© Emiel van Est
Did Toyota Fool the
Lean Community for
Decades?
Emiel van Est & Pascal Pollet
March 2014
© Emiel van Est
In the Lean
community we
admire
Taiichi Ohno
for his role in the
development of the
Toyota Production
Syst...
© Emiel van Est
Get ready to admire
him even more!
© Emiel van Est
Hi
I am Emiel van Est
Toyota Kata ambassador
The Netherlands
I am Pascal Pollet
Toyota Kata ambassador
Bel...
© Emiel van Est
Yes we both speak Dutch!
© Emiel van Est
Recently we
read something
amazing.
Near the end of
his life Taiichi
Ohno said in an
interview:
© Emiel van Est
“I’m proud to be Japanese and I
wanted my country to succeed. I
believed my system was a way that
could he...
© Emiel van Est
“But I was very, very
concerned that you
Americans and the Europeans
would understand what we
were doing, ...
© Emiel van Est
Hey, wait a minute, I thought Toyota
had been very open to us…
© Emiel van Est
“I did my best to
prevent the visitors
from fully grasping our
overall approach.”
- Taiichi Ohno -
Source:...
© Emiel van Est
Okay…
© Emiel van Est
“I explained it by talking
about … reduction of the
seven wastes (muda)”
- Taiichi Ohno -
Source: Profitab...
© Emiel van Est
WHAT?
© Emiel van Est
Talking about the
7 Wastes was a way
to confuse his
visitors?
© Emiel van Est
Even today for
many people
Lean
=
Eliminating Waste
© Emiel van Est
His strategy to
confuse us is still
effective almost
25 years after
his death!
RIP
Taiichi Ohno
February 2...
© Emiel van Est
Just an empty slide for you to fully grasp this…
Take your time….
© Emiel van Est
As said, we are
Toyota Kata
ambassadors
© Emiel van Est
With the improvement kata
it can be explained why the 7
wastes was a way to confuse.
© Emiel van Est
The improvement kata is a pattern
of thinking and acting we can
practice to meet challenges.
© Emiel van Est
Just like in martial arts
© Emiel van Est
As you can see, the
improvement kata starts with
understanding the direction.
© Emiel van Est
Eliminating waste lacks
direction
1
2
3
45
6
7
Overproduction
Inventory
Waiting
MotionTransport
Rework
Ove...
© Emiel van Est
What to do?
Logistics
Manager
Production
Manager
We need
smaller bins to
reduce travel
distance for our
as...
© Emiel van Est
What is the right direction?
© Emiel van Est
“All we are doing is looking at the
time line, from the moment the
customer gives us an order to the
point...
© Emiel van Est
That’s where
kanban
comes in right?
© Emiel van Est
“I explained it by talking
about techniques … with
Japanese names like
kanban…”
- Taiichi Ohno -
Source: P...
© Emiel van Est
Kanban was another
way to confuse us?
© Emiel van Est
YES!
© Emiel van Est
By focussing our attention on the tools
Ohno could hide the most important: his
way of thinking and acting...
© Emiel van Est
We just
copied the
solution without
understanding
the thinking
that created the
solution.
© Emiel van Est
We misunderstood the
purpose
of kanban.
© Emiel van Est
The purpose of
kanban is to
eliminate
kanban!
© Emiel van Est
The best number of
kanban cards is
0
© Emiel van Est
Ah I understand. We do
not want material to
stop; we want it to
flow continuously so
we get the shortest
l...
© Emiel van Est
Well, Yes and No…
Stay with us,
we will explain.
© Emiel van Est
First, lets talk about
making money.
© Emiel van Est
“Costs do not exist to be
calculated. Costs exist to
be reduced.”
- Taiichi Ohno -
© Emiel van Est
Who has used these graphs?
Traditional Thinking
Price = Cost + Profit
This worked when supply
was lower th...
© Emiel van Est
Don’t be shy, we did it too!
© Emiel van Est
What’s wrong with these graphs?
Cost
Profit
Price
Cost
Profit
Price
Value in Market
© Emiel van Est
These graphs hide
some important
information!
© Emiel van Est
Over the years the
portion of fixed
costs has risen.

© Emiel van Est
Leaving us with less to improve
1920 1960
Fixed Cost
Profit
Price
Variable Cost
© Emiel van Est
These graphs lack a
second dimension.

© Emiel van Est
Variable costs vary by volume
Volume
$
Fixed Cost
Profit
Variable Cost
© Emiel van Est
Profit = Price – Cost
Profit = Sales – fixed cost – variable cost
Volume
$
Fixed Cost
Profit
Variable Cost
© Emiel van Est
We were directed to
improve an ever
smaller portion of
variable costs to
improve our margins.
© Emiel van Est
The better way to
improve margins is…
© Emiel van Est
…to increase
volume with the
same fixed costs and
less variable costs.
© Emiel van Est
So Ohno directed us in this
direction…
$
Fixed Cost
Profit
Current
Condition
Volume
© Emiel van Est
… while he spurted in this direction!
$
Fixed Cost
Profit
Current
Condition
Volume
© Emiel van Est
Sorry to
bother you
with another
book but we
do not want
you to think
we make this
all up…
© Emiel van Est
From the very
beginning Toyota set
course to beat GM
Source: Inside the Mind of Toyota P58
© Emiel van Est
Imagine the difference at the time!
© Emiel van Est
So, back to
continuous flow and
kanban. What were
we thinking?
© Emiel van Est
Were we
thinking
this?
© Emiel van Est
Or this?
Ohno frequently referred to
his river system Source: Profitability With No Boundaries
© Emiel van Est
Ever used this image?
No worries, this is one of our own…
Waiting
Inventory
Transport
Over-
production
Rew...
© Emiel van Est
It is not about
the boat, it is
about the
water!
Waiting
Inventory
Transport
Over-
production
Rework
Over-...
© Emiel van Est
It is not a
lake, it is a
river. Waiting
Inventory
Transport
Over-
production
Rework
Over-
processing
© Emiel van Est
It is not about less
water. It is about
more water flowing
faster.
© Emiel van Est
That is why
the rocks
have to move!
© Emiel van Est
Is there more we
misunderstood? What
about quality?
© Emiel van Est
Is quality
“Job One”
at Toyota?
© Emiel van Est
“There are two
reasons we try to
improve quality.”
- Taiichi Ohno -
Source: Profitability With No Boundari...
© Emiel van Est
“If our product is
better more people
will buy it.”
- Taiichi Ohno -
Source: Profitability With No Boundar...
© Emiel van Est
“Also, bad quality
causes big disruptions
in my river system.”
- Taiichi Ohno -
Source: Profitability With...
© Emiel van Est
“When the experts from
your country visited, they
noticed that our machines
were very dependable, our
qual...
© Emiel van Est
“I do not think that they understood
why we did these things, which
might explain why these changes
often ...
© Emiel van Est
Oh yes!
© Emiel van Est
While Ohno pointed
us to the rocks in
the water
© Emiel van Est
He hid his river system plans…
© Emiel van Est
Now we
understand this
we can create
more value
for everyone on
this planet.
© Emiel van Est
So, lets make
a deep bow
for Ohno
© Emiel van Est
He was truly
brilliant!
© Emiel van Est
Want another quote?
Here is one more for
you to chew on…
© Emiel van Est
“Where there is no
Standard there
can be no Kaizen”
- Taiichi Ohno -
© Emiel van Est
Thank you for
staying with us!
Upcoming SlideShare
Loading in...5
×

Did Toyota fool the lean community for decades?

43,960

Published on

Published in: Business
20 Comments
230 Likes
Statistics
Notes
  • Thanks Emiel for a truly inspiring presentation!
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • This is outstanding. As a remote "student" of Ohno and Shingo for 30 years, it took until I had studied martial arts and a stint in the Marines to understand that he was trying to both 1) teach us and 2) keep us in the dark concept by concept until we could stack mastery on top of mastery. It has been Western hubris to think that a system, a philosophy, a worldview that took generations to develop could be co-opted by corporate trainers (and those fancy 3 ring binders that pile up in your office), distilled and implemented cafeteria style (based on the whims of the most powerful person in the executive committee) and get the type of results that Toyota has had.
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • mooie presentatie!
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Can I have a copy of your presentation? Or how can I download it?
    Thanks
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Respect for your presentation skills, the message is clear and fun to get :) (although too much bombastic) However, imho, there is a misinterpretation.I am not familiar with the books you referenced and the particular interview with Mr Ohno, but I think it is naive of anyone to think you can replicate a system by pure reuse the tools. Without the skill and mindset (noticeable in the TPS without actually being pointed out to) you will always stay beyond expectations. It is also natural of ambitious companies to grow. Or I am really not getting the point here...
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total Views
43,960
On Slideshare
0
From Embeds
0
Number of Embeds
68
Actions
Shares
0
Downloads
0
Comments
20
Likes
230
Embeds 0
No embeds

No notes for slide

Transcript of "Did Toyota fool the lean community for decades?"

  1. 1. © Emiel van Est Did Toyota Fool the Lean Community for Decades? Emiel van Est & Pascal Pollet March 2014
  2. 2. © Emiel van Est In the Lean community we admire Taiichi Ohno for his role in the development of the Toyota Production System.
  3. 3. © Emiel van Est Get ready to admire him even more!
  4. 4. © Emiel van Est Hi I am Emiel van Est Toyota Kata ambassador The Netherlands I am Pascal Pollet Toyota Kata ambassador Belgium emiel@leanmanagement.nl pascal.pollet@sirris.be
  5. 5. © Emiel van Est Yes we both speak Dutch!
  6. 6. © Emiel van Est Recently we read something amazing. Near the end of his life Taiichi Ohno said in an interview:
  7. 7. © Emiel van Est “I’m proud to be Japanese and I wanted my country to succeed. I believed my system was a way that could help us become a modern industrial nation. That is why I had no problem with sharing it with other Japanese companies, even my biggest competitors.” - Taiichi Ohno - Source: Profitability With No Boundaries P99
  8. 8. © Emiel van Est “But I was very, very concerned that you Americans and the Europeans would understand what we were doing, copy it, and defeat us in the marketplace.” - Taiichi Ohno - Source: Profitability With No Boundaries P99
  9. 9. © Emiel van Est Hey, wait a minute, I thought Toyota had been very open to us…
  10. 10. © Emiel van Est “I did my best to prevent the visitors from fully grasping our overall approach.” - Taiichi Ohno - Source: Profitability With No Boundaries P99
  11. 11. © Emiel van Est Okay…
  12. 12. © Emiel van Est “I explained it by talking about … reduction of the seven wastes (muda)” - Taiichi Ohno - Source: Profitability With No Boundaries P99
  13. 13. © Emiel van Est WHAT?
  14. 14. © Emiel van Est Talking about the 7 Wastes was a way to confuse his visitors?
  15. 15. © Emiel van Est Even today for many people Lean = Eliminating Waste
  16. 16. © Emiel van Est His strategy to confuse us is still effective almost 25 years after his death! RIP Taiichi Ohno February 29, 1912 – May 28, 1990
  17. 17. © Emiel van Est Just an empty slide for you to fully grasp this… Take your time….
  18. 18. © Emiel van Est As said, we are Toyota Kata ambassadors
  19. 19. © Emiel van Est With the improvement kata it can be explained why the 7 wastes was a way to confuse.
  20. 20. © Emiel van Est The improvement kata is a pattern of thinking and acting we can practice to meet challenges.
  21. 21. © Emiel van Est Just like in martial arts
  22. 22. © Emiel van Est As you can see, the improvement kata starts with understanding the direction.
  23. 23. © Emiel van Est Eliminating waste lacks direction 1 2 3 45 6 7 Overproduction Inventory Waiting MotionTransport Rework Overprocessing
  24. 24. © Emiel van Est What to do? Logistics Manager Production Manager We need smaller bins to reduce travel distance for our assembly people We need bigger bins to reduce travel distance for our logistics people Example from Toyota Kata P40
  25. 25. © Emiel van Est What is the right direction?
  26. 26. © Emiel van Est “All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.” - Taiichi Ohno -
  27. 27. © Emiel van Est That’s where kanban comes in right?
  28. 28. © Emiel van Est “I explained it by talking about techniques … with Japanese names like kanban…” - Taiichi Ohno - Source: Profitability With No Boundaries P99
  29. 29. © Emiel van Est Kanban was another way to confuse us?
  30. 30. © Emiel van Est YES!
  31. 31. © Emiel van Est By focussing our attention on the tools Ohno could hide the most important: his way of thinking and acting. Lean solutions (tools, techniques and principles) to improve quality, cost, delivery • A systematic, scientific routine of thinking & acting • Managers as the teachers of that routine Visible Less Visible Image by Mike Rother
  32. 32. © Emiel van Est We just copied the solution without understanding the thinking that created the solution.
  33. 33. © Emiel van Est We misunderstood the purpose of kanban.
  34. 34. © Emiel van Est The purpose of kanban is to eliminate kanban!
  35. 35. © Emiel van Est The best number of kanban cards is 0
  36. 36. © Emiel van Est Ah I understand. We do not want material to stop; we want it to flow continuously so we get the shortest lead times.
  37. 37. © Emiel van Est Well, Yes and No… Stay with us, we will explain.
  38. 38. © Emiel van Est First, lets talk about making money.
  39. 39. © Emiel van Est “Costs do not exist to be calculated. Costs exist to be reduced.” - Taiichi Ohno -
  40. 40. © Emiel van Est Who has used these graphs? Traditional Thinking Price = Cost + Profit This worked when supply was lower then demand Lean Thinking Profit = Price – Cost That changed to a situation with more competition and the market dictating the price Cost Profit Price Cost Profit Price Value in Market
  41. 41. © Emiel van Est Don’t be shy, we did it too!
  42. 42. © Emiel van Est What’s wrong with these graphs? Cost Profit Price Cost Profit Price Value in Market
  43. 43. © Emiel van Est These graphs hide some important information!
  44. 44. © Emiel van Est Over the years the portion of fixed costs has risen. 
  45. 45. © Emiel van Est Leaving us with less to improve 1920 1960 Fixed Cost Profit Price Variable Cost
  46. 46. © Emiel van Est These graphs lack a second dimension. 
  47. 47. © Emiel van Est Variable costs vary by volume Volume $ Fixed Cost Profit Variable Cost
  48. 48. © Emiel van Est Profit = Price – Cost Profit = Sales – fixed cost – variable cost Volume $ Fixed Cost Profit Variable Cost
  49. 49. © Emiel van Est We were directed to improve an ever smaller portion of variable costs to improve our margins.
  50. 50. © Emiel van Est The better way to improve margins is…
  51. 51. © Emiel van Est …to increase volume with the same fixed costs and less variable costs.
  52. 52. © Emiel van Est So Ohno directed us in this direction… $ Fixed Cost Profit Current Condition Volume
  53. 53. © Emiel van Est … while he spurted in this direction! $ Fixed Cost Profit Current Condition Volume
  54. 54. © Emiel van Est Sorry to bother you with another book but we do not want you to think we make this all up…
  55. 55. © Emiel van Est From the very beginning Toyota set course to beat GM Source: Inside the Mind of Toyota P58
  56. 56. © Emiel van Est Imagine the difference at the time!
  57. 57. © Emiel van Est So, back to continuous flow and kanban. What were we thinking?
  58. 58. © Emiel van Est Were we thinking this?
  59. 59. © Emiel van Est Or this? Ohno frequently referred to his river system Source: Profitability With No Boundaries
  60. 60. © Emiel van Est Ever used this image? No worries, this is one of our own… Waiting Inventory Transport Over- production Rework Over- processing Waiting Inventory Transport Over- production Rework Over- processing
  61. 61. © Emiel van Est It is not about the boat, it is about the water! Waiting Inventory Transport Over- production Rework Over- processing
  62. 62. © Emiel van Est It is not a lake, it is a river. Waiting Inventory Transport Over- production Rework Over- processing
  63. 63. © Emiel van Est It is not about less water. It is about more water flowing faster.
  64. 64. © Emiel van Est That is why the rocks have to move!
  65. 65. © Emiel van Est Is there more we misunderstood? What about quality?
  66. 66. © Emiel van Est Is quality “Job One” at Toyota?
  67. 67. © Emiel van Est “There are two reasons we try to improve quality.” - Taiichi Ohno - Source: Profitability With No Boundaries P101
  68. 68. © Emiel van Est “If our product is better more people will buy it.” - Taiichi Ohno - Source: Profitability With No Boundaries P101 
  69. 69. © Emiel van Est “Also, bad quality causes big disruptions in my river system.” - Taiichi Ohno - Source: Profitability With No Boundaries P101 
  70. 70. © Emiel van Est “When the experts from your country visited, they noticed that our machines were very dependable, our quality was high... I understand that many went back … and suggested you implement preventative maintenance programs, quality circles, and other programs in order to copy our results.” - Taiichi Ohno - Source: Profitability With No Boundaries P101
  71. 71. © Emiel van Est “I do not think that they understood why we did these things, which might explain why these changes often weren’t very helpful. I tried to prevent them from understanding why we wanted a river system, and I think I was successful.” - Taiichi Ohno - Source: Profitability With No Boundaries P101
  72. 72. © Emiel van Est Oh yes!
  73. 73. © Emiel van Est While Ohno pointed us to the rocks in the water
  74. 74. © Emiel van Est He hid his river system plans…
  75. 75. © Emiel van Est Now we understand this we can create more value for everyone on this planet.
  76. 76. © Emiel van Est So, lets make a deep bow for Ohno
  77. 77. © Emiel van Est He was truly brilliant!
  78. 78. © Emiel van Est Want another quote? Here is one more for you to chew on…
  79. 79. © Emiel van Est “Where there is no Standard there can be no Kaizen” - Taiichi Ohno -
  80. 80. © Emiel van Est Thank you for staying with us!

×