Evolving Excellence

A Discussion with Masaaki Imai

Ron Pereira at Gemba Academy recently had the opportunity to sit down with Masaaki Imai, the fascinating founder of the Kaizen Institute and author of Kaizen: The Key to Japan's Competitive Success.  The discussion was recorded in full HD, one part of which is below.

In this video you’ll hear about Mr. Imai’s personal encounters with Kiichiro Toyoda and Taiichi Ohno… including a surprise story about Mr. Ohno rarely (if ever?) told before.  Be sure to listen to the end as that is where Mr. Imai let’s the “cat” out of the bag!

This 5 part 40+ minute interview is included in Gemba Academy's Complete Lean Package which currently consists of 165 lean training videos and continues to expand each month. 

We also captured additional video of Mr. Imai conducting a gemba walk and delivering a 45 minute lecture on Kaizen Leadership… all of this video footage will be included in the Complete Lean Package in the near future at no additional cost.

Click “480p” at the bottom of the video for a sharper picture or 720p for full HD!

Not another outsourcing lemming

With all the grief that Bill and Kevin give the US government about its misguided interventions in the free market (quite often deservedly), it's also important to note when the government should be more activist in order to help rebuild American manufacturing.

In today's NY Times Tom Friedman tells a disheartening story about Applied Materials. Since 2004 they set up 14 factories to manufacture the machines that make solar panels. Unfortunately,

Not a single one is in America.

Let’s see: five are in Germany, four are in China, one is in Spain, one is in India, one is in Italy, one is in Taiwan and one is even in Abu Dhabi. I suggested a new company motto for Applied Materials’s solar business: “Invented here, sold there.”

As a result,

our federal and state subsidies for installing solar systems are largely paying for the cost of importing solar panels made in China, by Chinese workers, using hi-tech manufacturing equipment invented in America.

Friedman doesn't consider Applied Materials an outsourcing lemming. As he says, in reference to the company's new research center opening in China, "Gotta go where the customers are." He lays the blame at the feet of the US government:

The reason that all these other countries are building solar-panel industries today is because most of their governments have put in place the three perquisites for growing a renewable energy industry: 1) any business or homeowner can generate solar energy; 2) if they decide to do so, the power utility has to connect them to the grid; and 3) the utility has to buy the power for a predictable period at a price that is a no-brainer good deal for the family or business putting the solar panels on their rooftop.

Unfortunately, the fragmented and stuttering solar subsidies in the US make those three requirements far from certain. And that makes it financially impractical for Applied Materials to build a factory here.

I know that many people don't think that the government has a role to play in industrial policy. But we wouldn't have today's computer industry if the government (NASA and the Air Force) in the 1960s didn't commit to buying all the semiconductors from no matter how expensive. We wouldn't have the internet if it weren't for DARPA. Hell, we wouldn't have an interstate highway system that allows for inexpensive and rapid transport of goods if it weren't for the government.

So, if it's fair to attack the government for its stupid market interventions, it's also fair to give credit when its due. Its also important to point out places where some intervention would be a good thing. Even if solar power isn't yet cost effective compared to fossil fuels, it will be eventually. And it would be good to have those jobs -- and those manufacturing skills -- here.

da Vinci - The First Lean Thinker?

I've been reading a fascinating book titled How to Think Like Leonardo da Vinci: Seven Steps to Genius Every Day.  I originally picked it up to learn more about the guy, but it really isn't that great of a historical text.  However the analysis of da Vinci's thought and analytical style was great.  There are even a few exercises to develop that style, and apparently an accompanying workbook.

Author Michael Gelb's seven steps to da Vinci genius are:

• Curiosita: An insatiably curious approach to life.
• Dimonstratzione: A commitment to test knowledge through experience.
• Sensazione: The continual refinement of the senses, especially sight, as the means to clarify experience.
• Sfumato: A willingness to embrace ambiguity, paradox, and uncertainty.
• Arte/Scienza: The development of the balance between science and art, logic and imagination ("whole-brain thinking").
• Corporalita: The cultivation of ambidexterity, fitness, and poise.
• Connessione: A recognition and appreciation for the connectedness of all things and phenomena; "systems thinking."

Sound familiar?  Think about the lean manufacturing analogies.

• Curiosity and testing knowledge through experience... going to the gemba. 
• Using sight as the means to clarify experience... visual factory and 5S.
• Embracing paradox... the counterintuitiveness of pull manufacturing and one piece flow.
• Ambidexterity... cross training.
• The connectedness of all things... the value stream.

Was Leonardo da Vinci an early lean thinker?

Lean Green Bubbles

Joel Makower is a frequent writer on green business issues, and a year ago Superfactory even published one of his articles on the lean, green supply chain.  A couple days ago he posted a new article on his blog, reprinted in CNN Money, asking if we've reached a green "tipping point."  Have we reached the point where green business priorities are sustainable, or can they still revert backwards with a bursting bubble?

Where are we, exactly, in the trajectory of green business? Things seem to have changed decidedly in the past six to twelve months, as more and more companies do more and more things. But what should we make of it?  Two questions keep popping up from reporters: Is there a green business bubble? And have we achieved a tipping point?

He then draws a very interesting analogy... to the quality movement and lean manufacturing.

The quality movement of yore represents a good analogy. During the late 1980s and early 1990s, "total quality management," popularized by American statistician W. Edwards Deming, was the rage.

But when TQM faded from the limelight and the business media turned its collective gaze elsewhere, quality didn't go away; companies didn't revert to their old, inefficient ways. Quality became part of the fabric, eventually showing up in the form of six sigma, lean manufacturing, just-in-time inventory, and other business processes and strategies.

Really?  Perhaps.  Quality management and lean manufacturing are fragile, as we discussed a couple months ago when telling you about the sad story of Wiremold.  As much as we'd like to think that a culture change and dramatic results can create a self-sustaining lean environment, a simple change in top management can quickly wreak havoc.

But at the same time lean methods are rapidly becoming almost required for business success, the new entry barrier for basic competition.  Many companies are going lean to stay competitive, such as the many examples of U.S.-based companies using lean to compete against offshore or outsourced operations.  However in more and more cases those offshore companies are also diving into lean, therefore the competitive bar continues to raise... and fast.  Quite bluntly, traditionallly-managed companies don't stand much of a chance, and complaining may score political points but won't save you in the long run.

But back to Makower's thoughts on the green tipping point...

So, too, with the greening of business. Yes, some green products and companies will, inevitably, fail or lose favor. But the hardcore (and largely unsexy) stuff -- energy efficiency, waste reduction, pollution prevention, supply-chain management, environmental reporting, etc. -- will be around in one form or another for decades.

Many of my colleagues seem downright tipsy. "We've finally reached a tipping point!" they proclaim.  Have we? Not even close.

Just when you thought he was arguing that we had reached a tipping point, he throws in that humdinger.  Why?

The virus called "green business" has not hit critical mass. The number of large companies that have embraced sustainability as a core business strategy remains small -- no more than a dozen of the Fortune 500, if that.

Far smaller number than I thought, but that's where perception diverges with reality.

True, more companies are paying attention. From where I sit, it seems as if nearly every company is asking some form of the question, "What's our green strategy?" They don't necessarily understand what that means, but they know they need one. And that's a sea change.   And small and midsized companies -- 98 percent of all firms in the U.S. (and probably most other countries) have fewer than 100 employees -- remain largely uninvolved.

But as he mentions, the simple fact that they are asking they questions and beginning to feel the groundswell of the all-powerful market demanding green initiatives, is important.  Real green programs, just like real lean programs, remove waste from the value stream.Makower's analogy with lean manufacturing may be more correct that he initially surmised.  Green programs themselves may be fragile, but the time will come when the market will demand them, with real results, and then being green will be a fundamental barrier to entry to play the competitive game. 

And I expect that just as with today's changing competitive landscape there will be organizations that want to simply whine and complain instead of focusing on competing.  And like today, they will fail.

Taiichi Ohno's Workplace Management

It's rather rare that I write about books I've read or recommend, but this is an appropriate occasion.   Gemba Press is now shipping Workplace Management, originally authored by Taiichi Ohno with this edition translated by fellow blogger Jon Miller.

Jon was nice enough to send me a pre-release copy of the book a few months ago, which I read while soaking up some rays on a deserted beach in Belize in late February.  I had to apologize to Jon for returning a book to him that, in addition to some comments, was filled with sand.

My very first impression of the book, after reading perhaps 20 of the 140 pages, was that it was rather dry.  But then something happened... I started to feel like Mr. Ohno was actually talking to me.  You could really feel his wisdom and power, and at the risk of being lumped in with some of those folks that really have turned lean into a religion, I felt humbled by his words. 

Corny?  Perhaps.  However I feel the same way when I'm lucky enough to talk to someone obviously more intelligent and driven than I am. My feelings are apparently not unique.  Our friend Ron over at the Lean Six Sigma Academy blog had similar thoughts today.  Like Ron I also had to read the book again, and again.  Each time I dug up more nuggets of wisdom.  The reading can be a little dry, a little unpolished, but it's still better than most of the other translations of books from the original Japanese masters.

If you want a fairly quick read (although you'll end up reading it multiple times) that puts you in almost direct contact with the original core concepts of lean, then order a copy of this book.

PS: We'll try not to ding Jon for using batch manufacturing/printing for his book, which created some problems... even though the nice lean print-on-demand process we used for our book worked so well!  Ok, that was a ding, but a friendly one!   

A Historical Perspective on Waste

Our friend Bob Emiliani won a Shingo Prize for his book Better Thinking, Better Results, and he has contributed many thought-provoking articles to Superfactory.  This month we published his article titled The Tragedy of Waste, which also was added to our History of Excellence section.  I'd encourage you to take a look at the growing "Timeline of Manufacturing Excellence" that appears on that page.

Many of us know at least a little about early lean history, such as Henry Ford's book Today and Tomorrow from 1926 that discussed waste and influenced the thinking of Taiichi Ohno.  Stuart Chase wrote a book a year earlier titled The Tragedy of Waste that Henry Ford probably read.  Bob Emiliani does an excellent job of dissecting Chase's work and showing how it influenced nascent lean thinking.

Chase's interest in waste began with the observation that at the beginning of World War I almost 25% of the workforce was displaced to fight within a very short time period... just a few months.  Traditional thinking would predict that the nation's productive output would also fall, but in fact it did the opposite... it actually increased. 

Chase attributes this to a combination of "the danger factor" and the sudden labor shortage driving a requirement for the shortest and most straight line process.  Current day lean companies such as Toyota are always aware of "the danger"... the competition, and never rest on their laurels even when they're number one in their industry.  if you can increase output with a 25% labor reduction, especially on a macro level, it's pretty obvious how much of the original process was waste of some form or another.

Whereas Ohno talks about the "seven wastes," Chase identifies four major types of waste:

1. Wastes in consumption
2. Idle man-power
3. Wastes in technique
4. Wastes of natural resources

He takes a specific aim at the "overhead professions," and in particular calls advertising "the life blood of quackery."  However he does advocate the education of the consumer, which led him to be one of the founders of Consumer Research in 1929, which eventually became Consumer Reports.

Take a look at Bob Emiliani's article to learn more about what Chase thought of line balancing, process variation, and even the psycho/social and political aspects of waste.  Luke Van Dongen at the Lean Blog has also written a great Q&A with Bob Emiliani on the article.

Much Ado About Shingo and Ohno

Those of you that subscribe to the monthly Superfactory e-Newsletter have probably been following an interesting debate in the Historical Persective section, which is also in the History of Excellence section of Superfactory. 

Before I go further, I want to emphasize that from a lean transformation perspective this debate is pretty inconsequential and unimportant.  It is far more important to focus on the future and work on continuous improvement.  But for some of us history junkies, this is still interesting.

One of the reasons the debate has become so popular is because it is between two heavyweights in the lean world, both of whom are regular contributors to Superfactory... Norman Bodek (publisher and author of many award-winning books on lean and the original English translations of texts by Shingo and Ohno), and Art Smalley (author of many important articles and books as well as also a Shingo Prize winner).  Both of these guys know their stuff, have spent considerable time in Japan, and have actually worked with the founders of TPS.

Up until recently most of us have taken for granted that Shingo was responsible for the Toyota Development System and the early refinement of that philosophy, and that Ohno was responsible for executing the system. 

Art Smalley stirred things up a bit when he published an article on Superfactory last April entitled Shingo's Influence on TPS, which was based on an interview with Isao Kato, a 35-year executive within Toyota.  From his perspective Shingo was a consultant who taught an industrial engineering course (the "P-Course") to several thousand Toyota team members.  But he didn't create TPS.  In fact, Mr. Kato finds it puzzling why Shingo is so revered in North America.  This suprised even Art Smalley at the time, so he did considerable additional research, and those notes are at the bottom of his article.

Norman Bodek has a different point of view, to put it politely, and wrote a counterpoint article for the June newsletter entitled Shingo: The Greatest Manufacturing Consultant.  From his perspective, based in part on first-hand experience, Shingo gave birth to the new industrial engineering concepts that then gave birth to lean and the Toyota Production System.  Shingo was the genius, and Ohno was the Toyota employee charged with implementing his ideas. 

To help clarify things, Art asked Isao Kato himself to write an article for the July newsletter, entitled Shingo's P-Course and Contribution to TPS, where Mr. Kato elaborates on some of the points he made during his interview with Art.  Specifically he provides a detailed outline of the four-week P-Course taught by Shingo, which shows general industrial engineering topics.  He also discusses how Shingo typically looked at manufacturing from an individual process perspective, while Ohno kept a top management viewpoint of the overall production process.  He also points out that Ohno also did not invent TPS... many of the concepts had already been developed in the early engine plants... and that Shingo was rather critical of those concepts early on.

Art, ever the historical fact-checker, dived into those claims yet again and wrote what he called a Brief Investigation into the Origins of the Toyota Production System.  Be careful... that "brief" investigation resulted in a 1.2 megabyte file, complete with photos of old original texts, Japanese translation, and the like.  A couple highlights are quotes from Shingo himself saying that Ohno invented TPS and the inconsistencies with who invented SMED.

The reality is that both Shingo and Ohno played huge roles in the development, implementation and communication of the Toyota Production System and eventually Lean.  Those accomplishments cannot be belittled by minor points of contention or interpretation.  And it's on the shoulders of those great men that today's thought leaders, like Norman Bodek and Art Smalley, stand.

Perhaps it's just another case of the chicken or the egg.  It doesn't change the fact that implementing real lean can drive incredible success.

Life, Liberty and the Pursuit of Manufacturing

The founders of the United States demonstrated quite a bit of wisdom in many areas and it is fitting that one of our our most widely, happily and passionately celebrated holidays is the anniversary of their courage and accomplishments.  Little known, however, is that manufacturing was squarely in the center of the agenda for the American Revolution.

Everyone seems to be wringing their hands over globalization these days as if it is some new phenomena, thrust on the world as a result of the internet and telecommunications.  I am often amused at how our collective ignorance of history and self-centered culture leads us to believe that everything that happens in our world is entirely new, and is the biggest, worst, most stressful, greatest or some other 'est' that has ever happened.  It is rarely true.  The guy who wrote The World Is Flat is an excellent case in point.  According to him we entered into a whole new economic era driven by globalization in about 2000.  In truth, absolutely nothing happened in 2000 - or at any other time in the last 100 years that comes close to the globalization challenge British manufacturing faced prior to the American Revolution.

The economic idea behind Great Britain's colonization of the world was a quest for raw materials.  Colonize North America, have the settlers harvest wood, tobacco, animal pelts and just about anything else that could be found, ship it to England where the British manufacturers could make it into something useful, then sell it to the rest of the world.  That was the grand scheme.  The fly in the ointment was that the pesky colonists kept setting up factories of their own to make things out of the raw materials, cutting the factory owners in England out of the supply chains.  British manufacturing found itself in the crosshairs of globalization pressure such as had never before existed in history.

Just like they do today, business owners tried to overcome poor logistics and lousy cost structures by government fiat.  A series of laws were passed in England aimed at stifling American manufacturing, and especially trying to put a stop to colonial manufacturing for export.  Textiles were especially nettlesome.  The British wanted a sheep to be sheared in Massachusetts, the wool to be shipped to England and made into a shirt or whatever, then the shirt shipped back to Massachusetts and sold to the guy who had sheared the sheep.  The folks in Massachusetts had a different idea - namely cutting out the middle men and eliminating the waste of all that back and forth across the Atlantic Ocean.  For exactly the same reason Toyota builds cars in the U.S. for the U.S. market and in Europe for the European market, the only sensible place to manufacture goods for the colonies was in the colonies.

At any rate, people in the colonies signed up to fight in the Continental Army against the British for a lot of different reasons, but quite a few of them were motivated by what they believed to be a God given right to manufacture without the imposition of regulations and taxes imposed by the British government in their misguided attempt to protect their manufacturing base from globalization.

In retrospect, British manufacturers would have been far better off had they invested in manufacturing in their colonies - especially in North America - and pursued a strategy of manufacturing close to the customer.

The manufacturing and logistics lessons from history are clear, and the internet has not changed any of the fundamentals.  It is dumb to manufacture goods in England for customers in the U.S.; it is dumb to manufacture goods in the U.S. for customers in Asia; and it is dumb to manufacture goods in India or China for customers in England or the U.S.  Local manufacturing inherently has a shorter cycle time and less waste in the process, and - convoluted economic theories be damned - it always prevails because it is always the highest value proposition.

The moral of the story - when you hoist a cold one to salute the founding fathers today, don't forget to salute the folks who fought and died to protect your right to fire up those hot dogs and hamburgers on an American made Weber Grill.

Strategy Is For Amateurs

American manufacturing has thrived for a mighty long time by standing on the shoulders of some incredible civil engineering. Not a whole lot of people really appreciate that – although I suspect no one in the military takes American civil engineering for granted.

Eisenhower said, "You will not find it difficult to prove that battles, campaigns, and even wars have been won or lost primarily because of logistics."   And logistics is won or lost with civil engineering.

I bring this up because of the number of manufacturers who ignore the old military maxim – ‘Amateurs study strategy while professionals study logistics’ – in launching their offshore outsourcing strategies, only to be undermined by poor logistics.

Next Thursday is the 151^st anniversary of the first ship – the steamer Illinois – to pass through the Soo Locks, connecting Lake Superior with the lower Great Lakes. More important, the locks connected the vast iron ore ranges in Minnesota with the coal fields of Pennsylvania and West Virginia, making the steel industry what it is, and with it the auto industry. Better than 11,000 boats (they don’t call them ‘ships’ on the Great Lakes even though some of them like the Walter J. McCarthy make the Titanic look small by comparison) will haul over 90 million tons of cargo through the locks this year.

A week later, on June 29, the 50^th anniversary of the signing of the Federal Highway Act of 1956 will take place. Eisenhower was the driving force for it, along with the auto makers, and it is an overblown version of Germany’s autobahn which very much impressed the General during WWII. It has almost 50,000 miles of at least four lane highway connecting the entire continental US – the autobahn X 7. When the last traffic light was removed from I-90 in Wallace, Idaho fifteen years ago, it became possible to move any load between any two major point in the U.S. without stopping.

And less than two weeks from now, July 1 marks the 144^th anniversary of the date Abraham Lincoln signed the Pacific Railway Act, authorizing the Union Pacific Railroad to start at Omaha and build west, and the Central Pacific Railroad to start at Sacramento and build east, racing to meet each other. They built almost 700 miles of railroad through and over mountains and deserts, connecting California with the east.

These were all engineering projects of staggering proportions, that are largely taken for granted today. The idea that any load of anything – no matter the size or the weight – can be moved from anywhere to anywhere in the United States cheaply and in a matter of days has been a fact of manufacturing life for so long that we often fail to appreciate our incredible logistical resource.

The Egyptians devoted their engineering resources to pyramids and the Chinese built their Great Wall. I don’t want to take anything away from either incredible feat or to demean their cultural priorities, but the great economic empires were built when engineering was devoted to transportation and logistics - the Roman road and bridge network that crisscrossed Europe and the Middle East, the British maritime investment that ruled the seas, and the American transportation system that will be celebrated in the next few weeks.

Before packing up and heading for China, India, Viet Nam, Malaysia or Brazil to cash in on all of that cheap labor, an executive with an outsourcing strategy would be wise to think long and hard about the implications of doing business outside of the most effective logistical infrastructure the world has ever seen. Give some thought to why the military folks know very well that a strategy is easy to devise, but the logistics to pull it off are often anything but easy.

Creating Historical Balance

Each quarter for the past 20+ years I've received the alumni magazine from my alma mater.  Each time I usually read the class notes section first... who's doing what from my class and others.  For the first few years I was mostly interested who was getting hitched and having kids, then for a few more years I was comparing my career against my classmates.  That soon passed and then I was simply curious about what interesting places people were visiting.  Lately I've been watching old classmates transition out of traditional careers to enjoy hobbies.  Some are lucky enough to no longer need the income, and some are lucky enough to derive enough income from their hobby or passion.  And some are passionate enough to make their career their hobby.

And I read about alumni passing on.  The memoriam section is always sobering.  Many have had healthy and fruitful lives.  Some haven't been so lucky.  I distinctly remember reading the issue after 9/11 and seeing the names of a couple people I vaguely recalled from classroom days.  Life can be fragile.  When I read about the accomplishments of some of the old-timers, I wonder what could have become of the classmates that left too soon.

The ones that have been lucky seem to be amazingly well-rounded.  Alfred Jenny '34, a retired GE engineer... and pianist.  Nathaniel Owen '34, another GE veteran... and woodworker.  James Ayres '41, explosives engineer... and accomplished musician and conductor.  Looking through the stories of active alumni I find a winemaker, several musicians, aging athletes, and world travelers.  And of course several writers, although the tomes that come from engineering school grads have exciting titles like Fundamentals of Industrial Catalytic Processes and Assembly Language and Computer Architecture Using C++ and Java.  The Lunar Orbiter Photographic Atlas of the Near Side of the Moon might make for an interesting coffee table book.  And the scary thing is that some of those books have a higher Amazon rank than many well-known lean manufacturing books.  As someone who's also working on a book project, I'm fascinated by how some people provide innovative insight into such narrow niche subjects.

Ok I can see the glazed eyes rolling, so it's time to tie this post to something at least obliquely related to manufacturing.  Therefore two points. 

First, when I look at the oldest active alumni, from class years in the 1930's, I can't help but wonder what manufacturing was like back then.  One talks about his years running a furniture manufacturing business.  What was that like in the 1930's?  Another worked on the world's largest waterwheel in upstate New York... still a competitive alternative to steam engines at the time.  And another writes about when he met Albert Einstein in 1939 while building and installing "advanced meterology equipment" at Newark Airport.  Production planning before computers.  Sometimes I wonder if we should ditch MRP and go back to those methods.

Taking a look at Superfactory's History of Excellence timeline and we see that Kiichiro Toyoda is just starting to implement just in time at the Koromo / Honsha plant, the German aircraft industry is pioneering takt time, and Juran is dreaming up the pareto principle.  Consolidated Aircraft has just about figured out how to build one B-24 bomber per day, and Ford's Charles Sorensen is looking at that operation... and in less than four years will be cranking out one B-24 per hour at Willow Run.  Exciting, and deadly, times.

The second point is the influence we can have on future generations.  Some of these old-timers had a knack (dare I say passion?) for procreating... one has 63 total offspring to his credit when adding up all the generations he spawned.  Many of those kids have also gone to the same engineering school... a testament to the importance ole great-granddad placed on a technical education.  Hopefully some of them will spend some time in a real-world factory instead of rushing off to chase the quick buck of consulting with no real experience.  We have a responsibility to continually teach the importance of real manufacturing, real leadership, and real innovation.  To our offspring, as well as to those around us.  Most of the people reading this blog really get it, and it's up to us.

Ok, time to end the nostalgia.