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May 2014 Kaizen Tour Report

Our most recent Lean Japan Tour was held during the 18th through 24th of May in Tokyo and Nagoya, with the aim of showcasing the rich history that Japanese industry has in the fields of lean manufacturing, industrial engineering and continuous improvement (kaizen). The kaizen tour has been an annual initiative of Shinka Management for the past eight years and is designed to provide companies with lean training and first-hand experience of the world-class application of kaizen within Japanese industry.

This year’s tour group comprised industry professionals from multiple countries representing a variety of industry sectors. During the week-long kaizen tour participants learned about the implementation of lean manufacturing and kaizen in some of Japan’s top companies. Participants experienced seminars on lean manufacturing, operations analysis, Japanese business culture and several factory tours.

The factory tours and reception provided by the host companies throughout the week were excellent. Isuzu Corporation (Metal One Group), which specialises in the processing and sales of cold rolled steel was a standout in terms of the company’s dedication to employee welfare and motivation, and their efficient use of space within their service centres. The tour group was impressed by the level of excellence on display in terms of productivity and organisation within Isuzu’s immaculate Gifu Service Centre.

Metal One Isuzu Kaizen Tour

Inoac, a world-leading innovator and producer of polyurethane, plastic, rubber and composite materials, was another standout visit. The company provided a warm reception, and led the group on a tour of the company’s Anjo plant prior to a discussion with several members of their senior management team regarding their production management systems and kaizen activities.

Inoac Briefing

Inoac Factory Tour

Two days of the tour were dedicated to lean training at a Toyota Group lean training centre. The group developed their understanding of the Toyota Production System (TPS) during their stay, and in addition to classroom and hands-on training, experienced TPS in action on the floor of a vehicle assembly plant and through visits and management discussions with two Toyota Group suppliers. The application of Just-In-Time manufacturing, visual management, supplier development and kanban systems were all covered.

Toyota Kanban Training

Toyota Kaizen Training

The tour also included visits to two multinational companies applying lean principles within the food and beverage industry. Kikkoman, famous for its excellence in R&D and innovation in the production and distribution of soy sauce, was the tour group’s first visit. In addition to a plant tour, a management discussion was held with Kikkoman staff presenting on two of their recent kaizen projects.

Kikkoman Tour

ITO EN, the world leader in production and distribution of green tea products, was the group’s final visit. The tour included ITO EN’s R&D and quality control labs, tea processing and packaging, and their new coffee roasting facility for their Tully’s Coffee brand. The group met with representatives from ITO EN’s production division responsible for administering the company’s kaizen and employee suggestion schemes.

In addition to learning about Japanese management philosophy and productivity practices, the tour group spent the week immersed in Japanese culture, received training on Japanese business culture, and experienced local food, drink, entertainment and customs.

Kaizen Tour Group

The tour was led by Shinka Management in conjunction with the Australian Industry Group and Simply Lean Business Solutions. The tour is open to participants from all countries. For further details see the Lean Japan Tour page. The tour is page is also available in Turkish (Yalın üretim Eğitim), Arabic (جولة التعرف على نظام الإنتاج والتصنيع الرشيق في اليابان) and German (Lean Manufacturing Ausbildung).

Long-Term Benefits from Lean Study Mission to Japan

Long-Term Benefits from Lean Study Mission to Japan

Shinka Management and clients were interviewed by Leila Henderson of in-Business Magazine South Australia for the following article on our annual lean study mission to Japan. The PDF version of the article that appeared in the February/March 2014 edition of the magazine can be viewed here.

Japan has been a beacon for success in manufacturing for over half a century, yet it has faced challenges that would have crippled another nation – a market downturn caused by the global financial crisis, the 2011 triple disaster, a drop in exports to China, and the high value of the yen to name a few.

Lean Factory TrainingNow South Australian companies have learned first-hand how Japanese businesses implemented productivity improvements and developed strong management foundations over recent decades that allowed them to weather the storm and remain competitive on the global stage.

The Australian Industry Group Lean Japan Tour, led by Wayville-based lean manufacturing consulting firm Shinka Management, has provided businesses like Redarc Electronics and Coopers with invaluable insights and first-hand experience of Lean best practice.

Tour leaders Paul Smith and Ben Sparrow of Shinka Management organised, facilitated and interpreted during the 2013 tour.

Paul Smith said that the idea for the lean study mission, which has been run annually since 2007, originated from awareness that in Australia there had “not been a genuine example of lean manufacturing being applied over an extended period of time.”

“A major objective of the tour was to provide opportunities for senior management from Australian industry to visit Japanese companies that excel in lean manufacturing, and to find out how, while they have experienced similar challenges to Australia relating to cost of labour and strong currency, they remain competitive.”

Innes Willox, Chief Executive of the Australian Industry Group, views opportunities such as the tour as important to developing industry competitiveness.

“With the ongoing competitive pressures on local manufacturing and especially the recent events affecting manufacturing in Australia, the need to strengthen our productivity improvement capability is more apparent than ever,” said Innes. “The Australian Industry Group Lean Japan Tour is timely in providing the opportunity to learn from the decades of lean management innovation and know-how that has been developed in Japan.”

The 15 participants on the 2013 Lean Japan Tour came from a broad range of industries, including automotive, manufacturing, food and beverage, transport, government, and software development.

Rinnai Factory Tour

“The participants discussed with Japanese management how to establish, implement and sustain lean programs, and they brought this knowledge back to Australia for the betterment of their organisations and the industry as a whole,” Paul said.

“In most cases, these factories are decades ahead of Australian factories, yet management from the host companies were very open in discussing both successes and failures along their journeys.”

Shinka Management planned last year’s tour to include host companies in several different industries ranging from large corporations right down to organisations that employ fewer than 50 people.

“This was noted by participants as useful to see how improvement programs differ depending on scale and type of organisation, yet still have a common foundation and concepts,” Paul said.

In addition to looking at companies that had implemented lean over several decades, the tour included a visit to a company that had only recently set out on its lean journey.

“Managers shared with us their learnings on how to implement cultural change in their workforce and achieve significant tangible results from lean implementation that saved them from bankruptcy following the GFC,” Paul said.

Factory Tour NagoyaJeremy Hawkes, Managing Director of Bowhill Engineering, attended the Lean Japan Tour as part of his Industry Leaders Fund scholarship.

He said he chose to join the tour because Bowhill Engineering had just begun its lean journey.

“With eight of our staff beginning a Certificate IV in Competitive Manufacturing, I felt it was important to witness first-hand what a world-class productive and efficient manufacturing environment looks and feels like,” Jeremy said.

The group had several exclusive opportunities to visit companies such as Rinnai and Chuo Malleable Iron that generally do not accept groups into their factories. They also spent two days at a Toyota kaizen training facility, only made possible through the close relationship Shinka Management has with Japanese Industry.

“There are so many ideas that we will bring back and weave into our business,” Jeremy said, “but none more valuable than the broad Japanese and Toyota Production System manufacturing principles, as these can be adapted to suit what we do and our Australian workforce at Bowhill Engineering.”

Geoff Vogt, CEO of the Industry Leaders Fund, said that Jeremy’s attendance would result in a “significant multiplier benefit to the local community” as he shares his knowledge with his deep networks around the Murraylands.”

Japan Lean Tour alumnus Gilbert Bruton, TPM Co-ordinator for Coopers Brewery Ltd, said the tour would benefit any company with a desire to forge change, but warns, “…this could lead to some serious self-analysis on how GOOD companies operate!”

Andrew Marshall, Production Manager of Wineworks Marlborough in New Zealand, admired the Japanese systems, machinery, processes and people.

“The passion for lean manufacturing shown by every staff member was evident and the dedication shown at all levels of management was significant,” Andrew said. “The lean implementation is at such a high level at some of the sites that you realise how many more opportunities there are at your own site.”

“Even where the factories are unrelated to your own industry, the message is more about the process and disciplines used to get the business to the current state. Small steps to achieve the ultimate goal.”

Jeremy Hawkes said that the perspectives and principles he learned in Japan would extend to everything he does, “how you react when things go wrong and how important it is to continuously improve in everything that you do.”

“It’s hard to know what is out there beyond the boundaries of SA and Australia, but it is so important that we do know!”

2014 Lean Study Mission to Japan

Lean Factory VisitThe Lean Manufacturing Tour of Japan has taken place every year since 2007. This year two tours will be held from 18-24 May and 9-15 November.

“A key difference for 2014 is that we are looking to add a couple of food and beverage companies into the itinerary,” said Paul Smith.

The tour also includes cultural activities and a seminar on Japanese business etiquette and doing business with the Japanese.

Further information about the Australian Industry Group Lean Japan Tour can be found at http://shinkamanagement.com/lean-training/lean-tour/

Kavanagh Industries Sheet Metal Ducting Factory – Lean Job Shop Tour

Kavanagh Industries is a Western Sydney success story, specialising in the manufacture of sheet metal ducting. In February 2014, Managing Director Aidan Kavanagh invited members of the local lean community to join a factory tour of Kavanagh Industries’ Smithfield facilities.

Kavanagh Industries is a family business that has grown to become Australia’s leading sheet metal duct manufacturer. The company’s 17,000 square metre Smithfield facility houses major equipment such as coil fed plasma cutters, automated straight duct lines, a spiral lock-seam round duct machine, and other automated cutting, turning and welding processes.

lean job shop

The Smithfield facility is set up to be as flexible as possible to cater for orders varying in type, size, shape, weight and material. The excellent application of lean thinking to a job shop environment was impressive, especially given that many companies use made-to-order production as an excuse as to why they can’t achieve lean production.

In an environment where product type, specification, volume and fabrication time varies by product, and where it can be difficult (but not impossible) to determine a standard time for each product, it can be easy to dismiss lean. Handling methods will differ when products are heavy, large and of varying shapes and in many cases it can be difficult to move products between operations. Job shops tend to have frequent welding and grinding operations which lead to dirty work spaces, and it can be easy to amass large quantities of surplus material.

Despite these challenges, the lean implementation and presentation of Kavanagh Industries’ operations were exemplary. Take for example the implementation of 5S, which can often suffer in made-to-order factories for reasons given above, and at times of workload peaks. The Smithfield facility was a well laid out lean job shop, allowing for safe and efficient work. Good use of shadow boards freed up space in work areas, cables and cords were kept in check, and as the saying goes, there was a place for everything and everything in its place.

lean-made-to-order

In leading us through the facility, Aidan noted that production targets for the day are set each morning by operators (rather than by management), and the production control system allows for simple, visual communication to all of these targets and how well the team are tracking against them.

visual production control

Worker morale and employee engagement appeared strong. The operators are multi-skilled, motivated to perform and their efforts are appreciated and rewarded appropriately. The room which hosted our group for the presentations following the tour, was filled with equipment that had been purchased with the well-being of employees in mind, including meditation chairs, fitness equipment, pool and table-tennis tables, and an adjacent massage room where each employee receives a massage each week courtesy of the company. Kavanagh Industries has been recognised as an employer of choice previously, and the Today Tonight feature on the company is well worth a look (followed by reflection as to what else could be done for those employed at your company). Love the closing comment.

At each turn throughout the tour, both at Kavanagh Industries and the adjacent KS Metal Fabrications, there were signs of enlightened management and the benefits that result in terms of productivity, quality, safety and importantly employee welfare.

lean tour sheet metal

production planning

A briefing on our recent lean study mission to Japan followed with presentations from tour participants Aidan Kavanagh, Managing Director of Kavanagh Industries, and Lee Baines, Manager Best Practice Unit of Enterprise Connect.

lean study mission

Ben Sparrow, Director and Lean Consultant of Shinka Management spoke about three standout companies that we have visited on our lean tours to Japan – Rinnai, Sekisui Heim and Suzaki Industries. Rinnai especially is a standout, and Ben has written about his experiences with the company previously (See: My New Lean Benchmark; The Taiichi Ohno Visit That Triggered Rinnai’s Lean Excellence).

Ben Sparrow Lean Consultant

John Mills, Business Adviser, Australian Industry Group, also provided the group with a presentation regarding Enterprise Connect’s funding and support offerings.

John Mills Enterprise Connect

Thanks is extended to the presenters, and especially to Aidan and his team for hosting us.

If you are interested in learning of dates for future lean factory visits and lean training events in Australia or Japan, we invite you to join our mailing list via the form at the top right of this page.

Lion Castlemaine Perkins XXXX Brewery Tour

Lion showcases its Manufacturing Excellence (MEX) Journey

In November 2013 two staff from Lion’s brewing operations joined us on our Lean Japan Tour, and on their return kindly agreed to host a brewery tour at their Castlemaine Perkins Brewery this February for our clients in South East Queensland and local members of the Australian Industry Group.

Lean Production Training

Lion is well-known in Australia as a leading beverage and food company employing 7,500 staff. The company boasts a portfolio of market-leading brands in beer, spirits, wine, milk, fresh dairy foods, juice, cheese and soy beverages.

Lion’s Castlemaine Perkins Brewery is famous for its signature XXXX Bitter Ale and Lion’s biggest selling brand, XXXX Gold. The brewery is well equipped to host visitors, and the tour started with an audio-visual explanation regarding the brewing process. The group then proceeded through the brewery to witness the various processes described.

Lion Brewery Tour

lean brewery tour

The highlight of the tour was the session held in the brewery’s Manufacturing Excellence (MEX) room where Manufacturing Excellence Leader Chris Sheehan shared details of Lion’s MEX program and lean journey.

Lion’s continuous improvement program focuses on several themes with autonomous maintenance, asset care, set-up time reduction and quality identified as key pillars of the MEX program. Teamwork in eliminating waste, 5S discipline, visual management and structured problem solving for continuous improvement are also highlighted, with safety and leadership as a foundation of MEX.

Lion Manufacturing Excellen

Lion Lean Briefing

Presentations and a report on the November 2013 Lean Japan Tour followed from Mark McGuinness, Manufacturing Manager of Moffat, and Ben Sparrow and Paul Smith, Directors of Shinka Management.

Moffat Lean Presentation

Lean Mission Briefing

Thanks to Lion for hosting the brewery tour (and for putting on the drinks!) and to Mark McGuinness of Moffatt for his talk.

We look forward to running our next factory tour in South East Queensland in mid 2014.

Redarc Electronics Factory Tour

On the afternoon of the 3rd of February 2014, 38 leaders of South Australian industry gathered in Lonsdale for a factory tour of Redarc Electronics. The event was one of four organised in Australia in early 2014 by Shinka Management, with the Redarc tour held with the support of the Australian Industry Group under the banner of the South Australian Lean Manufacturing Special Interest Group.

Redarc Electronics has over three decades of experience in designing and manufacturing electronic voltage converters and related products for commercial and recreational vehicles. The company is well known for its industry-leading range of inverters, battery chargers, power supplies and customised electronic modules.

Ben Sparrow Shinka Management Site Tour

The factory tour commenced with an introduction from Production Manager Shane Wreford on Redarc’s management philosophy, quality control initiatives and production challenges.

Redarc Electronics Presentation

Participants were divided into three groups for the site tour, visiting Engineering and R&D, Assembly and the Finished Goods Store.

Lean Factory Tour Australia

lean finished goods

The factory tour included a visit to Redarc’s Surface-mount technology facility, hosted by SMT Supervisor Johan Otto.

Johan Otto Redarc Electronics

surface-mount technology

Innovation and focus on ensuring quality and customer satisfaction were evident in walking through the facility. A focus on right-first-time was highlighted, and the product flow achieved throughout the site ensured that any issues were immediately recognised and resolved. Use of visual management throughout the facility for both real-time and retrospective tracking of operations was impressive.

visual management

Shane and Johan were participants on the November 2013 Australian Industry Group Lean Japan Tour, and improvements made to their management processes and operations were highlighted during the visit. One improvement was showcased that enabled quicker picking of parts, an innovation adapted directly from a technique demonstrated during the Gifu Auto Body site visit.

lean parts handling

Following the site visit, the focus of the event turned to the Lean Japan Tour held in November, with tour reports provided by South Australian tour participants.

Lean Tour Briefing

Paul Smith Shinka Management Presentation

Jeremy Hawkes, Managing Director of Bowhill Engineering, Thinus Steyn, Managing Director of ZF Lemforder Australia and Johan Otto of Redarc Electronics provided presentations on their experience and learnings from the lean study tour to Japan.

Jeremy Hawkes Bowhill Engineering

My perspective of how high the bar can go was definitely challenged by what we witnessed in Japan.
- Jeremy Hawkes, Managing Director, Bowhill Engineering

Thinus Steyn ZF Lemforder

Lean is a way of life – not a project.
- Thinus Steyn, Managing Director, ZF Lemforder Australia

lean journey

As a high mix low volume electronic manufacturer in Australia the challenges to survive are huge. We saw the lean tour as an opportunity to go to Japan and see how they reduce waste.
- Johan Otto, SMT Supervisor, Redarc Electronics

Thanks to Shane and the team at Redarc for their hospitality in hosting us, and to Jeremy, Johan and Thinus for their presentations. Photographs by Juan Photography.

The Redarc Site Tour was the first of four factory visits held around Australia in February and March 2014 to showcase learnings from last year’s Lean Japan Tour. The other visits were held at Lion’s Castlemaine Perkins Brewery in Brisbane, Kavanagh Industries in Sydney and REA Group in Melbourne. The next round of factory tours in Australia will be held in mid 2014.

To be notified of dates and locations, sign up for the Shinka Management mailing list or drop us a line. This year’s Lean Japan Tours will be held in May and November – for further information see the lean study tours page.

The Taiichi Ohno Visit That Triggered Rinnai’s Lean Excellence

Since visiting for the first time in 2011, I have been fascinated with the level of lean excellence at Rinnai.  I recently had the pleasure to interview Mr Masao Kosugi, Director of Rinnai Corporation. Kosugi has been at Rinnai since they first started studying the Toyota Production System (TPS).

Being a leading Japanese corporation, I am sure Rinnai were practicing a quite reasonable level of lean back in 1979. But a visit from Toyota’s Taiichi Ohno changed everything.

Taiichi Ohno visited our factory. He said it was horrible,” Kosugi recalled. Ohno also had some quite brutal words for their senior management. “He called us all terrible managers, and left.”

Ohno wasn’t focusing his criticism on any particular area, nor focusing on a certain theme. “It was all bad,” Kosugi said. “The distance travelled by operators was too far, the amount of work-in-progress was too much, the production speed was too slow, there were unnecessary items scattered all around…there was not one good aspect.”

Shinka-Management-9802 (300x200)Ohno was in front of many Rinnai employees when he directed his spray to management. However, then President Akito Naito realized that what Ohno had pointed out was quite accurate. From that moment Naito wanted Rinnai to seriously study the Toyota Production System. Many others thought the same after witnessing Ohno’s reaction, and they all agreed to begin the journey.

Rinnai spent ten years developing their employees and improvement foundations before formally launching the Rinnai Production System (RPS) in 1990. “There are many companies that rush to implement a kanban system and fail. Rinnai waited ten years before introducing kanban. From 1979 to 1989, we practiced the Toyota style of kaizen and waste elimination. We solidly studied the fundamentals.”

Through kaizen and waste elimination they tackled and eliminated the issues in each of their processes one-by-one. “The result of this was that by the time we introduced kanban, the level of each one of our processes was quite high. So we did not experience any disruption when we finally introduced kanban and our new production system,” Kosugi said.

However, Rinnai did not develop the Rinnai Production System for the sake of doing so. Kosugi explained, “We understood the importance of kaizen and waste elimination activities. However at the time we did not produce many types of products. We would plan our production to produce one model all on one day of the month. We responded to the market sufficiently with this method. We studied the Toyota way, but we did not feel the necessity of a kanban system or a mixed production system at that stage.”

Shinka-Management-9811 (300x150)The latter half of the 1980s saw the market become very competitive and a flood of new products released. “Once we started increasing the number of models, some models would have too much stock, some models we would run out of stock, despite us having plenty of overall stock. We had the product that we didn’t want, and didn’t have the product that we wanted, so the production system issue was escalated. We thought that if we didn’t change our way of producing, that we would create much trouble for our customers and the overall inventory level would increase. So we made the decision to introduce a new production system.”

There were some key characteristics in the way Rinnai spent those ten years studying TPS. Firstly, they had a clear plan of stages that they followed with discipline. Secondly, they involved all employees in improvement activities and production maintenance. Thirdly, they sent some of their own employees to Toyoda Gosei for 12 months to train in TPS. And finally, they would make regular visits to Aisin Seiki to learn the theory and shop floor application of their improvement efforts.

The result is a spectacular example of lean excellence. Naito, now in his role as Chairman, still plays an pivotal role in driving this effort. The Oguchi plant was certainly the most popular factory visited on the Australian Industry Group Lean Japan Tour last November.

Taiichi Ohno never made a second visit to Rinnai’s Oguchi plant. However, somehow he did hear about the improvement made. “He still did not have anything positive to say. He was never going to commend us after being so harsh when he visited,” Kosugi commented. “People from Toyota don’t generally praise us. But through their visits to our Oguchi plant, each year the positive comments have slowly increased. So we feel that we are heading in the right direction.”

Ben Sparrow is a Director of Shinka Management, a company of lean consultants supporting Australian industry to improve productivity through Japanese lean manufacturing practices.

Challenges in Implementing Lean Across Multiple Sites

The following transcript is from a presentation to the South Australian Lean Manufacturing Special Interest Group in May 2013 by Mr Peter Gardner, Global Manufacturing Engineering Director, TI Automotive. The talk focuses on having the right motivation and attitude towards lean implementation, and discusses the use of consistent standards and assessment systems within production sites spread across the globe.

Introduction – Lean Implementation

Peter Gardner TI AutomotiveI’m going to try to share a few of my experiences. We’ll have a bit of an introduction first. I’d like to start by introducing our company with two or three slides as that sets the scene. I’ll ask the question as to why you may think that lean manufacturing is your solution. I’ll provide a little bit of history, I think that’s always helpful as there is a lot of history in lean manufacturing. I’ll talk about what TI Automotive has done, and we’ll finish up with some final comments.

TI Automotive actually has four divisions. We make blow-moulded fuel tanks, pump and module systems for fuel, fluid carrying systems which is the area which I’m involved in, HVAC fluid systems in the engine bay, and power train systems comes under the Fluid Carrying Systems Division.

In the division that I am involved in we make a lot of brake and fuel tubular systems. We make all the plumbing that goes underneath the car from the fuel tank right through to the engine, for both the brake and fuel, for the wheels, ABS units etc. On the power train system side of the business there is a lot of fuel rail and high pressure diesel work. Diesel tubes are now coming in and that’s a very big part of our business. Diesel motors are becoming more and more popular every day.

The company overall has about 130 locations, and I don’t think there is anywhere in the world where motorcars are being built where we don’t have some sort of facility – either a manufacturing facility, a warehouse or a sales office. We have a very wide coverage. The nature of the brake and fuel products, once they are fabricated and assembled ready to go on a car, is such that they are extremely difficult to ship. They don’t package easily and they can be damaged easily, so our philosophy is to have our manufacturing facilities close to where our customers are building cars.

Here’s just a snapshot of the overall size of the company. The Asia-Pacific region represents about 28% of the sales of the total company. That’s rapidly changing – over the past three years the Asia-Pacific region has overtaken the US and in about four years it will overtake Europe. Europe is not travelling all that well at present, whereas the size of the automotive industry in the Asia-Pacific is still doubling about every five years.

Fluid Systems

Lean Implementation – The Right Attitude

Before you jump into lean manufacturing you need to think about whether that really is the best solution for you. Is there a real need for it, or is it that someone has been to a seminar like this and it has become flavour of the month. If some executive somewhere says that they were at something the other day, and they were talking about lean manufacturing, and therefore we must do a bit of that – well that is exactly the worst motivation to get into lean manufacturing. TI Automotive, coming through the Global Financial Crisis that hit the automotive industry and most other industries pretty hard, came out quite shaky. So during the 2010 to 2012 period we had problems with cost of poor quality, too much inventory, and productivity improvement not where it needed to be. And if we look at those three alone, quality issues, inventory issues and productivity issues, they are the classic needs where lean manufacturing systems should be effective.

I want you to get into it for the right reason. You don’t just assign someone to go off and say “Listen, develop a lean manufacturing system for us and come back when you’re ready.” It really does need involvement from the senior management or the board within your organisation, because unless they are committed to working with you, you will continue to run into problems, because lean manufacturing is not a quick fix solution to problems. You will get sustainable benefits out of it but it may take months or years before these benefits come. This isn’t something that will happen overnight. Unless you’ve got the hierarchy in your organisation well in tune with that line of thinking, you will be in trouble. This is because if the improvements don’t come overnight, I dare say that you’ll be told to shut up shop.

One of the things from lean manufacturing that can trap people; and our company has been through it and I will talk a little more about that when summing up; is a mindset that lean is just a toolbox of tricks. There are a lot of tools that will help you solve problems through lean processes, but the main thing to focus on in lean manufacturing is attitudes. We want our people needing to find better ways to improve themselves, to improve the business, to identify waste in the business and focus on getting rid of wasted opportunities in the business – that’s the starting point. The tools are easy to implement once you’ve got the people on board and understanding that there is a need to improve.

A Brief History of Lean Manufacturing

A little bit of history is helpful. Even before World War II, Toyota were making improvements in their weaving loom business, and it was back then that the Toyota people realised that improvements made in their business would make not only the cost of their processes more robust and lower, but that it would be beneficial to the people in the business also because their jobs would become more stable. So from those very early days before World War II, improvement and elimination of waste was in the DNA of the Toyota people. Just after World War II when Toyota were in the early days of getting into the automotive business, the Toyota president of the day, Kiichiro Toyoda, stated that Toyota needed to catch up with America in three years otherwise the automotive industry in Japan would not survive. Investigation started as to where the gaps were in Toyota’s business, and it was quickly established that there was a difference in productivity between what they saw in America and at home in Japan of about nine to one, so for every car that the Japanese automotive industry was putting out, the Americans, with the same level of resource input were able to put out nine vehicles.

It became obvious that there was a lot of waste in the process. And this is where a gentleman by the name of Taiichi Ohno came in. He was essentially the architect behind the Toyota Production System, and in the very early days, in the late 1940s and early 1950s, he did a lot of experimentation on the shop floor about breaking down people’s attitudes in the factory about the way they should work.

I can still go into some factories these days and see people that say “well I work on a welding machine, and I’m trained to do a welding operation, and that’s all I’m good for.” Taiichi Ohno had that challenge in the 1950s in Japan and over many attempts he was able to convince the workforce that it would be better if they could all train in a range of processes so that they could get their materials to flow better through their factory. The people became multi-skilled and the productivity ratcheted up very quickly once that realisation was made.

Toyota has been at this game for sixty years, and even today when you talk to senior Toyota people who are directly involved in the Toyota Production System philosophy they still profess today that they have a long way to go, a lot of learning yet to do, a lot more experimentation required and a lot more improvement to achieve. So lean manufacturing is not an overnight solution. You can get gains fairly early on, but you’ve got to realise that it is a long hard road.

Taiichi Ohno Beyond Large Scale ProductionSo what did TI Automotive do about this? We worked out we had a need, we understood the history, and we read the literature. If no-one has read the book by Taiichi Ohno (Toyota Production System: Beyond Large-Scale Production), I would recommend that as your starting point, because that talks about the philosophy behind the Toyota Production System. It’s not a bible on how to do things, but if you read it, and read between the lines too, you can see where the Toyota Production System is coming from. More than anything, do not blindly follow the Toyota Production System, because as the Toyota people say themselves, the Toyota Production System evolved and developed to solve Toyota’s problems, not our problems. Each of our plants has a unique set of problems, and some will be similar to Toyota’s problems, but many will be different. Certainly our products are likely to be extremely different.

So we need to make sure we understand that there is a real need. Get your philosophy clear on what you’re trying to do with your improvement program and lean manufacturing, and get your focus crystal clear.

In the division we are in at TI Automotive we have 86 sites, so we had to have a fairly hierarchical type of organisation to make sure we were inclusive of our whole business when we were launching lean manufacturing. We chose not to set up two or three pilot plants, but instead we chose to do a lot of hard yards behind the scenes and set up the system with consultation with a lot of plants that we could launch globally.

So we set up a steering committee of which there were three of us involved, myself I was looking after Asia-Pacific inputs, we had another from North America looking after North and South America inputs, and we had another from Europe who also looked after eastern Europe and South Africa. So we pretty much had the world covered. The other two were direct operations guys, so they were truly hands-on, whereas my role in manufacturing engineering, whilst very closely associated with the operations, is not directly hands-on. So we thought we had it covered at that level, but we didn’t have all the expertise ourselves, so as we were developing the workings behind the TI Automotive systems we coerced some special teams to look after special areas and provide feedback to us about what was needed as well.

We worked on this without launching into the plants for two years. Part of the reason for requiring two years was because we have such a complex organisation, and I would hope that anyone with a simpler structure could do it much faster. Ultimately we finished up with the TI Productions System, or as we called it “TIPS”. But we weren’t afraid to borrow from TPS and the infamous TPS house, so we built a TIPS House. The roof represents our objective to support stakeholders, customers and employees, and make sure they were satisfied with the outputs of the business. If they were satisfied we knew the business would be strong.

We built this TIPS process on a foundation of both Kaizen / Continuous Improvement and zero defects. In our business we need to build our product to a takt time, which is the rate at which our customers are demanding products from us. We didn’t want to over produce or under produce, and this required the involvement of all of our employees, especially our shop floor employees. We wanted to have pull systems throughout all of our operations, and I can tell you we have a long way to go there – we’re just scratching the surface. The advantages of pull systems are that they will remove WIP from your process, it will help you manage your finished goods, and it will give you clarity on the shop floor – as problems and bottlenecks evolve you will be able to see them much clearer.

Standards and Assessment

Our brake and fuel business in particular has grown since the 1920s, and one of the reasons that our business has been successful globally is that we’ve given a lot of autonomy to our outposts. They’ve been successful in winning business and servicing their customers. However every outpost was doing its own thing and being successful in its own right. When when of our large global companies came into China and said it wanted the same performance out of China that it was getting out of TI Automotive in Germany, well we didn’t know if that was fair. But if you’ve got global customers, you just say “yes sir” – because their business is good, their money is good. So global standards is a challenge ahead of us at the moment, and that is all consuming for me.

We’ve produced a booklet that has some basics of what we are calling those nine elements from TIPS: the three elements of satisfaction, the four pillars, and the two foundation elements. The purpose of producing that was to be able to give it to the shop floor employees. Then when we came onto the shop floor and talked about having to build to standards and requesting their involvement in implementing pull systems, they had something they could take away to read and to question.

TI Production System ManualWe’ve also produced a manual that is an expansion of the employee booklet. It is not a how-to book, nor a lean manufacturing toolbox, so it does not tell you the day-to-day tasks of how to implement a pull system or how to do SMED or how to do TPM (there’s a lot of acronyms in all of this). Instead, the manual is a set of guidelines about how to operate the business on a daily basis: what you need to do in your monthly management reviews, what you need to do on the shop floor on a daily basis, how to set the shop floor up with information about what’s happening in the business, etc., so that everyone is exposed to the performance of the business.

The reason that we put that into the manual and not the toolkit, is so that when we do a self-assessment of the business we are assessing the way the business is structured and managed for improvement activities. The focus is not the success that they are having with pull systems, or SMED or Kaizen or small group activities, but it is a system that will allow you to measure how you are running the business. And what we’ve done here is split each of those nine elements off of the TIPS House, and within there we have sub-elements as well, split into five categories. Category one is that you are not doing anything associated with what the element requires you to do, up to Category five, where you are truly world-class in your activity in that particular area. And so the plant manager can score his operation on a one-to-five basis.

As we are planning to roll TIPS out across our organisation, this is not a corporate roll-out. This is a roll-out that is putting the onus directly back at the plant level where the improvements need to be. As such the objective and the task is to get buy-in at the plant manager level such that his management team take ownership of the process and roll it out across their plant. Improvement activities must surely be the plant manager’s responsibility. I can’t walk into a plant and say that improvements are needed if the plant manager is standing back and saying that that is rubbish, I don’t want to do this, I have different priorities, etc.

So out of this self-assessment process, where we are analysing the elements and the sub-elements in our system, we can get this score which will automatically give us a gap analysis. Anything less than five tells us that we have a gap, so if we are down in the twos and threes, then that’s where we should put our priority. If we are four then we can probably live with that for a year or two, because I can assure you that we will have twos and threes elsewhere, but hopefully not too many. Ultimately the gap analysis can be presented anyway you like. We are choosing to do it with a spider diagram so that we can see where the highs and lows are. There are also some improvement plan activities and a timing plan that go together with the self assessment.

The other big advantage of the scoring system that we are bringing in, is that it will allow us not just to identify improvements required in one plant, but it will help us share knowledge across all of our plants. So we might have a group of plants across India that are struggling across one particular element and have twos and threes, but we might have a plant in Spain that has fours and fives in that area, so we can get the two of them talking together, or use myself as a conduit, to understand what the team in Spain is doing to get fours and fives, and what is being done in India to get twos and threes. We can bring that information together, and that way we feel that we can very rapidly deploy the very good things we are doing in our business, bring the ones, twos and threes up to fours and fives, and achieve results quicker.

Implementing Lean – Final Comments

I read a lot of material on this subject, because I personally find it fascinating and challenging to find the best ways to help us in our business. There’s currently a lot of information coming out of North America about Six Sigma being a lean tool. Six Sigma definitely has a place for problem solving in business, but my definition of a truly lean tool for help improve your business is one that can be applied at the factory floor level involving the factory floor people. Six Sigma does not easily lend itself to applications involving people directly on the shop floor driving improvements. There’s a place for it, but I don’t put it in the same category as lean manufacturing.

Six Sigma does not easily lend itself to applications involving people directly on the shop floor driving improvements. There’s a place for it, but I don’t put it in the same category as lean manufacturing.

I’ve already touched on focusing on attitude and not on the toolbox of solutions. In one example out of our own business in the US some fifteen years ago, we launched what we then called Common-Sense Manufacturing, which is really just a local name for the Toyota Production System or lean manufacturing. Essentially we went into it very heavily with lots of tools and lots of training on how to use the toolkits, but over the last fifteen years, as people have come and gone, and as we’ve had to squeeze head count in North America during the Global Financial Crisis, we realised that there was no substance underpinning the lean manufacturing processes that we put in there. We hadn’t changed the culture in the factories. We were doing some good work in how we were using the tools, but we hadn’t changed the culture. And really that’s where a lot of effort has got to go.

Regarding communications with stakeholders, it is absolutely critical to keep your senior management and board involved. You don’t want any surprises when implementing lean – if you’re running late or coming up against any budgetary constraints, get it out there and get it out there early. Lean implementation is a long-term program, not a quick-fix overnight.

Be aware of cultural differences. I get exposed to this a lot in Asia, where some of the Asian cultures are very strong,  especially within Japan, China, India and Thailand. When working inside our factories I don’t try to change people’s country culture – you’ve got no hope. But inside the factory there is a company culture as to the way we do things, and we’ve got to work with that company culture and the country culture to find some middle ground. You cannot just impose one on top of the other. If you just let the company culture rule, and we’ve been there in particular in China and Thailand, and if the company culture tries to bulldoze its way through, your success rate will be very slow.

But it’s not just country culture that you need to be aware of. There are regional issues, and North Americans don’t like the Europeans, who don’t like the Asians, etc. And so there’s a whole lot of work that has got to be done within your own organisation. Even plant to plant – I remember when I started here with TI Automotive I was the General Manager of the Australian operations and couldn’t believe the differences in attitude between our plant in Dandenong, Melbourne, and our plant in Kilburn, Adelaide. Just 750 km apart there were differences in attitudes, differences in culture and differences in the way people did things. It’s very important that you are aware of these things early before they start to fester and undermine your activities in your lean implementation actions.

Shigeo ShingoI would highly recommend that you find the book by Taiichi Ohno, it’s probably around $40 and well worth the investment. There’s another guru from the 1950s and 1960s out of Japan, Shigeo Shingo, with a very good range of books on toolkit activities such as Poka-yoke, Single Minute Exchange of Die, and some basic production process techniques. Another good source of information is the Lean Enterprise Institute.

I would highly recommend the Shinka Management team and their association with the Japan Management Association Consultants (JMAC). I have used them myself and I can’t speak highly enough of their capabilities.

There’s a heap of information on lean manufacturing. Be careful you don’t get swallowed up by it all. Be careful you don’t jump into the toolbox solution too quickly. Be careful you don’t get bogged down like our company did taking two years working out want to do before implementing it. Roll your sleeves up and get stuck into it cautiously. Plan, plan, plan and then implement fast. And once you start implementing I think you will find the benefits and it will be very, very rewarding.

The South Australian Lean Manufacturing Special Interest Group meets quarterly at the South Australian branch of the Australian Industry Group. Meetings are facilitated by lean consultants Shinka Management.

My New Lean Benchmark

On my first visit to Rinnai Corporation, they were surprisingly nervous. Official groups visiting the company had been very rare. They also knew that our Lean Japan Tour group was visiting the likes of Toyota, which is a benchmark for manufacturing in Japan and set up for mass numbers of tour groups. But the quality of the Rinnai tour was first-class, not only because of their genuine willingness to share their story, but also because of the level of lean that their shop floor exhibited. They expressed to me on numerous occasions that they are not as good as Toyota. They were right, they are better. I have found my new lean benchmark.

Over the summer break, I read the autobiography of the Chairman of Rinnai, Mr Akito Naito. I was presented the book by one of his colleagues on a visit to Rinnai in 2011. I feel awkward referring to him by his first name here (as Japanese are referred to by their last name), but will do so for the sake of clarity.

I first met Akito in 2010 through my role as Vice-President of the National Federation of Australia-Japan Societies. He was the President of the equivalent federation in Japan. However, it wasn’t until I visited his company that I truly became aware of the great things that he has achieved in his life.

The company name Rinnai comes from the combined family names of the two founders, Kanekichi Hayashi and Hidejiro Naito (Akito’s father). The Chinese character for Hayashi can be read as Rin, forming the first half. The second half comes from the character making the first part of Naito. In the early days, Rinnai was a gas appliance company with only 50 employees. Today, Rinnai employs more than 10,000 people across the globe.

Akito’s older brother was always destined to inherit the management of Rinnai from his father. Akito’s dream was to join a big company as an engineer and develop new technologies. He took a big step down this path by being accepted into Tokyo University – the most prestigious university in Japan. However, his older brother died in the war in 1943. Akito’s father asked him to forget his dream and join Rinnai. After graduating from Tokyo University in the spring of 1948, Akito started working for Rinnai. However, his father died later that year.

Akito assumed the role of Vice-President with Hayashi as President. President Hayashi gave Akito much of the management responsibility. From the very beginning, Akito always had the vision of Rinnai becoming the world’s top gas appliance maker. Akito became President in 1966, and served in that position until 2000 when he became Chairman. Today, he still is actively involved in the company as Chairman at 87 years of age. In short, much of what Rinnai is today has been the making of Akito.

In his travels around the world and visits to many types of manufacturing operations, Akito found his own industry was very close to that of aircraft manufacturing. The point of similarity was that with both products, poor quality could result in the death of the user. Because of this, he made quality the cornerstone of his company and coined the phrase “quality is our destiny”, which is instilled right across the company.

On our Lean Japan Tours, Akito has spoken to our group at length in English on both visits to Rinnai. Last year, he even joined us on the factory tour. He did not walk directly with us, but at his own pace and with his own intentions behind the group. I was acting as a marker at the back of the group and was able to watch his interactions around the plant. He had an aura of respect, but employees were comfortable in approaching him to discuss issues with him. Even at 87 years of age, he is still driving excellence in his organisation. However, on the 5S front, he is apparently running out of unsatisfactory areas to point out! You can understand why when you walk around his plant. It is the best example of 5S I have seen that spreads the entire site – including difficult to implement areas such as the press shop.

It is an honour to have the opportunity to know Akito. For years to come, the company that he gave the vision to and built from a young age will be my lean benchmark of management excellence that I hope our Shinka Management clients will aspire to.

Is Kaizen Second Nature?

As a high school student, I was fortunate enough to experience a one-year exchange program to Kumamoto, Japan. During the course of the year, I lived with a number of Japanese host families. I have managed to remain in touch with them over the years and visit them every so often when I travel to Japan.

visualSince one of my host fathers retired a number of years ago, I noticed that his city home and mountain shack were starting to become quite visual. In the bathroom, for example, he had labels everywhere indicating light switches, showing the hot and cold direction on taps and indicating where things belonged.

He also had a number of woodwork projects completed. Five years ago he installed an enclosed iron fire into the main room of the shack. Inside the fire sits a tray that collects the ash from the wood as it burns. On my most recent visit to his mountain shack, I was sitting in the main room next to the window watching him go through the process of cleaning this tray.

 

toolHe turned around and said to me that he always had trouble with the ash blowing off the tray and around the inside of the shack as he removed the tray and took it outside. At this point he walked outside the window and took a tool that he had a set location for on the wall outside. He brought the tool to the fire and slid the ash tray into the tool. This prevented the ash from flying through the air inside. He then took the tool out to a large bucket. He designed the tool so that he could empty the ash out directly from the tool. Of course, the other end of the tool is smaller so that the ash does not spill all over the ground. He placed the tool back in its set location on the wall outside and brought the tray back inside to the fire.

 

table

I asked him to show me another similar improvement he had made. He took me to the grassed area outside and had me help him pull out what appeared to be a large wooden table. He had designed it, however, so that two benches could fit into the centre for compact storage. In the hole created by taking the benches out sat a BBQ charcoal tray. As I asked where he cooked the food, he pulled out four rods (marked in red at one end) that sat in holes on either side (one end painted in red) across the gap in the table. The mesh to cook the food on sat on these rods. How brilliant! He had designed a BBQ table set that was visual and compact.

bbqI hadn’t thought about it previously, but I started realizing that he was applying visual management, 5S and kaizen across his life. When I first told him in 2004 that I had started working for Japan Management Association Consultants, he said that during his career with the Kumamoto prefectural government, he had taken some training from the Japan Management Association. But when I started testing his formal knowledge of the above management concepts, he had no idea what I was referring to.

Why would be acting this way? Where is this thinking coming from? Is it a thought process that is second nature to Japanese? That night over a shochu (Japanese vodka) I started discussing my observations with him further. He gave two simple reasons to explain why he behaves in this manner.

redendFirstly, he has a lot of people visit his shack for BBQ parties, outdoor concerts and mountain climbing. He makes things as visual as possible to make it easy for anybody, anytime, to understand where things are, where things need to be returned and the function of each switch in the shack. It saves people from asking him these questions over and over again and wasting his time.

Secondly, he likes to make life as easy for himself as possible. He is not a strong person, he isn’t a tall person and he isn’t getting any younger. So he sets his life up around himself so to make it simple to achieve tasks without wasting time, without physically wearing out his body and without redoing things because they didn’t work the first time. In other words, he is improving the environment around himself so that he can achieve things within his physical limitations.

It sounds like a familiar tale doesn’t it? These are concepts that we try and achieve in our efforts to improve our workplace. Giving items set locations, making locations visual, and implementing ideas to improve the safety, efficiency and quality of our work.

You see similar thinking around Western homes too. Some of the best shadow boards I have seen are in people’s sheds. The resident handy man loves to make small improvements around the home to improve life. My host father has taken the visual aspect to another level, but continuous improvement thinking is not only inherent in the Japanese. It is something that we all have inside of us, but often only utilise at home. The magic is to unlock ability in the workplace.

Ben Sparrow is a Director of Shinka Management, a company of lean consultants supporting Australian industry to improve productivity through Japanese lean manufacturing practices.

Searching for the Essence of Lean

Walking through factories in Japan, you can visually pick up on the concepts of lean being implemented. Reading through English books on lean, you can generally understand the concepts of lean being implemented. However, some of the essence of lean is hidden behind a veil of Japanese language, customs and culture. It is not generally visible to a foreign eye and not easily translated into a foreign language.

I occasionally hear people say that lean does not work outside of Japan. I think this perception may be due to this veil. We need to understand lean at a deeper level and learn about its original intentions. A deeper level doesn’t necessarily equate to further complexity. Actually, it may equate to simplification.

I have been dealing with Japanese in Japanese for over half my life now. If you have studied a foreign language, you know that some words translated into another language cannot always be done so with the full essence of its original meaning. I find that the Japanese concepts that lean is based upon do not always translate well into English.

In fact, I believe that the English body of lean material is missing that essence.

Take for example the word monodzukuri. If you look at the Japanese language websites of companies in Japan, such as Toyota, you often see this term. It is a common word used in industry. The English equivalent of the website translates this word consistently as “manufacturing”. However, the Japanese word has a much deeper meaning.

Allow me to explain with a brief language lesson. The Japanese language is made up from three different character sets; hiragana, katakana and kanji. Hiragana is generally used for words of Japanese origin and katakana is generally used for words of foreign origin. Neither set have any meaning to their individual characters. Kanji is made up of thousands of characters that made their way from China to Japan. These individual characters have meaning.

Now, break the word monodzukuri up into two halves; “mono” and “dzukuri”. Depending on the kanji you use for “mono”, it can have two separate meanings – thing or person. Depending on the kanji you use for “dzukuri”, it can have three separate meanings – build, create or make. The magic of this word starts to become apparent when you combine some of those sets of words: building things, creating things, making things, building people, creating people and making people.

However, it is generally not written using any kanji, only hiragana and/or katakana, thus encompassing all of these words into one. And the more you read this word in context, the more you start to see that it can essentially be summarised into a simple phrase: the Japanese art of making things.

Can you see how translating it as “manufacturing” doesn’t quite convey the message? Also, can you see why it is not translated to the above phrase each time?! It would certainly spoil the natural rhythm of the sentence.

Working at this from the other direction, “lean” on an English page may be written in katakana (a foreign word) on a Japanese page, but the term does not inspire images of excellence through eliminating waste (like it does to us now in English). In fact, most professionals in Japan are mistaking what the Western definition of lean is. They instead consider that lean refers somehow to becoming very thin, starving and then falling over – bankruptcy!

So let’s get this right. “Lean” is a concept coined in the West to package up concepts based on the Toyota production system. But, if Japan is not using the term “lean” in the same way it is used in English, what terms and concepts do they have that define “lean” in Japanese? Do you really think Honda describes it as the Toyota Production System?

Ben Sparrow is Director and Consultant with lean manufacturing consulting firm Shinka Management. Ben leads kaizen and lean six sigma training courses in Australia and Japan.