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Lean Manufacturing - APICS discussion

Kaikaku discussions

7th commandment

From: Norman Bodek
Sent: November 07, 2004

Dear Group,

The 7th Commandment of Kaikaku from Hirano is: "Problems give you a chance to use your brains."

Over 100 years ago Frederick Taylor and Frank and Lillian Gilbreth's created Scientific Management and the Division of Labor reversing the very nature of work. Prior to them workers had great variability at work. People developed and practiced their skills. A carpenter building a chair would pick out the wood, help design the product, cut the wood, carved the wood, polished the wood, nailed it, stained it and might have presented it to the customer. Work was filled with many creative opportunities. But with the Division of Labor workers now only repeated over and over again the same process day after day. Work became boring and repetitive. People were no longer fulfilled at work, no longer trusted to use their brains to solve problems. Problem solving became the job of the supervisor and the manager.

Of course, Scientific Management allowed industry to become much more productive and brought great wealth to Henry Ford and others. It enriched our lives at home and gave us "deadly" lives at work.

Toyota and other Japanese companies, once again studying early American industry, changed all of that and asked their workers to bring their "brains," to work. They went back and studied Kodak's suggestion system and updated it. While the average American company with a suggestion system received only one idea per worker every seven years, Japanese companies were getting on the average two ideas per worker per month. While we looked at our workers as "Drones," the Japanese were creating a much more humane working place, fulfilling people and also saving on the average over $3,000 per year per worker from the workers own ideas.

Toyota's real power with Lean is Jidoka allowing the workers to stop the line and use their brains to solve problems. Last week I was in Georgetown, Kentucky; visited the Toyota plant and was told that the line stops 5000 times a day asking workers to solve problems. Only around 300 of those stoppages affect the takt time but lost time is made up before the end of the day.

Fortunately, the adoption of lean is also fostering Quick and Easy Kaizen and American companies are starting to ask their workers for their ideas on how to solve problems in their work area.

Dana Corporation for years has been receiving over two ideas per worker per month. Technicolor has launched an idea process to tap into their workers and has been receiving enormous rewards from it.

"Lean buying-in also was bolstered by good relations with rank-and-file workers at the plant, as evidenced by the facility's subsequent ability to post impressive gains in employee involvement. In addition to the 40 hr of annual training per employee since 1997, the unit has averaged 21 kaizen ideas submitted per employee since 1997. Annual savings per employee is $4285, at a cost of $204 per kaizen idea since 1997. The idea implementation rate is 95%, and safety incidents declined 86% since 1999. Incident rate has fallen 48% since 2002, and the lost-time rate/hrs has dropped 60% since 2002. The plant's successes have earned more than the Shingo award, as it has been recognized as a Ford Q1 supplier, a Ford Full-Service Supplier, and a four-time recipient of the State of Indiana Quality Improvement Award."

Hirano is telling us if you want to be competitive and Lean you must allow all of your workers to be involved in problem solving activities. I recommend that you have people both involved in quality circles activities and also in Quick and Easy Kaizen. In fact, the word Kaizen really means small ideas from all workers. We use Kaizen in "Kaizen Blitz," but Kaikaku is really a Kaizen Blitz - a radical change. You must do both.

I do hope you like my weekly postings. I would love to get more feedback from you.

Best regards,

Norman Bodek

From: Steve Feller
Sent: November 11, 2004

If Toyota saves so much money per year, per employee, why are their vehicles so much more expensive than other brands? Over the years, I have done much comparison shopping, and constantly find Toyota products much more expensive. Yes, I know the argument about quality, but I don't usually keep any vehicles long enough to test that proposition, so the price issue becomes much more relevant to me than the "higher" Toyota quality. I have long since purchased another vehicle before quality became an issue on the last vehicle. I happen to like the variety available to me. For example, I have now driven a Mitsubishi Eclipse for 3 years (no quality issues) only brake pad replacement, and next year plan to purchase another vehicle, which I have not yet decided upon, but since my price shopping always shows Toyota to be more expensive, I will probably ignore them this time.

From: Debra Lemore
Sent: November 11, 2004

From a corporation view, they money they save should be able to be channeled to the employees and share holders. Hopefully the worker bees are realizing the benefits of the production cost savings and not just the upper echelon.

And then some of us are just die hard Toyota fans. When I can drive a car 100,000+ miles without any major repairs, I don't lament over the price I paid, especially, if I can purchase a used car, saving the new car price. Totally off the Lean Sig subject I realize.

From: Chet Frame
Sent: November 11, 2004

In CIRM we learn that price and cost are not necessarily synchronized. The perception of better quality allows for higher pricing. The delta between price and cost is converted into shareholder equity. They got to this point because of the work done years ago. Many of us are interested in that work to learn what we can do to provide our companies with similar impetus for the next fifty years.

Chet Frame
El Paso/Juárez Chapter

From: Kevin B. Falenda
Sent: November 11, 2004

Hi Steve/all,
Steve with regards to your comments, don't forget the age old Marketing  axiom, "Charge what the market will bear!". People are buying Toyota  products at an alarming rate (I believe Camry recently became the number 1 sold vehicle in North America - a first for Toyota ever) and even if they are more expensive. As a manufacturer, if the customer will buy, why not make the profit? Also, check out the resale value of a Toyota vehicle compared to any domestic product and you'll have another reason why Toyota is coveted by many.

Also, something that I've been wrestling with in my "Lean Journey Belief System" - if myself and others in this SIG are truly pursing North for our companies with passion and our belief that it will provide the huge gains that we have seen and experienced, then why wouldn't we do so in our personal lives (insert plug for Tony Robbins here)? Hence, why wouldn't we buy a product/vehicle from the Grand Masters of Lean? It should be a no-brainer decision. All the best!

Yours truly,

Kevin B. Falenda, C.E.T.