Following Taiichi Ohno’s footsteps

Part 1 - Origins of Lean

This was part of a Lecture series for Industrial

Engineering students at a University of
Science and Technology in 2018.
The first part in the series was an
introduction to Industrial Engineering and the
history of Lean. The rest of the lectures were
how their classmates had been working as
interns to help a local company improve their
productivity. The results over two years of
working with the managers and supervisors were improvements in productivity annually over 30% and
more than $1,000,000 in savings each year (as tracked by their financial department, not guesses by the
students).
One of the questions that seems to come up regularly; “Is ‘lean’ the solution for all organizational
problems?” That depends upon which consultant you ask. They might not know enough about
manufacturing or your industry to understand which elements to apply.

Most of the ‘lean’ tools are centered around Toyota’s style of ‘lean’ (the green square), this is only one
segment across a broad range of possibilities. The chart illustrates the diversity of manufacturing
operations – from job shops to operations with continuous flow (like mining or chemical processes).
It’s truly impossible to fully learn lean without practice in a real working environment.
Do you remember learning how to swim or learning how to ride a bicycle?
To teach you lean, we will need to go to where the work is so you can practice.

Industrial engineering is the

connection of people to the
production system.
All the decisions driving lean
choices were economic ones in the
early days at Toyota.
Since so much of ‘lean’ is centered on Toyota, you need to understand that there were many external
events that happened at Toyota that drove the need for Taiichi Ohno to create a robust production
system.
(Needing a production system is an outcome of leadership creating a vision on how they can add value to
society and finding product/market fit with a product or service that the customers see as adding value
to solve their needs.)
There is so much material available, where do
you start? How many books have you read on
lean? How many are in your university
library? (My local university has thousands…
far more than I could ever read).
Since there are thousands of books to choose
from, it’s difficult to know where do you
start?

The best sellers are written by academics,

sales and marketing, etc.; those with the gift
of words. As such, they are unlikely to
understand what they have observed.
On the other side, engineers are not known
for their entertaining or clear writing styles,
just read any assembly instructions or
operating instructions for equipment.
Not to complain too much about the writers,
the observers have the “Iceberg Effect” in
play. Only 1/8th of the iceberg is visible, the
balance is what supports what you see. If
you haven’t spent years in a manufacturing
environment, it’s difficult to understand all
the interconnections in the system. The
observers are left guessing what the rest of
the system is, if they are even aware of it. At
best, they might be able to accurately
describe what they see.

Since I’m unraveling how ‘lean’ was developed over the years, it is important to understand that the
observers are writing about what they saw, not how or what it took to get to this point.
We failed to consider that observing their mature system could not reveal how that got to this point;
how do you build the system (not copy)? Most of what people write about is what they can observe
today and what they have read that other ‘experts’ have written. They can describe what they see today
but have no idea how Ohno and his team built and stabilized their production system. All they can do is
have you look like Toyota and use the tools, maybe it will work…
(Industry has a poor record of success creating commercially measurable results that would have a ROI
that would meet the standard hurdles for the purchase of new equipment or other capital investments.)
Just so you won’t think I’m being mean to the book writing community, here’s a recent article by John
Shook.

What was written about Toyota in the 1980’s is not the same as Toyota today and Toyota’s core
manufacturing facilities are different than their smaller satellite facilities. Toyota doesn’t do as good a
job sharing internally as you might think. In the mid 1990’s, Toyota did part simplification (DFMA) after
comparing the number of parts in a European light assembly to their product. This led to an overall
design for manufacture and assemble review. And again about 2010 to begin to commonize similar parts
across models to reduce part proliferation.
 Kata is Japanese for Pattern. We use
the TWI skills to provide the initial
PATTERNS. The TWI programs define
the initial ACTION steps. You are told
to repeat it until it became a HABIT.
The habit becomes an unconscious
act and is merged with your other
habits to make up your BEHAVIOR.
When most of the leaders in a
company develop these behaviors, it
becomes their CULTURE. The KATA's
are the mature patterns, which are
outcomes of your experience.
In Toyota Kata, Mike Rother has defined the high-level steps an experienced person will generally
follow. If you were to follow them around for a week, it would not look like they are following a pattern.
They intuitively respond to the problems observed, like a jazz musician improvising in a jam session. You
can master the questioning pattern, but the improvisation takes years of experience.
There are many versions of leader
standard work that consultants are
selling as systems the managers
must implement to create a culture
that is being promoted as ‘lean’.
The original leader standard work
evolved when managers realized
that supervisors had a core set of
tasks that were expected to do. By
applying Job Instruction to
standardize the tasks, they improved
the overall performance of the
organization.
The Toyota Way Fieldbook was first published in 2005. If you want to get an idea of typical expectations
that Toyota had for their employees; team leaders and team managers. Leader standard work is
standardizing the core activities; yes, managers have standard work in their jobs just like the production
operator.
Six Sigma was concocted from a series
of popular programs from the
1980’s: SPC (Statistical Process
Control); Re-Engineering (start
designing your production process
with a blank piece of paper); QFD
(Quality Function Deployment) –
House of Quality, the matrix was
actually good at getting people to
focus on attributes that mattered to
the customer.
First started at Motorola, popularized
by GE.
There is a trap of getting certified in one of the Six Sigma belts. You may have mastered the technical
side and even completed a project or two. It's only after you have a few years of experience and dozens
of projects completed, that you will realize that the certificate was just recognizing your beginner status.
To compare the difficulty in getting certifications, SME’s Lean Bronze certificate requires five projects.
 The Guiding Principles at Toyota
reflects the kind of company that
Toyota seeks to be. The Toyota Way
2001 clarifies the values and business
methods that all employees should
embrace in order to carry out the
Guiding Principles at Toyota
throughout the company's global
activities.
The Toyota Way is supported by two
main pillars: 'Continuous
Improvement' and 'Respect for
People'. (http://www.toyota-global.com/company/vision_philosophy/guiding_principles.html)
John Shook mentioned that the
Value Stream mapping process was a
way for people to be able to better
see the flows (materials and
information) in a production system.
If you need to post it electronically or
share it with other sites, you can
use eVSM (https://www.evsm.com/),
it can do all sorts of simulations (and
the calculations that a typical
engineer would do by hand or in a
spreadsheet). This can be useful
when you are working with a big
manufacturer with complex
manufacturing processes and you need to be able to do ‘what if’ simulations and deliver fancy
presentations to impress management.

On the left is a typical process flow

chart; the symbols haven’t changed
much in the last 50 years. Mostly
used for documentation.
On the right, a flow chart done in an
office to understand and solve
problems.
Visually you can see the whole
process in one place, and it is easier
to find places to improve or simplify
the flows.
Simplified mapping development –
1930s
Work Simplification development
started – 1932
“Work Simplification” conferences
started – 1937 Mogensen and
associates.
The first structured method for
documenting process flow, the flow
process chart, was introduced by
Frank Gilbreth to members of ASME
in 1921 as the presentation “Process
Charts—First Steps in Finding the One Best Way”. Gilbreth's tools were quickly integrated into industrial
engineering curricula. In the early 1930s, an industrial engineer, Allan H. Mogensen began training
business people by using these tools of industrial engineering at his Work Simplification Conferences in
Lake Placid, New York. A 1944 graduate of Mogensen's class, Art Spinanger, took the tools back to
Procter and Gamble where he developed their work simplification program called the Deliberate
Methods Change Program. Another 1944 graduate, Ben S. Graham, Director of Formcraft Engineering at
Standard Register Industrial, adapted the flow process chart to information processing with his
development of the multi-flow process chart to display multiple documents and their relationships. In
1947, ASME adopted a symbol set derived from Gilbreth's original work as the ASME Standard for
Process Charts.

Trainers don’t need to really know anything about lean to sell the training programs for 5S. Companies
are usually satisfied because of the big visual changes that happen. However, there is a 98% failure rate
within 3 years of implementation; people return to the way they did things before.
Looking lean, but with
limited results. Where is the
productivity and quality
results?
Do people know why things
are marked off in their work
area?
Is it more than just a
housekeeping exercise?
Do people feel compelled to
follow your 5S rules just
because you have '5S police'
to audit them?

The 5S program can be very useful when it’s not sold as a standalone product, or the starting point for
looking like Toyota. It was just a small part of Job Methods; part of a checklist to help people think of
improvements. The third level concentrates on visual work, making things obvious (management at a
glance).
People had difficulty of identifying the disruptions to flow when you just told them about the basic
principles, this was easier. Ohno defined four categories of activities to remove:
1. Unnecessary activity of overproduction
2. Unnecessary activity of waiting time.
3. Unnecessary activity of transport.
4. Unnecessary activity in processing itself.

This connects back to Ohno’s ‘profit making IE’. The 7-Wastes list shows up about 1978, not earlier. The
7-Waste designation made it easy to be somewhat successful without knowing WHY! The focus is to
effectively and efficiently deliver your product. It’s not about working harder or faster.
The student was John Krafcik, he was
Toyota’s first American engineer at
the NUMMI plant. He went on to
become the CEO of Hyundai Motor
America, now he is the CEO of
Waymo Inc. – Google’s self-driving
car company.

Masaaki Imai published his Kaizen

book to help launch the Kaizen
Institute Consulting Group. (If you
have ambitions at starting a
successful consulting group like the
Kaizen Institute, write a best seller to
get you started.) The US State
Department was also funding
technology transfer visits to the US
for Japanese in the 1950’s.

John Krafcik – now works for

Google; John Shook – first American
that knew that Toyota’s core
program was the TWI Job
Instruction. Plant went from worst in
GM system to best in 2 years

Reducing inventories was just the

next ‘if only…’ step Americans were
taking to compete with Japan. this
was before we were told to be 'lean'
or create management systems that
'respected' people.
By the 1970’s, “Made in Japan”
changed meanings in America, in the
1950's and 1960's it had meant
cheap, low quality products. Now it
became inexpensive, yet durable and
functional products. The Japanese
entered market after market and
displaced the industry leaders. We
went through a series of experts
proposing that “If only…“ we did X,
then we could compete. This
included changing management
systems from “Theory X” to “Theory Y”, and to the hybrid “Theory Z”. Then it was inventory reduction
(and Just-In-Time). Then quality control (SPC which partly fed the development of 6 Sigma). Then looking
like Toyota…
Ohno published his first book on TPS
in 1978, then had to ‘retire’ from
Toyota (he was a VP). He went on to
share his NPS (New Production
System) and help about 40 companies
improve their production systems and
profitability. The NPS group
performance stalled after his death,
but still exists today. (If you are
curious, there is a book on NPS.)

The suppliers contributed to internal

Toyota problems, like Quality and
Delivery. Once Toyota had refined
their internal production system,
they realized that they needed to
help their primary suppliers, as they
were often the root cause of
problems inside Toyota’s factory.
The first group of suppliers selected
were assisted by men who had spent
years working with Ohno to
implement the system inside Toyota.
At the suppliers, they implemented ‘Study Groups’ to improve the quality and delivery issues. The first
few years depended on the coaching provided by the men assigned to assist the suppliers. Within a few
years, Ohno allowed them to assemble the first Toyota Production System (TPS) Manual (standard
work).
Knowledge of lean inside Toyota; the reality is, we don’t know what we don’t know. There are subtle
differences in Ohno’s approach and Harada (the next generation). He was one of the most
knowledgeable people in the next generation of engineers. He oversaw Toyota’s OMCD group. Even in
the very first manual written inside Toyota we can identify knowledge losses (such as the JM question
sequence, even though they use most of the JM skills in their tools). Today’s Toyota experts are 6-8
generations from the original people that created the system. It is common for people in OMCD or other
top management positions to have never seen the original TPS manual.

By about 1967, Ohno considered his

production stable. (Enough to begin
to get suppliers using the kanban
system.)
 The kanban system is a containment
step:
1953 - supermarket system in
machine shop
1961 - pallet kanban (ended in failure)
1962 - kanban adopted companywide
(machining, forging, body assembly,
etc.)
1965 - kanban adopted for ordering
outside parts, 100% supply system,
began teaching Toyota system to
affiliates

As you progress towards enough stability to implement the kanban system and have a few series of
activities that flow, the overall system will still be in the pull phase.

Kanban sizing – general rule of no

more than 1/10 of a day’s production.
Weight - less than 20 kg on the line
for manual handling. Size – fits line
needs and quantity matched to line
where possible. Volume is fixed –
same quantity per container. Number
of kanbans or containers is fixed –
defined WIP.
Ohno’s kanban system was
developed to approximate making
the whole system operate as if it was
a single conveyor system. The
kanban rules required that the
segments achieve stability of +-5%,
without stability and continuous
demand, the system creates more
problems.

The other rules include the fixed

number of ‘kanbans’ (units of
materials moved defined, i.e. 200
pieces per kanban). The size of the
kanban could be no more than 10% of
the daily demand, avoiding large lot
movements.

American auto companies were

experimenting with reducing the
setup times, mostly for machining
operations (including the tooling
changes) as early as about 1910.
1945 – setups, starting to reduce to
2-3 hours (thru 1955)
1962 - main plant setups (15
minutes)
Toyota had die changes down into
single digits before Shingo saw the
process. Shingo should get credit for defining the 'Inside/Outside' sorting step for starting the
changeover improvement process. Toyota Brazil started in 1958 and were told that the Japanese could
change a press over in less than 10 minutes (it was not quite true at the time). So, the Brazilians sought
to accomplish what they thought the Japanese could do. When the Japanese saw what had been
accomplished, they copied most of the Brazilian innovations back in Japan.
 Eiji Toyoda’s visit to Ford’s plant
drove the realization that they must
catch up to the American level of
productivity. He set a target of doing
it in three years; it took five. He
visited Ford’s River Rouge Plant for 3
months in 1950 – to give you an idea
of the difference in size, Ford was
producing nearly 5000 vehicles a day.
In just over 2 days, Ford would
produce more than Toyota did in a
year. (Ford 4835/day – 1,208,912 year – Toyota 46/day – 11,706 year), Ford was more than 100 times
larger than Toyota in 1950.

We need to recognize the customer

focus was an idea brought in by
Shotaro Kamiya.
He learned it while working for GM
of Japan and GM used the customer
focus to gain market share from
Ford when Ford had more than 50%
of the world market.
 The expanding demand drove the
need for creating a production
system. The Job Methods program
was not detailed enough to create
standard work.
1955 – 7,398 vehicles
1965 – 236,005 ~ 32x increase of
production

Toyota's use of Job Methods was not

enough to develop standard work.
There is no time study training or
layout beyond superficial
suggestions.
Shingo's P Courses supplied this
need. Shingo was the best
alternative. The first IE university
course in Japan started about 1950
and IE's were in short supply.

Ohno needed the IE training to

develop standard work, TWI was not
enough.
Simplification of the implementation
process has led to color coding the
process flow rather than having
people memorize the names of tools
or programs.
Eiji Toyoda spending 3 months at
Ford’s River Rouge Plant helped him
realize, while Ford produced in a few
days what Toyota did in a year, there
was no technology at Ford that
Toyota did not have access to. This is
a major turning point in their
thinking (choosing to become a
leader instead of a follower). They
could not attribute the productivity
gap to special technology.

Understanding the context that

Taiichi Ohno was working in may help
in understanding the sequence that
he used for application. In 1950, they
estimated that it took about 9 Toyota
workers to do the same amount of
work as one Ford worker.
 With TWI – Ohno began to merge it
with what he already knew and had
been experimenting with. The TWI
programs gave him the ability to
develop the structure needed to get
closer to his ideal flow.

At first it was called Ohno’s system

as it was debugged, when it was
obvious that it really worked, they
renamed it the Toyota Production
System.
The TWI skills offer a structured
approach to problem solving as well
as building the structure necessary
to create flow.
Ohno took what he knew and added
the TWI skills into an existing
production environment. In an interview, Ohno stated that he seriously started the development of the
system in 1951. And it was stable by about 1965-7 (depending upon source quoting Ohno).
Understand that the role of the
leaders will shift as your system
matures, it did for Toyota and will for
you as well. Takehiko Harada joined
Toyota in 1968, a time when Ohno
states that his Production System
was stable.
Harada’s primary impression was
that his task was to remove
disruptions to flow, an objective that
has been lost in most current lean
implementations.
(Both the books pictured are worth putting on your reading list if you are serious about understanding
Ohno's production system. A copy of the 1973 TPS Manual is available as a PDF - send me a request
Mark.Tesla2@gmail.com)

Toyota’s “Respect for People”

started here… teaching the
supervisors to treat them like
human beings was part of the
strike settlement in 1950.
 This is an illustration taken for the Job
Relations training program. One of
the main points that they start with is
that all results a leader gets is done
through people.

Ironically, ‘kaizen’ was introduced by

the US Army!
People mistake ‘kaizen’ for just being
the improvement process; improving
includes problem solving at all levels.
Script for promotional movie in US
National Archives, SCAP records.

The ‘Just-in-Time’ process has a less

romantic origin than the generally
accepted story. They may have
thought about implementing it long
before it was forced on them by the
banks.
Ford had a ‘just-in-time’ delivery
system by about 1915. By the 1920's
Ford claimed he could convert iron
ore into a running car in just over
three days.
 The TWI programs were established
to allow industry to rapidly ramp up
production by training supervisors
and managers on three core skills
needed by all people in leadership
positions.

Taiichi Ohno had a long history

of learning by doing; starting in 1932
with his joining Toyoda Spinning and
Weaving, then moving to Toyota
Motor Manufacturing in 1943, then
the reorganization of Toyota about
1951 and the addition of the TWI
programs. By 1967 he considered
that he had most of the bugs worked
out of the Toyota Production System
(TPS).
Early in Ohno's career he was tasked with bench-marking a competitor Nichibo to understand their
advantages in the market. While there are recorded examples of factories being reorganized for flow in
Japan as early as 1917 (Ueno). Ohno’s first recorded exposure came in the 1930's. One could consider
this his first step in developing awareness of flow. His observations were based on the differences in the
approach that the Nichibo factory took in comparison to Toyoda’s methods.
Some of the things he noticed were; product focused layout, small lot production, and doing things right
the first time. Ohno mentions that he was able improve the production of the spinning factory several
times. When he moved to the Toyota Motor Manufacturing in 1943, his first impression was that he
could raise production three to five times simply by introducing the production systems adopted in the
spinning plant. It was only in 1949-50 that he made the first steps toward establishing the flow of
production by rearranging the machines. It is important to point out that by this time, Ohno has nearly
20 years of production experience. Most of the production machines were reorganized for flow by
1955.

Ohno’s primary objective is to create

flow of materials, information,
people, products, etc. This is
knowing what the end should be; in
general terms. People may not know
what it looks like, but they will
understand what it will ‘feel’ like.

There are limits to human endurance,

there is no limit to our creativity.
It’s a trap to start by trying to speed
up the process, although that might
be the outcome.
Lean construction before Toyota -
Empire State Building was completed
in 11 months after the first steel
columns were set, 102 floors (1931).
Thinking of the whole factory as a machine to be synchronized as a single machine began to emerge
about 1880. (Also known as “The
American System of Manufacture”.)
Walter Flanders is recorded as
reorganizing Henry Ford’s factory in
the fall of 1906. While he is not the
first, it is better documented than
earlier factories. Organizing for flow
helped, but it was also difficult to
implement as well as maintain. There
was no structured approach to
organizing for flow; especially
problem solving.

Put Processes in Sequence: From a

lean perspective, this is about each
process being able to hand off their
work to the next operation rather
than sending it to a warehouse or
boxing it up to be transported and
moved multiple times before the
next value adding activity happens.
If you can’t hand off to the next
process, then you will need a
containment step to communicate
between processes and a transport
function. When the processes are close enough, communication is easy with visual or audible signals.
When they are further away, like another department, building or supplier, this is where the Kanban
system is implemented. Kanbans are an added cost to production. Additional added costs are packing
and unpacking, packing containers and materials, disposal of packing materials, storage and transport of
materials, inventory tracking, etc.
The ideal is to have one process hand off to the next. Second choice would be to have the processes
within sight of each other, this enables visual communications. The next choice would be to signal with
Kanban - can be cards, bins, carts, even conveyors, trolleys, or virtual signals. Putting the processes in
sequence is a first step in working towards not packing/unpacking, transporting to a storage area,
eliminating many unnecessary activities.

Synchronize Processes: You can think

of a metronome (musical beat
- Takt is a German term for musical
beat) as an example for getting the
processes synchronized. Each process
has an ideal of producing at the pace
of consumption of the following
process. If the end consumer
consumption rate is slower than your
base cycle time, you could slow down
the cycle times by removing people,
increasing the number of tasks they
complete in a cycle. Or reduce the
working time. This is where the fourth flow principle is critical; stabilization of the demand pace on the
production system. This pace can be adjusted weekly, biweekly, monthly or even quarterly.
We start by measuring the velocity (capacity) of the processes to understand the variance between
sequential processes. Then we start pairing up processes that have similar velocities, then move on to
adding processes as we can. The first barrier to closely linked processes is there still is some variation in
cycle times. The natural limit is about 3-5 processes before you need some sort of small buffer to
stabilize the flow in the next series of processes. We recognize these as cells.

Balance Work Content: Without

balancing the work content, it is
difficult to synchronize. There are
containment steps that can be taken
as you work towards this ideal. It
requires that the people be multi-
skilled, knowing the processes
preceding and following their
operation. Limits are defined on the
number you can build ahead. When
this limit is reached, then you help to
reduce the bottleneck. (If you have
supplied the following process but
have no work available you go to the preceding process to help.)
Balancing the work also connects to morale; no one wants the tough job where you must struggle just to
keep up, especially if your neighbors have idle time to watch you sweat. Balancing the work content is
needed to support synchronizing the processes, it also gets you to look closer at the longer work cycles
to see if they can be simplified. Reducing the longer cycle times increases the system velocity. By ranking
the velocity, you have a way to pick out the barriers on a process flow. You might have several processes
that have velocities (cycle times longer than the desired beat - Takt) this just indicates the number of
processes that must be improved before you can begin to meet the flow demand.

Balance Process Demand: At the top

level, the marketing /sales /planning
have an obligation to level the
demand at the final step in the
process flow. There are some
businesses that have daily surges in
addition to external customer
daily/weekly demand, such as a
restaurant. In these situations, we can
use the setup reduction guidelines to
move much of the work content to off
peak time to limit loading the
bottleneck operations.

As the flow experiments continued to

improve productivity in the
manufacturing operations, the
assembly process became the
bottleneck. Ford’s story about being
inspired by the meat packing industry
is just that… a story. He had his men
visit Westinghouse shops to study
their production methods. He also
had teams study Sears and Roebuck
for their parts management system –
they had thousands of products and
filled orders in less than a day.

Walter Flanders not only reorganized

the production lines, but also their
supplier system and distribution
network. He arrived in the fall of
1906, left in the spring of 1908.
Henry Leland brought in by board
after they dismissed Ford. He
observed that all they needed was a
good engine and transmission and
the car would sell. (Which he was
already producing under contract to
the Dodge brothers who then
supplied them to Oldsmobile.)
Leland introduced the idea of
interchangeable parts to the auto
industry (having applied it making guns and sewing machines). When the board brought in Walter
Flanders the third year of business, it was just like how Ford lost control of his previous car company
(now Cadillac).
Rationalization started by focusing on
individual constraints; breakthroughs
or disruptive inventions solved a
constraint in one of these areas. The
late 1700’s and early 1800’s saw a
spike in creative ideas for machines to
reduce manual labor. While it started
in Europe, America caught up and
began to lead by the 1850’s. The
shortage and high cost of labor (more
expensive in the US than Europe),
drove much of the innovation, as
entrepreneurs tried to fulfill market
demands.
 While the person that led the rise of
Ford or Toyota is well known and
studied, we need to look closer.
They did not work alone. You cannot
be a leader without a team. They
developed a leadership vision and
created an environment that
supported innovation.
A company of one has little impact;
however, a great leader has many
outstanding lieutenants. While the
leader of an organization is
responsible for creating an
environment that allows people to
flourish, on a larger scale, any city, region, or country does the same to create an environment for
business to flourish, or not.

Results of people learning and building their

production system like Taiichi Ohno did.
 How they did it... growing people to solve problems and
to create flow in their production system

They have gone through several learning curves to get to this point. It started with applying the TWI
skills to remove disruptions to flow. Then the sequence was refined into 12 Steps. To further simplify the
process, we defined four stages in the loop after we develop awareness.

For more information, contact Mark Warren (Mark.Tesla2@gmail.com)