Why The Obsession With Speed?

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Many years ago, I remember W. Edwards Deming questioning the obsession businesses had with speed.  I thought it was strange coming from the man who worked so closely with Toyota - the company that invented lean.  Wasn’t one of the main objectives of the Toyota Production System to reduce cycle times and make processes run faster?

I’ve thought about Deming’s question for many years and, after working with a variety of production and improvement systems, I finally came to the conclusion that Deming may have been referring to the idea that rhythm between processes is more critical than the speed of individual processes.

Rhythm vs. Speed

Companies put a lot of effort and focus on the speed and efficiency of processes.  People are measured and rewarded on their ability to speed up the processes with which they work.  As a result of this focus, we often end up with a completely unsynchronized production or service system, thereby increasing inventory and costs, and in most cases, slowing down the company, as a whole.

I have seen many instances where people pushed as much output as possible to the next step in the process in order to meet goals – even when the next step was not ready or able to handle the extra work.  As a result, teamwork breaks down, finger-pointing increases, WIP inventory increases, and quality decreases. A common response to the buildup of WIP in the system includes measures to attack the symptoms (e.g., the increased inventory), rather than the causes (lack of synchronization and poorly focused goals).

There is an optimal speed at which a process should operate in order to meet objectives (i.e., its takt time).  Achieving and sustaining takt time requires that every step in the process operate in rhythm with each other.  Any individual step in the process that produces in excess of takt time has a negative effect on the overall system, which is often as destructive as producing too slowly.  Whether the operation provides a product or service, the key is synchronization at the optimal pace.  Even ignoring the internal cost and cultural problems associated with a lack of synchronization, one has to question the practice of producing faster than customers want.

Although I'll never know, it could be that Deming was referring to the idea that synchronization of processes – and meeting takt time – is far better than increasing the speed of any individual process.  He may have been trying to teach the concept that, without a focus on rhythm, speed means nothing.

Toyota Bashing

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It seems we have a new pastime in this country: Toyota bashing.  It started when the first round of accelerator problems were announced and became a full-blown fad after the issue resulted in suspending sales of the company's most popular products.

Even Transportation Secretary Ray LaHood got into the act, saying that anyone who owns a Toyota vehicle should "stop driving it" (he later recanted his statement).  Call up virtually any news site today and there's a good chance you'll find something negative about Toyota.

I'm not here to downplay the seriousness of the accelerator problem.  The company deserves some of the criticism because of the massive scope of the problem.  We spend a lot of money on our cars and expect them to work safely and reliably.  Toyota's reputation for quality has also most likely contributed to the fallout in this situation.  They have been a hugely successful company for many years now and they have to take their licks just like any other company facing a massive recall.

The problem I'm having is that some of the criticism seems to be based on politics or ignorance rather than facts.

Lean is Not the Problem

The Wall Street Journal (WSJ) ran a story last week entitled, "How Lean Manufacturing Can Fail," claiming that the Toyota Production System contributed to the accelerator problem because of standardization of parts across models and a reduced number of suppliers.  I can see how someone who doesn't understand lean could think this, but the WSJ is a respected business news source and its reporters should know better.

Lean has been a key to the company's success (in terms of quality and profitability).  Standardizing parts across models - which, by the way is not just a "lean" concept - is what makes cars affordable.  It's the way the high volume automakers (as well as manufacturers in many other industries) do business.

Reducing the number of vendors also contributes to improved quality because it enables the company to work much more closely with each supplier.  Also, more suppliers means more variation in incoming products - thereby increasing assembly time and quality problems.

CEO Visibility

Another issue that's causing problems for Toyota is the lack of visibility of Akio Toyoda, the company's CEO.  Although I agree that this problem was large enough to warrant more media presence from Toyoda, it's really not how Japanese executives operate.

To demonstrate the difference between U.S. and foreign companies, how many people can name the CEO of Honda?  Volkswagen?  Total?  ING?  These are among the world's largest companies, but very few people can name their chief executives.  CEOs of foreign companies don't tend to grab the spotlight the way American executives do.  Toyota is learning a difficult lesson right now that Americans expect swift assurance from the chief executive that the problem is being resolved.

Japanese companies (especially Toyota) also tend to study problems methodically and do not jump to implement fixes until they feel they truly understand the causes.  Unfortunately, when we're talking about an issue like this, those using the product get very nervous about their personal safety while the problem is being analyzed.

Political?

My guess is that the media bashing is also heavily political, in nature.  American automakers have been beaten down so badly - mostly by Toyota - over the last several years that the buy American sentiment is driving many of the attacks. I guess we'll learn more about this when Volkswagen takes over as the world's number one automaker as a result of this crisis.

Several months ago, I wrote that Toyota had taken its eye off the ball and, as a result, problems were starting to surface (see Taking Your Eye Off the Ball).  It was evident to me back then that, in its push to supplant  General Motors as the world's largest automaker, Toyota seemed to forget what got them there in the first place.

I also wrote in the blog that it appeared that their problems were being addressed.  They have a new CEO and he seems to be refocusing the company on its fundamental purpose (to enrich society through carmaking).  I also don't believe that the bad habits the company developed had been around long enough to cause major damage to their culture.

My guess is that they will survive this slip-up and return to the number one spot over the next few years.  Toyota tends to be a very long-term focused company and I'm betting that they won't take short-term action that will result in hurting their future.  The company undoubtedly does not want anything like this to happen again, but if it does, they really need to channel their obsession with learning toward improving the way they deal with the American media.