Lean Construction Applications #41

Submitted by Dennis Sowards on 30 December 2008 - 1:58pm.

The Race

A Japanese company (Toyota) and an American company (FORD Motor) decided to have a canoe race on the Red River. Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the Japanese had eight people rowing and one person steering, while the American team had eight people steering and one person rowing.

Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to four steering supervisors, three area steering superintendents and one assistant superintendent steering manager.

They also implemented a new performance system that would give the one person rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program' with meetings, dinners and free pens for the rower. There was discussion of getting new paddles, canoes, other equipment, and extra vacation days for practices and bonuses.

The next year the Japanese won by two miles.

Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses, and the next year's racing team was out-sourced to India.

Sadly, the end.

Here's something else to think about: FORD has spent the last thirty years moving all its factories out of the US, claiming they can't make money paying American wages.

TOYOTA has spent the last thirty years building more than a dozen plants inside the US. The last quarter's results:

TOYOTA makes four billion in profits while Ford racked up nine billion in losses.

FORD folks are still scratching their heads.

IF THIS WEREN'T SO TRUE, IT MIGHT BE FUNNY.

The Ninth Waste is Management Saying No

Norman Bodek, a noted expert on Toyota’s Lean systems says, “Encouraging new ideas (saying yes) is one of the pillars of Toyota's success.” He goes on to write:

“Toyota Motor Corp. pursues excellence relentlessly and clearly focuses on continuous improvement through the elimination of non-value-adding wastes. Traditionally, Toyota has defined seven wastes:

Defects
Waiting
Motion
Transportation
Inventory (finished goods)
Overproduction (work-in-process); and
Extra processing

“Years ago, I added an eighth waste -- the underutilized talents of workers -- and started to write and teach about Quick and Easy Kaizen, a marvelous technique developed in Japan to open up people's hidden creative talent. At one time, Toyota was receiving 70 improvement ideas per worker per year. “

“Today, I see a desperate need to address a ninth waste: manager's resistance to change.”

“Go ahead, present a new idea to your manager that can save your company a great deal of money, and see what kind of reaction you get! It's my experience that 90% of managers will say "No!" They believe this is safer than saying yes. They probably are thinking: "Somehow, I got through yesterday without changing. Why rock the boat and make waves today?" Also, most managers have a talent for finding some minor flaw in everything, and since no idea is perfect, this might play a role in the idea being rejected.”

“But always saying no goes against lean thinking. Consider that Toyota has two pillars of success: Just-In-Time -- the elimination of the non-value-adding wastes, and Respect for People. The latter is empowering people -- all workers -- to be part of the ongoing continuous improvement process. This is achieved by encouraging all workers to "pull the cord" (immediately stop work -- yours and your fellow workers' -- whenever a problem is detected). The best time to detect a problem and solve it is when the problem occurs. This is sometimes called "first-time quality" or "quality at the source." The monetary value of this practice has been proved over and over again inside and outside of Toyota.

“Equally powerful is empowering all workers to come up with small ideas to make their work easier, more interesting and to build their skills and capabilities. Look, General Motors knows all about Toyota's seven wastes but somehow cannot keep up with Toyota. Why? They still underutilize people's hidden creative talents, and they have set a top-down management structure that prevents change from happening quickly.

“Bottoms-up management, the Japanese approach, clearly puts the decision-making process at the point of the most knowledge, not the most power. If a Japanese worker comes up with a new idea that will save the company money, the worker does not have to ask for permission from a boss. The worker with the idea will discuss it with fellow workers and study all of the ramifications of how the new idea will affect others. He or she will inform the superior of the problem and the recommended solution -- but this is a courtesy to keep the boss informed and is not an attempt for approval.”

“Quick and Easy Kaizen is a very simple and powerful technique that empowers workers to be involved in daily improvement activities. The average company in Japan saves $4,000 per year per worker because of a constant flow of ideas. Why aren't all managers jumping on the bandwagon and following this important process? Instead they go after Six Sigma and kaizen blitzes, or send work to China. It is easier (and less courageous) to do these things than to change management style to one that supports independent thought and encourages new ideas.”

“I know it is not easy to change, but that is the major role of today's managers: They must overcome their resistance and lead their companies to success, starting with not being afraid of saying ‘Yes.’ “

What do you tell your workers when they suggest a new way to do things?

Source: The Ninth Waste -- Saying No, By Norman Bodek, IndustryWeek, Oct. 9, 2007

The Last Planner System (LPS) *

Some highlights from the October 2008 Lean Construction Institute Congress -

Peter Court, MEP Project Leader for Crown House Technologies Limited reported these savings at a project at the University Hospital of North Staffordshire - Maternity & Oncology Centre in the UK. They are using the LPS and modular construction:

Labor savings: 9387 hours (a 7% reduction from estimate)

Onsite labor reduction of 37%

Zero reportable incidents

George Zettel, Project Director for Turner Construction reported that they now have 26 projects using the Last Planner System. He shared some quotes about using the Last Planner System:

“Turner Logistic’s supplier bid process changed Mech. design that also reduced steel tonnage.” – Owner’s Project Manager

“Great exercise. By getting the whole team involved, we produced a more accurate schedule in a fraction of the time.” – Curtain Wall Project Manager

“I will use the Last Planner System on all my jobs!” - Project Superintendent

* Last Planner System is a trademark of the Lean Construction Institute.

Learning Opportunities

You may be interested in attending one of these training seminars:

Jan. 15, 2009 - Introduction to Lean in Construction, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy

Feb. 19, 2009 - Eliminating Treasure Hunts”– Applying the 5S’s for Lean Construction – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy

March 19, 2009 - Job Planning the Really Works – The Last Planner System, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy

April 16 & 23, 2009 - Making Meetings Work for You (must attend both session), – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy

May 14, 2009 - Problem Solving Lite (No Carbs) - Getting to the Root Cause, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy

Sept. 17, 2009 - Customer Loyalty by Design, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy

Oct. 15. 2009 - Introduction to Lean in Service, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy