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Samuel Obara

Sammy Obara: Ringi as used by Toyota, ensures that resources will be allocated according to the Hoshin Kanri for that period

By Samuel Obara, - Last updated: Sunday, December 23, 2012 - Save & Share - Leave a comment

Great topic.   As to how widespread Ringi is in Toyota, I think most people in Toyota would be well familiar with this practice as it is used in all areas, from production to sales to IT.   In Toyota they refer to it as Ringi Sho, which is roughly translated to Approval Document.  But as some other Japanese or Toyota terminologies, this one should not be just roughly translated.  It brings a much deeper concept which makes it fair to use the Japanese terminology.

Ringi as used by Toyota, ensures that resources will be allocated according to the Hoshin Kanri for that period.

A simplistic example:  a production engineer needs to bring in a$50,000 equipment to improve the productivity.  She fills out a Ringi Sho highlighting how the equipment is supporting the Hoshin Kanri, and how it would be justified by the current production demand (standardized work is key to understand that).  If needed, she will need to add some more Kaizens to justify that expenditure.  Depending on the amount requested, different layers of approval are necessary.  I was in one Toyota site early this year where anything above $5,000 had to go to the president.  I have no idea of the thresholds here in the US, but my guess it would be a little higher than that, but not much higher.  >From $1,000 to 5,000, director level approval, lower goes to manager or even just supervisor.

Ringi cannot exist without Yosan Kanri, which is the most important budgetary element from Ringi.  That’s where rigorous budget controls are performed and Yosan is linked all the way down to the Standardized Work on the shop floor.  Yosan Kanri is used to monitor item by item, the cost benefit of this new equipment until fully implemented.  This includes not only its operating and maintenance cost but also its measured benefits to the cost, quality, delivery, etc.  They call the bottom line of a Yosan, merit.   Roughly, Ringi is done for approval, Yosan for validation.  All this involves intense Nemawashi the same way any other typical A3 does.  However, for Ringi we had an option of using an A4 form, besides the A3.

<<As a disclaimer, I’m NOT advocating we should use more Japanese language in the lean workplace.  On the contrary, I think many of them can be translated to English or local languages as some of those words are existing concepts also outside Toyota.  However, I think it is a disservice to our community of students if we try to teach them the roughly translated words just for the sake of lowering barriers.  This may be one of the reasons Kaizen became “continuous improvement” and most companies struggle to get to the essence of it.  In my opinioin, Ringi is just another one of those translations that cannot be made accurately in less than a page.  And if we try, people may think it is just another Approval Document>>

I wish you all a Merry Christmas and Happy New Year.

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