| The Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) issued their release of the study performed in conjunction with NASA engineers with regards to the safety of Toyota vehicles with regards to the potential causes of sudden unintended acceleration. The finding was a positive one for Toyota. The results of a ten-month study by 30 NASA engineers of possible electronic causes of unintended acceleration in Toyota vehicles was released today by the U.S. Department of Transportation (DOT). “NASA found no evidence that a malfunction in electronics caused large unintended accelerations,” said Michael Kirsch,principal engineer and team lead of the study from the NASA Engineering and Safety Center (NESC) based at NASA’s Langley Research Center in Hampton,Va.
For those interested in the details a 180 page pdf file of the report is online at this location as well as the shorter executive summary. http://www.nasa.gov/topics/nasalife/features/nesc-toyota-study.html This is certainly positive news for Toyota and owners of Toyota vehicles. From what I understand Toyota was confident that this would be the result but no amount of internal claims will convince the public in such a case which also deals with the court of public opinion. Toyota did of course have problems with sticky pedals and floor mat problems and that is not covered by this report which was the more serious of the technical issues. Countermeasures were put in place for the other problems already. So are Toyota’s troubles all clear? The NASA finding is positive news for the company but it will take time before the court of public opinion settles down. Any small mistake will be jumped upon by the press for some time now. That is the price you pay when things like this happen regardless of the facts of the matter. Only time and future performance will tell if Toyota maintains its reputation for quality. In some ways shocks to the system can be beneficial. If this makes Toyota improve its efforts in product design and quality control even further then there will be a silver lining to this painful set of events. I can’t predict the future any better than the next person but I am fairly confident in the case of Toyota. The company has over come obstacles in the past and will most likely do so again in the future. Some things of note about this set of events is that despite the bad publicity and arguably poor handing of public relations in the media,Toyota stayed true to the concepts of Respect for People and Continuous Improvement. Whatever mistakes were made (and there are always problems and mistakes made in any organization) Toyota was certainly not engaged in any intentionally malicious behavior. Respect for the customer still is what the drives the company to perform. Secondly inside of their Continuous Improvement pillar Toyota always preaches “Genchi Genbutsu” or get the facts from the actual location and the actual source. In this case the facts all came out and Toyota looks exonerated. That is part of the nature of improvement in science and engineering. The court of public opinion is swift,unkind,and often mistaken. In the end the truth appears to have come out and is not as bad as many implied. When it comes to safety however there is no acceptable level of mistakes and Toyota realizes this reality. Toyota will reflect and learn from this case and make further countermeasures in product design,development,and testing. Historically Toyota Motor Corporation has been a very profitable company over the past 60 years in what is generally a very cyclical business. Before its recent problems Toyota was racking up annual profits for several years in the $15 Billion + range and had not reported an annual loss since the early 1950′s. Various problems and the global economic slowdown brought those numbers to a grinding halt in 2010 but the figures appear to be picking up again it seems. Regardless the question remains why does (or did) Toyota produce such great financial results and in contrast why do other companies attempting lean not see similar financial results. Orry Fiume gives some excellent insight from his valuable perspective as do other responders to the question. I will try and add some other reasons however from my perspective. For starters most companies attempting lean are just not as proficient as Toyota in their efforts. Like many a golfer who tried to emulate Jack Nicklaus or Tiger Woods it seems easy until you pick up the golf club and try to hit it. Then you find out rather quickly that real hard work,skill,and discipline are required to become proficient in the task and not everyone will be as successful as the best in the world. With coaching,good equipment,effort,and practice everyone can improve. It is just a question of how much. Secondly the companies that I often observe tell me they are doing “Lean” and that it is modeled after the Toyota Production System. Unfortunately there is often little resemblance in the actions I observe and what really transpired in Toyota. There is simply too much emphasis on drafting superficial items or tools that look good on paper i.e. value stream maps,standardized work,or A3 reports and too little emphasis on obtaining results through targeted activities. Rather than applying the window dressing I tell clients to get to 100% schedule attainment (then do it with fewer resources),100% on-time delivery (then cut the lead-time),100% availability (at least on critical equipment),and 100% quality (no excuses). Yes it is hard work and perhaps impossible to some extent however unless that sort of directional effort and achievement occurs you won’t see the operational results that Toyota achieved. Thirdly the other problem I observe is that Lean is primarily only practiced in production environments. That is a fine place to start just as Toyota did decades ago. However up to 70% of the cost of an item can be locked in during the design phase according to various experts. You won’t achieve large financial impact unless this big piece of the puzzle is analyzed and improved continuously and Toyota does an excellent job in this area. Toyota practices Target Costing and Kaizen Costing for the life cycle of a vehicle. Over the course of the product life from inception to the end of production different activities occur in design,procurement,and manufacturing to reduce cost. Some of the activities fall under the domain of Value Analysis (VA) activities after production starts. Other extremely important actions occur through on-going Value Engineering (VE) or Value Improvement (VI) activities which start before production ever occurs. The combined effect of these activities across the life cycle of a program from design to final production in addition to all the efforts occurring in the plants are why Toyota was so profitable. You just can’t hang up a standardized work chart,draw a value stream map,and throw out a few kanban in an attempt to obtain financial results. It just is not that simple despite what you sometimes hear or read from various parties. Too many efforts on lean that I observe are both piecemeal in nature and minimal in scope in comparison to Toyota’s historical efforts. Prof. Yasuhiro Monden and Prof. Kazuki Hamada do a nice job of articulating some of the key points in Toyota’s Target Costing System in book entitled “Toyota Management System:Linking the Seven Key Functional Areas”. The information is outdated now by about two decades however the main points are still on track. You can see the scope of the actions outlined in the following graphic.
 In the text of the book the authors talk about the basics of Target Costing (Toyota calls it Genka Kikaku) and Kaizen Costing (Genka Kaizen). Toyota puts a lot of work into managing the planned versus actual costs associated with a vehicle. Just like every second is watched on the shop floor every dollar in a component is analyzed for improvement in vehicles as well. Sometimes this topic mistakenly turns into a narrow question of accounting principles but that dialogue usually missed the point from my experiences with Toyota. Just switching to some version of “lean accounting” (and I see minimal agreement on what exactly that topic is) won’t produce results. Measurement is just a piece of the improvement equation just as “Check” is only a part of the Plan-Do-Check-Action cycle for improvement. A critical piece of Toyota’s strength in terms of financial results lies in the realm of the overall cost planning process and the structured VA,VE,&VI activities that occur during the life cycle of the program. I received a copy of the recently published book Toyota Under Fire by Jeffrey K. Liker and Timothy Ogden and was asked to write up a short review of the contents. In interests of full disclosure I am of course a former employee of Toyota Motor Corporation in Japan having worked in engine manufacturing. Also I have known Jeff Liker for over a decade and jointly participate with him and other authors at the LeanEdge.com website. 
Overall I thought that this was a very well researched and detailed book pertaining to the various problems and recall incidents that plagued Toyota the past couple of years. Unfortunately in today’s media the newsroom lives by the mantra “if it bleeds it leads”. As a result sensational highlights with accusations instead of objective facts are the norm instead of detailed investigative journalism. That unfortunately is a sad commentary on the state of the news media today and our apparent appetite for that style of reporting. Instead of relying upon the superficial media reporting done by organizations like the Los Angeles Times and other news agencies Liker and Ogden practiced their own form of “genchi genbutsu” and worked to get to the bottom of the all the conflicting stories about the recalls and sort out the basic facts. The result is an excellent story of what actually occurred and it is told in five roughly chronological chapters: 1. The Most Admired Company in the World 2. The Oil Crisis and the Great Recession 3. The Recall Crisis 4. Response and the Road to Recovery 5. Lessons I thought that the clear strength of the book was in its investigative reporting of the actual problems that Toyota was facing and how they responded. This was all jumbled in the media and poorly communicated but at various times Toyota faced the following problems:Petal entrapment by unsecured or incompatible floor mats,Sticking accelerator petals,Electronic throttle control systems failure,and the 2010 Prius ABS problem. I won’t spoil the fun in reading about what really transpired in each of the cases. Separating the facts from the myths and highlighting the errors in the media is the most interesting part of the book in my opinion. On the most serious accusation (Sudden Unintended Acceleration) I will point out that the NHTSA has issued a report authored by different scientists and lead by NASA that there is no finding of electronics based caused for unintended high speed acceleration. That was always the million dollar question in my mind compared to the other topics. As this book and other reports show Toyota’s incidence rate for this problem is not significantly different from other manufacturers and there is still is no documented case of SUA that has ever been established for any manufacturer. If that seems impossible to believe then you need to read the book to understand the testing that goes on and what has been established so far and why. I recommend this book to anyone interested in the facts of what transpired on the various “problems” and how Toyota reacted to those problems. You’ll see the pattern of sensational reporting by the news media and the overly slow and caution approach of Toyota which exacerbated several of the problems. Throw in language and location problems between Toyota engineers in Japan and sales in the Unites States and you can see why the cases unfolded the way they did. If there is a section of the book that could be improved I think it is in the latter section of Lessons Learned and what the company is doing to improve and prevent these sorts of problems again. Some of the Lessons seem like more like “Observations” and I could not link them directly back to the overall problems that occurred for Toyota. For example Lesson 2 is that “A culture of responsibility will always beat a culture of finger pointing”. In the end I agree but as shown in the Toyota case finger pointing grabs the headlines and puts the company on the defensive and in a negative position very quickly unless they are careful and more proactive than Toyota was. I am not sure how Toyota would handle this differently today or tomorrow. I presume they learned but the key action items of the lesson are not clear to me in this case and in one other. That minor nitpicking aside I honestly enjoyed reading the book and found it to be very good reporting – the type I wish the news media would engage in. You won’t learn the overall facts of the case anywhere else yet in this convenient of a format. If getting the facts organized and straight matter to you then this book is the place to start. For general information about Toyota the early chapter covering some of the history of the company is very useful as well. I ran across a well put together Toyota Production System brochure from Toyota’s Industrial Equipment (TIE) Division. This one was put together by the European side of TIE operations. It does a nice job of explaining the Toyota Production System in 20 pages with a mix of text and graphics. It is worth a download a look if you are looking to spruce up your framework or see how a Toyota division explains their system. TPS Brochure A reader named Vimal from a processing company writes in this week with the following question: Organizations encounter a number of problems of extremely different variety,importance and scale on a daily basis. However,addressing each of these problems using an A3 approach can be very challenging. How do we determine whether or not a problem demands an A3 approach to solving it?
This is a good question that we receive from time to time from readers and practitioners of A3 reports especially the problem solving variety. Here are two respective points of view from Prof. Durward Sobek and Art Smalley. Continue reading When to Write an A3 Report A client asked me to give some pointers pertaining to A3 presentations and communication points. Here is a list of ten things that I mentioned and a few words of advice pertaining to each point. The following list is not exhaustive by any means and is just intended as some points of practical advice for thought starters. Continue reading A3 Communication Advice Assembly Magazine did an article similar to this topic some type a while ago. At a recent client off site meeting I was asked to briefly discuss common mistakes I see made in A3 reports. The list is simply populated by observation and no doubt might change over time. It also varies of course widely case by case,company by company,etc. Here are a dozen items that I mentioned during the discussion. Continue reading Common Mistakes in A3 Report Writing This concept is one of the more famous topics in the Toyota Production System yet I don’t see a lot of companies applying it correctly. Often times they struggle for a variety of reasons. All too often I see companies attempting to put the proverbial square peg in a round hole with regards to Standardized Work. One naive assumption is that Standardized Work is the only type of documentation on the shop floor of Toyota and will work for everything. In reality nothing could be further from the truth. A quick assessment of a machining plant inside of Toyota when I was an employee in Japan highlighted that true standardized work charts equaled less than 10% of the documents on the shop floor for example. What else exists you might wonder? In general we thought of documentation in manufacturing (leave out product development,process engineering,purchasing,and other functions as that is another story entirely) as residing in one of four categories as shown on the following chart. Continue reading Standardized Work How do Lean organizations develop their employees if Lean considers expenditure of resources other than for creation of value to be wasteful?
Art Smalley Response: This somewhat loaded question follows the previous one involving a commonly used but narrow and inaccurate depiction of lean manufacturing as simply “waste reduction”. A similar problem occurs if you simply claim that Lean considers expenditure of resources other than for creation of value to be wasteful. As I attempted to explain previously somewhat tongue in cheek most depictions fall short of describing the Toyota Production System due to the broad area that the system covers. I’ll answer the question in two parts articulating why I think there is an embedded misconception in the question and then reflect upon what some of my training experiences were in Toyota. For starters if you simply use any one narrow depiction of Toyota’s system and extrapolate from there you can easily wind up with mistaken interpretations or inaccurate conclusions. The submitted question in its original or edited form unfortunately wind up in that category in my opinion with its comment about how do you develop people (or do other tasks for that matter) if they do not add value to the customer. There is often this sort of misunderstanding about the Toyota concept of waste embedded within the question and what that implies for the organization. I’ll see if I can help eliminate some of the confusion using some of Toyota’s old education materials. Below here is an example of the original graphic that depicted waste categories in human operations from page 57 of the original 1973 Toyota Production System Handbook. 
Translated into English 
It should be noted that this concept was introduced on page 57 of the manual put together by the Education and Training Department. In other words it was not necessarily considered page one or even chapter one type of material for depicting Toyota’s system. If you read carefully the graphic specifically applies to production employee centric operations involving motion and is not directed at other departments for example such as accounting or product development or other activities such as training. The now widely recognized but often misconstrued graphic breaks things down into either A) value added activities for the operation,B) non value added work that is currently required to complete the job in its current state,or finally C) pure waste or “muda”. Later sections go on to then break down the pure waste into the famous seven types found in most operations i.e. 1) over-production,2) inventory beyond what is needed,3) rework or any type of correction,4) excess motion,5) waiting,6) unnecessary processing,and 7) excess conveyance of materials. Toyota developed the seven types of waste to expound up the four categories often used to describe production processes in industrial engineering – Process,Inventory,Conveyance,or Stagnation. I think the historical roots of this often get lost. That plus the Japanese terminology (muda,etc.) contribute to the definition problem…no one ever seems to misinterpret from plain old industrial engineering that all other functions or activities in the company have to be eliminated. The section heading of the graphic is “How to proceed with activities in reducing manpower hours”. That heading is important. The concept of waste elimination within the production system chiefly applied to evaluating production operations for improvements in efficiency. Through standardized work and kaizen most operations can easily be improved. Of course the concept has some applicability beyond its original scope. The problem develops as I mentioned up above when you take this one narrow depiction of Lean or TPS,and interpret it slightly differently and then extrapolate it to the whole organization. Specifically for example I mean taking the concept of waste elimination in operations involving human motion and characterizing it to imply that any action that does not add value to the customer is waste and thus must be eliminated. This logic fallacy if followed to the extreme then results in the mistaken notion that pretty much everything in the company that the customer does not think adds value must be eliminated. This is simply a case of faulty comprehension resulting in a mistaken conclusion. For the second part of my response I will just briefly talk about my own training experiences at Toyota. Like most organizations Toyota has basic training and development plans and semi annual reviews for all employees of the company. Toyota promotes the basic tenants of leadership,communication,problem solving,team work,and other areas through a lot of on the job training. Toyota is famous however for its ability to develop employees who can problem solve and practice kaizen. There is a slight difference between the two concepts. The former deals with getting processes to expected standards i.e. solve gap from standard type of situations quickly and efficiently. The latter deals with improving standards to new levels of performance even when there is no problem per se. For example you might be at 100% of a productivity standard however you still have to improve next year by 8%. I detail some of these subtle differences in Toyota Kaizen Methods:Six Steps to Improvement for those interested. I had plenty of other training in Toyota as well that was more technical. Since I was new to engine manufacturing in general I had in-house training in the basics of machine tool elements,tooling,hydraulic and electrical controls,and a host of other topics. Production employees and especially maintenance skilled trades personnel had extensive training programs as well to keep their skill level sharp. This was also viewed as an ingredient in terms of respecting people and making them valuable employees. For further reading on the entire training topic and talent development I’d suggest Jeff Liker’s book Toyota Talent:Developing People The Toyota Way. In summary think it is far more useful to take the more general depiction of Toyota’s system as 1) Continuous Improvement and 2) Respect for People that has been in effect for the last decade. In order to conduct continuous improvement in product,process,or people obviously departments outside of assembly operations involving motion are required. Respect for people implies that they in reality are the value added part of the company that enables everything else to occur. Try doing anything in manufacturing or software development for that matter without people and see where you get. Training people so that they can safely,correctly,and conscientiously do their job as well as make improvements is a given in the Toyota management equation. Unfortunately that key concept is often missing in discussions and for example in the Wikipedia entry on Lean Manufacturing on the internet as of the writing of this post. According to Wikipedia,“”Lean,” is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful,and thus a target for elimination.”First,do you agree with this characterization (and,if you don’t,why not)?
Art Smalley Response: I think it is best to be honest and admit that most characterizations of lean (or the Toyota Production System) are all lacking in general. In one sense the question posed is simple enough but the answer is not really all that easy. Depending upon what angle or approach you take you can come up with some different points of view on the topic. I’ll summarize a couple and then close with some advice. If you read any of the old Toyota Production System (TPS) handbooks or books and speeches by Taichi Ohno you’ll quickly find that there historically is no one definition of TPS (aka Lean) that has survived over the years. Everyone has probably run across definitions like “waste elimination”,“reducing the time-line from order to delivery”,“cost reduction principle”,or “Kaizen”,for example. For a long time the “system” really did not have a name. In hindsight I think that was a benefit. From the period of 1950 to 1973 Toyota worked hard at improving and the efforts were vaguely referred to as the Ohno System in some parts of the company. Other handles such as “supermarket methods”,“kaizen”,“kanban”,and other terms were of course used as well depending upon what topic was being discussed. In the 1950-1960 era most often improvements were chiefly referred to in published documents as 合理化 (Gorika) or rationalization efforts. In 1973 Toyota finally published the first TPS handbook in Japanese. The title for the handbook was トヨタ式生産システム トヨタ方式. Here is a snap shot of the cover page of the text. 
The rather cumbersome sounding translation of the manual in reality is “Toyota Style Production System / Toyota Methods”. In later yeas of course this become shortened down to just the the Toyota Production System for simplicity. The first handbook did not define TPS in a single sentence. Instead it talked about aspects of the various components that are now so familiar and not worth reviewing. Taiichi Ohno penned the foreword and he emphasized balancing the competing dimensions of quality,quantity,and cost in a way that avoided waste and achieved productivity. In some ways I think it is an act of folly to depict the Toyota Production System as a single entity. No one in my opinion has been that successful yet. Perhaps it is easier to think of it as multiple systems such as a build in quality system,a productivity system,a scheduling system (JIT),a people development system,a product development system,a supplier development system,etc.,etc. The opposite alternative is to be strategically vague and just call it excellence or the Toyota Way. The latter term is what Toyota has employed for the past ten years for greater simplicity. Whether you prefer to be more like Aristotle and attempt to classify and sub-classify the “elements” of TPS or more like Plato and focus on the essential “forms” is a matter of personal taste and bias in my opinion. It also depends upon where you are in your personal journey and comprehension of the topic. Unfortunately as I have pointed out in speeches over the years the result winds up a bit like the parable of the blind men and the elephant…everyone is positive they know what they are grasping onto but no one can explain the whole properly. (Note:Some of this is also necessary for communication and learning purposes so it is not all bad. I for one will certainly continue to write about elements of the system from time to time.) 
The various definitions most often used with TPS/Lean are in the logic category of “necessary” but not “sufficient” in my opinion. Waste elimination is okay but alone it is not enough. For example I can eliminate waste all day long and not improve quality or shorten the time-line for delivery. Similarly I can shorten the time-line from order to delivery in a variety of ways including adding equipment. Of course this runs afoul of the concept of cost reduction,etc. I can practice the scientific method all day long and not solve the right problems or get things done very quickly. TPS / Lean simple has too many facets to apply one simple definition or moniker to the methods involved. Unfortunately this makes communication of the concepts and the execution inherently difficult. My concluding advice on the topic is to figure out a characterization that is apt for your personal situation or needs and not someone else’s situation. Use what works and then re-orient as needed i.e. basic PDCA thinking. Toyota was not copying any one company or single technique when they built their “system”. Their situation required improvements in profitability,product and manufacturing quality,productivity,human resources,and other dimensions and they set out to develop ways to accomplish those goals. The disciplined act of focusing on a few things that matter and improving is what will help most people and organizations the most. After you have accomplished something substantial then like Toyota did in 1973 you can argue (and continue to argue) about what to call it. | |
