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BUILDING A LEAN MANAGEMENT SYSTEM

Daniel T Jones

The Toyota Example


Toyota created a unique synthesis of three improvement streams: Process thinking organising the flow of work Learning by doing and reflecting Quality using the scientific approach Out of this came many new tools and techniques The lean principles for designing value streams And a different way of managing and leading
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Starting Point
Hunger! A common language and way of thinking

A shared visual context for dialogue and decision making

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What is Important?
Strategic objectives their interrelationship and the significance of time

Understanding the dynamics of your organisation as a system deep causes of variation See the performance gaps that could be closed and actions to turn these into financial results
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What Problems?
Agree which gaps are most important Dialogue down the organisation to translate gaps into actions Give someone the end-to-end responsibility to gain agreement to act and to agree the resources Then to deselect the less important

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Which Actions?
First step is to create stability by addressing common cause variability Develop a visual hub to see deviations from plan root cause analysis escalation processes Gemba management

Develop and A3 plan for the subsequent countermeasures to get to the Future State
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Build Knowledge
Through well chosen controlled experiments creating examples Developing a mentoring infrastructure for A3 thinking

Capturing and sharing knowledge and experience communities of practice recognition - intranet
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BUILDING A LEAN MANAGEMENT SYSTEM


Daniel T Jones

Basic Title

TMS
Toyota Management System

Takashi Tanaka Sharon Tanner


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History of Toyota Basic Title Sales


New Leader set vision & clear target Visualization & Oobeya Globalization Quality into Process Multi skilled engineers
d an ols d o ke ed t r o W elop v de

Increase outside of Japan

TPS 1950

Lean introduced in
Western corporations

1990

2010 2
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Roots Toyota Basic of Title


1700 1800 1900 2000

Ninomiya Kinjiro (1787-1856 )

Toyoda Sakichi (1867-1930 ) Ohno Taiichi (1912-1990 )

Famous governor J.F. Kennedy respects Uesugi Youzan (17511822)

Toyota Way

Show them, tell them, have them do it, and then praise them. Focus on people.

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Basic Title Toyota Way


Toyota Way Continuous Improvement
Challenge Improvement Genchi, Gembutu

Principle of TOYOTA

Respect for People


Respect Teamwork

Externalized Rule and Principle of Toyota in 2001 Preparation for more globalization
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History in Western Corporations Basic Title


Lean principles introduced in Western factory in the 1980s; Dan Jones books follow within a decade Lean principles for the Knowledge Workers area followed much later (some companies have not yet started!)

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Basic Work Title Culture Differences Basic

Typical Western PDCA

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Basic Title Output Definition

Output =

i=1

(Person)
x i

(Ability)

(Motivation)

By the improvement activity

Total number of employees

n = Workers + Staff
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Toyota Management System Basic Title


Product Concept Design Sales, After sales and CRM

TDS

TMSS

Engineering Production Concept

TMS

Marketing Design

Marketing Concept Production TPS

Production Design

Total

TPS

TMS (Toyota Management System) TDS (Toyota Development System) Total TPS (Total Toyota Production System) TMSS (Toyota Marketing & Sales System)

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BasicTools Title TMS

TMS
Management System

Total TPS
Production System

Oobeya

TMSS TDS
Developmen t System Marketing & Sales System

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Basic Title TMS and Corporate Management


Content Activity 1-1. Capital of senior management
1-1-1. Vision 1-1-2. Leadership 1-1-3. Ability 1-2-1. Corporate policy

Focus
1-1-4. Decision making 1-1-5. Existence of key person 1-2-4. Standardization 1-2-5. Active atmosphere 1-3-4. Power of middle management 1-3-5. Adequate cost center

1. Corporate Management 2. Finance 3. Cost Planning 4. Globalization

1-2. Policy deployment 1-2-2. Divisional policy


1-2-3. Daily management 1-3-1. Organizational structure 1-3-2. Collaboration with vice president 1-3-3. Collaboration among organizations 1-4-1. Reduction of fixed cost 1-4-2. Debt 1-4-3. Productivity 1-5-1. Attitude of top management 1-5-2. Working structure 1-5-3. Function and role 1-6-1. Target achievement

1-3. Organizational power

1. Corporate management

1-4. Improvement effort

1-4-4. Commitment for target profit 1-4-5. Drastic cost reduction activity 1-5-4. Creation of ability for audit staff 1-5-5. Risk management 1-6-4. Countermeasure for daily customer expectation 1-6-5. Recognition from customer

1-5. Audit

1-6. Customers

1-6-2. Price adjustment for customer 1-6-3. Customer satisfaction

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Difficulty of Implementation Basic Title


Background

- The use of tools has improved factories


- Knowledge work areas has been more difficult - Most managers do not advance to the implementation of Toyota Management System
p an a J ta o y o T

Rate of improvement

U Toyota

SA

Western

Problem Time
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Basic Do weTitle understand each other?


Finished!

Think
Western

Do

What is the goal?

Think
Toyota

Do
Genchi Gembutsu

Continue PDCA Cycle

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Basic Do weTitle understand each other?


Work Tools
Japanese Culture Toyota Culture

Rules Principles
Toyota Culture Japanese Culture

Other Culture

Management

?
Western

Culture blocks understanding of Principles, Rules and management.


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Basic Titleto Implement Procedure


Using both Tools (Method-side) and Management (Human-side), we can create sustained improvement. Tools Management
Kick -off 6 4 4 4 18-months

Visualization

Oobeya Visual board Higher Perspective

Tools

TMS Culture Self TDS New role Sustaining Total TPS Accountablity TMSS LfL Studio Working habit

New Working

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Basic Title Oobeya: Big Project Room


Objective
Project Background Project Objective Technical Spec Project Organization

Expected Output
Expected Output

Metrics
Weight Cost Capital
Targ et 1 2 3 - 12 Targ et 1 2 3 - 12

Progress check, only Green & Red


Action Board
Concurrent Schedule
Today

Good Good

Projector for Virtual Design Review or meeting

Jan Feb Mar ---Dec

Prototype
All related members, Planning, Design, Production and Sales & Marketing
Issue Board
Potential Real Finish Record

Design Engineering Production Marketing Service

Decomposition Area
Issue Board: Panel

R&D Main Board

2-issues per week

Design Engineering
Production

New concept Drawing delay 3/5 Line A Improve Supplier select 4/3

Marketing

Supplier select 4/3 Supplier select 4/3

Identify issues for management decisions


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Basic Title Oobeya: Hierarchy with Flow


Visualization Hierarchy3 levels only Policy Decisions Targets Metrics
Project Oobeya

Executive (Main) Board

Escalate two decision-ready issues per meeting cycle

Team A

Team B

Team C

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Visualization of GEMBA (Work place)

Basic Title Review Activity


DUNS -- Did, Understood, Next Steps
MyName Listened(Did) SomenewconceptIhave learned,oranewinsight aboutaconceptIalready knew(Understood) WhatIwilldodifferently backatmyorganization (Next Step)
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Role of Leaders Basic Title


Before
Improve Improve ment ment Daily Daily Work Work
(Meeting, (Meeting, Decision Decision making, making, Team Team management, management, etc.) etc.)

Trouble Trouble shooting shooting

Now

Improvement Improvement
(Product, (Product, Process Process and and Personnel Personnel development) development)

Daily Daily Work Work

Decrease

Ideal

Increase

Effective and Efficient

Leader: use more than 50% of time on improvement work.

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BasicEngieer Title Chief of Toyota


CEO
VP Engineering Only one VP to manage all Chief Engineers and functions

Prius
Cost Body Chassis ---Under -10%

Chief Engineer

Corolla

CE

---

CE

Quality Delivery
DOK 90% 1st proto May 1

Matrix & Metrics Target break down

Platform Standardized committee New navigation system committee Cost Reduction Committee

VP Strategy VP Production VP Marketing & Sales ...

-20%

DOK 80%

On time Dec 15

Executives lead cross-functinal committee

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Basic Targets Title Clear Drive Results


Oobeya creates a more action-oriented organization.
Productivity
Target

Schedule 2009 Jan Feb --- Dec

Weekly Actions

Issue Board

Sales Target this year Profit Quality

Achievable Actual

4 5 6 7 8 9 10 11

Deliver Product

Product A Product B ---

Planning R&D Production Marketing Sales HR

Actual

Achievable

Target

4 5 6 7 8 9 10 11

Cost
Achievable Actual Target

1. Improve Improve products A 2. Experimental -ment process ---

4 5 6 7 8 9 10 11

Suitable Target
Gap Current Status Only 3-5 focused metrics Clear and concise activity and action Only decision ready issues
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Basic Setting Title Target and Decomposition


Organizational (or VP) Targets Quality Cost Schedule Team A Targets Team B Targets Team C Targets Team D Targets Decompose targets to a meaningful level for the team Metrics show teams unique contributions to overall organizational goals

Specific Accurate Measurable

Team metrics = Organizational Target


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Basic Title Targets with Barashi Visualizing

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Basic Title Example of Western Client Barashi

LeanforLeadersImplementationTeam,2007
ProgramPlan
Program ToAchieve Target Function
Product Improvements
Quality
Metrics
Selected prioritized metrics Indication of current hot topics Clear indication with same format Connection with other board Update all results regularly Scenario chart for difficult issue DR in the project room Priority marks Connection with quickening action Virtual tools Forecasted line with scenario Arriving at 5why level

TeamProgressAudit
Progress Check Sheet: Oobeya/ Project room
Category 1 2 3
Indication of priority with green & red mark

Section: 4
Connection with Total R&D

Date: 5
Member's consistent check Consistently update with related documents IT based screen

Key Goal Indicator Graph

ProgramMetrics
Target Actua l l

Total

Measurement Summary by Project Progress chart metrics Leader Attached suitable contents

Product

Objective, Target

Shared with all Break down to Logical link members sub-system and connection

Expected Output

Issues & Visualized with Shared with all Decomposition countermeasur drawing etc. members of critical part es are clear

Decomposition / Scenario Real products or model

Process Improvements

Inside a project Some room, is it real decomposition products parts

Integration and Standard

Quantity

Concurrent Schedule

Due date and At earlier milestone with phase, join all output / related Process member Improvement

Capturing delay & change for review

Sub-systems are spontaneously breakdown

Connection with subsystem schedule

Apr. May. Jun July Aug. Sep. e

Issue flow

Kind etiquette

Contents & From record, Select 2Spontaneous Potential issue Countermeasur issue moving issues are attitude for is proactively e are mutually for PDCA smooth activity solution capture kind process

TMSImplementation

Process
Target

Human-side

Meeting

Agenda & schedule

Explain Kindly support effectively and leader & other efficiently member

Front loading considered opinion

Conscious of new role & responsibility

Visualization

Display

Visual Control Visual Control Level1 Level2

Quickening Visualization Level1

Quickening Visualization Level2

Total Grade

TeamSupport

Apr May JunJul AugSepOct

ICSkill Map

5levels

Internal Consultant Development

TMSImplementation Phased implementation Emphasizing TDS toolset Developing internal consultants (IC) Supporting teamand ICmaturity Achieveprogramtargets

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Basic Title Concept of Quality into Process

Occurrence prevention

Process 1

Process 2

Process 3
No defect

Process 4
No defect

Inspection

Delivery

No defect

No final inspection!!

Outflow prevention

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Quality into Process tools Basic Title


Front loading tools
Planning Design Test
Production

Target:
- Right on time - Right first time

Delivery

2. Education/ Training
Occurrence prevention
Knowledge management Multi-skilled engineer Supplier training

1. Management 7. Feedback sheet


Lesson and learn from past projects Policy deployment Target and Metrics Long-term planning Daily implementation Issue board for unexpected problems Oobeya for project

3. Standard Work
Design standards

Process standards Structured template

4. Quality assurance
Sustain standard work Support improvement activity

Outflow prevention at each gate

6. Check sheet
Front page, Whole process Back sheet, a part or a process
Rem: Follow up later items is establish another file, GM checks w eekly.

5. Improved Design Review


Gate DR Collaborative review Open/closed issues

Face

Engine Related

Design Check Sheet


Parts# Name Other Requested sectio n Order Final

Final Order

Route: Design room -> Manage r ->each CE 2- copy for group Depart R Outside design request #: Design change #:

Eng Type Facto ry Car Type D istribute Other

Document, Memo

CE agree

GM

Le ader

Estab lish

Pl ann ing D rawi ng C ha nge draw ing Outs ide des ig n R ec ogn ized d raw Othe rs

Cost

Estimated
Purchase, Fin st Plann in g Co

Weight

min

min

min Insp ec t drawi ng


with l ea der

$ (+ -

Ou t si d e

g ) (+ %)

%) (

Y -N Y -N Y -N Final audit of dra w ing 1. No problem 2. No confirmation, but no problem 3. There is is sue, but go What is is sue?

Background, Objective
g e spec Common ali za Reduce we i ght Chan Rese arch Pe rf o rmance Prod uctivi ty So lu t ion o f Iss Service e f ficiency rs Ot he

Durability, Reliability check


It e m Co unt

Check VA, VE

I f i t nee ded , distri b ute t o prod uction enginee ri n g of e ach fact ory

Continue hi-speed Full throttle U/D Low sw eep U/D Total pattern Total temperature Low tempe rature Ex main temp. Long drive Hammering Stresses Resonance Dirt course Hi-speed reliability Heat test Body test CAE Stress

Explain: Contents of change, Problems by GM Objective, reason by GM


rf o rmance So lu t ion o f Issu e Pe Request from others (CE, Produ c Common ali zati o n Cost redu cti o n SOC pro blem Others(

Attachment Planning figure Engineering c heck sheet Required specif ication


ntact i ssue Others ( NV improv co Service effi ci en cy ) ) Red uce weight

Cost Contents of change


1.SOP pha se 2.Targ e t co st 3.Curren t 4.Supplier estimate 5.Gap

A nxious by change

Countermeasure

6.Coun te rmeasure

Prototype
1.Part s cost 2.M o ld 3.Total

Ref lect f or test (Lef t table)

Reflect to production

Weight
1.SOP pha se 2.Targ e t co st 3.Curren t 4.Supplier estimate

I f necessary in te rnally,

5.Gap

Copy

Later Recognized draw ing OR Follow up ( Y - N ) Check grade


N o i ssu e : ++

Plan ( / Item

)
M D M D

Plan ( Check

)
M D

6.Coun te rmeasure M D

Item
C onf irm with Ma teria l de p: rub ber, pla stic , pai nt Gene ral n ame of ma teria l( )

Check

En g ine er GY

R eg ula tion che ck requ ire ( Y - N )

N o g ues sin g i ssu e : + Gue ssi ng i ss ue : N o c oun term eas ure: -N ot a cce pt:

Ac cep tan ce f or F/R , F/F Pa rts l ist o f OBD (On -boa rd d iag nos is) Sa fe ty iss ue (FH , C ras h, OR, L eak ) In clu di ng a ll PPC ite ms

Ass emb ly an d s erv ic e(Li ne to ols , se rv ice man ual ) R ow ma teria l, p roce ss wi th pro d. En g & su ppl ier C onf irm gui del in e of pa rts f ittin g (In terna l E2-1 4) D rawi ng: p arts tabl e, req ues t, la bel C ha nge Dra win g: ol d pa rts, ov e rse a, Pa rts tab le: S af ety , reg ula tion , ma ker o ptio n Pa ttent:re que ste d (Y N), Fa ll f a ult (Y N Anal y ) D eli v ery lo cati on , cha nge ( Env i ronm en tal c ond itio n & in f lue nce Oi l, wate r & ga s tem pera ture, f ro ze n, f uel , etc )

Bl ank C on fi rma tion Engi nee ring ch eck she et Sa tisf i ed re qui red f un ctio ns by rel iab ili ty ma trix Ke ep dev e lop men t targe t by j usti fi cati on c he ck s hee t C on fi rme d by c ontro l de si gn i nf orma tion ma trix Im ple me nt D RBFM Pro hib ite d de sig n ch ang e, c onf irm ed b y rea l pa rts C on fl ict o f p arts, d is tanc e, sl ack , fa ste ned , sea l Ca ulk ing , weld , pre ss, i nse rt cho kin g

The c ase of - an d --, Wri te f oll ow u p da te

Inf ormation Leader comments:


To ta l

Roll out other model(Y N ), Inf luence o ther organization(Y N), informed(Y N ):

(Revised '05 Ju ne)

#1: Each engine & using area has template #2: Attach en gineering check sheet

Ch eck su b-de sig n ch eck sh eet o f b ack sid e

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Comparison Basic Title of Design Review


DR at US manufacturer
Engineering, Purchasing Test and production

~ 6 months
1st DR

Individually prepare, Engineering sub-teams

1 - 2 days

Internally prepare, Production

Internally prepare, Test

Many hours in large meetings


-- Much discussion -- Little problem solving

Internally prepare, Finance, Purchasing, etc.

Toyota DR
Engineering Purchasing
Internal Meeting 1-hour

1-month
1st DR

Engineering

Purchasing
Internal Meeting 1-hour

2nd DR

2-hour
Leaders Production
Internal Meeting 1-hour

2-hour

Leaders Production
Internal Meeting 1-hour

Test
Internal Meeting 1-hour

Test
Internal Meeting 1-hour

- Problem solving - Decision making

- Problem solving - Decision making

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Basic Title Process Metrics: Design Completion


# of Issue Opened

Solved Plan -> Development -> Delivery Opened Solved

Hold original date

Plan -> Development -> Delivery

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Basic Title Value Maximizing


Start at the topExecutives apply TMS to themselves first. Lean is not a delegated activity that executives sponsor. Select and train internal consultants (ICs) to support the implementation Incorporate a journey-approach to training by creating an LfL (Lean for Leaders) Studio Create infastructure to support Ics & teams Institute a disciplined approach to progress checks for teams and ICs
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Basic Title Principle of Implementation

Developing both simultaneously

Horizontal
- Organizational roll-out - Participation of all members

Vertical
1) Tool installation - Multi-skilled Worker -TLSC, Structured 5-Why - Oobeya - etc. 2) Management skill - Vision, Target setting - Decision-making - Leadership 29 - etc.
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Basic Title Selecting the Right IC


Internal Consultants:
Learn quickly, by working with consultants on multiple projects within the organization Apply techniques themselves Aid executives/teams implementing TMS.

Necessary Characteristics:
Technical strength Success in leading large projects Influence at the executive level Strong collaborative skills Real network within the organization

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LfL Studio to develop IC Basic Title


1. QV&TECs role is to develop IC.

2. IC exercises Kaizen with own team. 3. IC develops Kaizen Leader (KL) with support of QV&TEC. 4. KL develops own team / other team.
LfL Studio for Senior / Organization IC

1.
QVS & TEC

IC Target level 3 - 4

2. Own team
IC IC Team

1.5 days/mo

exercise

LfL Studio for Kaizen Leader

3.
Kaizen
QVS & TEC & IC

4. Own team / other team


K/L Team Leaders K/L Team

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IC Support Basic Title & Development Tools


Program, Project
To achieve target

Basic project plan Progress audit

SharePoint
IC Field Book: 250-p.

Function

Support

Introduction Guidebook: by IC

TMS Tools: 92 LfL Studio

LfL Skill map: 5--grades


Visual Board
Background Objective Policy Target Action

Theme : XXXXXX KPI

Team

Schedule

KGI

KGI Graph KPI Graph

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Progress Basic TitleCheck Sheet


Example of Check Sheet: Project
Progress Check Sheet: Oobeya/ Project room
Category 1 2 3
Indication of priority with green & red mark

Section: 4
Connection with Total R&D

Date: 5
Member's consistent check

Total

Summary by Project Progress chart Measurement metrics Leader


Attached suitable contents

Executive (Main) Board Project Team TDS

Objective, Target

Consistently Shared with all Break down to Logical link update with members sub-system and connection related documents IT based screen Forecasted line with scenario Arriving at 5why level

Expected Output

Issues & Visualized with Shared with all Decomposition countermeasur drawing etc. members of critical part es are clear Selected prioritized metrics Indication of current hot topics Clear indication with same format Connection with other board Update all results regularly Scenario chart for difficult issue DR in the project room

Quality
Metrics
Priority marks Connection with quickening action Virtual tools

Decomposition / Scenario Real products or model

Inside a project Some room, is it real decomposition products parts

Integration and Standard

Quantity

Due date and At earlier milestone with phase, join all output / Concurrent Schedule related Process member Improvement

Capturing delay & change for review

Sub-systems are spontaneously breakdown

Connection with subsystem schedule

Issue flow

Kind etiquette

Contents & From record, Select 2Spontaneous Potential issue Countermeasur issue moving issues are attitude for is proactively e are mutually for PDCA smooth activity solution capture kind process

Human-side

Meeting

Agenda & schedule

Explain Kindly support effectively and leader & other efficiently member

Front loading considered opinion

Conscious of new role & responsibility

Visualization

Display

Visual Control Visual Control Level1 Level2

Quickening Visualization Level1

Quickening Visualization Level2

Total Grade

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Basic Title Summary


Clear, focused targets will empower teams and drive accountability Deep reflections and strategic planning will improve long-term success Visibility of knowledge work & metrics will foster continuous improvement Standard work and disciplined process approach enhance quality improvements IC development will ensure a self-sustaining lean culture within Millennium
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Basic Title

The Basics of Oobeya

Lean for Leaders Masterclass Summer 2011 Takashi Tanaka Sharon Tanner

Move to Rochester Purpose Basic Title


To communicate the oobeya technique quickly QV Oobeya makes knowledge-work visible, so that waste and non-value-add activities can be removed. Oobeya means big conference room Developed with Toyota in the 1990s for
first Prius and SUV 50% time-to-market reduction

Basic Title Oobeya Basics--Target A clear problem/target statement


Quantified Includes entire scope Balanced Differentiates internal and external targets

Basic Title Oobeya BasicsTarget Decomposition

Each target is fully decomposed


Broken down into targets for each team or participant

Targets are adequate


60% accurate to start is OK You will improve accuracy and ensure fairness as you go

Bounded with +/- limits

Basic Title Oobeya BasicsRole of the Leader Define targets Maintain time and content discipline Manage issue priority Check that activities are sufficient to meet targets Check member workload; balance as needed Ensure team participation, team skill

Basic Title Oobeya BasicsMember Role Deliver solutions Define activity and task to meet targets Report ahead-or-behind on targets Define and resolve issues in a kind way

Basic Title Oobeya Checklist Clear problem statement Target decomposition (external, internal) Roles/responsibilities defined and followed Problem-solving skills Kind approach/kind issue:
Clear, concise Constructive, contains analysis or recommendation

Issue board basics

Basic Title The PDCA of Oobeya Plan - My target is


I am ahead/behind Issues/countermeasures

Do - Last week I accomplished Check - I learned the following


New insight Aha! moment

Act - Next week I will

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