When I first started to study the Toyota Production System many years ago, I was struck by something very simple: Its utter precision. There was a place for every tool and part, and standard work for every task. There was a standard amount of inventory (minimum and maximum) at every point where inventory was necessary and a standard way to send signals for everything production associates needed, from more parts to help with a problem. Equally striking, there was a clear knowledge of the current state of each operation and a vision of a better state to be achieved quickly through kaizen. Nothing seemed to happen by chance and continuous improvement was easier because the base condition was visible to everyone.
Several years ago my impressions were brilliantly summarized by Steve Spear and Kent Bowen at the Harvard Business School in their article “Decoding the DNA of the Toyota Production System”, which I hope you have read. (If not, you can get a copy by going to hbr.org and searching under Toyota Production System.)
But if the heart of the Toyota system is precision and if more and more managers say they embrace this system, why has there been so little movement toward precise processes? The biggest problem I believe is that most managers still don’t appreciate the need to get every step in every process precisely specified and conducted correctly every time. And even if they do, this seems too hard achieve all at once. So managers set of a goal achieving precision at some time in the future as kaizen on each point gradually leads from chaos to order.
The problem, in my experience, is that they will never get there. Take the case of material handling. In most facilities I visit, the material handling system is a mess. If there is a central schedule (often in the form of a Material Requirements Planning system), it calls for materials to be delivered to points of use in precise amounts at precise times, from receiving, a storage area, or an upstream activity. But the schedule is continually changing and many of the centralized instructions don’t reflect on-the-gemba realities. Or, if there is a “pull” system in place, it is run very loosely, with the same part number stored in many locations, vagueness about standard inventories, and confusion about who makes deliveries and when.
In either case the material handling is largely reactive and ad hoc, focused on expediting parts to the point of use as shortfalls suddenly emerge. As a result, when I ask on my frequent walks through facilities why an area scheduled to produce at the moment of my visit is not producing, the most common explanation is “lack of materials” or “wrong materials”.
But please note that even if the management believes in the need for a precise material handling process, it’s not possible to get there incrementally with “point” kaizen fixing individual process steps. Nor is it possible to get there with “flow” kaizen for a single product family’s value stream, of the sort we have popularized through the LEI workbook Learning to See. What’s needed instead is “system” kaizen in which the material- handling system for an entire facility is redesigned to create a bullet-proof process that is utterly precise and stable.
Such a system must include a Plan for Every Part that documents all relevant information about each part number in the facility, including its storage location and points of use. It must also include precisely designed supermarkets, both for purchased parts and for work-in-process, that assign each part number a single storage location and minimum and maximum inventory quantities. In addition, a lean material- handling process requires precise delivery routes with standard work to get every part from its storage location to its point of use exactly when needed. Finally, a lean material- handling process requires a pull system that is completely precise in triggering deliveries of parts to the point of use. Only when you put all four steps in place can you have a truly precise process and a stable base to improve on.
I hope you will grasp the power of precise processes – and for activities ranging far beyond narrow operations to include information management, equipment maintenance, process capability, and human resources. More important, I hope you will specify and implement precise processes in every aspect of your own operations.
President and Founder
Lean Enterprise Institute