Workplace Management

By Taiichi Ohno

Amazon Summary

This unique volume delivers a clear, concise overview of the Toyota Production System and kaizen in the very words of the architect of both of these movements, Taiichi Ohno.  Filled with insightful new commentary from global quality visionaries, Taiichi Ohno’s Workplace Management is a classic that shows how Toyota managers were taught to think.

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Reader Summary

The superior person knows how to adapt.  The superior man does not fear change.

– Confucius

Taiichi Ohno offers distinct and elegant advice on a number of questions and topics concerned with the Toyota Production System.  Ohno reflects on thirty-six topics that explain how best to manage a workplace.  I will pluck out my favorite concepts and discuss their merits here.  This is not a comprehensive book review, but only a summary of my takeaways from the book.

The three areas I chose to address are:

• To get to the Lean we know today, it was necessary to look at the problem of work in a contrary way from the prevailing wisdom.  Ohno calls it “postconventional wisdom”.
• Words have meaning. People use terms and concepts incorrectly, which cause waste and inefficiency in the workplace.
• Kaizen, costs, and standards.  I summarize Ohno’s main points on these topics.

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On the Contrary

Taiichi Ohno makes it clear in the Preface that the Toyota Production System can be summed up in a single phrase:

Make only what you need, in the quantities you need, when you need it.¹

In this quote, Taiichi Ohno refers to the most basic tenet that turned traditional production processes on its head.  The typical way of doing things called for parts to be transported to later processes as soon as they were made.  This process caused a disconnect with customer demand.  Ohno observed how easy it was for departments to feel good about the multitude of parts they could produce in a month.  However, only Ohno seemed to notice that no cars were completed in that time period.  Why?  Mass production always rewarded those who produced the most.  There was no sense that each department’s output must form an integrated set that is consumed by the customer.  To correct this, each department must operate in unison with the set.  Atypically, some departments must become idle if their contribution to the set is not needed at the moment.  This became the crux of the post-conventional wisdom that Ohno required to change the system.  He even makes a comment about himself to explain why he was able to create this type of thinking:

Nevertheless, I insisted on talking about “postconventional wisom,” perhaps because I have a contrary streak in me and tend to look at things backwards.²

Looking at things backwards creates a historical moment.  Taiichi Ohno created just-in-time production by reversing the system from push to pull.

A process that needs a part goes to an earlier process to get it.  It’s that easy.  No trouble at all.³

My Own Experience

I see this example in the IT industry all the time.  The server department pats themselves on the back for creating X servers per month.  The web services department glows when they set up Y number of web environments.  However, when the customer receives their environment, they can’t log into it because nobody thought about giving them access.  There is a very large piece missing in both examples.  Nobody (or somebody) is not noticing the true goal of the production process, to hand the keys to someone so that they can consume their product.

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Words Have Meaning

Ohno likes to point out the importance of correct terminology.  Through his experience, he has seen other organizations look at work the wrong way out of habit.  The corrections he makes are central to the Lean mentality, yet hamper organizations everywhere.

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Motion vs. Work

Ohno makes several points that begin to explain the concept of value vs. waste.  He picks apart typical ways of referring to activities in the workplace.  Two quotes illustrate his point.  They are:

• Don’t manage speed or motion, manage work.⁴
• If people are sweeping while waiting for parts, that’s not working.  Everyone confuses motion with work.⁵

Ohno accuses the traditional manufacturing industry of looking at work the wrong way.  He insists that you must look one level deeper at work activities because only some of the time spent making a product is actually… making the product.  Just because people are moving all the time, racing to and fro, cleaning, sweeping, monitoring, attending meetings, or handing off work to the next step, it doesn’t mean that they must surrender to this fate.  These “extras” are not work.  If it isn’t work, then it is taking too long or costing too much to produce the output.  I’m not a historian of Lean, but since this book was written in 1982, this could easily be a precursor to the Lean concepts of value stream and the two types of muda:

1. Type I – non-value added activity, necessary for end customer.
2. Type II : non-value added activity, unnecessary for end customer. The aim is to eliminate this type of wastage.

As a result, Ohno illustrates that the only activity that matters is the value-added activity that creates the product.  That’s the real work.

Organization and Orderliness⁶

Ohno goes down to the basic structure of the Japanese language to define words in the right way.  He defines organization as anything that “involves disposing of things you don’t need.”  Orderliness means “always having access to things you need.”  Using these two words together create an optimized working environment.  Strip away the bad and keep only the good.  If you must move everything out of the way to get what you need, then you have neither organization or orderliness. That is why keeping a clean shop floor has been such an important principle for Lean.

Processing Time and Processing Worker Hours⁷

Here, Ohno wants to parse the total time it takes to create a part.  In his example, a part may take five minutes to complete.  However, only one minute of the effort requires a person to mount a part on a machine and remove the part when it is finished.  The remaining four minutes is watching the machine process the part.  Since this four minutes is waste, then the remedy is to assign the person to more than one machine.  This sounds simple, but processes and production efforts across the world still calculate their time and labor estimates on the full five minutes.  Likewise, specialists still cling to their “one machine” mindset and make it difficult to contribute more cross-functionally. Once again, Ohno tells us to look deeper.

If you take this example and bring it to my own work world, I have seen, time and time again, situations where something takes 5 days to deliver but requires only 20 minutes of actual work.  It is extremely important to make people aware of this.  Even when you do that, it still may fall on deaf ears.  In these situations, you need to push for a single-piece flow experiment.  Pick the items you want to produce in one day and align your resources so that every single step occurs in one day instead of being handed off to a queue where it may not be picked up for two days.  Processing time should never be held hostage to processing worker hours.

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Rate of Operability vs. Rate of Operation⁸

Ohno indicates how many get the two terms above backwards.  Rate of operability is defined as how much a machine is able to do work.  Related, but not the same, is the rate of operation, which varies with the demand of work.  Ohno insists that the former must be maximized but the latter should not.  Oftentimes, production facilities do the opposite.  They will let a machine die or neglect maintenance so that it functions below par, yet push active machines to produce full time without regard to customer demand. Ohno prefers that you maximize the usability of whatever machines you have.  Make them ready at all times so that they are ready for a spike in demand.  Otherwise, leave them offline but fully maintained.  If there is no demand, then the machines should not operate.  He also warns against thinking that productivity increases the more a machine produces.  Overproduction, in Ohno’s mind, is one of the worst enemies of productivity. It is always best to keep machines ready to produce only the amount needed and no more.

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Kaizen

Ohno explains the importance of improvement that makes the most of what you already have.  Specifically, he states that kaizen is an operational improvement that comes up with better methods of using existing equipment.  It is most important to think of new work methods before making new tools or buying equipment.  In fact, there is no point in buying new equipment if a team doesn’t know how to do general improvements first.

Ohno elaborates further by establishing an order to pursue improvement. First, you must improve your operations.  Again, make the current operation more productive and make sure that there is an improvement in quality. Do not bring in new machines yet. If you do, people become slaves to the machines.  People with no capacity for improving operations are a problem because they like to buy new machines all the time.⁹

Second, you must improve your equipment.  This is a close relative of the first step, operations. What Ohno clarifies here is that the people on the shop floor must possess the skills to tinker and improve the machines. If they only solve their problems by buying new machines and using them per vendor specification, they will never squeeze out the local and custom level of capability and creativity that enhances productivity.¹⁰

Third, and last, as emphasized by Ohno is process improvement. This effort creates the flow for how machines are used and how quality is produced.  Ohno reinforces his point that no improvement is worthwhile unless the people using the process understand it and can alter it based on their knowledge on the ground. People on the front lines own the process.  They cannot work in a daze because management, technicians, or “experts” decided on the procedures.  There also cannot be reliance upon one big change to fix all ills.  Ohno makes it clear that kaizen is an ongoing activity made up of many small improvements diagnosed and implemented by the people doing the process.  Having a culture where the front line people do this every day is the optimal method for increasing productivity and quality.¹¹

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Only the Workplace Can Cut Costs

As an extension of the ongoing kaizen, companies must embed cost reduction into all their activities.  The ultimate measure of success for a manager is to do the same work with fewer people than before.  That is one reason why Ohno holds so tightly to the principle of multi-machine supervision.  So too, costs will also come down to the extent that defects are reduced.¹²

Cost reduction must happen all the time.  You cannot wait until times get bad to start your cost reduction efforts. It takes a long time to get results, so you must remain vigilant even when it seems easy to coast.  To have this kind of discipline, a company needs people to nag¹³ in order to stay committed to reducing cost.¹⁴

Lastly, Ohno makes a special note that only the workplace can cut costs.  Accounting cannot.¹⁵ No matter what quota or targets are set by Accounting, the workplace must be willing to do the work.  The workplace therefore has an obligation to take ownership of that responsibility.  They must be fanatics about cost reduction as though cost-cutting were impossible outside the workplace. So much so, that tenacity becomes the differentiating factor for how successful cost reduction becomes.  This cannot be executed by Accounting; only the shop floor can achieve it.¹⁶

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Standards

Creating success from Ohno’s advice is a constant balancing act, especially when it comes to standards.  Standards must always exist, but they always must change. In order to improve, you must be able to improve from the existing standard. As Ohno states, “Standards are a kind of baseline for improvement” because standards can never be perfect.<sup17<  This can be unsettling to some who want more certainty and consistency.  However, Ohno warns that, “trying to get the perfect method from the first will quash the desire to improve.”  Consequently, people in the workplace need to accept both standards and change as two sides of the same coin.  You can’t have one without the other.

Second, Ohno spends some time discussing “chosen procedures”.  There is a good side and a bad side to this term.  The bad side says that chosen procedures are chosen by management or outside the immediate workplace.  People can hold themselves hostage to the idea that they can’t change or improve the system.  This makes it look like coercion is involved to make workers follow procedures. (maybe it’s true!)  Ohno prefers the good side, which says the frontline works choose the procedures.  The worker himself has the authority to choose.  There is no question of anything like correction when an individual adheres to procedures chosen by him or herself.¹⁸

Lastly, Ohno tells us how to choose the right standard.  In his experience, most test a process multiple times and take the average duration as the standard. Ohno disagrees and says that you should adopt the shortest time.  Why?  Because the shortest time shows how everything went right.  It has the least amount of waste.  This should be emulated, not averaged away as a statistical outlier.  Once you choose the shortest standard, then you can focus on eliminating the waste that infected all the others in the sample.

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Epilogue

This is the second book I’ve ready by Taiichi Ohno.  (See my review of The Toyota Production System here)  I love Ohno’s style.  He makes everything sound so simple and clear.  You get a sense, quickly, that he is an authority on the topics he discusses.  Ohno can write about a concept in a very short amount of words, yet they explain everything.  His writing style is as efficient as his improvement systems.

I chose to read Ohno’s books to ground myself in the origins of Lean.  I’m glad I did it since it gives me perspective on how the current processes formed.  It gives me the original “5 Whys” perhaps.  Since he is the standard, I can use it as a baseline for everything else.

I recommend Workplace Management highly.  It is a short read packed with a lot of great stuff.  If I had to choose, I suppose I think that The Toyota Production System was better.  However, I feel like I get a more comprehensive understanding of the man who did so much to shape the future of manufacturing and improvement.

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¹  Taiichi Ohno, Workplace Management, (Cambridge, MA.:  Productivity Press, 1988), p. ix.
²  Ibid., p. 78
³ Ibid., p. 78
⁴  Ibid., p. 107
⁵  Ibid., can’t find page
⁶  Ibid., p. 117
⁷ Ibid., p. 126
⁸ Ibid., p. 128
⁹ Ibid., p. 123
¹⁰  Ibid., p. 124
¹¹  Ibid., p. 125
¹² Ibid., p. 92
¹³ Ibid., p. 120
¹⁴ Ibid., p. 143
¹⁵ Ibid., p. 145
¹⁶ Ibid., p. 147
¹⁷ Ibid., p. 148
¹⁸ Ibid., p. 148
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