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Michael Balle

Michael Ballé: Pull creates an architecture for kaizen

By Michael Balle, co-author of The Gold Mine and The Lean Manager - Last updated: Wednesday, July 21, 2010 - Save & Share - Leave a comment

I visited three factories this week: one that is thinking about starting with lean, two that have been doing kaizen for three to four years: there is clearly a world of difference between doing kaizen and not.

However, the two factories doing kaizen are interesting to compare. In both cases, senior management is driving the lean effort. In company A, the CEO himself is choosing problems and conducting the kaizen workshops. In company B, the group’s operations VP is driving the lean program. Both the CEO from company A and the ops VP from company B work with a sensei. Both have had significant results. Company A has survived a 60 percent drop of demand during 2009 without laying off permanent workers, and now operates with almost no stocks. It has improved its quality by a factor of ten (yes, I know, but the figures are credible) and is now busy aligning its prices with the current market by going to single piece flow. Company B has generated 15 million Euros in cash for reducing inventory by 20% (whilst improving its on-time delivery) and cut its customer quality returns by half.

But in company A, the CEO has an ongoing problem of involvement: whenever he gets on a problem himself things progress quickly – yet he has difficulties in getting his line management to take lean on board and do kaizen autonomously. More often than not they succeed in sustaining the changes, so its not that they’re not good or no motivated, simply that they consider the kaizen efforts the CEO’s domain and wait for him to highlight what needs to be fixed and lead the kaizen effort.

In company B, last month they had each area manager present to the senior executives their improvement plans for the next six month: which direction they want to take their shop and how this breaks down in planned activities. Clearly the direction is given by the operations VP, but still, the plans are their own: they formulate the plans and they will have to get them done.

The difference? A pull system. Company B has been working at implementing a wall to wall pull about two years ago, and is now at the stage where pull is working all the way to supplying the lines with “small trains” of components from the procurement warehouse. Company A, for a variety of reasons (the financial crisis, the CEO not convinced, etc.) has radically reduced its batch sizes both at the presses, ovens and in assembly, but is still using the MRP-driven push system (there are number of technical issues such as technological times that makes pull a bit of a puzzle).

Seventeen years ago, when I first saw a Toyota sensei come to a supplier, he went to a workstation in front of the assembled executive group, and watched the operator work for about ten minutes, before moving a box of components closer the operator’s hand. Then the sensei went to the meeting room and drew a simple diagram of the river and the rocks (translated by his interpreter) and… left. At the time, the execs where furious – they had been asked to come to the plant for this?

That was the most powerful message we ever got about lean, and Toyota worked for several years with this supplier to teach it how to improve the cells (kaizen) and how to pull (just-in-time). It took us many years to understand ‘the river and the rocks”: the pull system shows you where your problems are so that you can do kaizen effectively – in a way that pays at budget level. Furthermore, with pull, everyone can see the problems, so when local supervisors have the right attitude, they will, by themselves, focus on the right kaizen opportunities and solve the problem.

This is the magic I saw in company B. The supervisors were not any smarter or more motivated than in company A. For two years they have need struggling at implementing the tools of pull (leveled plan, stocks at the right place, kanban cards, leveling board, small train, etc.) and it’s been a hard fight – to some extent still is: pull is never restful. But as a result of implementing pull they have become engaged in the need for improvement, and are clear enough on what they need to improve (productivity in assembly, quality in the paint shop, flexibility in the machine shop) that they are autonomously writing their own kaizen plans. The CEO of company A realizes the value of this, and is visiting company B in the coming weeks.

Kaizen without pull can be very effective, but it remains point kaizen. To move up to system kaizen (and see the opportunities for kaikaku and radical improvement) you need pull as well as kaizen: pull created the architecture for improvement.

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