Taiichi Ohno’s

Introduction to Workplace Management

 Workplace management covers all facilities, assets, services, technologies and processes that enhance
the workplace experience. With enhanced workplace management, organizations aim to achieve
greater efficiency and productivity, as well as financial benefits.

 Workplace management exceeds the scope of traditional facility management functions as it aims to
enhance workforce productivity and collaboration. It is a strategic instrument to support business goals
and provide measureable value.

 Workplace management is a continuous process that allows organizations to aim for the optimum
in workplace performance.

The workplace is a teacher. You can find answers only in the workplace – Taiichi Ohno
 Taiichi Ohno

• Taiichi Ohno was a Japanese industrial engineer and

businessman. (died in May, 1990)

• He is considered to be the father of the Toyota Production

System, which became Lean Manufacturing in the U.S.

• He devised the seven wastes as part of this system.

Taiichi Ohno

“Wisdom is given equally to everybody. The point is whether one can exercise it.”
The wise mend their ways
• Humility is one of the conditions for developing string of powers of persuasion. Companies should not stick stubbornly
to old ways and blindly follow established authorities.
• Mornings orders are revised in the afternoon. Wise man should not hesitate to correct himself. Why not revise
mornings order in the morning. The thing that is important is the attitude to correct yourself.
If you are wrong, admit it
• Sakkaku (Misconception) -Sometimes our fundamental ways of thinking creates misconceptions in an unnoticeable
way. (give ex of a T and two parallel lines)
• When you try yours ideas, your results can be contrary to your expectations.
• Just give it a try. Make the worker try many things for them to understand and digest that their ways are not correct
every single time. Its important for the person to see the results obtained through their own eyes, irrespective of the
fact whether it turns out well or a failure (give example of a worker drilling hole)
Misconceptions Reduce efficiency

Doing similar things together wont just increase productivity. People find it hard to believe and once they are made to try
it they understand it, but the tough part is making them try it.
Confirm failures with your own eyes
• Example of centralized grinding

The blind sport in mathematical calculations

• Three forms of the formula of

Price – Cost = Profit (Price set by the third party- Toyota works on this)
Profit= Price – Cost (Cost can’t be reduced so give more value addition- produce luxury items)
Price = Profit + Cost (This is cost + pricing)
Don’t fear opportunity loss
• Our brain fools us by thinking more about the opportunity loss that we experience instead of focusing on the actual loss,
despite knowing that the opportunity loss is a virtual loss.

Example : Launching product after test marketing

Limited Volume Production is to Produce at a Low Cost.

• What matters is to produce as much as the demand is there at the minimum possible cost. Yes it may first seem correct to
produce more considering it will reduce the cost(not always necessary) but the important thing is to see if that is
profitable. It should not happened that you produce double of what has been demanded and are only able to sell half of
total produced (demand) and the rest is gathering dust keeping inside a huge chunk of money.

• Limited volume production means producing at the lowest cost possible so that maximum profit is obtained without any
unnecessary gain in weight
Reduced Inventory, Increased Work in Process

• Companies sometimes buy a huge chunk of raw materials when their prices are low. It may be considered as legitimate if it
saves cost and there is space of keeping so much of material.

• It is a misconception to reduce the raw materials inventory and the finished goods inventory whereas the WIP increases. The
downstream process should also be considered the customer of the previous process. We cannot sell WIP. Machines that
would have deteriorated in ten may last 20 years.

• Company produces more thinking it would reduce the cost (Using Economy
of sale), then it comes to the realization that more space is required to store
it and a warehouse is created to store them more. Eventually when the
number produced increase by manifold they come to the realization that
now need a computer system so that they can process parts without any
error. Now the thought that started with the idea of reducing the cost has
somewhere increased the cost in a manner that cannot be directly
computed. Same goes for the transportation cost.
Wasted motion isn’t work

• There is a difference between ‘To Move’ and ‘To Work’. If you are moving energetically, doesn’t mean you are working.
• Wasted motion is like animal motion. For instance a bear roaming in a zoo cage, even when there is no visitor to see around.
• Supervisors must train their eyes to see the difference between motion without the human element and actual work, and
instruct the people not to waste motion.

Agriculture People like inventory

• Agriculture mind: Do as much as you can, while you can.

• Dont’t be like agriculture people, be like a hunter.
• Inventory needs to be managed so that we can ultimately succeed in reducing it to minimal.
• Since SALES PRICE = COST + PROFITS, building up of inventory will lead to increase in cost, and the market prices will go up
and up.
Improve Productivity even with low volumes

• Productivity and production volume have a cause and effect relationship, which just can’t be cut off.
• If volume increases by 10%, productivity improves by 10%, keeping the workforce same.
• If demand increase by 20%, workforce is increased by 10% and sales are 20% more, then productivity effectively improves by
10%.
• But our focus should be to improve productivity even if there is no growth in production volume.
• Eg – If volumes decreases by 10%, reducr the m/c speed by 10%, since electricity is related to square of r.p.m, less power is
consumed and ultimately cost decreases, and so productivty improves.
• Small efforts like these should be considered to reduce the costs.

Do Kaizen when times are good

• Real kaizen can be done only when company is in good position – economy is strong and profits are there.
• In poor times, our efforts to keep profits are limited to layoffs only. Or pursue lower labor costs. Ohno says that this is no way
to survive and only by applying truly rational and scientifc methods , one can generate profits even in bad times.
• Poverty dulls your wits.
Just in Time

• English persons think Just in Time is not correct, it should be Exactly or Precisley on time.
• They think that deliveries in Toyota are too strict.
• Ohno says that Toyota use “just” not as a name, they actually mean it. It means if they need a part at 1:00 0’clock, they need
it to be delivered by 11:00 and not by 9:00, because that would be too early and not just at all.

The idea of Jidoka

• Jidoka means – Autonomation with a human element.

• It was first used by Sakichi Toyoda in the Toyoda Boshuku mills.
• His people designed automatic looms that stopped when the thread broke, thus preventing defective clothes.
• Although this will definitely improve performance, as it was used as a way to whip workers into making more product, the
main thought is to focus on why the thread breaks and not blindly run behind the volumes.
Supermarkets in Toyoto:
• Taiichi Ohno was inspired by supermarkets in USA.
• There would be one to two person operating in the supermarket which would reduce expenses of the store and they would
be making profit even at low selling price.
• Supermarket gave the inspiration for the pull system to Ohno
• Door to door Service V/S Supermarkets. (why food e commerce will fail)

SMED:
• Before, people used to take long for changing dies and hence would produce in large lots to remain profitable.
• Toyoto plant in Brazil reduced the changeover time from 1hr to 15min.
• They could produce high mix product with low volume production quite profitably
• Also TPS was essential for midsized companies.
Shut the Machine Off:
• Toyota had automation with human element which was inspired by textile manufacturing.

Work in game of wits with subordinates:

• Taiichi Ohno tell people “When you give an order or any instruction to a subordinate you have to think as if you
were given the instruction”.

Fighting the Robot Fad:

• Limited volume of Production after 1973 bought TOYOTO in lime light
• How to produce at lower cost was the objective and people thought installing Robots; and if consider
manufacturing cost based on man-hour the production cost would reduce.
• Automation should come as a result of a need but if need is mistaken, it can be for kaizen or appearances sake
• Robots can be good for company but might harm society.
Become a Reliable Boss
• “The gemba (the work place) is very convenient place to get angry at people” When the supervisor is being scolded at or is
being yelled at, the workers sympathies with their supervisor when they see it. Then its gets easier for the supervisor to
correct the workers.

• The blue collar guys need a reliable boss. If the reliable person is frequently moved to other positions, they can no longer be
relied on.

Difference between Production and manufacturing engineering

• Deciding what measures to use and what tools to use for a purpose for various machines: Production
How to use the machines effectively: Manufacturing
There is a correct sequence to Kaizen
• It is emphasized that there is a proper flow of how Kaizen should be applied. If a person is unable to click photographs
from a very basic model and easy to use camera, then he surely wont be able to do the same with a high end camera.

• Likewise whenever thinking of doing Kaizen in the industry, it should be first applied on the existing equipment.
Manual Work Kaizan (existing equipment)-> Equipment Kaizan (when you buy a new equipment- machine should not
run human- human should run machine)-> Process kaizen (process improvement, Jidoka, SPC, Quality checks etc)

Operational availability vs Rate of Operation

• Operational availability is the number of hours the machine is effectively available for production. Removing the halt
hours or the time of changeovers increase the Operational Availability.

• Rate of Operations is the percentage of the demand that we are required to support at the current time. It can be 50%
when the demand falls to half of the normal demand.
The Monaka System
• Ohno takes the analogy of the production of a sweet named MONAKA to the design of dies. It is a bread with
different filling. Maker prepares the bread before hand as it does not get staled and puts in fillings when order id
received. This analogy can be used for the production of tools in industries too.
• He recommends that the dies should not be a single unit. Rather it should be made of different modules so that
as soon as a new or an old part is required the modules can be replaced in the same fashion as the filling of
Monaka
Business relies on people, material and money. Everything should be mobilised to make money.
Only the Gemba can do Cost reduction
• If the Gemba asks for 100 workers give them 10 and ignore. The Gemba will find a way to adjust with it. This will
reduce a human resource cast for 90 people.
• Accounting department’s job is not just giving cost reduction targets. It is also their duty to utilize the cost saved by a
department. Every Gemba should be fanatical about cost reduction
• Cost consciousness is better than cost knowledge.
• Improvements are very gradual and are seen very slowly. Replacing them with undecipherable robots and computers
is a waste.
• Like the game of golf where players are all equally skilled, perseverance is the key. One should keep calm and try to
see what implication can a decision have.
Follow the Decisions that were made
• It is never necessary that the decision or the rules that have been made are absolute. You should always question the
efficacy of the decisions. You should try it first and if you cannot follow it well, you need to change it.
• The worst thing that happens at Gemba is that they consider the decisions have been made by superiors. It should
be such that as soon as you get a good suggestion, you should try it and then try to declare it as a Kaiaku (Change for
the worse) or Kaizen
• This way it should always be tried and try to achieve a Standard work i.e. the best combination of manpower,
material and machinery for an improved output.
• Kaiaku and kaizen can also act as a source of motivation for the Gemba to achieve Kaizen
• Documentation of the new methods is necessary.
The Standard Time should be the Shortest Time
• There is no such thing as an average time.
• If you are working and drop a nut/ part frequently- try to answer these questions -“Can I grip the nut more
securely?” or “Why did I hold the nut in a way that it felt?”
• Understand that averaging the time means that one is giving extra time and allowances that is a waste.
• The shortest time is the time when all the thing are done perfectly.
Best Quotes from Ohno:
"Openness to admit your own mistakes makes people feel better about trying your ideas and become more willing to
cooperate. That is the true power of persuasion"

"If your idea fails, then go to see what failed with your own eyes
That way you will see what things were tried and what things were not"

"The ability of people to relate to each other is a significant strength"

"Misconceptions easily turn into common sense"

"Unless we completely change how we think, there is a limit to what we can accomplish by continuing the same
thinking"

"The shift to producing higher-value-added products is a typical philosophy of economists"

"The cost that is reduced is the profit that is generated"

"Costs do not exist to be calculated but to be reduced"

"If I could predict the future I wouldn't need to come to work. I could make more money betting on horses at the
track"