Lynn

FEATURE – Reflecting on Nomura-san’s recently published book on radical quality improvement, the author encourages us to embrace the spirit of “Dantotsu” to meet the challenges we face as a society.

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Words: Michael Ballé, lean author, executive coach and co-founder of Institut Lean France

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Over the years, I have heard many great stories on Nomura-sensei from my friends at Toyota’s South African plant and from TIE’s forklift plant here in France. Reading his book is a real delight – if somewhat wistful.

I remember when we did all this stuff, with my father Freddy, in automotive plants across Europe at the turn of the century. And then, some time after the Lehman Brothers crisis – right about when Nomura-san started his Dantotsu initiative with Toyota’s forklift operations – we somehow stopped.

We didn’t stop lean, mind you. Companies new to Lean Thinking, whether in construction, car refurbishment, hospitals or digital start-ups, all had spectacular successes with the same fundamental principles of putting customers first, reducing lead-time and reacting right away to quality issues in order to train people to be better at their job. The leaning of companies continued: progressively, we had the ear of CEOs and were able to explore what lean meant as a full company strategy, as pioneers like my father or Art Byrne had experienced it.

What we stopped doing is the rigorous, detailed work of collecting quality and lead-time data, standardized work training, and so on. For many years, the name of the game in car plants was tracking complaints, then defects found at final inspection, then at the end of the line, then at the workstation – gradually moving the curve backwards towards self-inspection, thus reducing the lead-time between defect occurrence and detection. We opened up machines to find ways to self-inspect the process. We drove rigorous and detailed technical analyses of where defects came from. We used Production Analysis Boards systematically to engage operators in rigorous analysis of missing production. Before starting production, all 4Ms (man, machines, materials, methods) aspects of a line were checked by team leaders and conditions corrected by supervisors whenever something went amiss.

The same detailed work was conducted on flows, with laborious Materials and Information Flow Analyses (forget VSMs – MIFA is the real deal) and tracking kanban cards one by one (before the use of bar codes was generalized) to understand exactly what happened in the flow and where the backflows were.

And the results were as described in Nomura’s book – steady, but uneven. With breakthroughs and backslides (new model, summer workers, change of local manager). And, what is less discussed in the book, behind each improvement of the results, the human stories of hours of discussion, investigation, sometimes argument (“We’ve progressed so much. Why do you want us to do it again?”).

I can’t help but wonder – we know we should be doing this (indeed, in my case, I’ve been privileged to be taught this firsthand), so why aren’t we?

Maybe it’s just me. Did I go soft? At some point I got tired of the arguments, the pushing and pulling, the cajoling (sometimes, the threatening) to get reluctant managers to stop playing the system against the system and actually do the work: inspect all parts, in their real conditions on the shop floor with the operators. Or more generally to simply actually care.

It also seems the lean movement as a whole lost some of this oomph as it veered towards coaching (to what?) or admin processes (to what end?) and progressively minimized the importance of looking for muda and how to eradicated it. Few lean efforts I now visit are serious about reducing lead-times by installing pull and creating flow, or radically reducing defects and not-right first time.

What troubles me most is that whereas the financial crisis of 2008/2009 should have been a turning point in our understanding of the catastrophic impact of financial management on industrial companies, it seems that the opposite has happened. Financial management is now the firmly established norm. Value is harvested on the stock market (or at the resale of unlisted companies) and created through expectations management rather than performance improvement. It’s all about what story the analysts want to hear, how the market will take this or that move, never about competition and advantage building.

Our real problems, however, are only beginning. You can deny gravity all you want, but gravity doesn’t care – it’s still there. Global issues such as climate change and pandemics will continue to disrupt supply chains and require deep technological solutions if we want to retain our way of life.

Dantotsu is the way – not only to achieve results but to learn more deeply about the reality of our delivery and production processes. Dantotsu is absolutely necessary to train the next generation of engineers who know about real processes, not just moving digital levers on a smart tablet. Dantotsu is about getting your hands dirty, gathering the data and learning to speak its language – recognizing what one scatter dot says versus another.

“Lord, we know what we are, but not what we may be,” says Ophelia, distraught in Hamlet. We’ll never know quite what Shakespeare had in mind when he wrote the line, but to me, it strikes a very deep chord. We also know what we were. I have been deeply affected by Sadao Nomura’s book on Dantotsu because it speaks so directly to what we are, as opposed to what we were, and what we may be if we only have the will and grit to own our own thinking processes and polish our methods.

Don’t miss out on this book. Take it one step at a time and really read it. Compare your current practice with what he suggests. Ask yourself what you could be doing better if you tried. We are incredibly fortunate to read his published briefings and share his thinking. Whatever mess your company is currently in, there’s a blueprint for getting out of it. It’s the way of Dantotsu radical quality improvement.

The world doesn’t need any more evidence of the greatness and genius of Leonardo da Vinci. From his artistic prowess to his discoveries and inventions in fields as diverse as aerodynamics and anatomy, there is no doubt Leonardo gave an immense contribution to the advancement of science and human knowledge.

Yet, there is an element of his contribution that has so far been overlooked – the lean-like nature of his way of thinking. Indeed, the more I leaned about Lean Thinking, the closer a connection I found with Leonardo. This has pushed me to deepen the possible connections and relations between lean and Leonardo.

Inspired by John Shook’s work, I find it natural to look at Lean Thinking from different perspectives. My aim is to explore and potentially highlight how different developments in science, culture, history, economics, or the arts might influence – directly or indirectly – our understanding and shaping of Lean Thinking. So, could Leonardo’s method and way of thinking have contributed to lean as we know and see it today?

According to John Shook and his double funnels, Lean Thinking is a consistent mix of ingredients that incubated at Toyota over the course of 30 years and were released to the outside world through a diffusion/dilution process that leads to applicative gaps of lean implementations worldwide. In this sense, could Leonardo da Vinci help us to bridge such gaps?

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ANALOGIES ABOUND

In order to answer this question, I drew a comparison between the five Lean Principles, as described by Jim Womack and Dan Jones, and the seven Da Vincian principles popularized by Gelb and illustrated in the book How to Think like Leonardo da Vinci: Seven Steps to Genius Every Day.

The Da Vincian principles have been presented by Gelb as the conceptualization of Leonardo’s methodology and thinking. Here they are:

1. Curiosity – Leonardo had a curious attitude towards life and research, a great appetite for continuous learning, and desire to know more about the world around him, its dynamics, and processes. These are the elements behind the depth of his studies and the range of topics he focused on.
2. Demonstration – Leonardo had a natural inclination for testing knowledge through experience and commitment, and a willingness to learn from mistakes. This is one of the reasons he was so ahead of time: he used experience to challenge the status quo and established knowledge. His learning process was based on experimentation and new knowledge was created one mistake at a time.
3. Sensation – Leonardo paid great attention to how the five senses helped him to experience the world. By improving his senses, he meant to improve his mind and experiences accordingly.
4. Sfumato, or blurriness – Leonardo was willing to embrace ambiguity and paradoxes. In fact, these were common traits in his search for the truth: as he learned more about things, he was dragged deeper into ambiguity and towards the unknown.
5. Art and science – Leonardo’s uniqueness partly stems from the balance he continuously tried to strive between art and science, logic and imagination. This is why Gelb called him “the supreme whole-brain thinker”, someone who was able to see the world in all its facets, find unexpected connections between them and understand its intrinsic dynamics.
6. Corporality – Leonardo was attracted to grace, beauty, and balance (which is reflected in his obsession for the human body and his interest in anatomy).
7. Connection – Leonardo was aware of the interconnections that exist among all things and phenomena. He found in them a way to create new knowledge out of their interactions. Gelb says that “one secret of Leonardo’s unparalleled creativity is his lifelong practice of combining and connecting disparate elements to form new patterns”.

In the light of all this, I find it impossible not to notice a number of analogies between Leonardo’s thinking and lean. First of all, in both cases there is a strong focus on the customer, who defines value according to his perspective. Much like for a lean organization providing value to customers is the main goal, so Leonardo felt the urgency to satisfy his “customers” – usually important patrons of major cities – to keep benefiting of their protection and sponsorship. Even when he didn’t really believe in what they asked him to do and he’d rather work on other, more fulfilling projects.

Another analogy with lean can be found in Leonardo’s tendency to make sketches of his concepts and ideas. These sketches don’t have to be intended just as ways to visualize the concept and to improve it, but also to test it and investigate different alternatives in terms of mechanics, connections, or materials. This approach is akin to the lean concept of Kaizen and, as suggested by Tarelko in Leonardo da Vinci: Precursor of Engineering Design, could be interpreted as a propensity for Rapid Prototyping, a common procedure in lean product development. This means the testing of his concepts was diluted throughout the design: testing and designing happened in parallel and their results influenced each other. It’s a simplified version of Set-Based Concurrent Engineering.

Finally, Leonardo constantly wrote notes on the side of the page. These could be reminders of how to develop a physical prototype, details that shouldn’t be forgotten, or insights for other important work. Essentially, this is what in Lean Thinking and Practice is now called Job Instructions and standardization – guidelines that are to be followed by whoever oversees a job once they are properly trained for it. In the same way, Leonardo described the procedure step by step, for the sake of clarity and simplicity.

As I mentioned when I described the seven Da Vincian principles, Leonardo’s projects were driven by experience, without relying much on theory. His invaluable life experience allowed his to even develop his own encyclopedia! He learned by doing, making mistakes, and understanding what didn’t work in each experiment and why. Doesn’t this sound very lean to you?

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BRIDGING THE GAPS OF LEAN IMPLEMENTATIONS?  

What surprises me the most about Leonardo’s method is related to his learning process. As previously said, he was eager to learn, regardless of the topic. Indeed, Leonardo’s learning process embraced different fields and disciplines. Similarly, Set-Based Concurrent Engineering promotes the development of “multidisciplinarity” in project teams instead of silo thinking, as a way to leverage synergies among different areas and functions.

As ever, Leonardo was one step ahead. He could find correlations among seemingly unrelated topics and exploit them to create new knowledge in different fields. In other words, interdisciplinarity is one of the major tools that Leonardo left us and that I think should be actively incorporated into modern lean practices. This would especially help us to address the gaps that exist in lean competencies management and development.

For this purpose, I developed a conceptual model – the Comb Model – that can be used to map and evaluate the available skills with the aim of integrating interdisciplinarity in the management and development of competencies within a company and boosting collaboration. As a matter of fact, four algorithms have been developed to efficiently assign the right resources to a project given its specific requirements and the available competencies. In a lean organization, this is turn into a powerful driven of synergies and mutual learning.

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TO CONCLUDE

Leonardo da Vinci (or should I say LEANardo?) gave a very relevant, although indirect and unconscious contribution to Lean Thinking. His ideas have greatly influenced scientific thinking and, to this day, inspire us to experiment, embrace uncertainty and problems, and make unexpected connections between elements of the reality around us that we consider unrelated. So aligned with lean is his way of thinking that I wouldn’t be surprised if one day, during a visit at a Toyota plant, I saw a banner hanging from the ceiling saying: “Leonardo was here”.

INTERVIEW – Following his 10 years at Toyota Industries Corporation (TICO) teaching his Dantotsu method for radical quality improvement, Sadao Nomura spoke to Japanese magazine Kojo Kanri (Factory Management).

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Interviewee: Sadao Nomura

Interviewer: Toshiko Narusawa

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Toshiko Narusawa: Ten years ago, you were tasked with implementing Dantotsu Quality Activities at TICO. How did that come about and what was the reason?

Sadao Nomura: I became an advisor to TICO at the request of Vice President Tatsuro Matsuura, in July 2006. With the idea of acquiring a Swedish company and with industrial vehicle manufacturing operations in Italy, France and the United States, TICO wanted its six businesses and their suppliers to be able to improve their quality. I was being asked to take on a big role, and I think that was because of my previous experience working for Toyota Motor Corporation both in Japan and overseas.

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TN: Can you tell us about your experience at Toyota? You have held several roles there, ranging from sales to a senior role at the Motomachi Plant and an assignment in Indonesia.

SN: At that time, Toyota was focusing on knockdown assembly abroad, which – due to the rapid growth – Toyota workers could not support. I spent six years at Toyota Astra Motors in Indonesia together with Mr Matsuura, with whom I shared quite a bit of pain. After that, I was a second-level section chief for the body department at the Motomachi Plant for four years. There, we made a number of key quality and performance improvements that led to best-ever new vehicle launch performance with full-scale production volume stability attained in the first month of production for Toyota’s best-selling 6th generation Mark II mid-size passenger car (we had a takt time of 54 seconds at an early stage). At the time, competition was fierce and expectations from dealers were extremely high. I am glad I was able to contribute to the increase in sales we experienced.

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TN: Did that approach to production preparation lead to Toyota’s current method?

SN: Even though what we did at the time was quite rudimentary, it is true that until then it could take over a year for production to stabilize. We did it in one month. Critically, we created a preparation manual that highlights all the problems that can be encountered in the process and the countermeasures that were previously implemented in past new vehicle launches. Of course, the company’s approach to production preparation is much more advanced now.

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TN: What about your experience in Australia and South Africa?

SN: In Australia, which was an acquisition for Toyota, I was asked to lead the production ramp-up for the new Corolla. It was a difficult environment with old equipment and employees who felt disenfranchised, but we were still able to reduce quality defects by 90%. I think Toyota Industries had a clear expectation in terms of changing the mindset and behaviors of the employees there.

Four years after returning to Japan as the general manager of the body department at Motomachi, I was sent to South Africa. Here, even in a country with a culture completely different to Japan, I gained very valuable experience strengthening the conviction that quality will improve if the basics are covered and the employees are motivated.

One of the challenges I faced was the limited impact I could have as an advisor. I had no direct authority on employees at any of the companies that I supported.

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TN: That sounds important. Tell us more, please.

SN: Before the Dantotsu initiative, I visited each factory once every few months for a year, pointing out problems and leaving some homework for people to do. However, each time I went back, they hadn’t done it. Determined, I left homework again. On my third visit, it was almost the same as last time. So, I asked top management to make it a top-down company-wide requirement. I’m grateful they followed my advice. That’s how Dantotsu began.

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TN: It is critical for top management to convey the message that improvement should be taken seriously. I think another problem you faced when trying to tap into everyone’s potential was that people were working in silos and not collaborating enough. I know that one of the key reasons for the success of the Dantotsu initiative was the introduction of the eight steps. And, of course, there were the legendary “Nomura memos”.

SN: If you want people to do what you teach, you have to make sure that you are communicating effectively. So, for each new issue we tackled, I took detailed notes of the countermeasures we devised and handed them to the teams. There were around 300 memos over the years, all handwritten (mostly at night).

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TN: I was surprised to see the handwriting was also a main feature at the Takahama factory.

SN: I believe that when you write by hand you convey your thinking much more effectively. Numbers and graphs that are hidden in a computer don’t communicate the same sense of urgency and don’t create remorse or the sense of discovery you need in order to get people engaged.

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TN: What can you tell us about the 8 Steps and the critical role of the team leader in implementing them, as the person closest to the front-line work? 

SN: I have standardized the process and “codified” it in the 8 Steps based on my experience across different countries and businesses. If you ask people to simply execute your order, you will be perceived as “pushing”. In reality, the 8 Steps make so much sense and are so rational that you don’t really need to convince anyone. When people try them, they immediately see the impact and are bought in. Executives are naturally interested in them, too, and their praise for the approach goes a long way motivating people.

The 8 Steps – as well as our Weak Point Management – are based on the idea of making our relentless quality improvement work commonplace and persevere in our tackling of every defect. This is how a company can push the number of defects to nearly zero.

Reimbursements represent a key process for SulAmérica, not least because it is one of the few opportunities that we have to interact with our customers directly. Over the years, our department has undergone a huge cultural shift, which has completely changed the way we think about our customers and the service we provide to them.

Today, thanks to our efforts to embrace Lean Thinking and digitalize our process, we have greatly improved the customer experience, as we deal with an unprecedented volume of requests.

To understand where we are, however, it is important to explain where we came from. In this article, we would like to provide a timeline of our lean journey. We hope this can inspire others to take the lean leap, too!

Until 2009, we only worked with paper. We had boxes full of reimbursement requests all around our offices. We took our first steps towards digitalizing our work between 2010 and 2015, but the only difference with the previous system was that, instead of coming to us, the documentation was sent to an external provider. They digitalized it for us and sent it over.

In 2015, we initiated the second phase of our digital transformation, becoming the first insurance company in Brazil to receive reimbursement requests digitally. In doing so, we disrupted the market and gained a great competitive advantage. At the same time, however, we realized that we needed more than just technology to succeed; we also needed to engage our people and improve our processes. That is when lean came into the picture.

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2015 – THE FIRST LEAN STEPS

From the very beginning, our department could count on the support of SulAmérica’s continuous improvement team. In 2015, they began to train us in the lean fundamentals. They taught us value stream mapping, so that we could finally see all the weak points in our process. We found that things didn’t exactly work smoothly all the time: clients expected a reimbursement in 14 days; instead, those who we not entitled to it were often given the bad news some 40 days after their request.

So, even though top management wanted us to rethink and digitalize the whole process right away, we decided it would be better to first focus on those reimbursement requests we rejected. This first step was enough to cause a first cultural shift in our department, convincing us that we had to rethink the idea of value for customers and how we provided it (that is when we worked on our strategic A3 on the reimbursement process, together with Lean Institute Brazil). We realized that value really meant paying customers back as quickly as possible. We also realized that if the request could not be reimbursed, we had to communicate the refusal as soon (and as clearly) as possible to our clients.

Redefining value is no easy task, and we still remember how much we struggled during those initial eight meetings (of eight hours each). We understood how important it was to just sit down and look at a problem in depth, but it was still new for us. We were not used to measuring and analyzing root causes. Luckily, the value of having a systematic and structured approach to problem solving quickly became clear to us.

Another pivotal moment in those first few months of our lean journey was a workshop with Kim Barnas, at the Lean Summit Brazil. She showed us examples of daily management and of standardized work. We left the workshop so excited that the following day we were ready to try it all out by ourselves. When, soon thereafter, we trialed the new system, the benefits were immediate. Leaders in the department, who were used to firefight on a daily basis, found their inbox empty by the end of the day and could therefore focus on what really matters – coaching team members and creating value for customers.

In many ways, we in the Reimbursements Department were lean pioneers within SulAmérica. We had one of the first daily management systems implemented in the company and our standardized work was very advanced. Our goal was to change people’s minds and help them to understand that the customer had to be our focus. What we were striving for was the “best reimbursement in Brazil”. Customer satisfaction became one of our key indicators (in the form of NPS) and we changed the way we looked at problems – no longer as something to avoid, but as opportunities to do things better.

In January 2016, we turned down 7.6% of the requests we received; in March 2017, it was 4.7%. Within the same period, our lead-time to issue rejections also went down, from 18 to 45 days to 2 to 8 days.

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2017 – OUR LEAN EVOLUTION

In 2017, we consolidated our understanding of Lean Thinking, as we focused on improving communication with our customers and rethought the way reimbursement requests came to us. It was also the year we kickstarted our digital reimbursement process, which turned out to be a disruptive model in the industry.

To give our customers a better understanding of the reimbursement process, we created a dedicated landing page in SulAmérica’s website that explained each step in detail.

We then worked on an A3 that was meant to overhaul another troublesome process by better leveraging the collaboration between our department and the Medical Area. We had found that many clients got in touch with us only to know the amount of money they could be reimbursed in the event of undergoing a certain procedure, so that they could decide whether it was worth pursuing it. It typically took us a long time to answer those questions, because we had to involve physicians (they were the ones whose approval we needed) in the decision-making process. When we realized that this was a mindset problem (we were looking at the situation from a perspective that was completely different from that of our customers), we decided to act. The solution was much simpler than what we thought: we simply had to give clients a figure!

2017 was a fundamental year in our lean transformation. We reviewed our entire business model by initiating our digital process (22% of the requests were digital in 2017; 100% in 2018). In the meantime, Customer Service saw a 34% drop in the number of calls regarding reimbursements, as the landing page clearly started to bear fruit. Finally, we began to issue reimbursement estimates much faster than before (it took us seven days in July 2017 and only three days in March 2018). In 2017, we also won the CNSeg award for process innovation in our reimbursement process. We think that lean contributed greatly to this achievement.

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2018/2019 – THE LEARNING CURVE GETS STEEPER

In 2018, people really embraced lean in their day-to-day work and the process was well-structured. Every day, come rain or shine, would start with our meeting by the visual boards, so that we could have a clear idea of where we were with our work and whether we were providing value to our customers. Everybody relied on those boards and those KPIs.

When we started our digitalization, it was for small amounts of documents and just for doctor’s appointments. In 2019, we changed provider because we wanted to enhance the quality of our systems. During the transition, there was also a clear impact on our performance: not only did we have to deal with the steep learning curve each new player faces when they join the game, but we were also expanding the scope of our digitalization efforts. Suddenly, we had much bigger volumes coming to us much faster, and for a while we struggled again. Even the smallest hiccup could generate big problems elsewhere in the process and create a bottleneck.

In response, our team had to learn to control a wider array of KPIs, which in turn consolidated the role of visual boards as our go-to system to manage the daily work. They also created their own quality indicators, in the hope to improve our NPS, and implemented new standards to support the work.

Throughout 2019, we widened and consolidated the roll-out of our digital process across the entire service value chain. We gradually overcame those initial challenges, but it was clear that there was still a gap in the performance of the external provider.

2020 – SUPPLIER SUPPORT AND PEOPLE DEVELOPMENT

To help the provider catch up, we provided them with our internal knowledge, inviting them to join our gemba walks and to attend our Quality Forums so that they could see the main problems they caused us.

But the real game-changer, which allowed us to dramatically improve our productivity as a team, was multiskilling our people. Until then, everyone used to work in their silo, unaware of the work going on in other parts of the process and of how their actions impacted it. So, in early 2020 we started this effort with only 33% of our team considered to be “multiskilled”. The year was full of challenges, as the pandemic forced our entire team to start working remotely. Throughout it, Lean Thinking was there to support our efforts to develop people and, by the end of 2020, nearly 90% of our team was multiskilled. What we see in their eyes now is the great satisfaction of knowing they are learning new things all the time and tapping into their full potential. That’s what lean is about!

When Covid-19 came, our department had already mastered the use of digital tools to process reimbursements. As the industry was scrambling to find solutions to the new problems, we continued to develop our people and to do our work. This gave us great competitive advantage.

This year, we are seeing a large increase in demand, which is challenging us to push towards automation and AI on one hand and to further review our purpose and internal processes on the other. We are looking at the Lean Transformation Framework and assessing where we are in each of the dimensions – an exercise that is proving remarkably helpful as we try to identify the gaps we need to fill if we are to continue to succeed in the future. Whatever challenge may come next, we know that lean can help us to tackle it. Knowing this helps us look to the future with confidence.

Toyota Industries Corporation has enjoyed the largest share of domestic sales of forklift trucks for 50 consecutive years and the top share in the world market. While they were in process of expanding the business worldwide, there was a time when TICO experienced a problem with quality. In response, they engaged in 10 years of steady and tenacious company-wide efforts through the “Dantotsu Quality Activities”. The company worked with parts manufacturers to improve manufacturing quality, incorporated production preparation and manufacturing requirements into product design, and created a mechanism to prevent the outflow of defects to the market. This article reports on the company’s activities to change awareness and behavior toward quality improvement, regardless of cultural and environmental differences between countries.

QUALITY AS THE STARTING POINT FOR MANUFACTURERS

Toyota Industries entered the forklift truck market in 1956. Since then, it has steadily grown to become the top domestic branf for sales share. The attractiveness of the product itself, which has both ease of use and high durability, a strong sales and service network, and the productivity to efficiently produce a wide variety of products have earned the company the support of customers. Toyota Industries Corporation also has had production sites overseas since the 1980s. In 2000, it acquired Swedish Company BT Industries. US-based Raymond, which is under the umbrella of BT, also became a member of the group. TICO currently provides forklifts worldwide under four brands, Toyota Logistics & Forklift, BT, Raymond, and Chesab. It can be said that it is a leading company in the industry.

It wasn’t all a walk in the park. While expanding its overseas business, the quality of factories abroad became a major issue in the mid-2000s. Therefore, under the top-down policy that “quality is the starting point for manufacturers and quality improvement is indispensable for growth”, in June 2007 TICO set itself a lofty goal and kicked off the global Dantotsu Quality Activities. The target for the first three years were to halve quality defects of assembly plants and suppliers every year, for an 88% total reduction, and halve the cost of market complaint.

Over time, this initiative has completely transformed the quality performance of TICO’s overseas companies. It changed the attitude of affiliates from “finding defects by inspection” to “creating quality”. For example, in 2014, Raymond received the Industry Week Award for Best Plant in recognition of its pursuit of zero defects. The efforts of overseas companies have greatly stimulated domestic factories, too: in the first three years since the introduction of the Dantotsu method, their yearly results have been reached almost entirely by achieving the targets of each country (excluding the reduction of market complaint costs). Critically, the activity also extended to TICO’s suppliers, some of whom – following the 2010-2012 Dantotsu-II program and the 2013-2015 Dantotsu-III program – could achieve the cumulative reduction target of 88% of market complaint costs.

THE DANTOTSU (STEEP) CURVE

One of the key elements of the Dantotsu approach is the setting of ambitious targets. Figure 1 (above) shows how the reduction target for the “number of defects per vehicle found in finished vehicle inspection”, which is a typical index, was set in Phases I, II, and III. Of course, Toyota is famous for its incredible ability to improve. But was there so much room for improvement? It may be hard to believe, but there was.

Figure 2 (below) shows the changes in the number of defective vehicles out of total number of manufactured vehicles at the Takahama Plant from 2007 to 2015. The Takahama factory was evaluated as having relatively good quality when it first opened in 2007. As you can see in the graph, it shows a wonderful “Dantotsu curve”. Factories in other country have achieved similar results. If you look closely at Figure 2, you will also notice that the mountains and valleys are getting smaller and smaller. The number of defects generally jumps during new car launches or in the event of sudden fluctuations in the number of vehicles. We can clearly conclude that the Dantotsu quality method has become a force to suppress the occurrence of defects. Looking back, the company’s top executives told us: “The basics are the same for every country. First, make quality visible to everyone in the field. Then, take quick and steady measurements. Make sure that what you can do in advance is designed and produced. Weaving it into the preparation, we immediately implemented countermeasures and ensured defects do not occur again. We persistently repeated this process over and over again. There are some defects for which the cause cannot be identified immediately, but was the countermeasure taken correct? The results will tell you: if it doesn’t reduce the defects, then something is missing or something is wrong.”

Prior to setting goals, the program entailed redefining defects in relation to the “flow of things” and “flow of quality information”. This was indispensable for later goal setting and standardization of how to proceed. Only a common definition can lead to healthy competition and learning!

QUALITY MANAGEMENT BOARD

In the quality corner in the center of the factory, which is easy for anyone to see, lies the Quality Management Board. It displays three levels of quality – whole factory, department, and weak point by department. A 30-minute morning meeting is held daily in front of the board. The person in charge reports the countermeasures for quality defects found the day before, discusses the causes and countermeasures for those that need to be tackled across departments, and decides the person in charge. The quality assurance department then follows up until the countermeasure is implemented. This is only half of the story, of course. The process is painstakingly observed over time until it can be determined that the defect won’t occur again.

STANDARDIZE IN 8 STEPS

For different departments in a large organization to work together to improve quality, a simple and easy-to-understand “procedure” is indispensable. The “8 Steps for Preventing the Recurrence of Defects” were compiled by Sadao Nomura, who led the company’s “Dantotsu Quality Activities” leveraging his decades-long experience within Toyota. His method is being used by all TICO affiliates abroad. The 8 steps include basic things, such as tidying, how to put and carry things, how to create and stick to standard work, daily management, skills development, and people. Nomura-san also carried out a comprehensive assessment of the managerial approach up to that point. Since the process is visualized in its every aspect, cheating doesn’t happen – so there is no point in window-dressing. It didn’t take long for people in the companies to become convinced that embracing the 8 steps was the fastest way to reach the quality targets.

WEAK POINT MANAGEMENT

When the simpler manufacturing defects are reduced in this way, the chronic ones tend to come to the surface. Weak Point Management (WPM) was a major force behind the team’s ability to pursue them. Recurring defects are often intricately intertwined with factors of people, material, equipment, and methods [the 4 Ms], and it is difficult to eradicate them. WPM aims to do so by visualizing the progress while taking measures one by one and persistently following up until it is confirmed that it will not recur. TICO has achieved great results with WPM, whether the problem was picking the wrong product or part number or an an oil leak in the hydraulic circuit (whose cause is much more difficult to identify).

CHALLENGING THE TEAMS

Toyota has a long tradition of quality improvement. However, due to the long product life of TICO’s products, it was difficult for the company to reduce warranty claims costs in a short period of time. In the first three years of Dantotsu-I, their reduction was far below the target. Starting in 2010, Dantotsu-II focused on them specifically, as proved by the Claims Morning Meeting that was introduced. For 30 minutes, at the beginning of every day, key people from all relevant departments gather to see the actual products of all complaints returned the day before, decide who will take responsibility for pursuing the claim and for coming up countermeasures, and follow up.

It is significant that key people gather every morning to see the actual items sent back to the company together with a warranty claim. Every returned item is seen as a treasure trove! Since the follow-up is consistently done until the solution can be sustained, saying that “I will take care of it” does not work. At the same time, the flow of warranty claims was visualized very effectively. The causes are divided into manufacturing responsibility, supplier responsibility, and design responsibility, and the quality assurance department follows up the activities of each department. For problems such as contamination, for which it is difficult to identify the responsible department, the quality assurance department took the initiative to take detailed measures involved the company’s suppliers. At overseas factories, suppliers are also actively invited to the Claims Morning Meeting. Trust with them has deepened, and it has become easier to get their cooperation. Since 2013, Dantotsu-III has focused onto new car projects and achieved great results in reducing warranty claims costs (one of the six companies in the world has achieved an astonishing 93% reduction compared to 2006). It can be said that, with Nomura-san’s help, the team has established a new vehicle development process that can prevent defects without rework by incorporating manufacturing requirements and production preparation requirements at the design stage.

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INTERVIEW – The former executive of the Toyota Material Handling plant in Italy reflects on how Sadao Nomura’s “Dantotsu” method helped them to drastically improve quality.  

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Interviewee: Stefano Cortiglioni, Head of Toyota Lean Academy Europe

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Roberto Priolo: Stefano, you were a senior executive at the Toyota Material Handling plant in Italy when Sadao Nomura was asked to help the group’s sites to improve their quality. Can you tell us what his goal was exactly?

Stefano Cortiglioni: The President of Toyota Material Handling had given Nomura-san the responsibility to radically improve quality in the group’s production sites around the world. The trend was positive, overall, but it fluctuated and didn’t measure up to what was expected of the Toyota brand.

An additional problem was that, outside of Japan, there were only two TMH sites that were green fields. The rest, including our plant, were acquisitions – with the resulting difficulty of having to bring change to a culture that is different to Toyota’s. Nomura’s Dantotsu project aimed to make Toyota Material Handling the “undisputed number one” in quality – a much bigger goal than simple quality improvement, really.

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RP: What was that first encounter like?

SC: From the very beginning, Nomura was clear on what his mandate was. His approach certainly wasn’t “soft”: as you would expect, to become the “undisputed number one” meant setting very challenging targets. Nomura told us he expected our plant to achieve a 50% reduction in warranty claims paid, 90% reduction in the number of non-conformities, and a 90% reduction in the number of in-process defects within 3 years.

I must admit that, at first, we were quite sceptical: Nomura’s approach to quality seemed to be very different to ours. Sure enough, he ended up changing many of our practices.

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RP: What were the main changes Nomura-san introduced with his Dantotsu approach? 

SC: We started by simply measuring three KPIs: what we pay out in warranties, the number of non-conformities reaching the client, and the amount of right-first-time. Nomura immediately put a lot of emphasis on daily management (“Speed is the key,” was his motto): you can’t wait until the end of the month to track your quality performance; you have to be on top of every single problem that appears as soon as it appears.

The Asaichi morning meeting was one of the first changes we introduced. It was a completely different approach, based on the idea that the quality results you see at the end of the month are built day after day. So, we started to gather data and track problems on a daily basis. The meeting took place on the production floor, in the presence of the CEO (a very important point). It lasted exactly 15 minutes, with everyone standing. This left no time for blaming or finger-pointing and forced everyone to just focus on discussing problems.

My role as Director became to smooth things out whenever conflicts arose, to orient people towards problem-solving, and never to interpret the list of detected issues as a way to tell who is good and who is bad at their jobs.

Nomura-san accompanied us through the eight steps of his approach to quality improvement. From the very beginning, he encouraged us to embrace standards (without them, there can be no kaizen). When we started to investigate the 4Ms, it was normal for us to start with Man. However, it only took a few visits to operators at their workstations with Nomura-san for us to understand that we were neglecting the other three (Method, for example, when it became clear that we didn’t always have standards in place).

With Nomura, we also restructured our way of doing PDCA, breaking the cycle down into deadlines and explicitly assigning each piece of improvement work to one person – to ensure intervention happened in a timely fashion and that people felt fully invested.

Finally, the leader of the Asaichi meeting was the department head. The person who was traditionally seen as the “victim of the system” became the internal client the company had to solve problems for.

The categorization of defects was another great contribution of Nomura’s (A, B, C and D defects). It made us more cognizant of the defects that reached our clients and improved our ability to filter out defects in our quality assurance stations and to control our processes. Once people understood this model, the one Asaichi board we used to track defects considerably grew in size. Nomura always emphasized the importance of visual management (he often told me: “I need to understand the business without you having to explain it to me”).

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RP: At what point did you engage with suppliers?

SC: Before asking anyone else to change, we wanted to have our processes under control and familiarize ourselves with Nomura’s method. Once we did, we reached out to our suppliers, offering them the same training we had received. When, after a few months, the first dramatic drops in the number of defects were recorded, even the most doubtful among them  came on board. Today, they would never go back to the previous way of working!

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RP: Many of the ideas and practices that Nomura-san introduced sound quite simple, which isn’t to say that they were easy to introduce. This seems to happen quite often with Toyota, don’t you think? 

SC: Toyota is simple! It is so simple that sometimes we struggle to understand it. What makes Toyota’s principles and ideas challenging to apply is the discipline they require. Too many companies (including our own CESAB, before the acquisition by Toyota Material Handling) still have a culture of “Who is wrong?”, whereas Toyota has a culture of “What is wrong?”. Thinking about raising problems is impossible, if the predominant culture is one of blame.

Not engaging people in the definition and improvement of the work is the worst thing you can do. They need to know they are always able to improve things, that they are valued by the business, and that their contribution goes beyond their job itself. With my Japanese colleagues, the difference was often this: it’s easier to complain about others than to fix your own mess, but the success of a company – and certainly of Toyota – comes from several small, simple improvements that combine to create a superior organization.

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RP: What was it like to work with Nomura-san on a personal level? 

SC: Nomura-san is a person of extraordinary knowledge and experience. He remembered everyone and everything and had a very clear understanding of how our business works.

Despite his great experience, however, we never felt judged. CESAB was an acquisition, and some expected an authoritative figure like Nomura would come in and simply tell us what to do. He never did (even though he knew). Instead, he accompanied us as we figured it out. He never undermined by role as Director, either. In fact, he wanted me to be the one introducing the changes, because he knew there was the only way they would stick.

One of my favourite memories of my time with Nomura is the two weeks I spent with him at Toyota in Japan. He put me next to the line for eight hours a day, asking me to identify any potential for kaizen I saw. Those two weeks spent on the floor with my helmet, safety shoes, pen, notepad, and stopwatch were some of the best professional learning I have ever had. There is no slide, presentation or explanation that can give you the same understanding of how a system works.

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RP: What are the lessons you have learned from Nomura?

SC: Before Nomura’s visits, we used to prepare everything so that the site would appear at its best, but he noticed the window-dressing right away. Two-three visits in, we realized that there was no point in hiding the dust under the carpets, because he already knew it was there. Whenever a problem occurred, Nomura taught us to track it back through the process to understand where it originated from and why it wasn’t detected. We’d bounce around the site until we got to the bottom of it. To him, it wasn’t about the error, but about the resilience and solidity of the system.

Another important lesson I learned from Nomura was that, when it comes to quality, you can never start too early. Nomura believes in integrating the work of Production with that of Engineering. He wanted people to be able to learn from their mistakes and thought it was absurd that the experience of one technical team with a defect should not be made available to everyone else (indeed, his piece de resistance was the Simultaneous Engineering manual). The time we spent on product development, design reviews, and so on, was meant to help us highlight problems at the very beginning, rather than only finding out about them after production was complete. To Nomura, it was critical to collaborate with R&D from the get-go and find the time to improve the product early on.

Another fundamental lesson he taught us was the relationship with suppliers, which should be seen as partners and shown commitment from the company into the middle- to long-term. Everyone wants cost savings, but to switch suppliers as soon as the pricing dictates it is ultimately counterproductive. Nomura taught us that a relationship based on trust is preferable and that it is much better to work with a supplier to help them regain or retain their competitiveness than to simply jump ship when things get tough. He asked us to invest a lot of time and energy (in the form of training, for example) in our suppliers, which paid off immensely: we taught them our way of doing things, which in turn meant that they started to go after every single defect themselves to understand their root cause. To Nomura, losing a supplier meant more than just losing a product; it meant losing a culture, a relationship, a way of working.

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RP: What were the results of the Dantotsu project for TMH Italy? 

SC: Nomura helped us to find ways to do more with less, by leveraging our kaizen capabilities and without any additional investment. His contribution proved fundamental for us, not only in terms of the extraordinary results detailed in the book. Before his time with us, we had been working as CESAB and only after Nomura’s intervention were we able to operate under the name Toyota Material Handling. Once we did, within a few years our volumes grew threefold!

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RP: The approach Nomura describes in his book is, at least in theory, replicable. What are your recommendations to those who are thinking about introducing the Dantotsu method in their own operations? 

SC: A common problem organizations face is lack of leadership commitment. CEOs who participate in the kick-off event and then disappear won’t be of much help. Instead, they need to participate in the morning meetings, talk to operators and listen to them. Without this, the Dantotsu method (or any other improvement activity for that matter) has no chance of succeeding.

I’d also recommend three concepts that have always been very dear to Nomura when it comes to tackling problems and improving the system: speed, consistency, and perseverance.

Finally, there is another dynamic typical of Western organizations that we must move past if we are to benefit from Nomura’s method: focusing on the macro dimension of problems without thinking about the details. In Japanese culture, and certainly at Toyota, it is the contribution of the individual that makes for the success of the system.

A FRUITFUL SWITCH TO CUSTOMER SATISFACTION IN 2012

Fabrice Bernhard, one of the two co-founders of the group, is sitting in front of me, reflecting on how Theodo’s strong focus on quality really came about. “Back in 2012, we had our first brainwave: we needed to focus far more on customer satisfaction so that customers would come back and buy more,” he says. Inspired by Toyota’s Once a customer, always a customer approach, weekly checks to probe how the customer felt about Theodo’s delivery were designed. The project teams now send out weekly reports to their customers as soon as the deal is locked and ask them about their satisfaction with the speed of delivery and the team’s support.

This turned out to be a real game-changer. This type of “customer andon” forces the developer to intently listen to the customer at least once a week and stick to what she actually wants. It may not be a comfortable confrontation, but it is certainly a great opportunity to learn. The result of this switch to customer satisfaction was impressive: by 2016, Theodo had grown their turnover tenfold thanks, at least in part, to returning customers.

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THE POOR COUSIN OF DELIVERY?

Unfortunately, being supportive and delivering fast is not enough to fully satisfy a customer. Today I am also meeting Rémy Luciani, who is known within Theodo as Mr Kaizen. Rémy explains how the stress on delivery may have occasionally overshadowed the need for built-in quality: “In our line of work, we have a constant pressure on delivery. Our incentives, both inside the company and in our relationship with customers, tend to be based on lead-times. This is probably because we can easily measure output through the delivery of scheduled tasks, while assessing quality is not as straightforward.”

The two founders of Theodo – Fabrice Bernhard and Benoît Charles-Lavauzelle – went to Japan in 2017 and 2019 to see the Toyota Production System in action at Toyota suppliers. “It came as a blow,” Fabrice recounts. “We learned we had to be at the gemba far more than we were, to develop good thinking and learning in design, if we wanted to seriously reduce rework and delays.”

The story of the visit to Mifune, a Toyota Tier-2 supplier, is a favorite within Theodo’s management team. During the tour of the supplier, Fabrice and Benoît asked how often the President of Mifune was on the gemba, expecting an answer in the range of a few hours per week or per month. They were told he was there on average 10 minutes each hour! Not only did this reveal the reality of top management presence on the shop floor, but it also shed a light on the powerful choice of carrying out gemba walks in small batches to observe different operations or activities at different times of the day. They also discovered that the top-quality levels expected by the customer were not measured just ahead of the delivery, but that it was a continuous effort at all production stages.

This gave them food for thought. When you develop an application, you can choose to test at the end (the equivalent of a final inspection on an assembly line) or as you code (self-checks at each step of “assembly”). If you go for the former – the so-called User Acceptance Test – you usually face a lengthy assessment that often results in a long list of last-minute changes and rework items. This activity includes a wide array of stress or scalability tests (can the product withstand simultaneous connections from many users?), non-regression tests (is a change in one function creating a defect in another function?), and integration tests (do data easily flow end-to-end, with the expected transformations?).

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RE-FOCUS ON QUALITY

In 2019, Fabrice himself started to walk the gemba to check the code and learn from the issues the team encountered. A quality framework, called the 3S, was soon set up for the Theodo group:

• Stability – no bugs
• Speed – fast response time
• Security – no vulnerability

There was a large debate on the response time. People wondered whether it should be the response time as seen by an individual user or the response time when a large group of users was connected.  The focus on the customer typical of Lean Thinking prevailed in the end: what was checked there was not the scalability of the app, but the response time perceived by an individual user, whether he connected alone or at the same time as a large group of people.

When checking on the gemba, Fabrice has three clear goals: check the reality of the “shop floor” versus what he has in mind as a top manager and co-founder; showcase the achievements of the Techs he visits; and facilitate the development of a quality strategy among Team Leaders.

The two gemba walks per week he has been taking over the past two years have revealed interesting things about the teams. “We have brilliant recruits creating smart things,” he tells me, “but while they can think out of the box and master complex technologies, kaizen is an opportunity to raise interesting questions on the job and the way to address a customer request.” Visiting teams twice a week helps to understand who does what and who is particularly proficient on any given subject, and Fabrice sometimes re-directs the Techs he visited to teams or individuals who could help and save them time.

The code is also a great source of potential improvements. “I sometimes see bugs or potential bugs. And when I ask to see the last segment of code developers have written, I am surprised to see it is often the rework of a previous faulty code,” he continues. Code libraries are great ideas, but copying-and-pasting a code segment without a clear understanding of the intent behind the code can lead to misuse. Fabrice’s intent is to encourage people to think before using a standard code.

Funnily enough, this reminds me of the so-called “best practices” large corporations love to promote: copy and paste something that has been cooked up by a team to address a specific issue elsewhere may not be a great idea. On the other end, stating the initial problem the team was addressing can be a great way to learn from others and develop your own answer. In other words, do not share the solution but the initial question to trigger people to think lean.

The need to work on code quality was therefore confirmed and, in September 2020, Rémy was asked to help teams on kaizen.

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PROBLEM-BASED LEARNING

Fabrice confirms that Theodo had their first kaizen attempt focused on code and development back in 2016. Although interesting, he says that those were framed as lengthy processes and that addressing such and complex issues could easily put people off.

Rémy was therefore assigned to help with these kaizens last year. He has been working for Theodo for 10 years and is fully convinced of the need to use a scientific approach at work. He saw too often how teams would shortcut an issue to avoid a deep investigation on why it occurred in the first place. Rémy says that some of the time that is spent debating the comparative merits of available market tools in the digital should be diverted to developing a fundamental understanding of how things actually work.

Fully aware of the fact he was facing a long, dicey journey to try and convince the teams to find time for regular kaizen, Rémy decided to make it simple for them. “I am pushing teams to select focused, team topics. Trying to address vast, transversal projects, as we once did, is a sure way to drown them in corrective actions, most of which they have no leverage on,” Rémy explains.

He also knows that kaizen in the past may have been window-dressed for the purpose of a peer review. If you remember what Marie, the Theodo Group HR, said in the third article of the series, a kaizen maturity model was once a mandatory step in career development. They have since then moved away from it.

So Rémy takes project teams one by one and helps them surface a performance issue that can be addressed in a maximum of one or two days. “We need to build trust in the approach, and confidence will increase as soon as results and/or learnings are quickly obtained,” he tells me.

Rémy fully buys into problem-based learning on code: “Fostering collaboration on a quality issue is a great way to develop your skills both on the code and on your capability to listen actively while influencing others.”

Once the performance issue has been defined, and if the team is in reasonably stable conditions (the basis of TPS), Rémy proposes to schedule a one-day kaizen workshop. With a new difficulty: with the prevailing focus on delivery and the fact that customer billing is based on the time spent on the app in the digital world, rather than on the outcome, someone needs to tell the customer that a full day dedicated to quality improvement will be charged. While some customers may think it’s a great idea, others will no doubt frown and will need some convincing. Mind you, this is not because they don’t care about quality, but because they believed this was an intrinsic part of the job to begin with!

With a slow start at the end of 2020, Rémy has now reached a cruising speed of one to two kaizen workshops per week.

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KAIZEN IN SIX STEPS

Rémy uses a classical 6-step kaizen approach.

First, you agree on the performance that needs improving. Then, you spend time observing how the work is done today and take real-time measurements as you do, repeating them in the event of high variability. Rémy shows me an example where they timed the full release to production, all the way down to the Apple Store. It turned out the team was not familiar with the tools, was losing time setting them up or waiting for a notification that would not come. They viewed the whole process as complex and unfamiliar and were therefore tempted to batch big lumps of build before attempting to release them to the Apple Store. This increased the time-to-market of new features.

This current method observation phase is crucial: you could be quickly tempted to jump to a solution crossing your mind without investigating the matter deeply enough and Rémy’s role is essential to avoiding this. “My day is a success if I see them open their eyes and beam at their learnings. They often tell me that it’s great to be able to take the time to observe, analyze, and think,” he says.

The third step is to discuss new ideas. In this example, the team found 16 ideas to alleviate the load and reduce the risk of mistakes. They selected one at this stage – automate the upload of the builds.

This “new idea” step is an opportunity to individually experiment with a few of those ideas so as to be in a position to compare and select the best one. “We generally observe and analyze in the morning and play around with the new ideas in the afternoon. The point is really to try out something immediately because it may unveil unexpected hurdles. In addition, each team member will learn while practicing, alone or as part of a pair,” Rémy says. Learning doesn’t happen collectively. You learn as you investigate an idea and experiment a possible solution, and you learn alone. The time allocated by Rémy to individual learning is crucial.

Rémy then insists: “It’s a very hands-on workshop. Sometimes, we start on an issue and the kaizen is closed by midday. We can then start a new one in the afternoon. In other cases, the analysis takes time, but the learnings are useful even when results are not achieved by the end of the day, both on how people view their job and on the kaizen approach itself.” Rémy’s objective for the day is to reach at least step 4 – define the implementation plan for the selected idea.

Step 5 – implementing the plan – and Step 6 – evaluating the new method – are left to the teams.

Rémy shows me another kaizen on Data Transfer Objects. He tells me: “Our developers actually spend more time reading code than writing it. They maintain applications or start from a customer legacy app to create a new one. Poor quality code soon becomes a mental burden for them. And DTOs are one of our targets as they are frequently used.”

He shows me the case of a DTO with ID or email and access rights, typically designed to deal with access rights to a page or an app. But looking more closely at it, there are actually two different use cases for this DTO: an account creation or an access permission once the account is created. And while the DTO they are looking at is relevant in the first instance, it isn’t in the second. Duplication without much thought given to the use case.

Other issues on this DTOs include different data types within the same app (a chain of characters in one instance, a permission name in another).

Indeed, the number of activities that can be a topic for kaizen is staggering. Fabrice can list quite a number of them: “Techs take the lead on choosing their tools and the flow. And those choices are not always the best ones. Some kaizens are consequently dedicated to the lead-time or the touch time in delivery, but there are many possible improvements on the software architecture, too, on duplication issues, interfaces, databases. Or on tests. We definitely lack standards there”.

He then adds with a smile: “Possibly also anything that prevents Techs from working smoothly, in the flow, with a sense that everything falls into place when needed.” Rémy underlines: “I can think of an app whose development environment takes eight minutes to get started in the morning – pretty painful.”

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CELEBRATE LEARNINGS

Rémy believes that, at this stage, only 5 to 10% of the teams that attended a kaizen workshop with him have pursued kaizen efforts on their own. The road will be long and anyone who has tried to promote the famous JOB = WORK + KAIZEN mantra has at one point or another had to face this disheartening reality. But the stakes are high and Rémy is determined.

One way to encourage kaizen is to talk profusely about the lessons learned. Fabrice steps in: “We debrief on kaizen learnings once a month in the UK. And in France, both the Theodo TV and the Asakai meetings are used to showcase the findings and thank the Techs who got involved.”

The purpose of these debriefs is to value the time people spend learning. “Only the top geeks do this continuous learning spontaneously,” Fabrice says. “We want to show everyone in the group how much we value the effort of thinking before acting and how enjoyable this can be. Good thinking for good products, as Toyota teaches us. I have often been very impressed by the investigation and the learnings resulting from a problem, and this is the sort of examples we need to continue to disseminate around the company.”

The Toyota approach to quality has its origins in the founding of the Toyoda group of companies in the late 19th century by Sakichi Toyoda (1867-1930). Sakichi, who is as known in Japan as perhaps Eli Whitney in the US or even James Watt in the UK, was bitten by the inventor’s bug at a time when he was struggling to follow in his father’s footsteps as a carpenter.

Sakichi got a patent for his Jidoka invention in the early 1900s, an important milestone but just one step in over three decades of tireless efforts to attain his goal of producing the world’s best loom, which he introduced to global acclaim in 1924. Sakichi was sparked by two inspirations. The first one was personal, with images of his mother and other women weavers in his hometown (in Japan’s current Shizuoka Prefecture) struggling at their hand-operated wooden looms. The other, more immediate inspiration came from Japanese government policies that aimed to encourage local invention in order to compete in a global economic and politics environment in which Japan appeared to be hopelessly behind.

Over the years, Sakichi founded a few companies. One of them is Toyota Industries Corporation (TICO),  from which Toyota Motor Corporation was spun off in 1937. Today, TICO is the parent of the TOYOTA Material Handling Group, widely known as the Toyota Logistics & Forklift Company (TL&F). So, it is only fitting for TL&F to be ground zero for the most important advances in quality improvement since the Deming-inspired quality improvements of the post-WWII Japanese economic miracle.

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JIDOKA AND DANTOTSU

Achieving perfect quality that is built in – not reworked upon later inspection – is one of the two basic purposes of Jidoka (the other being respect for people). This is the type of activity that should permeate the heart of your production system, much like it does TPS. Not surprisingly, there is a lot we can learn from TL&F about it.

This curious word “Jidoka” can cause confusion even in Japan because it is a made-up Toyota term (a Japanese portmanteau) based on the Japanese word and kanji for automation. The work of a machine – or the function of any technology – should be separated from the work of humans, with assurance made that machines or any automation should work for humans, not the other way around. This respect for humanity, and this way of thinking about the design of work, is the foundation of all work at all Toyota companies.

Following Jidoka, a second Japanese concept has been appropriated that constitutes the core concept of the 21st-century production system of the Toyota Logistics & Forklift Company. Dantotsu is a colloquialism that means something like “extreme” (think “Extreme Programming”) or “awesome” or “radical”. So, Dantotsu quality is quality performance that is extremely better: Radical Quality Improvement.

The Lean Global Network and Taylor & Francis just co-published a book on this very topic – The Toyota Way of Dantotsu Radical Quality Improvement. The author of the book and progenitor of the story – Sadao Nomura – could almost be a latter-day W. Edwards Deming. Over a period of almost 10 years, Nomura led TL&F through a series of activities and discoveries that radically raised the quality level of their products and, more importantly for us, along the way instituted a process that is replicable by any manufacturer. The process is replicable only with diligence and persistence along a journey of extreme quality improvement that begins with cutting in-process defects (reduced at TL&F by 98%!), putting the brakes on customer claims (reduced at TL&F by 93%!), and instituting upstream design engineering processes to prevent defects from occurring in the first place.

Nomura began his work with TL&F upon request in 2006, following a career with Toyota Motor Corporation that spanned more than four decades during which he held a wider-than-usual array of responsibilities – from manufacturing to quality assurance to support for suppliers and global operations. Notably at the Motomachi Plant, Nomura-sensei promoted development of key quality and productivity performance improvement processes that led to best-ever new vehicle launch performance with full-scale production volume stability attained in the first month of production for Toyota’s best-selling sixth generation Mark II (known in some markets as the Cressida) mid-size passenger car.

The principles and methods introduced by Nomura led directly to remarkable quality improvement inside one of the world’s best quality manufacturers. Nomura-sensei and TL&F proved that even the best can get better. As they did, you also can get radically better by following the steps laid out in painstaking detail in his remarkable book.

Last Friday, Nicolas Chartier and Guillaume Paoli led the largest Initial Public Offering on the Euronext stock exchange since 2019 for Aramis Group, the company they started 20 years ago with a phone and a laptop in a studio. This is a spectacular entrepreneurial success and lean is part of the story.

Keen students of business, Nicolas and Guillaume knew that growth would bring its load of operational problems. Watching other companies in their sector flounder, they saw that complexity and growing legacy could easily lead to poorer customers service and increased overhead costs. They’d heard about lean since their business school days and read what they came across about it, thinking of ways this way of thinking could help them sidestep “big company disease”.

In 2012, Guillaume and Nicolas started an experiment with a lean consultant to sort out the operational issues they were painfully aware of. The results were interesting, but inconclusive. Still, in the next couple of years, they hired a lean director and established their own internal lean program that was essentially project based. Their experience was common to that of many leaders who decide to try lean: each project showed initial appetizing results, but then failed to deliver in the mid-term, to actually transform processes, and in the end to demonstrate bottom-line results.

By 2017, they finally followed the advice they’d read in all the lean books, found a sensei and started learning the Toyota Production System (TPS) on the gemba – the traditional way. Although this approach didn’t look like much to start with and certainly didn’t seem scalable, it turned out to be the pivot to recapturing an improvement dynamic throughout the company and, in the end, a spectacular success. What neither of them expected was that lean was not simply a way to get operations under control, but a fully different way to do business – developing people to always put customers first. Lean taught the executives to ask the hard questions: “What problem are we trying to solve?” “What is our analysis of the current situation?” “Have we asked ‘why?’ deeply enough?” “What are the alternative options to every strategy?” – questions that encouraged people to learn rather than shoot from the hip and just decide and execute.

The turning point occurred when Nicolas asked himself: why shouldn’t the CEO be the sensei? Indeed, this was the same question previous pioneers, such as Art Byrne or Freddy Ballé, had answered. Lean CEOs act as sensei to their organizations. Nicolas went out of his way to meet other experience lean leaders, like Marc Onetto from Amazon or Orry Fiume of Wiremold fame, and led a team of lean authors to clarify the subject, resulting in his co-authoring The Lean Sensei. This team of lean thinkers continued to explore the learning theory underpinning the practical learning knowledge acquired from the original Toyota sensei.

It is often said of lean that many companies try but few succeed. But when they do succeed, they do so spectacularly. Looking inside success stories, like Wiremold or Aramis itself, gives us hints on what can go right and wrong in a lean transformation. In some areas of the company, such as the commercial network, logistics and production, Nicolas was quickly successful in mentoring his direct reports to the TPS as he was himself being coached, while in some other areas not so much. The difference in trajectory was starkly visible.

Results from TPS, it turns out, do not come from applying better processes to the organization but from creating a learning environment where the people themselves learn to look for ways to improve customer satisfaction and lower overall costs, by themselves. The TPS is not an organizational set-up, but a training program with four clear levels:

• Line of sight: the top of the house orients everybody every day towards customer satisfaction and towards asking again and again what customer satisfaction really means in this case. The question always comes down to “Are we doing this because it’s better for the customer or because it’s easier for the company?” This line of sight reminds us to always try to bring value closer to customers – it gives us orientation and intent.
• Challenging problems: the constant pressure to 1) reduce lead-times (just-in-time) and 2) build-in quality by reacting faster to every abnormality (jidoka) are “troublesome problems”, as they are known in learning theory: problems that never cease to be difficult, never cease to be a problem (whatever your current lead-time, halve it) and lead to breaking the current logic and coming up with new, creative breakthrough concepts.
• Routine deliberate practice: challenging problems deliver breakthroughs only if people practice their problem-solving skills daily, through routine learning activities such as making sure the daily workload is leveled, practicing with known standards, and engaging in kaizen to look for small-step improvements.
• Learning conditions: in order to learn-by-doing, teams must be autonomous and led by a trained team leader. Additionally, people must be trained regularly to handle their own problem solving and the systems of the company must be enabling, rather than red-tape bureaucracy that drags on everyone improvement spirit.

TPS	Learning level
CUSTOMER SATISFACTION	Orients to what is needed to be learned daily: how to offer better options, improve quality and reduce costs
JIT + JIDOKA	Troublesome problems leading people to break the logic of their current processes and look for breakthrough concepts
EMPLOYEE SATISFACTION	Daily, deliberate practice of handling workloads, knowing standards and looking for small-step improvements with kaizen
MUTUAL TRUST BETWEEN MANAGEMENT AND EMPLOYEES	Creating learning conditions by establishing a work environment that enables learning, rather than allowing bureaucracy to inhibit it.

This learning model is based on the theory of problem-based learning – how adults learn. Adults learn very differently from children because they are already experienced with many topics, they know what they know. Consequently, a smart way to get adults to learn is to let them grapple with concrete problems. Real-life problems trigger:

1. Activation of existing knowledge and, hopefully, striving for elaboration of this knowledge.
2. Situational interest: learning is hard, but people are motivated to make the effort because it’s part of a team activity and they’re expected to show something.
3. Self-directed learning: the trickiest part of the approach. Learning does not occur during the group discussions but does happen every time someone goes on to read, try, or discover something on their own.
4. Scaffolding and mentoring: the methods used to analyze the problem and the mentoring required to accelerate progress (good mentors steer learners to more promising experiments).

These four elements of problem-based learning are ever present in the TPS, which forms a full learning system, getting people to both practice at routine level through standards and kaizen and go for the bigger breaks, with just-in-time and jidoka. In Aramis’ case, the company succeeded in reducing customer delivery lead-time from several weeks to 24 hours by solving both small and large challenges.

CHALLENGE	RESPONSE
Pull flow of cars	Displaying on the site cars with reliable lead-times – if uncertain, the car is not offered to customers. Shipping on site only the cars for next-day delivery to customers. Solving car registry issues that stopped physical delivery of the car. Working closely with operators preparing cars to support them in guaranteeing quality and timeliness of delivery.
Truck control	Setting clear timetable objectives for trucks. Reducing variability in arrival and waiting for trucks on sites. Eliminating pain points for truck drivers to make their work easier on our routes and sites.
Acceleration of information flows	Reduce dependency on postal delays. Accelerating financing by focusing on simplifying paperwork and waiting.

The truly difficult point is that learning remains individual. It requires a collective setting for motivation and exchanging ideas and points of view, particularly in the fog-of-war, but the magic moment remains personal – someone has to learn something, and then share it to expand on it. Learning also requires accepting to step out of one’s comfort zone and try new things; not everybody is equally open to this experience.

This is why a lean transformation seems like a journey. In fact, transformation occurs where chains of mentoring, from senior to junior, occur. In departments where people side-step TPS and are content simply implementing the new processes as if they were best practices to roll out, nothing much happens (nothing bad either, as the new processes tend to be copied from the learning obtained by lean thinkers).

This is why teaching lean piecemeal, through the tools, through “lean” projects or through the many “lean-light” methods invented by consultants is a bad idea. The TPS is a robust, time-tested and smart method to visualize problems, identify waste and kaizen it – and from doing so, through deliberate, constant practice and lifelong hours, coming up with breakthrough ideas (such as the idea that trucks can be controlled to the minute) and breakthrough results (24-hour delivery). A lean transformation is not an organizational transformation, but a thinking one – which comes from learning and practicing the TPS.

Like Art Byrne or Freddy Ballé before them, Nicolas and Guillaume are among the most talented and innovative entrepreneurs of their generation. What lean offers them is a method to achieve repeatable results, as they are currently demonstrating with their hypergrowth, integrating operations in new countries without imposing central processes but simply by mentoring TPS on the gemba. This, we believe, is the vexing answer to why so many companies try and so few succeed, but those that succeed do so spectacularly. Lean is a learning system, and it needs to be taught one person at a time, on the gemba, in a chain of mentoring – that is what a true lean transformation looks like.

LEAN CONSTRUCTION Congress will be organized jointly with LEAN IN PUBLIC SECTOR (LIPS) Conference on  May 3-5, 2021.

We are working hard to make the LCC & LIPS conference as successful as possible and announcements regarding programme etc. will be made soon!

Find out more here