An Amazing Trip to Japan

In these most difficult of times, how can the Japanese grow their companies and continue to face the fierce competition from China?  Japan’s labor rates are much higher then ours and with China just across the China Sea, how can they compete so successfully?  Toyota made over 14 billion dollars in 2007; Canon leads the world in copiers and cameras; Matsushita has no equal in the Orient; and if you are fortunate to visit Tokyo and stay at their world-class hotels, you would see quality service at its zenith.  What does Japan do that we don’t?

At the recent Shingo Prize conference, I asked a room filled with over 500 attendees, “Are you attempting to be Lean?”  Every hand went up.  “How many are your companies are Lean?”  Not one hand went up.  Not one.  Why are we trying to be Lean and not getting there?  What are the barriers?  All the tools of Toyota are known to us: visual factory, 5s, TPM, quick change-overs, TPM, Kaizen blitz, Hoshin Kanri, cell design, Jidoka, Kanban, etc. etc.  We are implementing the tools and many of you are saving lots of money, but you are still not Lean, how come?

Gary Convis, former President of Toyota, Georgetown, was asked, “What do you expect from your workers?”  He said, “Come to work and pull the cord!”  Come to work is obvious but how many of you allow your workers to “pull the cord.”  How many of you really trust your workers enough to empower them, to train them continually, and to let them stop all of the other workers around them from working to get to the root cause of problems?  So we want to be Lean but we don’t want to invest in the growth of the workers.

Ironically, you pick and choose the tools you like from Toyota but you won’t engage and empower your workers.  As an example, the average Japanese company gets 24 implemented improvement ideas per year from their workers and saves over $4000 per year per worker.  In fact, Subaru received on the average 108 ideas per worker.   How many of you are doing Quick and Easy Kaizen?  And if not, why not?

So you try Six Sigma and you keep running, happily, those Kaizen blitzes, wonderful, but you are still not Lean.  And unfortunately, the word Lean has a synonym “Mean.”  “Lean and Mean.”  You cut costs through your Lean efforts, and you send your work to China and you lay off your workers.  What a reward for attempting to be Lean!  How can you be successful, when you want your workers to work themselves out of a job? Toyota has not layed off a single worker since 1950 and they go through the same economic cycles that you do? 

What Does Toyota Do That You Don’t Do?

Very simply, Toyota respects their people, and they have a long-term vision.  They want to win the long-term game and they don’t take the short cuts to get those profits this month or this quarter, and they are not willing to sacrifice their people for short-term gains.

One thing that has helped Toyota and other Japanese companies is that they have a dichotomy with their workforce, using part time or contract labor along with their permanent employees.  The advantage is that when there is downturn, some of the part time or contract workers will be suspended.  Those people know that the possibility exists.  Often, though those part time employees are given a chance to become fulltime employees.  And the permanent people never have to fear that their job is in jeopardy.

The Japanese companies also know that investing in their employees is a long-term benefit to both the employee and the company.

When you ask an American manager, “What is your most important asset?”  They will invariably say, “Our people.”  But, people are the first to go, aren’t they?  If they were really your valuable assets you wouldn’t so easy send them “out the door.”

I spent the last two weeks in Japan and it was a marvelous experience for me.  I visited Toyota, Hino, Aisin, Canon, Hitachi, Fuji Film, Chiba Toyopet and Toyota Fork Lift. It was “mind blowing.”  And the travelers on the study mission with me were enthralled.  In addition to the plant visits, we participated in a workshop with an ex-Toyota assistant plant manager, Mr. Zenji Kosaka.  He was incredible.  For me it was like sitting once again at the feet of Dr. Shingo and Mr. Ohno.

He told us about how Mr. Ohno would only “ASK,” and never tell you what to do. Even if Mr. Ohno knew the answer, he would not tell you.  He wanted you to learn and grow from your own challenges on the job.

Mr. Ohno and Dr. Shingo focused on eliminating those non-value adding wastes and building the capabilities of every employee.  Sure, they were hard “as nails.”  But, they were respected for their ceaseless, relentless pursuit of continuous improvement.  You might have great success on one project but both Ohno and Shingo expected you to do more.  And they expected everyone to be involved in continuous improvement.  That is continuous improvement every single day not just once in a while.

Ohno would ask you to reduce costs by 10% and let you go off and do it on your own.  When you achieved the cost reduction and exciting told Mr. Ohno of your success, he would simple say, "Go back and cut costs another 10%." 

Ohno was relentless in asking - demanding that you continuously improve .

Toyota has two pillars for their success:  JIT or Lean and “Respect for Employees.”  JIT is focused on the elimination of the non-value adding wastes. “Respect for Employees” is focused on building people to be problem solvers and empowering them to go and do it.

In the West, we have been pursuing Lean by solely focusing on the first pillar and totally neglecting the second.   It is like walking around with only one leg.  We can get there but only through hobbling along.

On my last visit to Japan, I noticed at every factory up on the factory walls "skill charts" with every workers name going down one side of the wall and skill certificates going along the other side.   The companies were encouraging all of their workers to pursue increasing their knowledge and skill abilities. Recognizing that people were true assets of the company, they knew by developing and training people they were increasing the value of those assets.

To be truly Lean is to begin to make sure that every worker is a member of a team, all working to solve problems.  In a true sense there is always problems.  Ohno’s favorite thing was to look at the non-value adding wastes and to reduce them.   Inventory was to be reduced.  If you had a batch size of 100 parts he would challenge you to reduce it to 90 parts and see what kind of problems came up.  Then he would challenge you to get to the root cause of the problems and eliminate them.  Then before you could take another breath, he would ask you to reduce the inventory to 80 parts to see what happens.

It is not complicated.  Just focus on developing people and eliminating all of the non-value adding wastes and do it everyday.  Like a person trying to lose weight, you can’t fast one day and eat a chocolate cake the next day.  You watch your diet everyday to become Lean.