It was June of 1998, and I was the President of a tier three automotive supplier of safety sensitive machined metal parts. I was attending The Lean Enterprise Institute’s first ever Lean Summit in Hartford, Connecticut. I had been hard at work implementing lean thinking for the previous year and a half or so at my company, and this summit was a great opportunity for me to learn more and expand my thinking.
The following breakout session caught my eye:
Scheduling
John Shook, Tom Luyster, Yoshi Yamada
The feature of lean operations which American managers seem to have the greatest difficulty applying is the levelized pull plan. American plants today are full of “kanbans” and pull plan boards, but most of these systems require continuous management attention and may in fact differ only modestly from manual plans in place prior to MRP. Yoshi Yamada is the retired head of production control at Toyota in Japan and was involved in the invention of “heijunka” under the guidance of Taiichi Ohno. He will collaborate in this breakout with John Shook and Tom Luyster to explain true pull scheduling systems and how to apply them in your operations.
Yoshi Yamada kicked off the session with a presentation. He had only just begun speaking about the importance of leveled pull and predictable demand when a group of executives from one of the Detroit-based auto companies, asked, almost in unison: “But what do we do if the plan keeps changing, sometimes multiple times a day?”
Yamada listened to their questions as they continued on and patiently asked questions in return (a pattern I had learned was the SOP for lean thinkers).
Yamada: “Why does the plan change?”
“Because it does”
Yamada: “Who is involved in the changes?”
“Mostly Senior Management”
Yamada: “Why does Senior Management change the plan?”
“Many reasons… to help make numbers, parts availability, or for other reasons we don’t know.”
Yamada: “What is the process they use to make the changes?”
“We don’t know.”
The team of executives asked more questions still.
Then Yamada asked everyone in this group to confirm that management changed the plan all of the time by raising their hands. When every member of this team agreed that this was the case, Yamada told this group that it was time for them to leave. There was absolutely nothing in his presentation that would help them in their situation.
After literally shooing these folks out of the room, Yamada reiterated his point: If management keeps changing the plan, they must not know what they want. And, if management truly does not know what they want, then that it is a big problem, a problem his presentation did not address and would not be able to fix.
Yamada went on to speak passionately about the importance of a good production plan. He expressed that the people who create the operating plan are the most powerful people in the organization, more powerful even than the CEO because they are the ones who determine what the whole organization is committed to doing and when they will do it.
I will never forget Yamada’s words that day or his fervor about the subject.
Yamada’s vision of a whole company focused on the flow of value at the demand of the customer was powerful. In Yamada’s presentation, I could see and hear exactly what Yamada meant about the takt time being set by the schedule and how this really was the heartbeat of the organization. I understood exactly why it mattered.
I’m still learning things about the significance of a good production plan and true pull scheduling systems. As I visit companies and coach leaders and teams, I tend to see three distinct types (let’s think of them as “levels”) of production plans:
Level 1
There is no plan, just an ever changing list of priorities and a bucket of items that *may* get done today. Management asks for much more than they believe can get done in hopes that it raises output through stressing the organization. The major feature here is that management and workers are continually firefighting and are doing very little or no root cause problem solving.
Level 2
There is a plan for what management hopes will get done today. It is still a big stretch, however, and managers are problem solving by changing the plan, reallocating resources, and working overtime to try to achieve the plan. Problem solving of the process is limited and is mostly done by a select group of “experts.”
Level 3
In this case, the production plan is detailed in time and quantity (quality is also defined and considered a given). The entire organization is aligned in supporting performance to the plan. Team members will get it done! The real value creators (the people who are doing the value-creating work) understand what work they need to get completed every takt time. Supervisors have a standard pitch (a multiple of takt) that they use to check performance to plan. Problem solving is happening everywhere, all of the time. Managers and workers create short-term fixes to get back on schedule and long-term fixes to address root cause of bigger problems together.
Most importantly, the entire team understands that achieving the plan is a “normal” condition and not achieving it is “abnormal” condition and therefore requires problem solving. Instead of feeling divided across competing priorities and resource allocation issues, the management team is focused on supporting problem solving efforts in and around the production process. Managers understand that their role is to address abnormal conditions, improve the work process design, and address the team’s long-term production strategy so that team members together can reach the company’s “true north” goal.
Ok, Level 3 sounds pretty good, right? I think so, too. Perfect execution of Level 3 is perfection. Does it exist—even inside Toyota?—I am not so sure. Actually, I bet Toyota would say no. But I can say that I have seen several companies work on achieving Level 3, and the results were stunning.
Reaching for Level 3 and sustaining the results of Level 3 is hard work. It requires relentless attention to detail in terms of how the work is being done (“standard work”) as well as a genuine commitment to the spirit of continuous improvement (kaizen). It requires having a management team that truly understands how the work is done so that managers and value creators can work together to develop a plan that strategically stresses the process.
A good production plan is specifically designed to do two things:
- highlight variation in the process
- trigger problem solving (around the abnormal condition) at a rate that the organization actually has the capacity to solve problems
It’s worth noting that a good schedule also meets customers’ expectations for quality, cost, and delivery (an unquestioned assumption at Toyota) and ensures that the wastes of overburden and under-utilization are addressed.
When there’s no abnormal condition, there’s no problem solving. When there’s too much of an abnormal situation, that’s over burden and no problem solving can occur then either. Striking a balance requires looking at the production plan as an experiment and embracing the PDCA (Plan, Do, Check, Adjust) cycle of thinking and then applying this thinking to the plan.
For over 20 years now I’ve been interested in helping teams improve their ability to perform to purpose and to plan. Without a great plan that the entire organization is committed to, there is no meaningful way to measure how well team members are delivering on purpose as part of their daily work. Is it so bad to obsess about a topic (like levelized pull plans and true pull scheduling systems) that most people either ignore, find mundane, or consider too tough to tackle?! I don’t know! But I love writing and teaching others about these concepts because without a true plan that functions as the heartbeat of the organization, it is just impossible to sustain continuous improvement. I’m still deeply interested in this stuff, and I have teachers like Yoshi Yamada to thank for sharing their wisdom with me and starting me down the path of learning.
For a more detailed discussion of the transformation work required to create a Level 3 production plan in your organization, reach out to me personally or any one of our partners.