book, I get a better understanding of the thinking behind the development of TPS, including how I can address a number of organizational problems I face that I’ve been unable to resolve.

This time around, though, there was one point that kept coming up and I couldn’t get past.  Throughout the book, Ohno repeats the idea the TPS is completely about eliminating waste.  The issue I had with this is that, in my experience, people who focus lean efforts only on waste tend to get overly focused on the tools and end up working a number of disconnected problems that result in little sustained improvement.

A more subtle message in the book that I don’t believe gets as much attention as the elimination of waste is the challenge that Kiichiro Toyoda put forth regarding the need to “catch up with America in three years.”  Ohno writes very fondly about Toyoda, including how important he was to Japanese industry and the development of TPS.  He credits Toyoda’s statement as being inspirational, but rather than being the drive for the development of TPS, translates it into a call for the elimination of waste.

So Much More than Waste

Perhaps Ohno’s view of waste is more complex than most people can truly comprehend, but I think that the message of using lean to reduce waste has gotten so watered down that most companies fail to achieve the big gains that a true transformation can achieve.

When the focus is waste reduction, lean can easily become a toolbox to reduce costs.  In my experience, every organization that turns its lean effort toward cost reduction fails to sustain the improvements and eventually drops the effort when something else draws its attention.

I contend that the focus of lean should be the company’s vision.  This assumes that the organization has a vision and that it’s truly inspirational.  In Toyota’s case, the vision was to catch up with America.  Other companies that have been successful with lean tend to have equally inspirational vision statements.

Deming said that a company’s vision is a value judgement and must include plans for the future.  This means that it includes much more than profits or share price.  It must relate to providing better and better value to the company’s stakeholders, including customers, employees, suppliers, the community, and shareholders.  It is the focus on improving the value to all stakeholders to a level never before achieved (or even conceived) that provides inspiration. 

When the organization has a clear statement that inspires people, lean becomes the vehicle to make it happen.  It provides a method for everyone in the organization to align efforts and work together to drive sustained and never-ending improvement.  The effort begins with the vision and translates it into more and more detail as it works through the company’s long-term objectives, annual plans, dashboards, meeting rhythm, and daily problem-solving. 

It is through the alignment of these efforts, beginning with a clear and inspirational vision, that lean enables innovation and an obsessive focus on closing the gaps that are truly important to the organization.  And when lean efforts are anchored by the vision, people will not be distracted by the numerous management fads that can derail the effort.

What Did Ohno Mean?

We’ll never get inside of Ohno’s head to understand whether or not the vision of catching up to America in three years is what truly inspired the development of TPS.  It is only my interpretation that the vision is what leads to sustained gains and what drives lean at Toyota.  Perhaps I’ll see this more clearly the next time I read the book . . . or perhaps I’ll find something else I completely missed this time.