Dr Edwards Deming could never have imagined the results that would ensue from his visit to Japan in 1950. That it had a tremendous effect, which can be felt even today, is now folklore in industry. Many were the days that Dr Deming would lecture to industries in America, but, while they adopted some of his recommendations, like the practice of statistical process controls, they ignored many of his other principles, which were altogether thirteen in number. Led by Toyota and supported & co-ordinated by the Union of Japanese Scientists and Engineers (JUSE), Japanese companies started the systematic adoption of Dr Deming’s principles.
All about the Toyota Production System
One of the key outcomes of all the frenzied action was the Toyota Production System (TPS). Also called the ‘Toyota Pyramid’, it had a deep impact in the world of quality. It was the first system in the world to do things as the customer wanted. The end of WW II led to the development of buyers’ markets all over the world, and Toyota seized the opportunity, using Dr Deming’s principles, to design and use a new paradigm. Thus, was Lean Management born, as a part of the TPS.
In its efforts to address customer needs as and when they arise, and as per their requirements, TPS became a mantra to run manufacturing and management in a totally quality driven way. Along with TPS came TQM – Total Quality Management. TQM and TPS were two sides of the same coin – for manufacturing and market driven excellence. Lean Management was central to the TPS. If we look at the TPS, which was also called the ‘4 Ps’ of Toyota, it is evident that Toyota put human endeavour at the heart of management.
Lean Management (LM) is understood in the west as ‘elimination of waste’. As can be seen it is only one part of the TPS, but LM became synonymous with waste elimination. The central concept in adopting LM is to serve customers in the best manner, and, as desired in the Kano model, the purpose is to delight customers. In combination with TQM, the idea is to create a company which can gain the respect, love, admiration, and loyalty of customers. Delighting the customer was always primary.
To do that, LM managers have to learn some concepts which they will have to practice all across the company. The first is JIT – Just In Time. This is widely used in the automobile, iron & steel, cement, and many other industries. The auto industry was where this idea took firm roots. Today, with Andon and autonomation (or Jidoka), Toyota assembly lines are the best run in the world.
For example, the Toyota plant in Kentucky. From the beginning, the plant practiced JIT – with all the parts for a car being received at the plant a few hours prior to production. In fact, the seats for cars were delivered online, real-time. Such was the efficiency built in through JIT that wastages, such as, rework, defectives, etc, were minimised or eliminated.
This enabled Toyota Kentucky to produce cars much faster, make model changes in the production line to suit customer demands speedily, which, in turn, led to market capture through customer delight. Same practices were adopted by the then Big Three – Ford, GM and Chrysler. Today, in India, all the auto plants – Maruti, Tata, M&M, Hyundai use such practices to keep the prices low, to build customer confidence through total quality, end to end.
The ‘5 Why’ analysis
Another key element of LM is the ‘Why Why’ analysis or the ‘5 Why’ analysis. This is a simple but effective way of solving problems. One should ask the question ‘Why’ five times, to get to the root cause of the problem. There is the famous example of a company finding its pumps frequently under stoppage and breakdowns. The ‘Why Why’ analysis went thus:
Why did the pump stop – because the circuit breaker stopped it for excessive current drawal
Why was the current in excess? Because there was resistance to the flow of fluid inside the pump
Why was the resistance high? Because there were some fine, hard particles in the fluid
Why were the particles in the fluid? Because at the suction end, these particles were being sucked in when the compressor pulled in the air
It was, thus, realised that the root cause was that air was being sucked in at the entry of the compressor pump without a FILTER. When the filter was introduced, the pump ran smoothly.
‘Why Why’ analysis will always lead to the identification of root causes. And root cause analysis is an essential part of LM. By using this analysis, companies deploy quality circles to solve problems, and then make suitable process changes, so that the mistakes are not repeated. Many companies in India, which practice LM, use ‘small groups’ (variously called quality circles, improvement groups, value engineering circles, etc.) to run ‘continuous improvement’ or ‘PDCA’ movements.
Ensuring continuous improvement
LM uses the PDCA extensively. Plan, Do, Check and Act is the heart of TQM, and LM is built upon TQM. PDCA is nothing but continuous improvement. Groups of people get together to identify problems, use tools and techniques to solve them, record them in the process documents, and then continue to look for more problems. Every problem solved will lead to new problems, and problem solving is a continuous process. Only, with every solution, many parameters improve from their previous levels, and this ‘virtuous cycle’ leads to cost reduction, improved quality, faster rates of production, better customer servicing, and so on. Continuous Improvement is a way life in LM. Waste elimination is another feature.
As shown in the figure, all three types are frequently observed, especially in logistics, warehousing and inventory management. A special case is the ‘uneven production’ which is also called ‘heijunka’. Heijunka is production levelling. Most factories and service establishments have to cater to sudden surges and lean periods in operations. For example, railways often face the ‘rush’ phenomenon during holidays, which they manage by running specials, longer trains, etc.
Similarly, local buses in Mumbai face the peak hours during morning and evening. Uneven loading leads to several problems, especially capacity design and utilisation. Due to the ‘unstable conditions’ which characterise uneven loading, defects, inventories, manpower utilisation are all adversely affected. In one word, the ‘momentum’ is interrupted, which leads to uneven results. To avoid this, LM recommends ‘heijunka’, which is levelled production. A system for manufacture or supply chain logistics and distribution wherein activities are ‘levelled’ is possible in LM.
Value Stream Mapping was a signal contribution of LM to manufacturing industry, as well as others. VSM, as it is often referred to, is a way of mapping the current supply chain activities, using symbols unique to LM, and study the areas which are wasteful. This is a powerful technique, which has led to quantum jumps in production, productivity, efficiency and waste reduction on a scale not imagined before. Such quantum improvements are possible only due to LM. Given below is an illustrative example of what was achieved in a Japanese Mattress manufacturing company using LM.
LM uses the ‘Pull’ approach, as against the ‘Push’ approach used in management. Pull is customer facing, responding to customer requirements, and ensuring that these requirements are more than met, to create customer delight. Such delight includes value for money, on time delivery, Six Sigma manufacturing and support, all of which lead to low to zero waste. In the current situation of emphasis on sustainability, as defined in the 17 Sustainable Development Goals (SDG) of the UN, introduced in 2015, LM is the single best tool to speedily comply with all the SDGs. In fact, James Womack and Daniel Jones, in their book, ‘Lean Thinking’, describe several case studies of the usage of LM and the enormous business benefits achieved by a variety of companies in the USA.
Way forward: ‘Five Point’ formula
In summary, today’s global industries need to adopt LM far more intensely and seriously if they are to comply with SDGs. The way to move forward is to use the ‘Five Point’ formula, given by Womack and Jones, as below:
Eliminate muda (Types of muda: actions that are currently not adding any value but are required by the product development, order filling or production systems (Type 1 muda) and actions which don’t add value to the customer and hence can be eliminated immediately (Type 2 muda)
Identify the Value Stream - VSM