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Toyota's Lean Manufacturing Issues

Submitted by Kamal Wickramanayake on April 25, 2007 - 12:16

When the business model changes to making the value flow at the pull of the customer, the demand for business agility starts to rise at unprecedented speeds where high speed reporting, analysis and solution identification become inevitable. While new management styles are part of the solution, automation of  business processes (reporting, analysis and solution identification) has its own stake which in many cases influences the just said management styles. A predicted slow down of Toyota is just one example where the values of an informed information technology strategy is highlighted.

Jim Womack (details), Founder & Chairman of Lean Enterprise Institute, in their April issue of  'eletter' predicts that Toyota might slow down. If it ever happens, Jim suggests that the reason will be a failure to propagate Toyota's management system towards new managers (Clarification on management system: He is NOT talking about a computer system, but the management styles, policies and procedures).

While details of this issue with causes and solutions are found in his eletter, two paragraphs are quoted in this article with Jim's kind permission.

“This means managing the organization's value-creating processes (value streams) by asking highly informed questions rather than managing results at the end of the reporting period. (The latter is simply another form of end-of-the-line quality inspection.) And it means avoiding a resort to orders on what to do next when matters seem to be getting out of hand.”

As highlighted by Jim, the modern agile enterprise doesn't depend on driving its business with after-the-operation-reports. Rather, the focus is to derive the value while the operation is in progress. IT to help! Information captured at the sources, near real time reporting, analysis and solution identification with intelligence engraved software become vital parts of the business and significantly reduce management overhead.

The interesting question is what level of automation (in reporting, analysis, solution identification) is best suited for Toyota (or any other business)? Until the business management experiences no information management but only the business management. In such an environment business managers are solution and innovation oriented than just act as communication channels between parties (at least because they are not left with anything else to do). Let the information be managed by the IT systems that are meant for it.

If one sees that Toyota is doing this right now? Well, it is highly unlikely that a business will not find another step to climb. Achieving higher levels of separation between information management and business management is not a next day deployable solution, but requires careful thought and step by step move forward.

“Issuing crisp orders is the natural instinct of any boss. Indeed, most bosses seem to think that by virtue of their experience and authority, they should be able to solve any problem lower in the organization. But orders from the boss rather than informed questions take away the lower-level managers' responsibility for solving problems. They start a vicious circle in which lower-level managers wait to be told what to do by higher-level managers who are much further from the gemba where value is created and who inherently have less – not more – knowledge of the best thing to do.”

Lack of employee empowerment! Any industry can harvest the power of employee brains. While it is a key focus area in lean production, what does IT have to do with employee empowerment?  Harvesting employee brain power requires a business to correctly stimulate the brains. Let the IT systems bring the correct information to the hands of correct people at the correct times. If precise information required to make a decision reaches the correct employee at the correct time, what are the chances of the employee making a wrong decision? Will the employee seek senior assistance? We don't grow fools in our companies, do we?

Humor: “Let there be more IT Architects in Toyota and the rest of the world! Like this person...”