The Business Complexity Accelerator at Toyota

There was an interesting article in the Knowledge@Wharton newsletter today. Wharton management professor John Paul MacDuffie interviewed Toyota expert, author and Tokyo University Professor Takahiro Fujimoto. The piece is called Under the Hood of Toyota’s Recall: ‘A Tremendous Expansion of Complexity’ and raises the by now familiar questions of complexity of modern automobile systems design, attitudes at Toyota towards its recent quality problems, and what this means for both Toyota and its competitors. To sum up the article with an automotive metaphor, Toyota needs to take its foot off of the business complexity accelerator.

Fujimoto said, “I was surprised to see that Toyota was the first to be caught in this trap of what we may call

complexity problems.” What has puzzled Toyota watchers is how Toyota, proven to be so great at solving problems for so many years, seems to have stumbled in a big way during this recent acceleration-related recall. Why?

Toyota failed to see this problem in the right way, at least in the beginning.

Failing to grasp a problem clearly, quantitatively and without prejudice is the first step in problem solving. Was this a case that the problem solving approach was flawed, or was it that the problem solving process is still sound but that Toyota did not follow their own process?

The danger is that people tend to connect the two problems. “This happened and that happened, so there must be causal relations between the two.” But this is not the case. There appears to be no connections between the design problems and the Toyota production system or Toyota Way.

He clearly says that the recent quality issue at Toyota is not connected to their way of working within the production operations, i.e. the Toyota Production System or even more broadly their philosophy, the Toyota Way. He suggests that that the complexity of new systems within the design simply got out of hand, and when they did, Toyota was unable to respond properly. While the processes within TPS are sound, the mindsets and behaviors of people may have shifted in an unhealthy way towards overconfidence, even arrogance. Fujimoto said:

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The Rise of Sustainable Supply Chains

After the recession of 2008 companies got leaner and part of this new way of doing business involves looking at inefficiencies throughout the value chain as a way to leverage cost and enhance savings. Lean efforts have been demonstrated to yield substantial environmental benefits (pollution prevention, waste reduction and reuse opportunities) as well as leverage compliance issues.

Although sustainable supply chains have been steadily growing, in 2010 we saw an explosion of activity. The growth of greener supply chains in 2010 included a much greater focus on monitoring, measurement and verification from a host of companies including Wal-Mart, IBM, Proctor and Gamble, Kaiser Permanente, Puma, Ford, Intel, Pepsi, Kimberly-Clark,

Unilever, Johnson & Johnson, Dell, AT&T, P&G, and Herman Miller.

In addition to private enterprise, government agencies in the US (General Services Administration) and abroad (DEFRA in Britain) have set green standards and guidelines for federal procurement.

Major value chain concerns such as materials water and waste management, are part of a growing sustainability trend where companies are increasingly concerned with their suppliers’ sustainability efforts.

Corporate social responsibility issues including addressing concerns for human rights, fair labor and sustainable development got a lot of attention from big companies like Nestle, Corporate Express, Danisco, Starbucks, Unilever and the apparel industry.

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Benefits for a world of seven billion people

As the world population achieves a new landmark of seven billion people, ISO standards offer practical tools for sustainability and a better, safer world.

According to the United Nations Population Fund (UNFPA), the population of our planet has now reached seven billion people (1). It said “This unique moment in human history represents both an achievement and a challenge, and will have an impact on every single person on the planet. A world of seven billion has implications for sustainability, urbanization, access to health services and youth empowerment – however, it also offers a rare call-to-action opportunity to renew global commitment for a healthy and sustainable world.”

ISO Secretary-General Rob Steele comments: “Standards play a pivotal role in facilitating the interaction of so many people. Every day, thousands of ISO standards help people at work, in the home and at play, by promoting quality and efficiency, making lives safer and more comfortable, fostering economic prosperity and looking after

our planet. And that is because ISO standards are made by people to help solve problems for people.”

Examples include standards for food safety, medical devices, social responsibility, building and construction, transportation and fighting climate change. Whether we are pressing on the brake of a car, playing ice hockey protected by a helmet, or using a computer, ISO standards make an important contribution to our safety and efficiency.

As the world population reaches seven billion, International Standards can help address the ever growing challenge of sustainability. For example, standards for food and water quality and for energy management can contribute to an effective use of resources. And standards for new technologies help promote and deploy innovations crucial to facilitating the lives of a rising population. In fact, most ISO standards contribute in one way or another to addressing the economic, societal and environmental aspects of sustainability.

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Toyota to Reduce Span of Control in Engineering

The Nikkei reported on June 11, 2010 that Toyota is bringing back front line supervisors, adding a layer of management to staff positions that has been missing since 1989. This is an admission by Toyota, the world’s greatest lean manufacturing company, that they got their span of control in engineering and possibly other staff areas, wrong.

This move is in quite stark contrast to the “de-layering” going on at many global companies in an effort mainly to cut costs. While it may not seem lean to add layers of supervision, it is in fact very lean when done to reduce span of control. Form follows function and in this case the supervisors function as team leaders, coaches and first responders to andon

cord pulls (calls for help). This in turn helps expose, catch and correct problems while they are still small, rather than letting them grow into bigger problems. These problems have apparently been escaping in recent years, based on the recalls and quality problems we are seeing at Toyota.



A few years ago we commented about an article citing concern among old-timers at Toyota that the rush increase volume and make large cost cuts in design was moving the company away from it’s principle of slow, steady growth through development of people. “When did Toyota get to be a company like this?” was the question asked in alarm at the way things were being changed. The person quoted in that article was Shoichiro Toyoda, the father of current Toyota CEO Akio Toyoda, who is leading this latest reorganization towards smaller span of control for engineers.

The Nikkei reports that this new team structure will be implemented first in the technology development sections. About 1,000 employees who have been with the company for about 10 years will move into supervisory positions. The span of control is a conservative five engineers per leader. Toyota has not given this position an official title yet, and plans to do so after a one-year pilot, according to Toyota.

For further reading on this important topic, here are three more articles on our blog about supervisor span of control:

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The Illustrated Toyota Production System, Vol. 2

We are pleased to bring to you The Illustrated Toyota Production System, Volume 2. This is a book that sheds light on lean manufacturing practices and in particular the Industrial Engineering underpinnings of TPS. Building on the overview of philosophy, principles and systems provided in Volume 1, the second half gives 60 practical lessons on kaizen and industrial engineering approaches and their use.

To celebrate the publishing of this book in English, we are offering a 2-for-1 sale through the month of June. Click on the banner above or visit www.gemba-shop.com and enter the coupon code TPSGEMBA upon checkout.

Each book is about 130 pages, half of which are illustrations of various principles and tools.

Volume 2 contains 60 lessons made up of one page of text and one supporting illustration, such as the one below from “Lesson 38: Education and Training Help People See Waste“.

The book is organized into four sections as shown below:

Section 1. What Is Kaizen?

1. Kaizen Is Built on Respect for People
2. A Key to Toyota’s Outstanding Success
3. Sharing Information through Visualization
4. Creating a Common Understanding of Work through Visual Management
5. Examples of Visual Management
6. Knowledge Is Not Sufficient–Creativity Is Needed
7. We Know Defects Are Waste–Why Can’t We Kaizen Them Away?
8. Understand Time-Tested and Proven Problem Solving Techniques
9. Kaizen Must Be Workplace-Centered
10. Understand the True Nature of Defects
11. How to Find the Root Causes of Defects in the Workplace
12. Getting Rid of the Waste of Inspection
13. Causes of Careless Mistakes & the Pokayoke Concept
14. Three Approaches to Pokayoke
15. How to Cope with Unplanned Minor Stops of Equipment
16. How Can We Learn to See Waste?
17. What to Do When You Cannot Find Topics for Kaizen

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Effective Team Charter

Too often teams spend a considerable amount of their valuable resources trying to figure out what it is they are supposed to do, writes contributors John Moran, Grace Duffy and Michael Rudis. Before starting any type of a process improvement work, it is important to know where you’re headed. Here’s how a Team Charter can help.

A Team Charter is the official document from the team sponsor that empowers the team to act. It is a written document describing the mission of the team and how this mission is to be accomplished.

The Team Charter is one of the most under-used and under-valued tools available to sponsors, team leaders, and facilitators for helping a team succeed.But it is often overlooked because it is time consuming to develop. To write a clear, concise, and inclusive Team Charter requires great forethought and effort.

Often the sponsor is in such a rush to start the teaming process that they skip the basic step of filling out a Team Charter that clearly defines the goals and objectives to be achieved. When a team is started without a formal Team Charter many meetings are often wasted trying to figure “why we are here, what we should do, and when it should be done.” The team spends a considerable amount of time and energy trying to second guess what the sponsor really wanted when the team was formed. This is a loss of valuable time and talent that could be avoided by designing a clear mission statement prior to the team’s formation. That’s why a sponsor must take the time to fill out a Team Charter.

The Team Charter is an official work contract. This document delineates the strategic goals, boundaries, measures of success, constraints/limits, and available resources. The Team Charter provides a framework for ongoing discussions between the team and its sponsor with regard to the team’s direction and progress.

It is an iterative process until a base line acceptance is established. It must be reviewed on a regular basis by the sponsor, the team leader, facilitator, and team members to ensure that it is reflective of what the team is doing or will be doing in the future.

The following example of the use of a Team Charter in a Public Health Department is an excellent adaptation of the concepts in the original team charter article to provide a guidance document to beginning Process Action Teams.

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Future of Quality

Change is persistant, what an old but never outdated wisdom. But what does that mean to our organizational environment? What does that mean concerning the job outline of a Quality Systems Manager? We will give you to both questions some answers. Mr. Paul Borawski, Chief Executive Officer, American Society for Quality, will provide you with useful information about the future of quality. He will invite you to lead. To take action. To prepare yourself and your organizations to benefit by anticipating and preparing for the future.

Mr. Benedikt Sommerhoff, Senior Consultant, German Society for Quality, is going to outline the change of the

occupational image of a Quality Systems Manager and will invite you to look into the future.

Closing Ceremony and Announcement of the 56th EOQ Congress

Process Mapping Mistakes

Process mapping provides a structural analysis approach and a capability of delivering systematic outputs. But the effectiveness of process mapping is affected by how it is selected as the method of analysis, how it is planned and executed, says contributor Shu-Wing Pang. Here are 4 common ways process improvement professionals go wrong with process mapping. Process mapping is an analytical tool commonly applied by process improvement professionals. By capturing real-world operation and reflecting it through a set of processes, they can, firstly, visualize the inputs, interactions, deliverables and parties involved in an organisation’s operation and decision-making, and secondly, identify process inefficiencies, disjoints and improvement opportunities.

The effectiveness of process mapping, however, varies significantly based on the writer’s experience and observations. On one procurement process reengineering project, for example, process mapping was appropriately applied to summarize core processes and identify non-value-added activities to facilitate

improvement; but on another project, the consultants involved failed to capture the true scale of the operational processes in the organisation and the resultant improvement was unable to address the real underlying problems.

Problem of Ineffective Process Mapping

The following are four common problems which adversely affect the use of process mapping on identifying improvement opportunities. These problems are related to the appropriate use of the process mapping method, how process mapping is planned and executed.

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The quality infrastructure

Introduction

UK businesses need to:

create and enter markets in a timely manner
meet customer requirements, including legislative requirements
manage risks, including risks to financial investment, product introductions, market exclusion, etc.

Underpinning these activities is the need to demonstrate conformance to standards (whether specified by

regulators, the market or the industry) in order to gain market access and gain market confidence in their products and services.



The ‘quality infrastructure’ supports these aims and comprises the physical facilities and the interrelated systems of organizations, structures and people that help organizations to implement quality practices and improve performance.

The principle parts of the infrastructure relate to:

regulation – government, regulators
standards – documentary, physical/ reference, other codified intellectual property
conformity assessment and accreditation
economic operators and their collective representatives
consumers

Overview

The UK quality infrastructure is concerned with the relationships between:

legal requirements contained in regulation and legislation
voluntary standards which define the quality of products and services and the methods of their production
industry practice and the actual solutions provided by business
the market, where the confidence and will to trade is promoted
the accreditation and conformity assessment regimes that provide the evidence and confidence

The UK quality infrastructure is principally made up of a number of separate bodies, each with separate remits but which impact the following:

Market access and international trade – facilitating the removal of technical barriers to trade, evolving common language and practices that promote trade and gaining access to overseas markets
Industrial policy – enabling the UK to take advantage of its strong science base and capacity for innovation to compete in global markets
Regulation – either supporting regulation where there are significant risks to health, safety or the environment, or through market self-regulation
Providing confidence, evidence, information and assurance to purchasers, suppliers and customers regarding the quality of products, services or their supply.
Promoting awareness of and providing training and assistance in quality tools, methods, practices and culture.

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C++ language

C++, one of the most popular programming languages used in everything from Web browsers to 3D video games, has been fully updated and published as, ISO/IEC 14882:2011, Information technology – Programming languages – C++.

ISO/IEC 14882:2011 defines the programming language and specifies requirements for implementation. Also known as C++11, this is the first major revision of the standard since 1998. Its new features extend C++’s traditional strengths of flexibility and efficiency – for example, lambda functions, move semantics, and variadic templates further enable developers to use powerful expressiveness and strong abstraction to write efficient,

high-performance code with full access to the hardware available when needed. Even more, the new C++11 has the convenience and ease of use of other modern languages – from features like auto type deduction and explicit virtual override control, to standard smart pointers that mean never writing delete again.



“During recent years the industry has paid more attention to ‘newer’ managed-code environments like Java that emphasize programmer convenience at the expense of expressive power and performance, for example by requiring always-on garbage collection, metadata for reflection, and virtual machine execution that incur a performance expense even when they’re not needed or used,” explains Herb Sutter, Convener of the ISO working group that developed the standard.

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