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.

Mr Akito Naito sadly passed away in 2017. His legacy remains as an inspiration to Shinka Management.