Toyota falls short of GM in global sales – Yahoo News… So What?

Toyota falls short of GM in global sales – Yahoo News

This news article is interesting, because it totally misses the point.

First, in the fine print, Toyota fell short of GM, yes, by about 3,000 total cars out of about 9.3 million cars. So, in my book, that is a tie because +/- a couple of thousand out of nearly 10 million is just noise.

But what is missed is the bottom line – profit.

Take a look at the numbers that matter:

These results are not something that comes from a quarter-by-quarter strategy to “maximize shareholder value.” Rather they come from a consistent year-to-year pursuit of being an ever-better supplier to their customers.

So many companies equate top-line sales with success. Apparently the press does as well – assigning significant meaning to “total number of cars sold” without even mentioning the simple fact that one company is giving them away at a loss, and the other is actually making money.

Thoughts from Nagoya: Japan, Toyota, Shingijutsu

Nagoya Castle

This last road trip was 3+ weeks in China, then a week at the Shingijutsu seminar in Japan. It was a little fortunate for me since I was the only member on our team who was not suffering from 8-12 hours of jet lag.

As I noted at the start of the Shingijutsu Seminar series, Shingijutsu Co. split along factional lines a few years ago. I did not get an opportunity to get into details with anyone I know who would tell me, maybe I will inquire about the juicy details later on through correspondence. Anyone who does know is welcome to comment below.

Nakao-sensei’s group is now based in Nagoya and has a USA office in Portland, Oregon. They call themselves “Shingijutsu USA.” The other Shingijutsu goes by “Shingijutsu Global Consulting” and is headed up by Niwa-Sensei. Although I have no personal experience with this organization, I have some reliable second-hand information that they are a little much better at organizing the seminars and training activities. I also get anecdotal information that there remains a great deal of bad blood between the two groups, though some of that is egos and personalities of certain individuals who need not be named as if you care, you know who they are.

One of the interesting things we did on Thursday after the report-out was visit to the Nagoya office. The feature is stand-up desks made from the modular tube structure available under several different names. The same material is used to make racks and carts at Toyota as well as many other companies, but this is the first time I have seen it used to make office furniture. I will let the photos speak for themselves.

Shingijutsu Office Tour Shingijutsu office

This is obviously not for everyone, but it works for them, and that is what is important.

The opposite side of the office is floor covered with a tatami mat and a traditional table.

Toyota Museum

I mentioned the Toyota Museum a couple of days ago. If you plan on visiting, plan on about 4 hours. We did not have enough time on the planned itinerary. I have been there before and still would have liked to spend another hour on the site. Good museums are like that.


The last time I was in Japan (except for stopovers at Narita) was 2000 on a similar seminar. That time we had two weeks in-country, and more time to get out and about. Still, eight years is more than enough time to get a sense of where a country is going. The mid- and late- teens of 2000 are well into the workforce now. While it is still clearly Japan, I also got a sense that things have continued to loosen up a bit, for better or worse. There are also more people on the streets with a few extra pounds than before.

Toyota Museum Display: Universal Design

One of the displays in the Toyota Museum in Nagoya was an exhibition on “Universal Design.” This exhibition runs through December 2.

Rather than trying to interpret and articulate the concepts, I just want to list some of the key words. I think they stand for themselves, and provide a good baseline for evaluating the design of anything which must interact with humans.

  • Easy to see
  • Easy to hear
  • Easy to use
  • Easy to understand
  • You don’t have to be strong
  • Comfortable posture
  • OK for almost everyone
  • Equitable use
  • Flexible in use
  • Simple and intuitive
  • Perceptible information
  • Tolerance for error
  • Low physical effort
  • Size and space for approach and use

The exhibition highlights design concepts and features that make products (particularly automobiles, obviously) .

They talk about the physiological value of the product, in addition to the physical value. This is the linkage between the things which provide physical comfort and accessibility through the things which provide “comfort and peace of mind” – the things which assure the user (driver) that things are OK.

Things which people must see include special attention to the view through aging eyes. I can personally attest that things look different through the eyes of a 50+ year old than they do to a 20 year old. Contrast is reduced, as is resolution. Choices of fonts, sizes, colors are more important.

Even outside of automotive, if you are designing anything which needs humans to pay attention and interpret information, it is important to apply a little thinking into what they (humans) actually see, and what sorts of things penetrate consciousness and get the attention of someone who isn’t that attentive right now.

This carries back to the concepts I outlined in an earlier post “Sticky Visual Controls.” Of course a “visual control” is (or should be) also audible if you want someone who is otherwise distracted (or looking in another direction) to see it.

Shingijutsu Kaizen Seminar – Day 4

Today was the final report-out. In these events this is quite ritualized. Each team has a takt time, and must present a standard work combination sheet that shows the flow of their presentation. Everyone must participate in the presentation. There is a general set sequence for what is shown first, second, third, etc.

Because we only had two days on the shop floor (plus the fact that the host company really wasn’t set up with the background support logistics for rapid idea implementation), a lot of the “kaizens” presented were actually results from simulations. While there is still some learning value, I think that the participants missed something in not seeing what really good kaizen response looks like.

Shingijutsu Gemba Kaizen Seminar – Kaizen Key Points

The last post was a bit of a narrative, and I think it is appropriate to call out a few key points and express them succinctly.

  • The theoretical stuff all emphasizes “initial process stability” as a requirement for progress. Ohno said “without standards there can be no kaizen.” Mark says – “Without parts there can be no assembly.” Everyone knows this, then goes ahead and tries to implement standard work in the assembly areas. Bzzzzzzzt. Wrong answer. You simply can’t if they are blocked from performing to the standard.
  • Key Point: Stability is often implemented from the outside in. If you have unreliable suppliers, or an unreliable or inconsistent conveyance process, you are going to have to stock the inventory you think is necessary (DO THE MATH!) to buffer you supplier’s issues from assembly operations.
  • Once we started even going through the limited motions of establishing stability in three operations, it was clear that there was available cycle time for the waster strider (mizusmashi).
  • Key Point: Adding a water strider (if done correctly) does not add cycle time etc, to the supported process. There simply isn’t any reason NOT to do it.
  • Once again the standard work combination sheet proved to be one of the most valuable, least understood, and least used tools in the kit.

One of the features, if you can call it that, of attending these seminars is that you go home with a nice stopwatch. In this instance, the stopwatches have a lap-time recording feature. You can leave the watch running, click the left button, and it records the elapsed time for each sub-event.

Intuitively this is useful for cycle time studies, however I found a few disadvantages from the old way of recording the continuously running time on the sheet and breaking down the individual times later.

  1. If the work cycle never varies you can happily click away at each observation point and you will get great cycle times. But if there is variation in the work cycle itself, you are hosed. The stopwatch only records times for “LAP-002; LAP-003” etc. Taking times on a sheet of paper allows you to record what was actually happening even if it varied from the work sequence you originally wrote down.
  2. Press the wrong button at the wrong time and you lose it all – the stopwatch clears. Actually I think the lap times remain in memory, but still, I am not comfortable with this. Make a mistake on a paper time observation sheet and you can recover. Even if you accidentally stop and clear the watch, it is easy to recover by re-starting the total elapsed time baseline.
  3. Maybe I am old school here, and I admit that I have lots of practice, but by the time they were finished explaining how to get the lap times out of the stopwatch and write them down, I had already calculated all of the component task times, total cycle times, and was finished.

The bottom line with the stopwatch bit is that I believe they would better serve their clients’ education needs by teaching the running-time method. Anyone who gets a lapping stopwatch can figure out how to do it the other way. The running time approach does require practice to get down. But I think it is more robust. YMMV, that is just my opinion.

Shingijutsu Kaizen Seminar – Day 3

Yesterday I told you the plan for today. Here is what really happened.

We got the even pitch going for a while. I was at the front of the line releasing units down the line as the pre-build Team Member was done with them. I was watching distance (since distance = time on a moving line). As the previous unit hit the pitch first pitch line, I launched the next. One of the little discoveries was that the conveyor has a “slow spot” that really changes the speed. Oh – and that happens to be when we measured the speed yesterday. Net result? The units were actually fired down line about 10% faster than they should have been. Oops.

Next discovery? Nobody noticed. So much for this great labor bottleneck. There were line stops, but they had nothing to do with this.

In the first position, our experiment to actually present parts at the point of use cut the team members’ work cycle. How much depends on the situation. His work cycle previously varied all over the place – easily by 100% or more when he had to go look for parts and wasn’t sure where they were.

By simply stabilizing his work, we cut his cycle time to well under the takt.

We ended up not recording line stops, but on the other hand, there weren’t any actual andon calls today. That is both good news – nothing we did really disrupted things – and bad news – their system has serious issues, and none of them trigger andon calls.

The kaizen team members studying the semi-automated test operation designed and proved a work sequence that not only handled this bottleneck process, they cut it nearly in half. It can be done well under the takt time if the Team Member and supervisor don’t panic and try to work ahead. If they do, it disrupts everything for two or three units. To “pay” for this improvement, the kaizen team members shifted a (very) small amount of work to the next position down line. All he has to do is disconnect the test equipment. That gives our team member of focus the time to start the next unit right away. Disconnection takes only a few seconds, and easily fits into the work cycle of this team member.

Another sub-team worked on the sub-assembly process with similar results to the first team. By actually making sure all of the parts are present and presented well, the terrifically unstable cycle started to get consistent. There is a lot of work here, and honestly I think the best solution is to break up the sub-assembly cell and get these processes operating right next to the assembly line. There are huge advantages in information flow (they could just look upline by two units and see what they needed to start next). There are huge advantages in material conveyance – there isn’t any. Quality issues would be spotted immediately and could be addressed immediately. Lots of other advantages as well.

This evening we worked on the final report-out. Since this is a Shingijutsu event, there is a fairly rigid pattern for how these report-outs should go. The team spent until about 10:30 working on it and having it reviewed by sensei. I think we got off pretty clean in that department since I already knew the drill, coached the team on what was important plus sensei knows me from past events. I have seen draft report-outs thrown across the room in the past – not especially effective communication in the details, but the big picture, “this is not acceptable,” gets across fairly clearly. That didn’t happen this time. I think Shingijutsu as a company, is mellowing out a little. It is too hard to actually say, but time will tell.

Shingijutsu Kaizen Seminar – Day 2

The day today ended about 10 pm. It is 11 pm now as I write this, which translates to 7 am Pacific Time. I will leave the remaining time zones as an exercise for my European readers. (Hello, Corrie!)

Once we hit the shop floor today we were in “understand the current situation” mode. It turned out to be more difficult than I expected due to a high level of variation, some real, but most self-inflicted, on the line. Yesterday I mentioned my great plan to put the less experienced people on the front line of the cycle time study. Well, I ended up doing that, along with everyone else, since the area we are working is fairly spread out and has 11 people working in it.

After getting our heads around things, we have these areas of focus tomorrow.

  1. Establish an even and visual pitch on the moving conveyor. We need to know when work cycles are supposed to start and end so we have some kind of baseline about where the cycle time issues are. This will help.
  2. Basic 5S and parts presentation in the first position. This guy is responsible for setting the takt for everyone else since he is the one who launches the unit down the conveyor after his stationary build. We might try to move most of his build to the conveyor too. I think it has been on the conveyor in the past because the unit moves through the first pitch without anyone touching it.
  3. Start recording line stops. When, why, how often. Basic understanding of where the problems are.
  4. Detailed work combination analysis of a semi-automated testing operation at mid-line. We know there are disruptions there, but those disruptions cause major distortions to the actual (vs. planned) work cycle, so we need to understand whether the operation even has the theoretical capability to meet takt.
  5. Work on a sub-assembly operation and at least try the concept of building unit-by-unit instead of batching to the weekly published schedule. Stuff is late to the line. It is probably not a capacity issue but rather that capacity being used making stuff other than what is needed right now. This will be a little complicated because they actually feed parts to more than one line position. Thus if they get truly synchronized with their customer, they will not build a unit set of parts because this is a mixed line, and different positions have different products at any given time. Instead they will have to shift their focus from “unit” to their individual main-line customers and build what they need next.

The real overall challenge is that this is a two-day event, and we spent the first day just getting our heads wrapped around all of this. So tomorrow will be busy. But people are learning, and that is the whole point. It is important not to lose sight of the reason we are here. If the host company gains, so much the better, but it is really about the participants learning something we can take back.

And yes, I have been deliberately vague so as not to compromise the host company. They have been at this a long time, and done some very impressive things. This particular area, however, needs work, which I suppose is why we are in it.

Shingijutsu Kaizen Seminar – Day 1

As I mentioned in the last post, this is the third time I have been through one of these events. The first time was in 1998, then again in late 2000, now in 2008 – so it has been a while. As you may or may not know, the company that was Shingijutsu back in 2000 had an internal factional split a few years ago, so now there are two of them. This seminar is being conducted by what I would call the “Nakao faction.” It was a credit to Nakao-sensei that he recognized me, as did his son and daughter who are also working for the company. They are all very good people, as usual.

The first day of these seminars is lecture.

I will be the first to tell you that the Japanese style of teaching, especially when filtered through an interpreter, can be difficult for a Westerner to follow. Nevertheless, it was good to re-grounded on some of the very basics.

Take-away quotes:

“I have them see what I am seeing.”

– Nakao-sensei describing taking a senior manager to the shop floor and questioning what she saw until she saw “it.” My early postings about “the chalk circle” reflect my own experience with the same thing. My note to myself was:

“Teaching through directed observation is a core concept.”

This is very consistent with the experience recounted in Steven Spear’s article “Learning to Lead at Toyota.”

The other key point (at least for me) was the end of a story told about the response to recommending more frequent deliveries from suppliers:

“That would be expensive.”
Response: “Why?”
And thus, the muda is revealed when implementing better flow merely as a thought experiment.
Many years ago Hirano published the same advice: Force single-piece-flow, at least temporarily, into the process to reveal what waste you need to work on. Then work on it.

Tomorrow we go to the shop floor. I found out that I am the “team leader” for this group of people, about half from my company, so it should be an interesting experience. There is a very diverse spread in the level of knowledge and understanding. I asked this afternoon who had not had experience with time studies before. Those are the people I will put on the point for gathering the current condition as this is a learning exercise. Too often people get obsessed with the targets, or with proving they “already know this” – that’s not the point, and not what our companies are paying us to do here. We are supposed to be learning.

Good night, it is an early morning.

Trust, Then Verify

This article NPR : Mattel Recalls More China-Made Toys highlights one of the problems with doing business with an unproven supply chain.

In this case, the OEM in China had specified the correct paint to their supplier – who was a friend of the owner – but the paint supplier had given them less expensive lead based paint. (Some friend, huh?)

As the story reports, the owner of the OEM company took the coward’s way out and hanged himself.

So – Mattel probably trusted that their OEM supplier in China would deliver what they specified (and would continue to do so after first article inspections). The OEM, in turn, trusted their paint supplier would deliver as specified. Now Mattel’s reputation is in recovery mode and China itself is internationally embarrassed. (Believe me, they do not like it when that happens. On second thought, maybe suicide wasn’t a bad strategy after all.)

The awful truth is that the world out there has people in it who either do not understand that a particular specification is important (which is pretty common here), or worse, are out to make more money (less common, but it happens).

Lean Thinking Question:
What would you learn from this if YOU were Mattel?