Home Services About Lean Contact Us Articles Employment

How Scientific Are Your Management Methods?

By J.W. Henry Watson, Principal, Caledonia Group Inc.

Out of fashion for half a century, scientific management is becoming respectable again. Probably because scientific methods are at the heart of the Toyota Production System, a system credited with keeping Toyota the world standard for excellence in manufacturing and service since the early 1970s.

    The scientific method also underpins Toyota-like systems known as "synchronous" or "competitive" manufacturing and activity-based management. In a 1990 book, three MIT scholars re-named the Toyota Production System "lean" production. Today, lean production and lean thinking are the names associated with a particular set of tools and practices, as well as a business operating system and philosophy (pioneered and refined by Toyota over 50 years) that have revolutionized automobile manufacturing worldwide. Lean production moved beyond the automotive industry during the 1990s, and in recent years has moved beyond manufacturing.

    There are several reasons why this is of interest to the turnaround industry. One, an increasing number of troubled companies need more than financial management and restructuring. They need to improve operations because their real problems stem from the fact they lag their competitors in reaching world-class benchmarks for efficiency, quality, delivery and cost. Two, in a typical, non-lean operation, lean has a track record of reducing inventory by 30 to 50 percent, reducing lead times by 40 to 75 percent, improving quality by 25 to 50 percent and improving productivity by 30 to 50 percent. Moving to lean is the cheapest and quickest way to achieve a turnaround in operations. And, three, because lean improvements begin immediately and typically reduce capital expenditures and working capital needs (compared to what they otherwise would have been), the initial cost of implementing lean usually pays for itself through reductions in working capital and operating costs.

    There is a caveat, however. While implementing a lean system can be relatively cheap and quick (depending on the type and size of operation, 18- to 24-months with major progress achieved in the first six months), change is always a challenge. Owners and senior management need to develop an appreciation of lean and must be committed to transforming the company. Introducing some pieces of a lean system in isolation won't produce sustainable results.

Perspectives on Lean Production

    This article reviews two recent publications that contain, from different perspec tives, a wealth of information about lean production and lean thinking.

    The first is an article, "Decoding the DNA of the Toyota Production System," by Steven Spear and H. Kent Bower, two Harvard Business School professors. The article appears in the September-October 1999 issue of the Harvard Business Review. This article provides a good introductory summary (10 pages) of what a lean system is and how it works. The second is a book, Manufacturing Ideology: Scientific Management in Twentieth-Century Japan, by University of Kansas history professor William M. Tsutsui. In the process of developing an unconventional, but interesting, thesis on the genesis of Japanese-style management, Tsutsui provides a rich history of the decades long evolution of the Toyota Production System, including telling glimpses of the single-minded commitment of Toyota's leaders to scientific management.

    The Spear and Bowen article is based on an extensive four-year study they undertook of the inner workings of some 40 companies in the U.S., Europe and Japan, some using the Toyota Production System, some not. The companies studied include both process and discrete manufacturers whose products range from prefabricated housing, auto parts, cell phones and computer printers to injection-molded plastics and aluminum extrusions. The authors stress that the key to understanding the Toyota Production System is recognizing that "whenever Toyota defines a specification, it is establishing sets of hypotheses that can then be tested. In other words, it is following the scientific method."

    Spear and Bowen capture in four basic rules the tacit body of knowledge that underlies lean production. The first rule governs the way workers do their work, the second governs the way they interact with one another, the third governs how production lines are constructed and the fourth addresses how people learn to improve.

Rule 1. All work shall be highly specified as to content, sequence, timing and outcome.

    Requiring that every activity be specified seems simple enough. The authors claim, however, that in reality most managers don't take this approach to work design and execution, even when they think they do. The problem is that most specifications allow, and even assume, some variation. Before long, there is plenty of scope for a new employee to do the job a little differently than specified, which translates into poorer quality, lower productivity and higher costs. When Rule 1 is rigidly adhered to, workers follow a well-defined sequence of steps when doing a particular job, with the result that it is instantly clear when they deviate. Even complex and infrequent activities, such as training an inexperienced workforce at a new plant, launching a new model, changing over a production line or shifting equipment from one area of a plant to another, are designed according to the rule.

    At one plant the authors visited, equipment from one area of the plant was moved to create a new production line in response to changes in demand for certain products. Moving the machinery was broken into 14 separate activities. Each activity was then subdivided and designed as a series of tasks. A specific person was assigned to do each task in a specified sequence. As each of the machines was moved, the way the tasks were actually done was compared with what was expected according to the original design, and discrepancies were immediately signaled.

    In demanding that people do their work as a highly specified sequence of steps, Rule 1 forces them to test hypotheses through action. Performing the activity tests the two hypotheses implicit in its design. First, that the person doing the activity is capable of performing it correctly and, second, that performing the activity actually creates the expected outcome. If the activity isn't done in the specified way in the specified time then at least one of these hypotheses is refuted, thereby indicating that the activity needs to be redesigned or the worker needs more training.

Rule 2. Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses.

    Another way of saying this is that every connection must be standardized and direct, unambiguously specifying the people involved, the form and quantity of goods and services to be provided, the way requests are made by each customer and the expected time in which the requests will be met. This creates a supplier-customer relationship between each person and the individual who is responsible for providing that person with each specific good or service. When a person needs a part, for example, there is no confusion over who will provide it, how the request will be triggered (usually with a kanban card), or what part will be delivered.

    Many companies devote substantial resources to coordinating people, but in most plants requests for materials or assistance often take a convoluted route from the line worker to the supplier via an intermediary. Any supervisor can answer any call for help because a specific person has not been assigned. The drawback, as all lean experts recognize, is that when something is everyone's problem it becomes no one's problem.

    Under Rule 2, a worker encountering a problem is required to ask for assistance at once and must receive help from the specified person within the worker's cycle time, which could be only 55 seconds. If the prob lem is not resolved within the specified time, the hypothesis in the customer-supplier connection for assistance is immediately challenged. The authors note that this requirement is difficult for managers accustomed to encouraging workers to try to resolve problems on their own before seeking help. But if this happens, problems remain hidden and are neither shared nor resolved company-wide. If workers begin to solve problems themselves and arbitrarily decide which ones to seek help for, problems mount and valuable information about the real causes of the problem may be lost.

Rule 3. The pathway for every product and service must be simple and direct.

    When production lines are designed in accordance with Rule 3, goods and services do not flow to the next available person or machine but to a specific person or machine. If for some reason that person or machine is not available, Toyota will see it as a problem and might require that the line be redesigned. The stipulation that every product flow in a simple, pre-specified path doesn't mean that each path is dedicated to only one particular product, however. Each production line adhering to lean principles typically accommodates many more types of products than its counterpart in a non-lean company.

    This rule not only applies to products but to service requests as well. When a worker needs help and if the specified supplier of that help can't provide it, he or she, in turn, has a designated helper. In some lean plants, this pathway for assistance can be several links long, connecting the factory floor worker to the plant manager. By requiring that every pathway be specified, the rule ensures that an experiment will occur each time the path is used.

Rule 4. Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization.

    For people to consistently make effective change, they must know how to change and who is responsible for making the changes. Lean production explicitly teaches people how to improve. This rule states the process for making any improvement to production activities, to connections between workers or machines or to pathways. But how do people learn the scientific method? Learn to improve? Spear and Bowen illustrate this by relating their visit to a mattress company. Since 1986 the different types of mattresses produced at this company has grown from 200 to 850, its volume has grown from 160 mattresses a day to 550 and its productivity has doubled.

    The authors studied a team of mattress assembly workers who were being taught to improve their problem-solving skills by redesigning their own work. Initially, the workers had been responsible for doing only their own standardized work; they had not been responsible for solving problems. Then the workers were assigned a leader who trained them to frame problems better and to formulate and test hypotheses. The results were impressive. The team's redesign of the way edging tape is attached to the mattresses reduced the defect rate by 90 percent.

    To make changes, people are expected to present the explicit logic of the hypotheses. The improvement effort must also be designed as an experiment with an explicit, clearly articulated, verifiable hypothesis such as: If we make the following specific changes, we expect to achieve this specific outcome. Further, they are expected to question their assumption deeply enough to fully exploit all the improvement opportunities available to them. Teams are taught that how they make changes is as important as what changes they make.

    Who does the improvement? Frontline workers make the improvements to their own jobs, and their supervisors provide direction and assistance as teachers. If something is wrong with the way a worker connects with a particular supplier within the immediate assembly area, the two of them make improvements, with the assistance of their common supervisor. When changes are made on a large scale, improvement teams are created consisting of the person directly affected and the person responsible for supervising the pathways involved.

    All the rules require that activities, connections and flow paths have built-in tests to signal problems automatically. It is the continual response to problems that makes this seemingly rigid system so flexible and adaptable to changing circumstances.

How Do Workers Learn the Rules?

    Managers in lean enterprises don't tell workers and supervisors specifically how to do their work. Rather, they use a teaching and learning approach that allows workers to discover the rules as a conseqnence of solving problems. For example, the supervisor teaching a workshop group or individual the principles of the Rule 1 will go to the work site and observe while asking a series of questions. How do you do this work? How do you know you are doing this work correctly? How do you know that the outcome is free of defects? What do you do if you have a problem?

    This continuing process gives the group or person increasingly deeper insights into the work being done. From many experiences of this sort, workers gradually learn to generalize how to design all activities according to the principles embodied in Rule 1. All the rules are taught in similar Socratic fashion of iterative questioning and problem solving.

    Not surprisingly, Spear and Bowen display a little arrogance in spots and also a bit of ignorance here and there. They claim, for example, that the Toyota Production System "grew naturally out of the workings of the company over the past five decades and as a result has never been written down." Moreover, they claim that "Toyota workers often are not able to articulate it." They also state that few enterprises have managed to imitate Toyota successfully because the Toyota Production System is a paradox. (On the one hand, every activity, connection and production flow is rigidly scripted. Yet at the same time, Toyota's operations are enormously flexible and responsive to customer demand.) The paradox disappears, they claim, when the system is properly viewed as a continuous series of controlled experiments.

    In fact, there are whole libraries on the Toyota Production System and books galore on other Toyota-like systems. While the article does a good job of summarizing, the same ideas are in the books. About the only thing missing in other work is the focus on scientific management, mainly because it has been controversial, though accurate. Also, lean production (which, recall, is the name a couple of MIT professors gave to the Toyota Production System) has been successfully implemented in scores of companies that I have personal, direct knowledge of. Lean production principles and tools have even been used with great success to achieve dramatic improvements in medical procedures such as open-heart surgery. The "paradox" the authors speak of is taught in industrial engineering courses in schools such as the University of Michigan and MIT--but not as a paradox.

    Before getting into the Tsutsui book, a brief word about Frederick Winslow Taylor, the father of scientific management (it's on his tombstone). "One-best-way" Taylor was the world's first management consultant and efficiency expert. His life (he lived from 1856 to 1915) coincided with the Industrial Revolution at its height and he is credited with speeding up the fruits of that revolution more than any person before or since. Management guru Peter Drucker calls Taylor's ideas the most powerful as well as the most lasting contribution America has made to Western thought since the Federalist Papers.

    Drucker is referring primarily to Taylor's "time and motion" studies, his work in standardizing tools, parts and shop floor methods and related efforts aimed at gaining production efficiencies. Even his enemies grant that Taylor's work exponentially boosted productivity and quality--and living standards.

    But Taylor, a wealthy aristocrat, had his weaknesses. He definitely didn't favor (probably gave little thought to) the kind of employee involvement required for a lean production system to succeed. He tended to segment workers into "brain" and "brawn" groups. His detractors, then and now, accuse him of overworking and enslaving employees, reducing skilled mechanics to common laborers and denying workers a voice. Labor rebelled and trashing scientific management began.

    Tsutsui's thesis is that so-called Japanese-style management, widely admired in the West since the 1970s and touted as uniquely Japanese, is little more than Taylorism, "revised" to include quality control circles and worker involvement. (Note: Toyota is the poster child of Japanese-style management; Honda and Nissan, for example, like most of their Western counterparts, have been less successful in implementing lean.) To build his case, Tsutsui painstakingly scrutinizes (decade after decade) the actions and statements of the Toyota Production System's primary architects (Toyota founder Toyoda Kiichiro, Ono Taiichi and Shingo Shigeo) for ways to connect these "Taylorism" and "Taylorite" ideas. Fortunately he finds plenty and for the reader interested in scientific management and the evolution of the Toyota Production System, the result is a pretty thorough education in both.

    In 1937, for example, Kiichiro established the "flow production system" and the just-in-time concept at Toyota's first automobile plant. This required explicit work standards and strict labor regimes. Tsutsui's comment: "Another Taylorite preoccupation reaffirmed in the Toyota system." Taiichi, he says, "sought to eliminate all unnecessary movements and allow no idle time, for machines or workers. Another quote from Taiichi: "Unless all sources of waste are detected and crushed, success will always be just a dream." And again: Taiichi's "conspicuous success in boosting labor productivity was due to time-and-motion study and layout design, the two Tayorite methodologies most highly developed in Japan." He quotes Shigeo, avowing at that the end of his career: "My thinking is based on Frederick Taylor's analytical philosophy."

    My favorite: Despite postwar conditions in Japan's political economy that would have permitted change [from scientific methods], "the logic of Taylorite solutions--most basically, the drive to wring the utmost efficiency out of existing facilities and personnel through incremental change--remained firmly engrained in the consciousness of Japanese managers."

    What's most interesting is that Spear and Bowen treat scientific methods as positive and uncontroversial. Tsutsui, on the other hand, adopts a hostile tone toward "Taylorism," but in producing a scholarly work has, probably unwittingly, presented a positive case for scientific management.

Harry Watson is founding principal of Detroit-based Caledonia Group Inc., which specializes in lean assessments and implementations.
October 1999
  Copyright 2011 - Caledonia Group Inc.