Can We Still Learn from Toyota Suppliers in Japan?

FEATURE – Fresh off a study tour in Japan, the authors wonder if there is anything left to learn from Toyota’s network of suppliers in the age of AI and digital. Hint: it’s a rethorical question.

Words: Michael Ballé and Alice Mathieu

In a world of digital apps and generative AI, is there still something to learn from Toyota’s supplier network in Japan? This is the question we (the authors) explored as we had the good fortune of visiting component plants in the Nagoya region with senseis and Toyota veterans Mr. Amezawa and Mr. Yoshino. Amezawa-san has 50 years of Toyota experience and is past vice-president of both the Kyushu Lexus plant and Toyota’s Kentucky plant. Yoshino-san has worked closely on the Toyota Hoshin Kanri program since its beginning, on structuring training in the NUMMI Californian plant and is co-author of Learning to Lead, Leading to Learn with Katie Anderson. As we toured the plants and marveled at the precision of the jidoka and just-in-time systems we were seeing, they tried to explain to us the underlying human system that made it all possible.

Does any of this apply to a startup’s ecosystem, where the flat organizational structure is worshipped, and digital native developers seek flexible work? Visit after visit, the senseis’ message was both simple and complex: “Make gemba people’s work easier.” How do you constantly make life easier for the people who actually create value? And what kind of management do you need to do so, to orient on quality and delivery for customers, to improve processes and, more deeply, to create the right conditions so that existing processes work flawlessly? When someone asked Mr. Amezawa which was the best Toyota plant, he immediately joked that it was “Lexus Kyushu, of course” – his former plant – and then demurred. He thought about it a little longer and told us it was the one where the gemba people had the best attitude, both in terms of taking responsibility for the work and their team and of self-development on technical skills.

This made us wonder. If you take the perspective of the “gemba people,” of an operator or indeed a code developer, what would you expect from your management to feel like they are responsible for your own delivery and development? There is, of course, no definitive answer to such a broad question, but putting together the senseis’ talks and what we saw in the plant, we have tried to formulate hypotheses that we will now share:

1. Clear teams and chain of command.
2. Clear-cut work and reasonable demands.
3. Hierarchy that shares intent rather than instructions.
4. Preparation of changes and regular teaching moments.
5. Help with personal problems and conflict resolution.
6. Fair recognition of efforts and support with career progress.

In the plants we saw, it was very clear that each “gemba person” belonged to a defined team of five to ten people, with an identified team leader (often wearing a different colored hat) who reported to a group leader, then assistant manager and area manager. Within the jidoka perspective, the chain-of-command is as much a chain of help as a conduit of instructions and the human structure of production in these plants helps to clarify who comes to help when a problem is flagged up by an operator, how it is resolved (often with immediate support, then training) and how the problem resolution follow-up is organized to check the problem will not reoccur. The clarity of the team/team leader structure and the gemba support role of the team leader (intervene within a minute) is striking.

The “what” of the work is also very clear. Tasks are visualized and both quality criteria and delivery targets are specified visually, as well as checked regularly by group leaders. Various boards show both how many parts must be produced within the shift (and how effective the shift is in terms of real time % of achieved versus plan) and what is the quality status at any time. This visualization has the effect of keeping the demands of the hierarchy reasonable: if the team is getting behind, it is the management’s responsibility to create the right conditions to bring it back within target (or adapt the target). This happens particularly with either a new product or a takt time change. Engineering implements the necessary change and then the gemba hierarchy supports the kaizen work to make this change workable for gemba people through relentless kaizen until the new work is again easy. Work difficulties are not given to team members to handle in the typical “I expect results I don’t care how” fashion of Western management. In this system, individual difficulties are management’s responsibility.

Both Mr. Amezawa and Mr. Yoshino were adamant that if you give someone an instruction, you take away both their responsibility and ability to learn – obviously this is hard to see in a plant tour, but they kept coming back to it. In explaining Toyota’s past failures, they said the company learned the hard way that if you strongarm people into doing things your way, they will either resist or comply mindlessly – and without results. The idea is to make it easy for people to commit and learn by explaining the purpose to them – the why, not the how. Then you clarify with them the current situation and visualize the gap to achieve the goal. Finally, you help them to find their own route, devise their own way to get there, and support them in doing so. Management’s explicit aim is to encourage gemba people to think for themselves and voluntarily participate in improvement activities in order to learn more deeply about their processes. For Yoshino-san, the two key roles of managers are, first, to create the environment to help people follow company strategy and, second, to help people grow constantly.

One of us had visited several of these same plants 10 years ago, then once again since. It was striking to see how the overall structure of the plants had changed little and yet everything had changed in terms of parts, processes and even technologies. In the hyper-competitive context of automotive, change is permanent, and yet to make things easier for gemba people, management seeks stability. As we explored this contradiction with the sensei, we saw kaizen in a different light. Engineering change is relentless, largely driven by customer demand in terms of new products, new processes or new technologies – that’s a given. However, the manager’s main job is to work with gemba people to adopt, stabilize and improve on these changes through a process of kaizen. Every change creates difficulties for everyone. The role of the shop floor hierarchy is to bring back conditions to the point where work is easy by encouraging and implementing gemba people’s ideas – kaizen. In practice, many of the shop floor techniques we saw were based on “henkaten”: preparing for changes, training, and improving.

Another, less visible part of the system is the ongoing focus on group cohesion. From team leader up, management is expected to help people with their personal problems and to handle intra-team and inter-personal conflict to maintain the group’s spirit and cohesion. This requires a difficult balance of making special case allowances for people with specific issues while maintaining fairness in the way everyone is treated. Managers are taught to listen to employees’ concerns and follow up on them. In this sense, they are not supposed to be someone employees look up to, but facilitators who make them feel their voice is heard and their concerns are addressed by focusing on thinking harder about the problem and reaching a compromise between what the company can do and what the person can do to solve it.

The explicit goal is a culture of open-minded and heart-to-heart communication. As one can imagine, this is easier said than done. A surprising part of establishing such a culture is encouraging employees to express their preferences as to their next career move. For instance, in one company we were shown a personal hoshin kanri format where each person had to write on one sheet of paper:

• Their understanding of the vision of the company.
• How they chose to personally contribute to that vision.
• What they were already doing in their job to do so.
• What they wanted to do in the future to continue to do so.
• What job changes this would entail.
• What training and development they felt they needed to succeed at those changes.

The company would then try to accommodate these wishes as best they can. Clearly, it is impossible to assess to what extent management is flexible and open to such demands, but the intent was quite clear to reach a compromise between available posts and employee requests, with many instances of creating ad hoc positions when it made sense. This is very different from the usual Western management approach of “offering” a position to people based on managerial assessments of ability and regardless of their own preferences or development potential.

As we reflected on these complex messages, we realized we were looking at a typical Toyota-style “yet” model: a set of contradictions one does one’s best to balance in order to create the right conditions for “gemba people”:

Clear hierarchy yet mild demands

Strong leadership on purpose and development yet low on authority

Frequent changes yet stabilization with kaizen

Individual responsibility yet collaboration and teamwork

Facilitating personal issues yet group cohesion

The question remained: what would any of this mean for a software house with millennial managers? More precisely, what kind of person should we learn to spot and promote to create a culture obsessed with balancing the needs of quality and delivery for customers and a drive to make developers’ lives easier? Our own self-assessment compared to what we saw in Japan led us to see that our management system frequently led to unreasonable demands and arbitrary instructions on the one hand, and just-for-show management rituals where nothing got resolved on the other. Managers are unable to find the right trade-off between being micro-managers and leaving people struggle on their own. That often leads to situations where either they tend to do micro-planning and give micro-instructions, often without explaning why or letting the team contribute, or lose their footing and are unable to jump into the gemba problem to analyze it with a system thinking perspective. In both cases, success is hard and very energy consuming for both managers and gemba people.

As we looked more deeply into typical startup projects, we could spot frequent instances where:

• The demand on the project was simply unreasonable: there was no known short-term way to succeed at the request and doing so required in-depth problem solving. Yet, often, by lack of technical understanding of the issue, the manager would give the team instructions that rarely helped and sometimes made matters worse.
• The management ritual set up to deal with these situations turned out to be inconclusive at best, with long discussions on red-herring topics and other defensive routines skirting around the real issue and avoiding authentic conversations on how to find a path to success and make the development team’s life easier.

What we typically expect of our managers is to master:

• Technical skills – mastery of the fundamental technical skills and mental models specific to their team’s job.
• Clarity and demanding mind – the skill to review progress and remind of priorities, while raising the bar when someone is close to achieving a goal.
• Care – adapting to the individual’s level and motivational factors, improving working conditions (tools, standards, training and staffing) to enable the team to make autonomous decisions, as well as give encouragement and recognition.

We now think we should be looking more specifically for two dimensions in the people we consider for a management role: the person’s own commitment to both technical and leadership competence and their sense of responsibility for both results and team cohesion.

Commitment to competence is the key to being proactive about one’ own learning curves, and to keep visualizing the gap between where they should be and where they are – what do you intend to achieve? What are you already doing about it? What could you do further? What would be the first thing to learn to do so? On the second dimensions, commitment to responsibility leads to ownership, and a focus on stabilizing both the people and the results. It’s a balancing act where we seek “no compromise” between team satisfaction and results. Too much focus on results and too little focus on team cohesion creates a toxic environment as sensemaking (collective goals) overpowers meaning-making (what’s in it for me) just like, conversely, too much focus on the teams’ feelings and not enough on results leads to equally bad workplaces where too much meaning-making obscures sense-making.

As we look back on the study trip, overall, we find it striking that in order to seek a clear goal, such as making the work easier for gemba people, leaders will look for a balance between opposite forces rather than, as we do tend to do, pick a process and adhere to it in every case. They keep the target in mind and then look at the balancing parts on the go – which also explains the focus on deeper thinking. Since they are looking for a difficult balance, they will ask themselves the same questions time and time again rather than, as we tend to do, respond – or rather react – to a situation and move on. Ask ‘why?’ five times, indeed!

Any generative AI may give you the consensus key dimensions to look at in any given situation. What it can’t teach you or do for you is balance contradictory dimensions to seek better outcomes. This can only be learned by trial-and-error in the physical world of people and machines, of customers and processes, of situations and systems. Constantly seeking this balance through change management and kaizen is what the Toyota supply network is strikingly good at and any visit to Japan is a reminder of the impact of this balancing skill on overall performance. ChatGPT doesn’t offer real hands-on knowledge, but the feeling of knowledge – the false satisfaction of our worry bump without the real discipline of learning. As the sensei would say time and time again: “Gemba is your greatest teacher.”

THE AUTHORS

Michael Ballé is a lean author, executive coach and co-founder of Institut Lean France.

Alice Mathieu is General Director and COO at BAM.

Original Article: https://planet-lean.com/toyota-supplier-lessons/