1. © Emiel van Est
Did Toyota Fool the
Lean Community for
Decades?
Emiel van Est & Pascal Pollet
March 2014

2. © Emiel van Est
In the Lean
community we
admire
Taiichi Ohno
for his role in the
development of the
Toyota Production
System.

3. © Emiel van Est
Get ready to admire
him even more!

4. © Emiel van Est
Hi
I am Emiel van Est
Toyota Kata ambassador
The Netherlands
I am Pascal Pollet
Toyota Kata ambassador
Belgium
emiel@leanmanagement.nl pascal.pollet@sirris.be

5. © Emiel van Est
Yes we both speak Dutch!

6. © Emiel van Est
Recently we
read something
amazing.
Near the end of
his life Taiichi
Ohno said in an
interview:

7. © Emiel van Est
“I’m proud to be Japanese and I
wanted my country to succeed. I
believed my system was a way that
could help us become a modern
industrial nation. That is why I had
no problem with sharing it with other
Japanese companies, even my
biggest competitors.”
- Taiichi Ohno -
Source: Profitability With No Boundaries P99

8. © Emiel van Est
“But I was very, very
concerned that you
Americans and the Europeans
would understand what we
were doing, copy it, and defeat
us in the marketplace.”
- Taiichi Ohno -
Source: Profitability With No Boundaries P99

9. © Emiel van Est
Hey, wait a minute, I thought Toyota
had been very open to us…

10. © Emiel van Est
“I did my best to
prevent the visitors
from fully grasping our
overall approach.”
- Taiichi Ohno -
Source: Profitability With No Boundaries P99

11. © Emiel van Est
Okay…

12. © Emiel van Est
“I explained it by talking
about … reduction of the
seven wastes (muda)”
- Taiichi Ohno -
Source: Profitability With No Boundaries P99

13. © Emiel van Est
WHAT?

14. © Emiel van Est
Talking about the
7 Wastes was a way
to confuse his
visitors?

15. © Emiel van Est
Even today for
many people
Lean
=
Eliminating Waste

16. © Emiel van Est
His strategy to
confuse us is still
effective almost
25 years after
his death!
RIP
Taiichi Ohno
February 29, 1912 – May 28, 1990

17. © Emiel van Est
Just an empty slide for you to fully grasp this…
Take your time….

18. © Emiel van Est
As said, we are
Toyota Kata
ambassadors

19. © Emiel van Est
With the improvement kata
it can be explained why the 7
wastes was a way to confuse.

20. © Emiel van Est
The improvement kata is a pattern
of thinking and acting we can
practice to meet challenges.

21. © Emiel van Est
Just like in martial arts

22. © Emiel van Est
As you can see, the
improvement kata starts with
understanding the direction.

23. © Emiel van Est
Eliminating waste lacks
direction
1
2
3
45
6
7
Overproduction
Inventory
Waiting
MotionTransport
Rework
Overprocessing

24. © Emiel van Est
What to do?
Logistics
Manager
Production
Manager
We need
smaller bins to
reduce travel
distance for our
assembly people
We need bigger
bins to reduce
travel distance for
our logistics
people
Example from Toyota Kata P40

25. © Emiel van Est
What is the right direction?

26. © Emiel van Est
“All we are doing is looking at the
time line, from the moment the
customer gives us an order to the
point when we collect the cash. And
we are reducing the time line by
reducing the non-value adding wastes.”
- Taiichi Ohno -

27. © Emiel van Est
That’s where
kanban
comes in right?

28. © Emiel van Est
“I explained it by talking
about techniques … with
Japanese names like
kanban…”
- Taiichi Ohno -
Source: Profitability With No Boundaries P99

29. © Emiel van Est
Kanban was another
way to confuse us?

30. © Emiel van Est
YES!

31. © Emiel van Est
By focussing our attention on the tools
Ohno could hide the most important: his
way of thinking and acting.
Lean solutions (tools, techniques
and principles) to improve quality,
cost, delivery
• A systematic, scientific
routine of thinking & acting
• Managers as the teachers
of that routine
Visible
Less
Visible
Image by Mike Rother

32. © Emiel van Est
We just
copied the
solution without
understanding
the thinking
that created the
solution.

33. © Emiel van Est
We misunderstood the
purpose
of kanban.

34. © Emiel van Est
The purpose of
kanban is to
eliminate
kanban!

35. © Emiel van Est
The best number of
kanban cards is
0

36. © Emiel van Est
Ah I understand. We do
not want material to
stop; we want it to
flow continuously so
we get the shortest
lead times.

37. © Emiel van Est
Well, Yes and No…
Stay with us,
we will explain.

38. © Emiel van Est
First, lets talk about
making money.

39. © Emiel van Est
“Costs do not exist to be
calculated. Costs exist to
be reduced.”
- Taiichi Ohno -

40. © Emiel van Est
Who has used these graphs?
Traditional Thinking
Price = Cost + Profit
This worked when supply
was lower then demand
Lean Thinking
Profit = Price – Cost
That changed to a situation with more
competition and the market dictating the price
Cost
Profit
Price
Cost
Profit
Price
Value in Market

41. © Emiel van Est
Don’t be shy, we did it too!

42. © Emiel van Est
What’s wrong with these graphs?
Cost
Profit
Price
Cost
Profit
Price
Value in Market

43. © Emiel van Est
These graphs hide
some important
information!

44. © Emiel van Est
Over the years the
portion of fixed
costs has risen.


45. © Emiel van Est
Leaving us with less to improve
1920 1960
Fixed Cost
Profit
Price
Variable Cost

46. © Emiel van Est
These graphs lack a
second dimension.


47. © Emiel van Est
Variable costs vary by volume
Volume
$
Fixed Cost
Profit
Variable Cost

48. © Emiel van Est
Profit = Price – Cost
Profit = Sales – fixed cost – variable cost
Volume
$
Fixed Cost
Profit
Variable Cost

49. © Emiel van Est
We were directed to
improve an ever
smaller portion of
variable costs to
improve our margins.

50. © Emiel van Est
The better way to
improve margins is…

51. © Emiel van Est
…to increase
volume with the
same fixed costs and
less variable costs.

52. © Emiel van Est
So Ohno directed us in this
direction…
$
Fixed Cost
Profit
Current
Condition
Volume

53. © Emiel van Est
… while he spurted in this direction!
$
Fixed Cost
Profit
Current
Condition
Volume

54. © Emiel van Est
Sorry to
bother you
with another
book but we
do not want
you to think
we make this
all up…

55. © Emiel van Est
From the very
beginning Toyota set
course to beat GM
Source: Inside the Mind of Toyota P58

56. © Emiel van Est
Imagine the difference at the time!

57. © Emiel van Est
So, back to
continuous flow and
kanban. What were
we thinking?

58. © Emiel van Est
Were we
thinking
this?

59. © Emiel van Est
Or this?
Ohno frequently referred to
his river system Source: Profitability With No Boundaries

60. © Emiel van Est
Ever used this image?
No worries, this is one of our own…
Waiting
Inventory
Transport
Over-
production
Rework
Over-
processing
Waiting
Inventory
Transport
Over-
production
Rework
Over-
processing

61. © Emiel van Est
It is not about
the boat, it is
about the
water!
Waiting
Inventory
Transport
Over-
production
Rework
Over-
processing

62. © Emiel van Est
It is not a
lake, it is a
river. Waiting
Inventory
Transport
Over-
production
Rework
Over-
processing

63. © Emiel van Est
It is not about less
water. It is about
more water flowing
faster.

64. © Emiel van Est
That is why
the rocks
have to move!

65. © Emiel van Est
Is there more we
misunderstood? What
about quality?

66. © Emiel van Est
Is quality
“Job One”
at Toyota?

67. © Emiel van Est
“There are two
reasons we try to
improve quality.”
- Taiichi Ohno -
Source: Profitability With No Boundaries P101

68. © Emiel van Est
“If our product is
better more people
will buy it.”
- Taiichi Ohno -
Source: Profitability With No Boundaries P101


69. © Emiel van Est
“Also, bad quality
causes big disruptions
in my river system.”
- Taiichi Ohno -
Source: Profitability With No Boundaries P101


70. © Emiel van Est
“When the experts from
your country visited, they
noticed that our machines
were very dependable, our
quality was high...
I understand that many
went back … and suggested
you implement preventative
maintenance programs,
quality circles, and other
programs in order to
copy our results.”
- Taiichi Ohno -
Source: Profitability With No Boundaries P101

71. © Emiel van Est
“I do not think that they understood
why we did these things, which
might explain why these changes
often weren’t very helpful. I tried to
prevent them from understanding
why we wanted a river system, and I
think I was successful.”
- Taiichi Ohno -
Source: Profitability With No Boundaries P101

72. © Emiel van Est
Oh yes!

73. © Emiel van Est
While Ohno pointed
us to the rocks in
the water

74. © Emiel van Est
He hid his river system plans…

75. © Emiel van Est
Now we
understand this
we can create
more value
for everyone on
this planet.

76. © Emiel van Est
So, lets make
a deep bow
for Ohno

77. © Emiel van Est
He was truly
brilliant!

78. © Emiel van Est
Want another quote?
Here is one more for
you to chew on…

79. © Emiel van Est
“Where there is no
Standard there
can be no Kaizen”
- Taiichi Ohno -

80. © Emiel van Est
Thank you for
staying with us!