When a lean-thinking enterprise achieves these “half” reductions, it tries again to reduce by half. This belief that you can always find more waste to cut away will lead you to a lean, world-class production system.
The important number: zero
Understanding these basics of lean production is necessary in making the shift to a world-class paradigm. The world-class paradigm is outside most managers’ thinking and far outside their comfort zone. The world-class paradigm is zero — zero defects, zero change-over time, zero inventory, even zero quality control. The word zero suggests both a bull’s-eye or target value and an aggressive agenda for improvement. Such goals are basic to world-class production.
The “Nine Zeros” of world-class production, as set forth by author and lean consultant Thomas L. Jackson:
1.ZERO customer dissatisfaction
2.ZERO misalignment
3.ZERO bureaucracy
4.ZERO stakeholder dissatisfaction
5.ZERO lost information
6.ZERO waste
7.ZERO non-value-adding work
8.ZERO breakdowns
9.ZERO lost opportunity
The concept of zero tends to invite resistance. Managers typically say, “Reduction is fine, zero might be a good theoretical goal, but we can’t possible reach zero in ‘real life.’” We are part of a culture that believes defects and waste are inevitable, or at least, the costs or risks of completely eradicating them are not worth the incremental gain. We use this belief to tolerate and even perpetuate them.
Yet there are serious consequences to accepting any performance short of zero defects. And there are also examples all around us of processes that, although they may not have quite reached zero defects, are much, much closer to that ideal simply because their managers and their customers refuse to tolerate more. Don’t believe me? Here are some examples of the errors U.S. society would have to put up with if we were willing to accept a defect rate of even one-tenth of one percent (0.01 percent):
•Two major airliner crashes each week
•500 mistaken surgeries each week
•16,000 pieces of mail lost every hour
•22,000 erroneous bank account deductions each day
•2 million lost IRS documents each year
•Between 11,500 and 24,500 preventable hospital deaths (due to error, not disease) each year
The responsible institutions have become as good as they are now because society will accept nothing less. Many organizations would be ecstatic about a 99.9 percent quality performance, because that would be so much better than usual. But they will never reach even that level of imperfection until they aspire beyond it to zero. Perhaps, unlike the air travel industry, they simply have not faced the pressure to do so — or perhaps they are already under that pressure, don’t realize it, and will simply go out of business rather than meet the challenge. You can be sure that if they do go out of business, they won’t blame their tolerance for errors and waste. They’ll blame global competition, an uneven playing field, corporate acquisitions and mergers, or a host of other realities they didn’t feel they could control, rather than their own wasteful and error-prone processes.
Zero defect performance, with zero waste, is possible. This is a key tenet of lean thinking. Lean, world-class production starts by removing all waste from production and then goes much further. It also focuses on removing all waste from the organizational structure and from management practices. It is aggressively customer-focused, with “customer focus” viewed as nothing less than eliminating customer dissatisfaction by knowing and serving the customer well.
Leading your company toward flawless performance
In a lean, world-class production system, the job of leaders is to plan carefully and execute flawlessly to avoid misalignment of goals. The system fights bureaucracy by empowering employees and managing through teams. The culture of empowerment eliminates waste by instilling a mind-set of waste elimination. Over time, all non-value-added work is eliminated. World-class maintenance strives to eradicate breakdowns and all equipment-related losses. Finally, world-class engineering eliminates lost opportunities to respond to market changes.
It takes time to get to the Nine Zeros, but working toward them also buys time by helping you build an organization that can still be thriving and growing a century from now. The proof is in the legacy of a Japanese weaver who started working toward zero in 1902 and whose name still resonates in markets and business schools around the world.
Japanese Roots — Toyota, Toyota, Toyota
Lesson 3: Without knowledge and understanding of the Toyota Production System, you are a small ship in heavy fog without a reliable compass.
Learning about world-class performance is certainly an international endeavor. Japan in particular has pioneered systems that, if used correctly, can increase output while minimizing input. Japan has also shown us an example of the success of a strict system, which works in any industry or business, large or small.
Starting with the loom
The world standard today for efficient production is the Toyota Production System pioneered early in the twentieth century by Sakichi Toyoda, his son Kiichiro, and a production engineer by the name of Taiichi Ohno.
Figure 3.1: Machines that can stop automatically when encountering problems
Sakichi Toyoda, the inventor of automatic looms, founded the Toyota Group. In 1902 he came up with a loom that stopped automatically if any of the threads snapped. (See Figure 3.1.) His invention — autonomation, or a machine that worked not only automatically but autonomously — opened the way for loom works that enabled a single operator to handle dozens of looms. Because such looms would not continue to produce imperfect fabric and use up thread after a problem occurred, Sakichi’s invention reduced defects and raised yields. This principle of designing equipment to stop automatically and immediately call attention to problems is a cornerstone of the Toyota Production System.
When the Toyota Group set up an automobile-manufacturing operation in the 1930s, Sakichi’s son, Kiichiro, headed the new venture. Kiichiro traveled to the United States to study Henry Ford’s production operations. He returned to Japan with an understanding of Ford’s conveyor system, which he was determined to adapt to the small production volumes of the Japanese market.5
In Japan, the younger Toyoda implemented Ford’s conveyor system. He also organized production of the different assembly parts so that each was produced only in the varieties and quantities needed and was supplied only when necessary for the assembly sequence. In this way, each process produced exactly what was required by the next process, and no more. Toyoda coined the term “Just in Time” for this basic philosophical foundation.
Borrowing from the supermarket
Taiichi Ohno took just-in-time manufacturing a step farther, integrating it into a comprehensive production framework. In the late 1940s, Ohno, who later became an executive vice president at Toyota, managed a machining shop for the company. There, he experimented with ways of configuring the equipment to produce needed items in a timely manner. But he got an entirely new perspective on his JIT production system when he visited the United States in 1956.
Ohno went to the United States to visit automobile plants, but it was the supermarkets that most influenced his thinking. At that time, Japan did not have many self-service stores,