Toyota's Extended Lean Enterprise

Toyota's Extended Lean Enterprise


Many organizations are progressing in their Lean journey with the goal of developing into a true Lean Enterprise. To build a strong lean enterprise companies need to develop a world-class supplier network. Toyota has spent decades investing in their extended network of partners and suppliers, with the principle of challenging and helping them to improve. Most companies seem to focus on new information technologies and price squeezing with their suppliers instead of following the extended lean enterprise model of enabling and partnering with their supplier network.

Auto industry suppliers consistently report that Toyota is their best customer but also their toughest. The US auto manufacturers have a reputation for being tough; however, "tough" is defined as unreasonable or hard to get along with. In Toyota's case, "tough" is defined as having high standards of excellence, with the expectation that their partners will rise to those standards. US companies and Toyota have similar quality methods and procedures with extensive standards, auditing procedures, and rules. What sets Toyota apart is that suppliers view US manufacturers as coercive while Toyota is viewed as enabling.

Over the last few decades Toyota created a strong supplier network in Japan that has distinguished them from other automakers. As they moved to build the same network in North America with US suppliers, their demanding but fair partnership approach has received positive reactions. The principal measure of supplier relations in the American auto industry is the OEM benchmark Survey that is published by John Henke of Oakland University. Suppliers rank auto manufacturers using 17 measures from trust to perceived opportunity. In the 2003 survey Toyota ranked first followed by Honda and Nissan, while Chrysler, Ford and GM were fourth fifth and sixth. The survey also showed that Toyota's scores had improved over 7% over 2002. Another automotive supplier survey published annually comes from J.D. Power. The 2003 survey found that Toyota, Nissan and BMW are the best North American automakers in promoting innovation with their suppliers. Chrysler, Ford and GM were all rated below average.

The rewards for Toyota's investment in building a network of highly capable suppliers are obvious. Their quality that has distinguished them as a leader in the industry is a direct result of their excellence in innovation, engineering, manufacturing, and overall supplier reliability. But the investment can also pay off in other ways as seen in 1997 when a potential crisis threatened to halt Toyota's production.

Aisin is one of Toyota's largest and closest suppliers. Toyota usually dual sources most parts but was using Aisin as a sole source. Aisin produces a part called a "p-valve" which is an essential brake part used in all Toyota vehicles worldwide. In 1997 Aisin was producing around 32,500 parts a day, which was about 2 days of production inventory for Toyota. On February 1, 1997 a fire destroyed their factory and threatened to leave Toyota without any parts in 2 days. Two hundred of Toyota's suppliers self organized in an attempt to get production of the valve started in two days. Sixty-three companies pieced together engineering documentation, used their own equipment, set-up temporary lines to make parts, and as a result Toyota did not miss a day of production. A new information technology system or a coercive environment did not keep production running, but long-term relationships and an enabling environment did. To reach the level of a true Lean Enterprise with suppliers, an enabling environment needs to be created.



About the Author
David McBride is co-founder of EMS Consulting Group (http://www.emsstrategies.com), a Carlsbad, CA based engineering and management consulting firm. David has a BS in Mechanical Engineering from Ohio State University. He has a successful track record in the development and implementation of FMEA and Design for Manufacturability programs at several organizations and has greatly reduced Manufacturing costs through the utilization of Lean Manufacturing, Kaizen Events, and Manufacturing System Analysis. He has also been highly successful at developing and executing New Product Introduction processes, and Staffing and Capital Equipment Plans.

The End of an Era

James P. Womack

When General Motors filed for bankruptcy yesterday it marked the end of an era. The first truly modern, manage-by-the-numbers corporation, created by Alfred Sloan in the 1920s, was laid to rest as a viable concept. But what comes next?

This is not just a question for GM or large enterprises more generally. Yesterday also marked an end of the lean narrative that has been unfolding for thirty years, ever since GM first began to decline in the recession of 1979. David (in fact a team of Davids) finally felled Goliath just as Goliath was finally paying attention to the lean message. So we need to consider what happens next for the Lean Community as well.

What's Next For GM?

At the beginning of 2009, GM had three major weaknesses. It had too much legacy debt – bondholders and retirees. It had compensation costs for current employees that were too high to compete with transplant operations in North America. And the money it received for its products in most segments of the market was far below average, partly as a legacy of decades of defective products and partly due to losing the pulse of the public on what the company and its products should mean for customers.

Ironically, GM also had considerable strengths. It had competitive factories in terms of productivity and quality and a competitive product development process when it could focus its energies. (E.g., the new Chevy Malibu.) After failing for 15 years to learn lessons from NUMMI (its California joint venture with Toyota), GM had in recent years developed a competitive and consistent global manufacturing system and rationalized its global product development organization. It had even taken impressive steps to lean its internal business processes. But -- as in the case of its cast-off parts supplier Delphi -- lean came too late.

The bankruptcy re-sets the trip odometer. The legacy debt has been written down to a manageable level and compensation costs for current employees will now be much more competitive. In addition, the company is dramatically retrenching toward a reasonable portfolio of brands with production capacity appropriate to its realistic share of likely market volumes.

So what is the problem? Simply that GM has now explained what it is not. It is not Saturn or Saab or Pontiac or Hummer. (Or Opel or Vauxhall either, although surely the new Opel will be a supplier of fully-engineered cars for GM for a long time to come.) And GM is not a significant manufacturer in the U.S. outside of the Midwest. And GM is not, from a profitability standpoint, mainly a finance company. And GM will not have a dealer net blanketing every area of every city across the continent.

But what a company is not is of no interest to consumers. If General Motors is no longer "your father's GM" (to paraphrase its advertising line in the last years of Oldsmobile) or "the company that let you down" (as CEO Fritz Henderson phrased it at yesterday's news conference), then what is it? Why should any new customers care to shop GM products, much less pay the top-of-the-segment prices GM needs to flourish? And who can define what the new, appealing GM is?

Sloan's great genius in re-creating General Motors in the 1920s (after its second trip through reorganization – yesterday marked the third in 100 years) was to provide a compelling explanation of how GM fit into every American's life. He presented a complete range of vehicles from a used Chevrolet as a first car for the low income buyer to a fully-equipped Cadillac for those who had succeeded financially. And GM products were carefully arrayed in a status hierarchy with brilliant attention to the look and feel of each product in relation to American tastes. Indeed, as it gained massive size, GM was often the arbiter of American tastes.

So far the only message about what GM is is the Volt, its extended-range hybrid. Perhaps this is a start, although with enormous risks given the flux in technologies and in political and public perceptions about climate change and energy dependency. But even if it is a start, it is a very small start. Who can comprehensively define "your son's GM", "the GM that never lets you down"? And what freedom will they have to do so?

It is easy to blame GM's recent management for its troubles. But the senior GM managers I have known – almost all of whom had strong finance backgrounds --were remarkably competent at running the company in the financially oriented, manage-by-results way that had produced success for generations. So the problem is not the individual competence of mangers but GM's irrelevant conception of what management needs to do. In simplest terms, where is the new Sloan, the leader able to rethink GM's management and purpose and make it relevant to Americans again?

And supposing the new Sloan (or Sloans) can be found. What freedom will this person or team have to run the company in a way that restores its former glory? This is truly a central question because the U.S. government, as the new owner, is sure to be enormously conflicted:

Should the company be immediately and completely "right-sized" for its new place in the world? (This would be the best way to boost share prices so the government can sell the stock to recoup its massive investment. And it would be the best way to help Ford and Chrysler as well, by eliminating excess capacity.) Or should GM stimulate employment in a deep recession and placate the union by minimizing cutbacks? It can't do both.

Should GM focus in the next few years on the big pick-ups and SUVs that account for all of its profits? (This would be another excellent way to boost share prices so the government can recoup its investment.) Or should GM take a dramatic turn toward highly fuel-efficient products, which won't sell and certainly not at high margins unless energy pricing is also dramatically adjusted upward toward world levels? (e.g., $5 versus $2 per gallon.) It can't do both.

Clearly the hard part comes now, after bankruptcy, and we will all watch what happens. But let me make an exception for those readers – and there are many – who work at GM and who can take an active role in making it happen. I truly wish you the best.

What's Next for Lean?

For 30 years now the Lean Community has benefited from a strong trailing wind. GM steadily declined as Toyota steadily advanced. All we needed to do was standby and cheer! But this narrative is over.

GM and almost all large manufacturers have now accepted lean as a management theory, although the actual practice is always a struggle. As I noted above, GM was becoming a vastly leaner enterprise just as it collapsed and I have confidence that it will continue to embrace lean principles and methods in the years immediately ahead.

At the same time Toyota has turned out to have flaws of its own in the current financial crisis. It barged ahead with capacity expansion across the world that outran its ability to create lean managers and defied reasonable expectations for long-term market demand. (As I have mentioned in previous e-letters, in the mid-1990s Toyota redefined its purpose from being the best organization at solving customer problems to being the largest, an objective of no interest to any customer.) This has been a real setback for the lean movement.

We in the Lean Community therefore find ourselves in the odd position of winning a battle of ideas without actually getting most believers to fully practice their new convictions. And we have as our ideal organization a company that is experiencing significant management and revenue challenges despite "winning" the great contest between modern management and lean management.

Even as this drama plays out within manufacturing, lean ideas are spreading rapidly to new fields, from the beleaguered financial industry to healthcare to government services. Yet we have not fully defined what lean means in these areas, much less how to implement and sustain it. So the dramatic events of recent weeks are not a time for self-congratulation. Instead, they are a time for modesty and self-reflection – hansei, if you will – as we all struggle with the economic crisis while trying to re-define our own purpose as a Lean Community for the new era ahead.

Strategic planning: Three tips for 2009

Strategic planning: Three tips for 2009
Even in these tumultuous times, strategic planning doesn’t have to be an exercise in anxiety—or futility.
APRIL 2009 • Renée Dye, Olivier Sibony, and S. Patrick Viguerie
Source: Strategy Practice


Strategic-planning season has arrived for many companies, and it couldn’t be more different than it has been in years past. Gone are the days of linear trend-extrapolation exercises that produce base, upside, and downside cases. Strategists, now facing the most profoundly uncertain times in their careers, are creating disaster scenarios that would have been unthinkable until recently and making the preservation of cash integral to their strategies.
Most strategists we know are avoiding the obvious mistakes, such as planning as usual or, conversely, eliminating essential strategy-development activities or even strategic planning itself. Nonetheless, strategists remain deeply—and understandably—concerned that the priorities emerging from the annual planning rituals won’t address the demands of today’s tumultuous environment.
These are uncharted waters, and no one has a clear map for sailing through them. It’s clear that scenario planning, a well-established technique for coping with uncertainty, should play a critical role this year, but executing successfully has never been as challenging as it is now. Most companies will have to consider more variables and involve more decision makers than they have in the past. Strategists will also need to place a greater emphasis on measurement—the only way to recognize when changing conditions merit quick strategic adjustments. Finally, the focus on new or surprising scenarios shouldn’t obscure relevant long-term trends or devalue important existing strategies.
Be realistic about scenario planning

In a highly uncertain environment, the advantages of scenario planning are clear: since no one base case can be regarded as probable, it’s necessary to develop plans on the assumption that several different futures are possible and to focus attention on the underlying drivers of uncertainty.
Today’s pervasive uncertainty complicates scenario-planning efforts: the number of variables at play—and the range of plausible outcomes—have exploded in the past year. Consider, for example, the predicament of an industrial supplier that is not only heavily exposed to commercial and residential real estate but also has many government customers. For this company, the critical uncertainties include the direction of the commercial-credit and mortgage markets, housing prices, tax revenues, and government stimulus spending. Different outcomes for each of these uncertainties produce vastly different paths for the business. Since the heart of scenario planning—crafting a number of strategies for different outcomes—has become significantly more complex,1 strategists should prepare for a more demanding process of gathering information, exploring possibilities, and plain old hard thinking.
Senior executives outside the strategic-planning group—even those accustomed to developing scenarios—may find the diversity and complexity of this year’s scenarios bewildering. It’s critical to bring such executives into the process early: for example, by kicking off the planning process with a scenario-development exercise involving the full senior team. Similarly, as the process of reviewing business units gets under way, a company can inculcate an appreciation of the threats it faces and of its collective strategic response by inviting executives from a number of divisions to participate in the proceedings—rather than hold one-off events between the senior team and the leader of each individual unit.
Intensify monitoring

Depending on how events unfold, the industrial supplier mentioned above could make radically different moves. If the commercial and residential real-estate markets stabilized, it could expect reduced sales within those channels until the economy rebounded, but its business model would remain fundamentally the same. If those markets softened further, the bulk of the company’s market opportunity, for the foreseeable future, would lie in infrastructure investments underwritten by government stimulus spending. In that case, the company would need to redeploy its sales resources to government-oriented business and focus on maximizing sales there.
The company’s strategy, in short, must account for many more contingencies than it has until recently. Since the effectiveness of such a strategy depends on an organization’s ability to adjust rapidly as the fog starts to lift, managers must identify and intensively monitor key indicators suggesting which scenario might unfold. For the industrial supplier, some of the most important indicators are sales of new and existing homes, foreclosure rates, mortgage interest rates, new building starts, and announcements of “shovel ready” government projects. Of course, the company’s managers always followed such indicators, but the strategic-planning process typically collapsed their potential variations into average market growth forecasts. Given the present heightened uncertainty, however, the strategy group decomposed the average forecast into its individual elements to make the possible outcome for each of the indicators more transparent and to monitor them in greater detail.
There’s no occasion like the strategic-planning process to get a fix on such indicators—a fix that should also help companies make ongoing budget decisions in real time. That’s critical, because it makes no sense to set each operating unit’s budget allocation at the start of the fiscal year if cash is tight and corporate executives expect to dole it out carefully as plans become less uncertain. What companies need now is a dynamic “pay as you go” resource allocation process that conserves cash and encourages adherence to the strategic road map laid out in scenario planning.
This year’s planning process should also generate unusually specific plans to monitor the performance of suppliers, customers, and competitors. As we’ve seen in the past six months, the most entrenched incumbents can plunge into financial distress with dizzying speed. Early intelligence helps companies to recognize when they should negotiate more favorable supply terms, line up alternatives to risky suppliers, offer kinder credit terms to critical customers, accelerate collections from faltering ones, or scoop up all or part of vulnerable competitors. Leading indicators of distress include such familiar signals as delinquent accounts payable, downgraded debt ratings, large share price declines, late inventory deliveries, or lower-quality goods or materials. These signs, though all too familiar to operating managers, are typically addressed in an ad hoc way, not in the strategic-planning process. This year is different.
Look beyond the crisis

Given the vastness of the economic change now under way, the temptation for many planners will be to gaze, mesmerized, at the unfolding crisis. That’s a mistake, for at least two reasons.
First, devastating as the current downturn may be, it cannot roll back fundamental market trends—such as the aging of consumers in Europe and North America or the continued economic development of Brazil, China, India, and Russia—which will continue to create strategic opportunities and threats. Managers must focus their eyes—and resources—on these trends no matter what happens.
Second, planners who become fixated on current economic events run the risk of overlooking a core responsibility: evaluating the effectiveness of current strategies. Although the crisis may force companies to suspend or redirect some of them, others will remain relevant even in the changed environment. This year’s strategic-planning process is a time to encourage managers to sort out which current strategies the crisis has helped, hurt, or failed to affect and to ensure that a system and metrics are in place to track their performance. While all this may sound like common sense, extreme uncertainty makes it easy to overlook.
One company that’s staying the course is McDonald’s, which has profited in the downturn from its low-cost menu items and is enjoying its most robust same-store sales growth in years. Meanwhile, senior management has remained focused on longer-term strategies involving expensive store renovations, operational overhauls, high-end coffee products, and healthful menu options. Managers elsewhere can learn valuable lessons from the company’s efforts to benefit from the current circumstances while sticking to longer-term strategies and the underlying trends (such as healthier lifestyles) that they reflect.
Despite the challenging times, this year’s strategic-planning process need not be an exercise in anxiety or futility. Developing scenarios in greater depth, monitoring strategies more rigorously, and remaining focused on the long term will all help strategists boost the odds of creating plans that can lead their companies through the turbulence.

About the Authors
Renée Dye is a consultant in McKinsey’s Atlanta office, where Patrick Viguerie is a director; Olivier Sibony is a director in the Paris office.


Notes
1See Lowell Bryan and Diana Farrell, “Leading through uncertainty,” mckinseyquarterly.com, December 2008.

安排工作3祕訣，做事俐落、效率高

取材自《工作一次就做對──成為可靠的職場紅人超簡單53招》，小田切展子著，春光出版。



即使是同樣的工作內容，每個人所花費的時間與完成工作的品質，顯然還是有相當大的差異。


其實只要掌握以下這3大訣竅，任何人都能在不出錯的情況下，乾淨俐落地完成工作。


1.整頓辦公環境：
丟滿凌亂文件的辦公桌，以及堆積如山的未處理案件，會讓人有一種「不知該從哪裡著手才好」的緊張感覺。要是把已處理的文件與尚未處理的文件混在一起，則會造成更大的問題。


所幸，只要先確實做好分類，就能順利地進行工作。


你可以先準備一個專門放文件的盒子，能讓送來的文件（例如上司交代的工作、郵件、傳真等等）整齊地收納在盒子裡，以免送件人隨意放置，導致文件散亂、甚至丟失。


碰到要出差或放假時，可在最後上班日的下班前，先在辦公桌上放一個盒子，請大家「把文件放在這裡」；當然，像公司內部公報之類的分發刊物或傳閱的資料等等，也可以放進盒子裡。


這樣的話，就能避免桌面陷入整個被文件埋起來的「混亂狀態」。


此外，建議使用網狀或是透明壓克力製成的盒子，這樣即使將盒子疊在一起，也可以一眼就判斷出裡面是不是有文件。


2.依緊急程度決定優先順序：
分類與處理文件的要訣，就是判斷文件的「緊急度」；至於處理的優先順序，便是按照緊急度來決定。


一般而言，必須趕快處理的文件，大多會蓋著「緊急」（urgent）的印章，所以在著手處理之前，請先檢視所有文件，挑出緊急度高的文件優先處理。


不過，當看到緊急度高的文件時，雖然想立刻開始著手處理，但是，最好先將所有文件檢查一遍。


因為，在還沒確認的文件中，可能會有進一步的消息，或更新／訂正的內容，所以必須先行確認，以免在還沒完全弄清楚狀況時就開始處理。同時也要檢查電子郵件信箱，因為有可能會透過電子郵件收到後續聯絡的相關內容。


在工作場合中，除了例行事務之外，通常也會出現各式各樣不同的工作，而且大部分都設有期限，所以如果同時處理好幾件案子，就要考量每個案子的完成期限及所需時間，來判斷優先順序。這裡舉一個簡單的例子來做具體說明：


工作①和工作②的期限差了1小時，所以先做完①再做②也沒問題。順序就是①→②→③。
但是，因為工作②有人正等著收文件，考慮到這個工作只要30秒就能完成，所以就可以按照②→①→③的順序處理。


其實，工作的方法或順序並沒有正確答案，重點在於「用頭腦思考如何提升工作效率」，如此就能從每次工作時獲得的教訓中抓住要領，來確立自己「安排工作的方法」。


3.事先排定每日「工作紀錄表」：
「工作紀錄表」是為了管理日程而製作、像日曆一樣的東西。不管是使用有日期的記事本，或是自己做都可以（自製工作紀錄表，只要用影印紙裁切之後再裝訂即可）。


「工作紀錄表」的內容其實就是按照工作類型，寫上當天必須完成的工作。每天按表操課，就能省下不少時間，更不怕工作有所遺漏。


一旦工作告一段落，就可以確定「下次會有動作的日期」，並在確定時間點的當下，寫上預定的工作內容，藉以確實掌握某件工作是「處理完畢」或「尚未處理」。如果有尚未完成的工作，而且即使延期處理也沒有什麼影響，那就再謄寫到下一個上班日。