Reflecting on buffers and production systems (The Birth of Lean. Chapter IV – The evolution of buffers at Toyota – Kaneyoshi Kusunoki)
This week I will continue my indulgence in exploring the book The Birth of Lean (published in Portuguese as As origens do Lean) by looking at another chapter that some readers may tend to overlook. Rather than quoting from the book – please read it for yourself! – I will share some personal observations.
Kaneyoshi Kusunoki was a key participant in the initial establishment of Toyota's production operations in North America in the 1980s. He was the first president of Toyota's production facilities in both Kentucky and Ontario (a commonly overlooked fact). Kusunoki was a non-resident president, so day-to-day operations were left to executive vice presidents Fujio Cho in Kentucky and Aki Iwabuchi in Ontario.
However, no one who worked at either of these facilities, or at NUMMI, where he also made critical decisions about the production system, will ever forget Kusunoki's visits. More than gemba visits or anything else, a pending review by Mr. Kusunoki would put the Japanese managers and trainers on full alert – they knew his review was always the toughest of all the executives from Toyota's headquarters.
Mr. Kusunoki is now 95 years old. I was fortunate to get to know him relatively well over the years and even visited him in his office throughout the 1990s. Each visit followed the same routine. I would ask him a question or two and he would completely captivate me with stories from the past, when the company was growing after the war. Then he would turn the question back on me. No matter what topic might be under discussion, he would point out how the original and best thinking usually came from America. Then he would ask the question, "So how is it that you never got it right?" I never had an answer that satisfied me, much less him.
How to think
Mr. Kusunoki joined Toyota in 1946, the first year of hiring after the war. He told me he was one of a class of six university graduates recruited to join Toyota that year. Toyota was still a small company at the time. Joining Toyota did not mean entering a company that could promise lasting job security. Joining Toyota was even a risk – no one knew whether the company would succeed or not.
Kusunoki spent most of his career in production engineering, not in operations management like Ohno. Kusunoki's challenges centered on how to make things work, how to cast parts that would not break, how to stamp the steel that would form the die. As Kusunoki states in The Birth of Lean, he came under Ohno's direct tutelage – or, as he told me, "man-to-man training" – in the 1970s, as the two advanced in their careers. Kusunoki told us that he was "…the first person to lead both production engineering and production control at Toyota, so I was the first person to have the chance to establish integrated policy [for buffering and other issues]." (Birth page 146)
Kusunoki's story about the evolution of buffers at the Motomachi and Takaoka plants encompasses much more than just buffers. His description illustrates the deep concern Toyota's leaders had with thinking strategically about production. Buffer decisions were not seen as simple matters of inventory calculation. They were strategic considerations based on a complex set of factors: how to operate a production system, how to think about downtime and its causes, how to view the psychology of managers and engineers, and how to use buffers as a motivational tool.
Kanban as Kaizen
Kusunoki talks about developing the first English-language explanations of TPS, and of kanban in particular. As Toyota became famous in the 1970s, the need arose to explain TPS to outside audiences. The company was invaded by “kanban tourists”. The Birth of Lean reproduces the first English-language explanation of TPS, authored by Mr. Kusunoki together with Y. Sugimori, F. Cho and S. Uchikawa for the Fourth International Conference on Production Research in 1977. In that paper, you will find one of the most talked-about illustrations of the TPS mindset, right within the simple kanban formula:
"Our paper expresses the number of kanban in circulation in a process y, with the formula y=[D (Tw+Tp) (1+a)] / a, where D is the demand per unit of time presented by the following process, Tw is the waiting time for kanban, Tp is the processing time, a is the number of parts per container, and a is the policy variable [or criterion]. The 'a' here deserves special attention. Ohno-san taught us to set the number of kanban needed to maintain production at a given rate, but to work continuously to achieve a leaner flow by reducing the number of kanban as much as possible. He always said that coordinating this effort is the responsibility of workplace leaders. Without the policy weighting expressed by the element 'a', our formula would be a simple calculation that any clerical assistant could perform. We knew that Ohno-san would never approve the paper if it did not contain that element". (Birth pages 141-142)
The calculation itself is simple. The telling part of the story and of the calculation is Ohno's insistence on including an alpha number, which stands for "policy", an "additional" amount of buffer to be determined based on the judgment of the man performing the calculation. In fact, Mr. Kusunoki told me that Ohno-san did NOT approve the first draft of the paper and the calculation, insisting on the inclusion of the alpha value.
Both psychologist and engineer, Ohno refused to allow operations managers to fall back on simple numerical calculations that a computer could perform. He wanted his production managers to use judgment, develop their instincts, pay attention, and never hide behind rules but rather exercise their own judgment. The purpose of kanban is, after all, not just to set inventory levels or even to reduce them, but to do kaizen. Set the levels, use your judgment to determine an appropriate alpha value, and do the work using kaizen to reduce that number!
The point about inventory is not simply that it should be zero – yes, less is better, so zero must be the best level – but that buffer is needed for specific reasons. (My great friend and one of the first TPS researchers, Doc Hall, knew this, but to his disappointment the publisher insisted on the title Zero Inventories for his 1983 book!) And there are buffers in various locations for different particular reasons, serving distinct strategic purposes. For example, Toyota thinks about the buffer between stamping and body welding, between body welding and paint, and between paint and final assembly, each in a very different way. This difference resulted, among other things, in a buffer of painted bodies of perhaps 40 units when I worked at Takaoka, compared with what would be hundreds in a conventional automotive assembly plant.
Constant evolution
Just two weeks ago, I visited the same Takaoka plant that Kusunoki describes as important in the development of the "buffers" strategy and where I did my own production training 25 years ago. Extraordinary. Arriving at the plant, everything looked exactly the same as the last time I was there, about 10 years ago. But inside, the final assembly area was unrecognizable. The production line had been shortened beyond what I could believe, workers' tasks had become easier with very little need to walk, everything was quiet and clean – the overall impression was more of an electronics factory than an automobile plant.
This visit led me, once again, to the intrinsic nature of constant evolution that makes up the deepest core of TPS. Kusunoki shared some of his views on this with comments such as:
"A striking characteristic of Toyota's corporate culture is that managers don't scold you for taking the initiative, for taking a risk and messing everything up. Instead, they scold you for not trying something new, for not taking a risk. Leaders are not there to judge. They are there to encourage people. That is what I always tried to do. It is all a matter of trial and error!
We had no money after the war. We tried everything, such as splitting employees' wages into small installments, but we finally came to a head [in 1950], when we could not meet the payroll and had to let people go. But even during that difficult time, we kept the spirit of trial and error.
When money is tight, your best option is to speed up the flow of materials through your system. You don't need to spend money to move things faster and shorten cycle times. You simply need to improve the way you do the work."(Birth page 150)
Kusunoki's chapter is very special to me. And in writing this column, I remembered that I have to send a copy of The Birth of Lean to Mr. Kusunoki! Don't be fooled by the chapter title, "Evolution of buffering…". I was happy to hear from my Learning To See co-author, Mike Rother, that Kusunoki's chapter is his favorite, not only because of the technical discussion of buffers themselves, but because a careful reading reveals part of the deep underlying mindset that Toyota put into the design of an integrated automotive production system.
As we all know by now, if we cannot adopt the mindset, we can design rational production systems for any product or service.
