HOW TO APPLY LEAN, pretend you are about to go bankrupt!

Toyota did not start by building vehicles they were building weaving looms.

After the second world war the Toyota campus was all but totally destroyed, flattened with little left in the rubble to rebuild the business. Add to the recipe a cultural responsibility to look after your people.

No equipment, No parts, Hardly any buildings and no cash but still a lot of people. As a business what are going to do?

Challenges breeds innovation

Unscathed in a corner of the Toyota campus was a small factory that produced engines. These engines were designed to help with the running of the weaving looms. This became the birth of innovation.

Toyota decided they could make a vehicle powered by their engine. It would be simple and cost effective for the local consumers ... but this required cash something they lacked.

But here the initial Toyota Production System came to be. It was a simple formula:

• Get an Order

• Get the Parts

• Assemble the Vehicle

• Deliver the vehicle and collect the cash

The challenge was all of these steps had to be completed before the suppliers demanded payment for the parts delivered. Guess what? they made it happen !!!

Many of the discreet methodologies we acknowledge to Toyota actually were all embraced and needed to work in harmony. Since the company was in essence bankrupt the focus was on velocity and efficiency and only ideas and methodologies that supported either were only allowed.

Get the order

Models and Options were minimized. The order form was simple, just a piece of paper detailing the customer and a very boxes that could be ticked for options. No elaborate order-entry system, no forecasting algorithm nada, nothing , just sheer simplicity.

Get the Parts

If you have ever toured a business in Japan you will notice a significant allergy towards people having individual offices or cubicles. It truly is a team setting sharing telephones and even trash cans. A true open concept encouraging team work and collaboration.

Assemble the Vehicle

Here is where all of the magic happened, and yes we have become distracted from the initial core purpose of a methodology.

First, and commonly overlooked Toyota focused on Material Movement. They could not afford to invest in inventory so Inventory had to stay in motion until it was attached to the vehicle. As the vehicle was being assembled it also had to stay in motion and yes as the part was being attached both the inventory and the vehicle remained in motion.

This brought a lot of challenges. Team Members could not afford a fraction of a second to find a specific tool or a part so Work Place Organization was introduced. This also helped with the time studies so that every operation could be precisely calculated and engineered.

An added benefit of Work Place Organization is that supplies were limited to an exact quantity the the Team Members needed for the day. Again cash and inventory location real estate was significantly limited.

Work Place Organization ultimately led to Standard Work. and the creation of Detailed Work Instructions. Needed? not much since Toyota relied on their Team Members muscle memory to build the vehicles, but it sure helped as new Option and even models were added and before the Team Members could develop additional muscle memory.

Remember those limited Options? this required change-overs. Change-overs were very bad since normally to amortize the cost of a changeover you built inventory to bridge the change-over. Well with no time and no money all change-overs were attacked so they could be done within one normal cycle of that operation. As Toyota got better with SMED they could offer more options.

A line stop was debilitating. It immediately idled the Assembly Team (burning cash) and interrupted the velocity of Inventory. Simple Solution ... "Clean to Inspect" use any idle moment to clean within your work station and either repair or report any anomaly.

Deliver the Vehicle and Collect the Cash

Initially Toyota sold their vehicles in close proximity of their facility. A long distance delivery would delay the ability to collect the cash. In those early days the vehicles were sold by door to door sales people, no fancy dealerships just simple brochures with a simple value proposition.

Did it Work? You be the judge. Today Toyota is one of the largest vehicle producers in the world, financially robust and building their brand as they could afford to do it.

MY challenge to you is look at your operational processes as if you were on the brink of going bankrupt and see where you can apply Lean Principals or apply them as originally intended ...

• How much time does your order spend in administrative processes before being launched as a work-order.?

• Is your Work Area Spotless and Organized?

• Are you measuring Inventory in minutes or turns?

• During the shift how much walking Team Members do you observe and do you question why they are walking?

• Are your Operations Balanced? Identify Cadence and balance, look for large inventory buffers, question? balance using SMED or adding capacity.

Need help, contact us. Just do not be surprised if I ask to be paid up front I dont want to be a creditor of a bankrupt company. I am also not telling you to wait until you are or getting close just look at your business with a bankruptcy optic.