Lost of Toyota!

Here is an article from Wall Street Journal, A Scion Drives Toyota Back To Basics . I was so surprised by the article and I think the world was set on fire by the story. Therefore, I want to share with the people who is interesting for lean concept.

"Three top executives, including Mitsuo Kinoshita, announced their retirement. Akio Toyoda is the first member of Toyota's founding family to take the helm in 14 years. Toyoda's appointment as president is pending shareholder approval in June. ...... Toyota bulked up in recent years and is now stuck with too much manufacturing capacity. It might also be faced with its first layoffs in Japan since 1950, when 3,000 workers were let go."

For a long time, we are learning lean manufacturing (or TPS) and we lelieved that the concept helps many kinds of industry to get higher profit through the way to eliminate the wastes. Why the most famous company in lean world, which is the originator of lean manufacturing, sufferred the bad situation? In this financial tsunami, is that the lost of Toyota reflects the invalidation of lean manufacturing? The answer is "NO", the lean concept has never invalid, the problem is Toyota got lost in front of the number game. Please read the below.

"An unprecedented number of unsold cars in Japan has forced Toyota to stockpile them in the parking lots of Fuji Speedway, a company-owned track near Mount Fuji. ....... I think Toyota probably over-expanded a little bit in order to compete with the American auto makers,' said his father, Shoichiro Toyoda, 83, who himself was the auto maker's president during the 1980s. "

The first waste of 7, over-production. It looks to me that Toyota forgot the 7 wastes principle. On the other hand, what is the meaning of over-expand? What is the meaning of over-capacity? In result of over-expand, it forms the over-capacity. In the same way, in result of over-capacity, it forms the over-production. Over-production forms the negative effect in P/L. The leader is only focusing on how they achieve the short term target, they only remember the number they needed to made this year. Basically, they only achieved their personal target to make somebody happy in board of director, but they forget the long term goal and the most inportant thing of company, the mission.

"There's a move away from technologically sophisticated in-car gizmos like a solar-powered cooling system designed for the new Prius and expensive new assembly-line technique of dipping car bodies into a vat of paint and swirling them around. ...... The company is also reining in its engineers, who have been designing new features that occasionally appear to be out of character with the company's utilitarian roots. For example, the new Prius, launching this year, has an option for a solar-powered ventilation system designed to keep the interior cool when parked. Gizmos like these helped lift the car's retail price to an estimated $28,000, according to analysts, compared with the $22,000 currently."

Yes, it sounds good if the interior of the car is cool when I back the car in carpark of summer days. But, how many months I need that function? I believed I need that only 3 to 4 months in a year. Do you willing to pay US$6000 more to get that thing? For me, no way! May be I need that if I can afford to buy a Benz or BMW, but I do not expect that happen in a PRIUS. I don't know what is your comment, but I think it is also over-production, or we can say "over-design". The management of product developement is also forget they only need to design something for customer demand, I meant free of charge.

"Then there's the shabu shabu paint system. Toyota's manufacturing division is one of the company's proudest operations, having developed a highly efficient 'lean manufacturing' philosophy. To replace the traditional system of slowly dragging a car through a 115-foot-long bath of anticorrosion undercoating, Toyota engineers came up with a new process in which a car body gets picked up by a robot arm, then swished around in a pool of paint, cutting the length of the line. However, the new system costs roughly four times as much to set up as the traditional process, while producing what Mr. Toyoda felt were minimal improvements in the quality of the paint job and its efficiency."

I think it would reduce much space for the painting if they paint the car as a hot pot way. In the point of no change in quality and efficiency but four time of cost higher, are customer want to pay for that as their willings? For myself, I need a car has a good coating to prevent the rust, but I don't care how to paint it from the manufacturer. I can not see how they paint the car, offcause I can not feel the exciting of painting a car in hot pot way, at least when I am driving. Why I need to pay for that? Yes, this time, the company remember the lean concept, the waste of motion, but they forget the top principle of lean. What is value-added process?

I am sorry that I am not going to attack Toyota. Actually, I like to drive a Toyota car. I felt safe and comfortable when I was driving that, just hope Toyota can find the way back and continuous to build the car as our need, not as Toyota needs.

Crisis and opportunity

A Chinese Saying,
"Opportunity is always present in the midst of crisis. Every crisis carries two elements, danger and opportunity. No matter the difficulty of the circumstances, no matter how dangerous the situation ..... at the heart of each crisis lies a tremendous opportunity. Great Blessings lie ahead for the one who knows the secret of finding the opportunity within each crisis."

In year 2007, I started the course of MBA in Hong Kong. Because of heavy burden of assignments of the course, it is obviously that speed of issuing post slow down, in other words, less time for thinking! Today, an event, a negative comment from my colleague to my job, made me calm down, forced me to meditate my job.

14 years, came out from college, still now, I don't like my job repeatedly everyday. I can not rise my interesting to do the same job which I have done before. I want a new assignment and like the new challenge. Nobody likes challenge and crisis, but I use the new assignment and challenge to make the crisis for myself. I need crisis to push me moving on. For these year, I fully studied the Chinese saying stated at the beginning of this article. The good opportunity is always come from the most dangerous place, postion or duty...

10 years before, I was a project engineer. I was assigned to develop a new product for the factory. The product was totally not familiar for the company. At that moment, serious conflict in different process departments, unfortunately, the new product needed to be produced through all process stations. I knew the risk for following the project, I faced many and many blocks, but I have a passion to complete my job. What is the result? I became the engineering manager after the project. May be I had not enough experience to be the manager at that moment, may be I had not enough knowledge of management to be the manager, but I had enough passion and volition to promote that position. Company gave me the opportunity to try.

Another short story, 5 years before, I just changed my job to a new company. Just on board for a few days, my underlings argued seriously with the colleague in other department. They were arguing be email and copied all over the company, it caused a really bad image to other departments. It also a risk for me at that moment, I stop their arguing and one email in 30 seconds, called them to discuss the issue face by face. What is the result? My boss ascertain my ability and my underlings felt confidence for my capability.

Thess years, I joined the course of MBA. So many people asked me why I need to study the course? I never gave them a certainly answer. Actually, my underlings improved and upgraded so much and they created the threaten for me. I need some upgrade for myself to avoid the crisis. The crisis management theory for me is simple, not plan for when will it happen, the important thing is how to plan for preventing them.

For the these many years, I have long time not hearing the negative comment for my job. I was already unfamiliar for negative speaking. It is so dangerous for me, not from the comment from my colleague. Frankly speaking, I don't agree the comment for his point of view to my existing result, the result from him can not cause any danger to me. The most dangerous to me is, I almost forget the useful power to push me, the crisis!!! At recent moment, I felt I was stop in a stage and I can not break through. I need some motivator for my career. Honestly say, I am never angry with anybody who gave me the negative comment. Let say the negative comment only represent 1% of my performance, I will improve the 1% accordingly.

In recent moment, I quit my job but it is not my willing. At least, it is not in my schedule, I planned to seek a new job after Chinese new year and resign when I got a better one. The time line is not in a big gap but I was quit passively. May be it is the good time for me to think about my plan for future.

Lean in American way? in Japanese way?

Entended from my last post "The different between American and Japanese management styles", I want to talk more about the the differet of the way they consider in lean manufacturing as well as its implementation. Here is also a blog post from Steed Wei "Lean in American way, Lean in Japanese way" for your reference. The ways of thinking for lean manufacturing is also different as their management style.

The different ways of thinking in lean between Amercian and Japanese,

1. As other management tools, such as balance score card, American thinks that lean manufacturing concept is also a tools only. How do you treat your tools? Put them in a toolbox and seek them when you need? They are using lean as a tools to force their employee to change, force them to continuous improvement. There is no culture change involved in implementation. From the cradleland of lean, actually, Japanese does not know what is lean but they called that concept in "TPS" (Toyota production system). Japanese way of lean is a culture and it is important to spread the culture to everybody in company. They need the employee fully understand the lean concept as their original thinking. All the continuous improvement actions are issued from their wills, and no need to force by senior management. In my last trip to Japan, I asked the Japanese consultant that, "is that all the Japanese companies implement lean concept?" The consultant replied, "yes, all the companies here understand the lean concept, but they only apply parts of tools for their company. They only apply the tools they needed in necessary."

2. American way of lean is focusing on short term result. As they think that lean is tools, any kind of tools would give the return or payback to its value. They spent money on investment to get a lean leader and Kaizen promotion officer, they spent on training and the charge from external consultant. They always ask for return, "How much saving we can get annually?". They need a schedule of actions, and they also need a budget they can save. They will give up some long term project to improve because of its result is not significant in the financial report. Japanese thinks in the way that lean is their responsibility. No matter it is a project in long term or short term, if the project has the benefit to their company, they will implement and push the project. They would never ask for a budget plan for how much they can saving, but they will have a summary for how much they did save. The summary is a prove they are improving the process in right direction and to motivate the people to continuous.

3. American way of lean is focusing on the holistic change, not only the manufacturing process, the logistic flow, supply chain flow, information flow even the office are also considered to changed in one shoot. As the Japanese consultant replied, they are not implement the lean concept totally. They are only focusing the critical point of their company and apply lean concept to that area accordingly. As we know, Japanese culture is focusing on the detail, they apply the lean into the area and they continuous to improve until they felt it was perfect. Offcause, for Japanese culture, it has no sense of perfect, it only has better, and better.

Any more ideas from you?

The different between American and Japanese management style

I am working for American company but I am developing lean transformation in the company. There are some different in concept of management after several months of studing and implement. Below is a summary found on internet which can well present my experiance for this topics.

力量来源
●美国：依赖制度
美国管理体系运作力量来源于严密的治理和激励制度，用制度的力量约束和激励高层管理者的行为。公司董事会、股东大会、管理层的权、责、利分明。
●日本：依赖文化
日本的管理体系运作力量来源于企业文化的凝聚力，依靠员工终身对企业效忠的日本文化传统。建立董事会、工会、主管间相互合作、磋商、和谐的管理模式。

人的地位
●美国：重视个人
美国推崇领袖或精英的个人力量。 领导力往往自上而下，企业依赖总裁的判断力、观察力和决策力，员工深受企业领袖行为的影响。企业文化的核心就是老板文化。
●日本：重视团队
日本的企业更加注重团队的力量。领导力通常是自下而上，中层领导不断地与一线工人在现场进行密切的沟通，激发他们的创新潜力，把公司文化渗透到每一个员工的心底。

使命目标
●美国：股东利益最大化
美国企业的根本目标是最大限度为股东创造价值，所以企业政策不断受到 股票市场波动的影响。
●日本：多元目标
日本企业的目标多元化，员工、顾客、市场的目标往往大于近期的股东利益。通常情况下，为了满足扩大市场额，企业宁愿短期内牺牲股东利益。

组织分工
●美国：高度专业化
美国的企业专业化趋势更强，内部分工细腻。员工通过提高自己的专业化水平来获得职业上的进取和组织上的优化。
●日本：高度综合化
日本的企业分工相当粗犷，强调员工的长期就业心态。企业往往为员工提供持续的综合培训，内部职务轮换流动，以应付市场出现的突然情况。

绩效考核
●美国：短期目标
美国企业采用目标管理，严格执行短期的绩效评估，在季度、年终奖评过程中实行物质刺激、惩罚鼓励、多劳多得、优胜劣汰。
●日本：长期发展
日本企业重视挖掘员工在企业中的潜力。企业的短期绩效通常放在员工长期发展之后，并不拿员工的短期表现作为惟一的评判和奖惩的标准.

What is the Chinese management style???

Toyota production system

Please check this link for Toyota site. This is a very clear flash media for value stream mapping as well as other useful info for lean manufacturing.