Most functions seek to be ‘lean’. Avoid hogging resources. Japan, squeezed enormously by its war effort and then by the extreme lack of resources after WWII, learnt how to be lean. It then taught the discipline to the rest of the world.
By the way, Japan never used the term. It was when researchers from the US studied their approaches that they used the term to describe what the Japanese were doing. Not too different from how the term ‘Frugal Engineering’ was suddenly coined and popularised by Carlos Ghosn to describe the general approach to innovation in India.
In an earlier post, we have already seen one aspect of ‘Lean’ – avoiding unevenness, called ‘Mura’ in Japanese. In this one, we will see another aspect, called Avoiding ‘Muda’, Waste.
Taichi Ohno, in his simple-seeming book on the core principles of the Toyota Production System, put it thus:
Capacity = Production + Waste
This helps explain the various connotations of Waste, beyond what we might mean by our lay understanding.
Waste: Defect
In the course of any operation, with various factors at play, we end up with outputs that look ok to the lay person, but cannot be shipped to the customer – a defective product.
This unit of output embodies an enormous waste – of materials, energy, manhours. Further energy and manhours will now have to be spent on it, to recover the materials, some of which are also likely to be lost. In addition, because of the defect, the supplier might miss the delivery schedule committed to the customer.
Obviously, any system should try and minimise defects. With this zeal, we come to the first step of any process, and from there on, try and set up ‘Poka Yoke’, mistake-proofing measures (Ohno must have been a fun, strict guy, the sort that I love – he had apparently used the term, ‘Baka Yoke’, Fool Proofing. Later, others came up with the politically correct Poka. Nowadays, I notice some people wanting to further tone down the expression, and say ‘error proofing’ – apparently it has a softer feel. I am neither convinced about the objective, nor the effectiveness of this step).
However, let’s say, despite our best efforts, there is a defective part produced. The really ‘Baka’ waste is the act of building on this defective component in the subsequent steps of the process, is it not? The cost of the defect rises rapidly at each workstation. Obviously, the effort should be to sieve out defective parts immediately after they are produced.
Obvious, yes, but not necessarily implement. Consider the case of product recalls by automotive players. One automotive player, for instance, launched high technology, luxury models in China a few years ago. It saw rapid growth of sales in a market that was starved for luxury brands. Within a short span of years, it had sold about 150,000 luxury cars. However, soon after selling them, it had to recall about 110,000 of them due to defective components. We don’t know what percentage of the margins of the products sold got spent on this. However, whatever that number, that is not the worry for the organisation. Soon there were jokes in social media across China about the company and its products. As a result, consumer interest in the brand flagged, leading to a steep drop in sales – it is yet to recover from this phase. Clearly, it had not done sufficient research on its product designs and its manufacturing systems.
Ohno also popularised a capital equipment design feature called ‘autonomation’. This word gives us a sense of where his mind had gone in his quest to contain the cost of defects: defects must be caught immediately after they are produced, by the equipment itself – equipment with the autonomation feature would stop on their own after producing a defective part, thus reducing the need for observing the process, reducing supervision costs. Sometimes, templates, etc., are used to eliminate defective parts from the line, by way of Jidoka / autonomation. But what if the machine starts producing a steady stream of defective parts? That is why the capability of the machine to stop itself is valuable – but anyway, this sort of discussion can, fairly soon, get into the territory of specialists, so we will not delve into it further. Today, with machine vision technology around, such equipment capabilities seem achievable, but remember that these ideas were being developed in the 50’s and 60’s! This represents the serious march Toyota had taken over competitors in the area of production capabilities.
Capacity = Production + Waste
Now a reader of all this who is not from a discrete manufacturing background might wonder how all this relates to other types of functions, including their own. Let me assure you that these ideas are universal in their applicability: If software code is not unit tested at the level of smaller modules, one might have an avoidably difficult de-bugging job at hand, later on. If while developing the plan for a company-wide initiative, the HR team does not take in the views of crucial stakeholders, they might face avoidable hiccups at launch. Ditto between Marketing and Sales. If at the time of monthly trial balance preparation, a mismatch is erroneously balanced, it might escape notice and capital might get accounted as revenue or vice versa. You get the picture.
Actually, there is much more to it, so allow me to go on. The identification, removal from the line, and offline rectification of a defect should naturally lead to the question as to why it occurred in the first place. This opens into a train of analyses – part technical and part process. This is how, over time, causes of various types of defects are tracked down and eliminated, cause by cause. A painstaking, multi-year (that’s right) process.
When you behold a well-oiled system running in front of you, know that several years of conscious efforts have gone into achieving that status. A serious capability: look around – most systems of most organisations cannot claim to be running defect-free.
Related Readings :
BNP MEDIA STAFF. Poka Yoke For Quality, Quality Magazine ( Feb 2008 )
STAFF WRITER. What Are Quality Conscious Habits And Processes, Reference ( April 2020 )
SRINIVASAN A, KUREY B. Creating A Culture Of Quality, HBR, Organization Culture ( April 2014 )
