Professional Documents
Culture Documents
Lean - Kaizen Manual of Toyota Production System - 2002
Lean - Kaizen Manual of Toyota Production System - 2002
Activities
TABLE OF CONTENTS
INTRODUCTION.................................................................................................................1
ACKNOWLEDGMENTS......................................................................................................2
PURPOSE...........................................................................................................................3
The Manual..................................................................................................................4
The Kaizen Activity Groups..........................................................................................4
Benefits for Staff...........................................................................................................5
STRATEGY.........................................................................................................................6
The manual......................................................................................................................7
Adapting the culture.....................................................................................................7
Facilitating process improvement................................................................................7
Harness internal synergies...........................................................................................8
Global approach...........................................................................................................8
Summary......................................................................................................................8
Kaizen..............................................................................................................................9
Dual focus..................................................................................................................10
ESTABLISHING GROUP GUIDELINES..................................................................11
1.0 Preparing for Kaizen Activities.............................................................................12
2.0 Kaizen Activity Group Responsibilities................................................................14
3.0 Other Reading and Related Information..............................................................16
KAIZEN REVIEW..............................................................................................................17
1.0 – Plan.......................................................................................................................18
1.1 Plan What – Definition of Problem and Analysis of Problem...............................18
1.2 Plan Why – Identification of Causes....................................................................21
1.3 Plan How – Planning Countermeasures..............................................................22
2.0 Do – Implementation................................................................................................24
3.0 Check – Confirmation of Results.............................................................................26
4.0 Action – Standardisation..........................................................................................27
CONTINUOUS IMPROVEMENT......................................................................................29
Continuously improving..............................................................................................30
Future strategies and opportunities...........................................................................31
APPENDIX A.....................................................................................................................32
Analysis tools.................................................................................................................32
Cause and effect diagrams........................................................................................35
Histograms.................................................................................................................37
Control Charts............................................................................................................42
APPENDIX B.....................................................................................................................44
Contact List....................................................................................................................44
Toyota Customer Service Marketing..........................................................................45
Best Practices Team USA..........................................................................................45
Global Best Practice Group........................................................................................46
Other References.......................................................................................................47
APPENDIX C.....................................................................................................................48
Definitions......................................................................................................................48
Common Language of Kaizen...................................................................................49
APPENDIX D.....................................................................................................................50
Process Mapping...........................................................................................................50
Mapping a Process....................................................................................................51
Main Elements of an Activity Decision Flow Diagram...............................................52
Alternative Nature of a Process.................................................................................53
Hierarchical Composition of a Process......................................................................54
INTRODUCTION
The Toyota Way was launched globally in 2001. Following this, Mr Hideo Ozaki,
President of Toyota Financial Services Corporation outlined a plan to focus upon building
the internal synergies and processes within each Sales Finance Company (SFC). To
facilitate the introduction of The Toyota Way, Global Best Practice Group (GBPG) was
established.
The GBPG consists of a representative Champion from each SFC within Toyota Financial
Services (TFS). A Regional Coordinator has been appointed for each of the four global
best practices regions: Asia/Oceania, Northern Europe, Southern Europe (including South
Africa) and Americas. Together this group reports to a Global Coordinator.
The focus of the GBPG is to champion the introduction of The Toyota Way concepts into
each SFC. These concepts are:
Continuous Improvement
Respect for People
This manual will assist you to achieve success through proven methods of Continuous
Improvement (Kaizen), a concept adapted from the world-recognised Toyota Production
System (TPS). This system has been responsible for the improving profits, quality and
delivery time of Toyota vehicles over the past 60 years. It has also provided a basis for
empowerment, encouraging factory staff to make improvements to their jobs.
Whilst TPS concepts have their roots in a manufacturing environment, they can also apply
to operations of SFC's. The task of translating these concepts has been a major challenge
and will also be subject to continuous improvement.
1
ACKNOWLEDGMENTS
This first release must acknowledge invaluable assistance and support in developing this
manual:
Hideo Ozaki – President TFSC
Koji Kobayashi – Executive Vice President TFSC
Larry Cannon – Senior Vice President TFSC
Ross Springer – President Asia/Oceania TFS
Ichrio Yajima – Deputy Managing Director Australia TFS
Walter Leyendecker – Chairman Europe/Africa TFS
Yoshihiko Morinaga – President Europe/Africa TFS
David Betteley – Vice President Europe/Africa TFS
George Borst – President Americas TFS
Ken Arnold – Managing Director Canada TFS
Nampachi Hayashi – Executive Advisory Engineer TPS
The TPS group at Araco Corporation, Toyota Industries Corporation Takahama Plant and
Toyotomi Kiko Plant, Best Practice Team USA, and representative Champions and
Coordinators of Global Best Practices Group are also acknowledged for their participation
in the first year of GBPG.
2
PURPOSE
3
The Manual
TFS operates in an increasingly competitive market, where internal and external demands
require more than just the provision of goods and services. The increasing international
expansion of TFS and the changing nature of the business environment into the
technologically reliant economy have seen new opportunities evolve. To continue to
exceed customer expectations, the harnessing of synergies within the TFS global
community is paramount. Your contributions to TFS are recognised as important to the
company's success. This first release manual will assist you to become involved in group-
based activities where your contributions can result in improvements to your work
environment.
The manual is designed to be used in all SFC's by staff with a wide ranging skill set. The
manual will also provide a universal platform for information sharing and permit direct
comparison between SFC's. The building of Knowledge Management will eventually stem
from the use of this standardised process of Kaizen initiatives, involving concepts,
measuring, fact/data recording and eventual reporting to a GBPG.
The manual also gives a framework to help staff undertake Kaizen activities that qualify for
a TFS Global Kaizen Award. Further information is available in the Global Best Practices
Group pack, or from your Global Best Practices representative.
The role of Kaizen Activity Groups is to identify opportunities for improvement within
business processes.
The relevance of Muda is that it both directly causes problems and also hides or disguises
other issues or problems that are occurring within a process. It is therefore the most
important element to eliminate from a process.
Past experience through TPS has shown that Muda has the worst effect upon a process
and, in turn, upon a business. Therefore the orientation of Kaizen Activity Groups will be
to focus on elimination of Muda to improve efficiencies and to detect issues or problems
within processes where improvement opportunities can be introduced.
4
Benefits for Staff
Kaizen Activity Groups are an opportunity for all staff to participate and learn about:
Toyota
Job functions
Problem identification and analysis
Project management
Group activities and synergies
The Toyota Way
The Toyota Production System
Process improvement/management
The undertaking of Kaizen activities is not extra work and must not be thought of as such.
Kaizen is a part of working at TFS. Some will no doubt be asking why this is not additional
work. The simple answer to this is that Toyota has empowered staff to challenge
processes, and will reward them for doing so. This philosophy is a factor for success of
TPS in Toyota manufacturing. Similar to Toyota, TFS is developing staff through training
and education to naturally identify areas for opportunity in their roles and to deliver
Customer First products and services.
Kaizen also offers opportunities to participate in a global initiative which will increase staff
understanding and exposure to aspects of TFS, provide opportunities to meet with people
from within the local SFC and other SFCs in the TFS family.
Ultimately, Kaizen gives employees, customers and TFS satisfaction for the
accomplishment of activities. The constantly evolving nature of Continuous Improvement
provides an ongoing improvement, so as an employee you are part of something special;
a cultural adaptation of The Toyota Way to TFS.
5
STRATEGY
6
The manual
TFS is looking to sustain long term growth. The company's strategic goals are focused
upon creating opportunities to make this happen. One such strategy has been the
formation of the GBPG. This group will contribute towards the goal of long term growth by:
Changing the culture of TFS
Facilitating process improvement
Harnessing internal synergies
Promoting a global approach
The Kaizen culture is one that requires discipline and dedication. It is not something that
is isolated to management or non-management staff. It is a way of doing business. In
adapting TFS culture to The Toyota Way, we should consider matching:
Job related requirements, including:
o Ways to act
o Ways to think
o Key accountabilities
Corporate goals
Staff training and development
Human Resources will play a large roll in the facilitation and management of these
activities. Translating The Toyota Way into meaningful actions is necessary to encourage
and develop the people of TFS. Moments of truth where staff should encounter The
Toyota Way are:
Corporate, Business and Personal goals
Induction and Orientation
Job descriptions
Training and Development
Policies and Procedures
Kaizen requires both the proficient thinking and action skills of The Toyota Way. The
skills necessary for identifying opportunities to improve the measurement and
implementation of processes are partly addressed in this manual.
The whole directional pull for Kaizen comes from:
Internally – from senior management through corporate and business goals and
objectives to process operators
Externally – from our customers and through market research
Other methods of facilitating process improvement come from the sharing of policies and
procedures by SFCs. These documents provide the starting point for newer SFCs to
7
develop best practices or for established SFCs to compare and assess their ongoing
practices.
People and knowledge are the most important resources of TFS. Learning to manage and
effectively promote knowledge transfer between our people and companies will bring
improvements in processes.
Sharing the following types of knowledge resources will improve internal synergies:
People
Policies and Procedures
Research
Experiences
Techniques
All of these knowledge resources add value to the way business is done. Sharing these
resources would reduce the amount of initial development required and encourage
improvement of existing benchmarks.
Global approach
Summary
Kaizen Activity Group outcomes and activities will become comparable throughout the TFS
global community. This will improve:
Cultural adaptation
Facilitation of process improvements
Internal synergies
Global approach
8
Kaizen
This activity manual will explain and address Group Oriented activities.
Briefly, the support mechanism of Group Orientated Kaizen activities will integrate with the
Hoshin Kanri from Management and a suggestion system from Individuals. These two
areas provide some meaningful guidance for Kaizen Activity Groups pre work activities.
Supporting the strategies of planning and staff development the Kaizen Activity Groups will
develop the skills of participants to a level where they may become group leaders for
future process reviews.
The manual is a resource that is to be used throughout the TFS family to ensure a
consistent approach to Kaizen training and application, provide a universal comparison of
activities and outcomes, and globalise Kaizen Activity Group practices.
Other than the incentives for Kaizen Activity Groups which are related to the
empowerment and participation of staff, increased job satisfaction and exposure to a
global concept, TFSC is also recognising and rewarding Kaizen activities. The next World
Sales Finance Conference will host the winner of a TFS Global Kaizen Award competition.
The winner will present their implemented Kaizen Group Activity to the Senior
Management and Country Managers of the company. (For further information see the
TFS Global Kaizen Award criteria)
The use of existing Policy and Procedure as a basis to move forward is paramount. Policy
and Procedure documents will explain the "as is" situation, and initiate the base of the
Kaizen activity. Kaizen Activity Group outcomes will in turn update and create new and
improved Policies and Procedures. These documents will form Best Practices within
9
TFS, and will build the platform for further improvement opportunities, by looking both
within TFS and externally.
Dual focus
During the identification stage of the activity, focus will be upon identifying problems in
processes. A method for this is to observe a job function in its entirety in order to measure
those aspects that add value, are incidental or wasteful. This will in turn identify processes
that can be improved upon or eliminated.
Processes that are improved will become Best Practices. Full utilisation of staff will
eliminate Muda and maximise value added work.
10
ESTABLISHING GROUP GUIDELINES
11
1.0 Preparing for Kaizen Activities
The members of the group should have skills in the following areas:
1. Project Management
2. Some basic statistical analysis
3. Microsoft Word
4. Microsoft Excel
5. Microsoft Visio
As with most roles, preparatory work forms some part of the overall job function. For a
Kaizen Activity Group, preparatory work forms an important starting point. This is
explained here in this strategy section and includes:
SFC are encouraged to establish groups with a diverse range of members with
complementary skills and knowledge to fulfil roles that are naturally best suited to them.
Establishing a group of like-minded people with similar skills may not be able to
achieve the same results of a broad skill based group.
Appointments will be made by the local GPBG representative and local management,
however GBPG will assist whenever possible.
1.2 Identifying the SFC Corporate Goals and Key areas for Improvement
The identification of Corporate Goals that the Kaizen Activity Group can contribute
towards can be identified through discussions with the senior management of the SFC.
Further research may be required into:
1. Balance Sheet
2. Profit or Loss
12
3. General Ledger
Research into submissions in a Kaizen suggestion scheme may also provide direction
for various areas of improvement.
Usually Corporate Goals will stipulate a level of attainment required for the company
as a whole, and during the scope setting, the group can set itself a target to reach. The
Kaizen Activity Group should undertake work that is not only valuable for group
members but that will also contribute to the achievement of Corporate Goals.
The base point for examination and analysis of processes commences with Policies
and Procedures. Current Policies and Procedures should be an accurate and relevant
reflection of the current process, "as is" and business rule. If Policy and Procedure
documents are outdated or inaccurate, the "as is" process will need to be established.
1.5 Identify major stakeholders in the area where the Kaizen Activity Group
propose to work
Prior to commencing work the Kaizen Activity Group must identify all stakeholders that
will be impacted by activity outcomes. The list of stakeholders may include:
operators in the business process for review
the supervisor and manager of the area
other departments with inter-related activities either prior to or after the process
area
senior management
Providing a structured format for all Kaizen Activity Group activities, the adoption of the
Plan, Do, Check, Action (PDCA) cycle is applied. The PDCA has proven to be a
successful method of reaching goals and objectives for organisations in Japan and around
the world, and it is a tried and tested method at Toyota and TFS.
The integral part of the Kaizen strategy is to systematically follow a cyclical channel of
developing and delivering Continuous Improvement. The format is utilised after Pre-
Kaizen work.
14
2.2 Eliminate Muda
Incidental work is non value added work which is necessary under present
working conditions
Value added work (Net work) is value added job operations that customers desire.
IMPORTANT: The addition of all parts will equal 100% of a process. Addition of all
processes will equal 100% of a job function.
Attached in the appendix is information that will assist with process mapping. This
information is designed to standardise the mapping of "as is" and "could be" processes.
GBPG encourage the use of Visio software for documenting the process maps, which will
permit and foster comparison between SFC processes.
15
2.4 Report all Kaizen Activities
As well as the Kaizen Activity Group manual, Global Best Practices Group has prepared:
TFS Global Kaizen Award
Global Best Practices Group – World Sales Finance Presentation
Global Best Practices Group – Reference materials and Toyota Kaizen contact list
16
KAIZEN REVIEW
17
1.0 – Plan
The Planning stage is the initial stage where multiple activities occur to truly identify:
1. What the problem is
2. Why it is occurring
3. How to correct it
The reasoning for planning is to identify the root cause of an issue. It is not concerned
with improving the work created by the problem, but the reason for the original cause,
which may have formed several steps prior to its actual detection. The issue and the steps
taken during the planning stage may result in detecting the cause of a problem in a far off
environment to where the problem actually exists. This interrelated flow highlights the
effect of processes on the business, and should involve other stakeholders in the Kaizen
Activity Group communications.
By defining the problem, the scope of the Kaizen Activity Groups' activities is set. As a
definition, a problem is "a doubtful or difficult matter requiring a solution" 1. The pre-work
undertaken has set the basic area and focus of where the Kaizen Activity Group will
commence.
1
The Australian Concise Oxford Dictionary, Fifth edition, AGPS 1994
18
Define Work Categories
An obvious problem in a process will be associated with Muda. The Muda is making the
process inefficient because of unnecessary actions, such as those listed next to the
diagram below. The detection of Muda in a process and the removal of this will give a
clearer picture, and will expose issues or problems in the process.
Categorising the work requires the definition of all the work that is undertaken by the staff
member during the working day. This includes value added work, incidental work and
Muda. The categorisation is not at this point concerned with a particular process, but is
focused on the efficiency of work undertaken by the staff member.
100% of all processes undertaken within a position must be recorded. A matrix should be
used to record the data as it will be referred to later when work on processes has been
completed, and improvements implemented. The matrix will separately list the processes
undertaken, placed into the three categories of value added, incidental and waste.
Addition of all the time in the matrix will add to the working hours, and therefore give an
indication of each category for improvement.
19
Find the Facts
Fact finding requires the documenting of data that applies to both the whole job role, the
processes within that role, and the processes identified as having a problem. This data is
used in the next step of "why", and therefore it should be recorded so that its manipulation
for the next step can occur. Documenting (in a measurable and comparable format)
aspects such as time, quality level and costs when applied to parts of a process, or a
whole process, will develop a data source that can be used in further analysis. For
assistance with this process, please consider reviewing the next stage from 1.2.1 to 1.2.4
where the data is used to form graphs and charts for analysis.
The way to determine and observe problems is by Genchi Genbutsu. You will have to go
to the source, which is the part of the business where the process is undertaken. You will
have to talk with the people that do the process and are experienced in its operation. You
will have to build a firm understanding of the process, and at this point, compare the actual
process undertaken to the existing documented "as is" process, recorded in the Policy and
Procedure. Where deviation occurs, standardisation is require to either the documented
"as is" process or production of a new "as is" process.
Information that was gathered in the pre-Kaizen Activity Group activities should provide
detailed information such as expense, time, quality and other statistics that will help to
determine the benchmark of process improvements that the group are about to undertake.
It is this information that can be matched to the matrix of work (usually cost and time are
indicators) however all can be used as benchmarks for improvement. Should this
information not be available, it is a priority for the group to document and establish this
benchmark prior to investigating further.
Where a process is not documented in Policy and Procedure, and is carried out differently
by each operator it will be difficult to establish the exact process, but at the same time an
immediate issue will have been identified. Other statistical fact recording can still be
carried out despite a lack of standardised information.
Information recorded by Genchi Genbutsu is the created benchmark. This raw data will be
used in the next step to understand "why" the issue has occurred.
Summary
Areas reviewed
o Whole job function
o Processes
Defined the Problem by:
o Genchi Genbutsu – going to the source
o Recorded the facts of the process
o Warusa-Kagen – what is it that is not quite right with a process
Analysed the Problem by:
o Matrix revision of whole job processes (value added, incidental, Muda)
o Comparison to the "as is" process
o Comparison to the Policy or Business rules of the process
20
o Preparing the facts into graphs and models
21
1.2 Plan Why – Identification of Causes
Understanding "why" a problem has been caused is a key aspect in understanding what
countermeasures can be produced to correct the situation. When asking why, do not stop
at the first response. Ask "why" 5 times.
Asking "why" 5 times will result in a more in depth answer and understanding as to the
root cause. The root cause may have gone unnoticed until now and it must be pursued
even if it occurred in another area of the business.
Methods that support the analysis of data gathered to assist with the discovery of why an
issue has occurred are listed below. This is not an exhaustive list of mediums to display
results of analysis. It is at this time that statistical interpretation is required where the
graphs and charts will isolate problems and assist with identification of the root cause.
1. Pareto diagrams
2. Cause and effect diagrams
3. Histograms
4. Control charts
22
1.3 Plan How – Planning Countermeasures
Here is an opportunity to build Jidoka into the "to be" process. A countermeasure should
not create any additional issues, and the awareness of Jidoka will avoid possible future
issues or problems.
A "to be" decision can be pictured using the matrix of all parts of a job role. The way in
which the "to be" is executed will be the arrangement of job functions that add the most
value. When reviewing the "as is", the process can be arranged for improvement to the "to
be". The "to be" is the process that will be implemented to bring about improvement to the
process and address the issue and problems that have been identified for correction.
24
2.0 Do – Implementation
The Do part of PDCA is where the implementation of all that has occurred during the
planning process happens. For both the whole job function and the processes, the Do's
come from:
1. Immediately recognised improvements/countermeasures
2. More detailed and analysed improvements/countermeasures
25
Other group member responsibilities such as training the processor to undertake
the standardised process, or provision of a workbook to assist implementation
As would have been considered during the planning process, adequate time should be
allowed to measure the results of the implemented countermeasure. Determinants of what
amount of time is regarded as adequate include:
Is this implemented in a test environment
Is this implemented more broadly than in a test environment
Does the implementation affect other parts of the business
How complex or relatively simple the implementation is
The effort exercised during the planning process should see that the countermeasures are
successfully implemented and result in the predicted and desired change. However in
some circumstances this is not always the case and further planning is required following
the implementation. This is covered in the Check.
As implementation is designed to improve and change a process or job role, this must be
done in strict consultation with the persons affected. These stakeholders should already
have been involved in some of the stages of the Kaizen activity already, even if they are
not a part of the Kaizen Activity Group. The Kaizen activity is now at a point of reliance
upon the persons affected, and if these persons are not properly briefed about and
understanding of the change, the passion and enthusiasm of the Kaizen Activity Group
may not be enough for them to appreciate the benefits of this change. Make all attempts
to address the concerns of the people now affected.
26
3.0 Check – Confirmation of Results
The Check is the measurement of the Do. This means that the countermeasures
implemented must be measurable. If they are not, there has been a failure in the planning
section. As is understood, if you can not measure it, it is not worth doing.
Result benchmarks that were gathered, observed, measured and recorded during the Plan
stage as the "as is" are now to be compared to the "to be" result. It is the "to be" result
that has been implemented during the Do stage, and is proposed to form the future "as is"
for other Kaizen activities.
27
4.0 Action – Standardisation
Recapping on the process; the planning has resulted in problems and issues being
identified at the root cause, countermeasures were developed to correct the issue at the
root cause and to increase value added work and eliminate Muda. These
countermeasures have been implemented, and their results have been compared and
measured against the benchmark "as is" and the "to be". The results from the measuring
are either:
Satisfactory
Unsatisfactory
Where the results are satisfactory, finalising the Kaizen Activity Group activity is required.
The following areas need to be completed:
1. Changes are implemented throughout the company where the processes are
undertaken
2. Resources are reallocated to either the increase in value added work or
elimination of Muda
3. Changes are documented into Policy and Procedure
4. Changes are documented into updated Process Maps
5. All stakeholders and staff affected are advised of the changes
6. Kaizen Activity Group finalise A3
28
Where the results of Checking are unsatisfactory, the Kaizen Activity Group is required to
revisit the Planning process to repeat the PDCA cycle. Before returning to the Plan stage,
the Kaizen Activity Group must complete the A3. The learning section of the A3 is a time
for reflection upon how the activity could have achieved different results. The reason/s for
unsatisfactory results are usually isolated to incorrect identification of the root cause to an
issue or problem. It may be that a root cause was identified, but that there was more than
one root cause. If however the root cause has been correctly identified, attention should
be turned to the countermeasures or their implementation. Countermeasures should
address the root cause. If the countermeasures do not do this directly, then they require
further development. If however they do, then the implementation may not have been
successful and have therefore skewed the results of measurement during the Check
stage. These are important lessons for the Kaizen Activity Group and future groups. By
documenting into the A3, learning and improvement to Kaizen Activity Groups can occur.
29
CONTINUOUS IMPROVEMENT
30
Continuously improving
Kaizen and PDCA is a continuous cycle as the following picture depicts. As the Kaizen
Activity Group is closing their activity, it does not mean that this process will now be
exempt from further process improvement initiatives.
The Kaizen Activity Group, through the process it has undertaken will leave a legacy of
learning in the business. This will permit the education and development of staff; not only
those who participated in the Kaizen Activity Group, but also those who were affected by
the change, to participate in future activities and contribute suggestions through the
acceptable medium within the SFC.
31
Future strategies and opportunities
The best practice concept is about delivering the best possible solution through various
methods. Kaizen is just one of those methods.
The improvements achieved from Kaizen and documented as TFS best practice policies
and procedures will not only embody the starting point for more internal Kaizen initiatives,
but will also promote a basis for Benchmarking and focus upon Knowledge Management.
Benchmarking at TFS can be both internal (amongst SFCs) and external (to companies
outside of TFS). Through Kaizen, internal benchmarking is encouraged as it utilises
existing synergies. External benchmarking requires a different approach as it exposes the
internal workings of TFS to outside companies that may result in disadvantage to TFS.
Knowledge Management is about harnessing the knowledge of the company and making it
available to where it is needed, in a form that is useful for the recipient. The Kaizen
initiatives resulting from this manual will be constantly building knowledge resources and
making these available to SFCs.
32
APPENDIX A
Analysis tools
33
Pareto diagrams2
The Pareto diagram will help to isolate the characteristics that are the major contributors to
a process. By isolating these features, a more focused approach can be taken upon the
process itself. The characterisation and isolation of parts to a process (the inputs) will also
assist determine the factors that are related to an issue.
The Pareto chart is most suitable where problems are isolated. This does not mean that
the root cause of the problem has been identified; it is just that a problem is readily
identifiable, such as:
Complaints
Rework
Downtime
Errors
35 120%
30 100%
25
80%
20
# of Errors
60%
Percentage
15
40%
10
5 20%
0 0%
Deposit Check data Process Input data File input Logon to
cheque cheque program
The Pareto effect operates on the principle that 80% of problems usually stem from 20% of
the causes. Pareto charts are used to display the Pareto principle in action, arranging data
so that the few vital factors that are causing most of the problems reveal themselves.
Concentrating improvement efforts on these few will have a greater impact and be more
cost-effective than undirected efforts.
For the Pareto chart, the following overall statistics are calculated:
Mean: the average of all the values in the series, i.e. the average bar height.
Sum: the sum of all the values in the series.
35
Cause and effect diagrams3
The cause and effect diagram is used to explore all the potential or real causes (or inputs)
that result in a single effect (or output). Causes are arranged according to their level of
importance or detail, resulting in a depiction of relationships and hierarchy of events. This
can help you search for root causes, identify areas where there may be problems, and
compare the relative importance of different causes.
Causes in a cause and effect diagram are frequently arranged into four major categories.
While these categories can be anything, you will often see:
1. equipment
2. policies
3. procedures
4. people
These guidelines can be helpful but should not be used if they limit the diagram or are
inappropriate. The categories you use should suit the needs of the Kaizen Activity Group.
The cause and effect diagram is suited best where problems require isolation. It provides
for a brainstorming session, where the facts that have been observed and data recorded
are applied and questioned with rigour. Here is where the application of the 5 "whys" will
assist with determining root causes.
Cause and effect diagrams can also be drawn as tree diagrams (resembling a tree turned
on its side.) From a single outcome or trunk, branches extend that represent major
categories of inputs or causes which create that single outcome. These large branches
then lead to smaller and smaller branches of causes (all the way down to twigs at the
ends.) As explained, the difference here is that the outcome determines what the
contributing factors are to that process. The tree structure has an advantage over the
fishbone-style diagram. As a fishbone diagram becomes more and more complex, it
becomes difficult to find and compare items that are the same distance from the effect
3
Adapted from http://www.skymark.com/pathmaker/tour/dataanal.asp
36
because they are dispersed over the diagram. With the tree structure, all items on the
same causal level are aligned vertically.
37
Histograms4
A histogram is a specialised type of bar chart. Individual data points are grouped together
in classes, so that you can get an idea of how frequently data in each class occur in the
data set. High bars indicate more points in a class, and low bars indicate fewer points.
The histogram is suited best where a large data set is held and requires comparison to
both upper and lower limit standards of TFS. The application builds the data into a
diagram (as above) and then it is compared to the standards of TFS, thereby addressing
variations. This process assists in producing regular standard levels in areas such as:
Time
Cost
Quality
Productivity
The SFC will need to determine the upper and lower benchmarks, as well as the mid point
of acceptability prior to detailed analysis occurring. The benchmarks should be aimed at
reducing variation in a process and delivering the best result possible.
4
Adapted from http://www.skymark.com/pathmaker/tour/dataanal.asp
38
Histograms require a level of mathematical ability, so prior to undertaking this analysis the
internal strengths of the group should be reviewed to ensure this method can be correctly
applied in practice.
Histogram statistics
Where relevant, you should display specification limits on your histograms. The
specifications include a target value, an upper limit and a lower limit. For example, if
Michael Jordan is shooting a basketball at a hoop, his target is the middle of the hoop. His
spec limits are those points in the circle of the hoop that will just allow the ball to bounce
through the basket. If the shot is outside spec limits, the ball doesn't go in.
When you overlay specification limits on a histogram, you can estimate how many items
are being produced which do not meet specifications. This gives you an idea of batch
performance; that is, of how the process performed during the period that you collected
data.
When you have added target, upper and lower limit lines, you can examine your histogram
to see how your process is performing.
39
If the histogram shows that the process is wider than the specification limits, then it is not
presently capable of meeting TFS specifications. This means the variation of the process
should be reduced.
Also, if the process is not centred on the target value, it may need to be adjusted so that it
can, on average, hit the target value. Sometimes, the distribution of a process could fit
between the specification limits if it was centred, but spreads across one of the limits
because it is not centred. Again, the process needs to be adjusted so that it can hit the
target value most often.
Centre of a Distribution
Processes have a target value (the value that the process should be producing) where
most output of the process should fall. The centre of the distribution in a histogram should,
in most cases, fall on or near this target value. If it does not, the process will often need to
be adjusted so that the centre will hit the target value.
Spread of a Distribution
The spread or width of a process is the distance between the minimum and maximum
measured values. If the spread of the distribution is narrower than the specification limits, it
is an indication of small variability in the process. This is almost always the goal, as
consistency is important in most processes. If the distribution is wider than the
specification limits then the process has too much variability. The process is generating
output that does not conform to specifications, and is therefore unwanted.
A "normal" distribution of variation results in a specific bell-shaped curve, with the highest
point in the middle and smoothly curving symmetrical slopes on both sides. The
characteristics of the standard normal distribution are tabulated in most statistical
reference works, allowing the relatively easy estimation of areas under the curve at any
point.
Many distributions are non-normal. They may be skewed, or they may be flatter or more
sharply peaked than the normal distribution.
A "skewed" distribution is one that is not symmetrical, but instead has a long tail in one
direction. If the tail extends to the right, the curve is said to be right-skewed, or positively
skewed. If the tail extends to the left, it is negatively skewed. Where skewness is present,
attention should usually be focused on the tail, which could extend beyond the process
specification limits, and where much of the potential for improvement generally lies.
40
Kurtosis is also a measure of the length of the tails of a distribution. For example, a
symmetrical distribution with positive kurtosis indicates a greater than normal proportion of
product in the tails. Negative kurtosis indicates shorter tails than a normal distribution
would have.
Taken together, the values for process centre, spread, skewness and kurtosis can tell you
a great deal about your process. However, unless you have a solid statistics background,
you will probably learn more from looking at the histogram itself than from looking at the
statistics. Remember that where there is data in the tails near a specification limit, chances
are that some non-conforming output is occurring. If your process is actually making five
outputs in every thousand, and you are sampling twenty in every thousand, it will take
some time before you find anything outside of the specifications. There are two things you
should do:
1. continue tracking data
2. make sure your sampling plan is efficient
A skewed distribution, with one tail longer than the other. Focus for improvement
should be with the outlying results, most likely in the direction that the data is
skewed.
A double-peaked curve often means that the data actually reflects two distinct
processes with different centres. You will need to distinguish between the two
processes to get a clear view of what is really happening in either individual
process.
A truncated curve (with the peak at or near the edge while trailing gently off to the
other side) often means that part of the distribution has been removed through
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screening, 100% inspection, or review. These efforts are usually costly and make
good candidates for improvement efforts.
A plateau-like curve often means that the process is ill-defined to those doing the
work, which leaves everyone on their own. Since everyone handles the process
differently, there are many different measurements with none standing out. The
solution here is to clearly define an efficient process, standardise and remeasure.
Outlying results in a histogram – bars that are removed from the others by at least
the width of one bar. Sometimes this may indicate that perhaps a separate process
is included, but one that doesn't happen all the time. It may also indicate that
special causes of variation are present in the process and should be investigated,
though if the process is in control before the histogram is made, as it should be, this
latter option is unlikely.
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Control Charts5
Every process varies to some degree (both system managed and human related
processes). There is an inherent variation with each process, however through
management controls it should vary between predictable limits. For many processes, it is
important to notice "special causes" of variation as soon as they occur.
There is also "common cause" variation. In most processes, reducing this saves money
and produces a more reliant standard of output that customers expect.
There are many different subspecies of control charts which can be applied to the different
types of process data that are typically available.
5
Adapted from http://www.skymark.com/pathmaker/tour/dataanal.asp
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other processes where external factors can attribute to variation
Types of errors
Control limits on a control chart are commonly drawn at 3σ (3-sigma) from the centreline.
3σ limits are a good balance point between two types of errors:
Type I or alpha errors occur when a point falls outside the control limits even though
no special cause is operating. Tampering with data usually distorts a stable process
and wastes time.
Type II or beta errors occur when a special cause is missed as the chart is not
sensitive enough to detect it. In this case, you will proceed unaware that the
problem exists and thus unable to identify it.
All process control is vulnerable to these two types of errors. The reason that 3σ
control limits balance the risk of error is that, for normally distributed data, data points will
fall inside 3σ limits 99.7% of the time when a process is in control. This makes the
Type I errors infrequent but still makes it likely that unusual causes of variation will be
detected.
If your process is in control, that is not necessarily good enough. You have to start
removing special causes, so that you have a stable process to work with. But then the
most substantial benefits occur when improving the process, so that common cause
variation is reduced.
The concept of Jidoka will assist here. Building quality into the process, supported by an
undertaking from the staff in the process that they will not pass on a defective result to the
next person is true Jidoka. For this to happen effectively, staff must be aware of what is a
defective standard, and the diagrams displaying the deviations greater from 3σ will be a
good starting point.
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APPENDIX B
Contact List
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GLOBAL KAIZEN CONTACTS
TSM is a global after sales project (parts & service), which is being rolled out into
individual Toyota dealers across the world.
U.S.A. Lexus Mr. Jim Anderson Service Development Manager 310-468-3296 Jim_Anderson@toyota.com
Brazil TDB Mr. Osnil A. Bruschi Field Representative, After Sales 55-11-4390-5298 bruschi@toyota.com.br
South TSAM Mr. Keith Cokayne Assistant General Manager 27-11-809-2247 cokayne@tsb.toyota.co.za
Africa After Sales Skills Development
Venezuela TMV Mr. Daniel Lugo Field Operations Manager 58-212-242-46-22 dlugo@toyota.com.ve
Malaysia UMWT Mr. Ismet Suki Assistant General Manager, 03-55191911 ismet@umwt.toyota.co.jp
Service Division
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Global Best Practice Group
It is suggested that at first help is sought from within our own Group.
Americas Region
Canada TCCI Mr Sylvain Gareau Regional Coordinator – Americas 1-905-513-5440 sylvain_gareau@toyotacredit.
& SFC Champion ca
Argentina TCA Mr Jorge Sganzetta SFC Champion 54-11-4341-7857 Jsganzetta
@toyotacredit.com.ar
Brazil BTB Mr David Cunha SFC Champion 55-11-5504-2060 david_cunha
@bancotoyota.com.br,
U.S.A. TMCC Mr Jeff Miller SFC Champion 1-310-468-6410 Jeff_Miller@toyota.com
Asia/Oceania Region
Australia TFA Mr Mark Ramsay Regional Coordinator Asia/Oceania 61-2-9934-1204 mark.ramsay@toyota.com.au
& SFC Champion (x 1298)
Japan TFC Mr Takatoshi Ikenishi SFC Champion 81-52-954-8171 t_ikenishi@toyota-
finance.co.jp
New TFNZ Mr Matthew Bond SFC Champion 64-9-571-4298 matthew.bond@tfs.co.nz,
Zealand
Thailand TLT Ms Raewadee (Ming) SFC Champion 66-2-636-1313 reawadee_c@tlt.co.th
Chiraburanun (x 701)
South Europe Region
United TFSUK Mr Martin Bates Regional Coordinator –Europe/South 44-1737-365542 martin.bates@toyota-fs.com
Kingdom & joint SFC Champion
Czech TFSCZ Olga Genadievova SFC Champion 420-2-227-2-2971 olga.genadievova
Republic @toyotafinance.cz
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Other References
Toyota Consulting Group and the Toyota Global Knowledge Centre (located in the US
headquarters)
http://www.benchnet.com http://www.benchmarkingnetwork.com/
http://www.apqc.org/ http://www.globalbenchmarking.com/
http://www.iccbc.org/ http://www.qualitydigest.com/
http://www.jdpa.com/
There are a vast amount of other potential sources of information for reference or training
material & your own Human Resources Department may well be able to help. The most
economical solution is always to see if we can provide the resource from within TFS so
going direct to the members of the GBPG is always highly recommended.
Books titled “Lean Thinking” by Womack & Jones & “Gemba Kaizen” (Work Kaizen) by
Imei give insight into the Toyota Production System.
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APPENDIX C
Definitions
49
Common Language of Kaizen
Muda Waste.
50
APPENDIX D
Process Mapping
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Mapping a Process
The development of a Process Model can go through much iteration before it is complete.
First, the Process Model has to be created; then it is necessary to verify that the data has
been correctly entered into the Model. Next, a reality check must be conducted to
determine whether the Model is an accurate representation of what the organization
actually does. To pass the verification and reality check phases of Process Model
development, Process data must be viewed and analysed (with updates made to the
Model accordingly) Process Data are Data items that pertain to the attributes of Business
Processes. The Process data items are (but not exclusive to): Activities, External
Processes, Variables, Decisions, and Choices. The key to process is based upon
understanding four important concepts:
1. A Process is chronological. Accurate models must therefore be oriented on a
timeline.
2. Flow modelling should display how objects and/or data are transferred and where
they are going. The majority of business problems stem from interdependent
relationships, which are best identified in a flow chart.
3. A Process can be modelled in a hierarchical fashion and can be viewed from many
levels. That is, Processes can contain other Processes.
4. The Choices made for Decisions, which occur within a Process, determine which of
all potential paths shall be taken. It is vital to capture all potential paths of a
Process.
Data collection for Process Modelling efforts can be an individual or a group effort.
Modelling a Process involves the creation of an Activity Decision Flow (ADF) Diagram,
which captures the inner workings of the Process. The boundaries (i.e., beginning and
ending) of a Process are defined first. If large in size, the Process can be broken down into
smaller Processes. Each of these smaller Processes will have its own detailed ADF
Diagram.
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Main Elements of an Activity Decision Flow Diagram
A Process is defined in an Activity Decision Flow Diagram. The main Activity Decision
Flow Diagram objects are activities - Tasks, Process Objects, and External Processes -
which are connected and driven by Decisions.
Tasks: A Task represents a low-level activity a generic term that represents
the work performed in a Business Process. Processes and Tasks are
activities performed within the Organization. External Process is activities
performed outside the Organization, which takes place within a Process. It
has a cost and duration associated with it and employs the resources (e.g.,
employee or software) of a particular group or organization.
Process Objects: A Process Object is a high-level activity that takes place in
a Process. A Process Object represents a lower-level Process that can
contain Tasks or even other Process Objects, creating a hierarchy.
External Entities and External Processes: An External Process is an
activity performed in your Process by an External Entity. Either an individual
or a company outside an Organization can impact the Organization’s
Process. In an Activity Decision Flow Diagram, the flow between an External
Entity and the Organization goes in one direction—meaning that External
Entities can provide either input to, or receive output from, an Activity
Decision Flow Diagram, but not both. Although External Processes are
outside the control of your organization, they are essential to modelling the
realities of a Process.
Decisions and Choices: During a Process, Decisions, which influence the
routing of work, may be required. A Choice is an alternative value of a
Decision. They are the answers to the questions that a Decision asks. For a
“What type of order?” question, the answers (or conditions) could be “Product
A” or “Product B.” Each Decision Choice creates a new alternative path
through the Process - a new Case. Also, Choices have a probability of
occurrence in the context of the other Choices of that Decision. Thus, the
total percentage of all the Choices of a Decision must be 100%. A Decision
must be made in order to identify the subsequent Tasks.
Connectors: Connectors The chronological connection between two Activity
Decision Flow Diagram objects. By default, it represents the flow of control in
an Activity Decision Flow Diagram and defines the sequence of activities in a
Process. In addition, Connectors can define the media that represents the
method (e.g., courier, electronic mail) used to transport an output from one
activity to the next.
Stops: These graphical markers show that a particular path within the
Process has stopped. For the Design Flow variation of the ADF, they mark
Stop the end of paths that are part of the Multi-Thread and Choice Box modelling
objects.
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Alternative Nature of a Process
The presence of Decisions in a Process creates at least two alternative paths of execution.
Each of these paths can result in completely different activities.
B
A YES
Process
Process
NO
C
Process
As the path of the Process is travelled, a Choice has to be made when a Decision Point is
reached. There are as many unique paths through the Process as there are combinations
of Decisions and Choices. Each unique path, from the beginning to the end, is called a
Case.
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Hierarchical Composition of a Process
The boundaries of a Process are set only by your point of view. For example, a Manager
may maintain an overall point of view of her or his department, but each Unit Supervisor
has their own point of view (sub-process), as depicted in the inset box below (as an
example). Each of the square Process Objects (i.e., Process Customer Order, Pack
Customer Order, and Fulfil Customer Order) contains their respective smaller Processes
(or sub-processes).
In this way, a hierarchical tree structure of your Process can be developed. You can think
of Processes and Process Objects as the branches of the tree, and the Tasks as leaves
on the branches.
Customer Rejection
Rejected Notice
Customer Order
Form C1
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