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Jeff Liker

Jeff Liker: You must balance the principle of “build to takt” with the principle of “heijunka,” and the principle of “respect for people.”

By Jeff Liker, - Last updated: Tuesday, February 7, 2012 - Save & Share - Leave a comment

I appreciate this question from Jean-Baptiste Bouthillon who himself has become a serious student of lean and had to make decisions like this for his construction company.  I will start with his assumption that “production must follow the takt of customer demand.”  It is always dangerous to take an ideal principle and turn it into a prescriptive statement.  “The ideal is working to achieve production to takt” is different then “thou shall always build to takt.”  The ideal is a True North direction that you are working toward and you want it engrained into your DNA as it is a truly foundational principle.  But there are many factors to consider and there are reasons to intentionally NOT build to takt.  For example, when we see a company that proudly builds every item to order, an example is the office furniture business,  we often see waste and inventory everyplace in the plant, with warehouses of raw materials, and held by suppliers.  Chaos reigns in their processes, but the furniture comes out at the end according to the schedule based on actual customer orders and promised lead times. We also see that people are being hired and fired like a see saw goes up and down as demand rises and falls.   In that case we often ask:  “Don’t you have any high selling items that you are confident will sell?  If so, why don’t you keep them in inventory and replenish those will building to customer orders for the rest?  They say “no, we are a build to order shop, proudly.”  Good luck with that.  By keeping some planned inventory, and using it in the right way, you can achieve a more leveled schedule, heijunka, which in the early TPS models was THE foundation of TPS.  Building to takt, pull, balancing the workload, and protecting the jobs of team members is not possible without heijunka.

In the construction industry I understand that you cannot build extra buildings and store them in a warehouse.  But you must balance the principle of “build to takt” with the principle of “heijunka,” and the principle of “respect for people.”   For example, Toyota has enough demand for many of their products to run three shifts in a plant, the most efficient use of capital resources.  Yet they have almost always run two shifts with a gap between shifts.  That is for preventative maintenance, but also so they can schedule overtime to deal with peak demand and then eliminate the overtime in periods of low demand.  They also use temporary workers i high demand period and make them permanent when the average trend will support the additional team members who can enjoy job security.  When the Great Recession hit they immediately eliminated overtime and soon eliminated temporary workers..  That helped with about 20 percent of the downturn, but they still had accumulated too much inventory in the pipeline and too many regular team members for the volume that for large vehicles was cut in half.  So they shut down the large vehicle plants for 3 months to bleed down the inventory then combined the two schedules into one.  At this point they did build to takt, and stopped overproducing.  They also beat themselves up for having overproduced.  But instead of laying off regular team members they kept them employed in North American plants and did daily kaizen and training at the most intensive level in decades. Team members rotated each day from working production to training-kaizen.  So they followed the takt principle religiously yet leveled the employment base through another principle.  They save money when they are highly profitable to help them get through bad times.  This leveling of spending allows them to provide a high level of job security, even though they do not promise lifetime employment to anyone.  They did violate “build to takt” in one area–they paid suppliers ahead of time for tooling for new products and they paid for building up some inventory for suppliers in financial trouble to help level a bit their income stream.

In the case of construction I do not know how you can balance build to takt, heijunka, and respect for people.  But that is in fact what lean is all about–defining the challenging targets and then creative problem solving step by step to work toward the targets.  Thus, you must have a clear set of principles–not one at a time, but as a combination–and then turn that into definable, observable targets, or what Mike Rother calls target conditions.  Then you need to think, try, measure, evaluate through PDCA to try to get closer and closer to your vision.  Nobody can tell you what rigid “lean principle” to use or what “lean solution” is the secret in the construction industry.

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