Business Management Articles
/ Quality Management
USE YOUR HEAD, NOT YOUR MONEY
Rene T. Domingo
The late Taiichi Ono, the former vice president
of Toyota Motors Corporation, pioneered and
perfected the much emulated Just-in-time system
of production in Japan's no. 1 carmaker. Legend
has it that when a manager sought his approval
for a project to raise productivity, Ono,
upon seeing the huge budget being requested,
would raise and wave both hands and say "Oh,
no!" to the proponent. A more accurate
version of the man's character was that when
anyone wanted to improve anything - quality,
or productivity or output - by spending money
and asking for more resources, especially
people, Ono would sternly remind him "Use
your head, not your money".
Ono may well be considered as the King of
Kaizen (continuous improvement). Kaizen is
the non-stop improvement of the process to
continuously raise the quality and productivity
of outputs. It means moving towards your goal
with little steps, but consistently, such
that after a period of time, the total effect
would be a big step or even a radical change
in process and people performance.
Perhaps the most important, most controversial,
and most neglected part of the kaizen philosophy
is that improvement should not cost anything.
In fact, it should result in savings. Traditional
management thinking tolerates the cost-benefit
tradeoffs, meaning, any cost could be justified
by the bigger benefit it brings about. This
theory of cost effectiveness or payback applies
well to big capital investment decisions.
But not to kaizen improvement projects proposed
by managers and empowered employees and teams
in companies practicing total quality management.
Kaizen focuses on elimination of wastes and
unnecessary processes, and the prevention
of defects by building in quality into the
product from the very start. Kaizen aims to
reduce quality costs - the costs of not doing
the right thing right the first time. It is
not about incurring costs to improve quality.
Kaizen is not about innovation nor investment.
It is a serious, sincere, though small effort
of every employee to improve his work and
The application of work simplification principles
in process improvement illustrates the kaizen
philosophy. Work simplification is an old
yet effective productivity tool of the industrial
engineer that has been rediscovered and adapted
by kaizen practitioners. After analyzing the
present system or process to be improved,
work simplification is applied using four
steps to be followed in the indicated sequence;
no skipping is allowed.
Step 1. Eliminate all unnecessary steps.
Step 2. Combine all related steps.
Step 3. Change sequence of processes.
Step 4. Add resources or replace steps.
Elimination of unnecessary steps is the most
vital kaizen step. Steps that do not add value
or quality to the product are exposed and
terminated. Just make sure the step is really
unnecessary, otherwise, quality will suffer
and the kaizen goal is not achieved. Elimination
has the biggest impact among the 4 steps in
terms of process time and resource reduction.
It is also the easiest to implement because
there is nothing to do, and the cheapest to
do because there is no cost in not doing something
unnecessary. Savings would actually result.
Elimination of unnecessary and redundant steps
is the best example of using one's head and
not one's money.
After all wasteful and non-value adding processes
are eliminated, the remaining necessary steps
are analyzed for possible combination, consolidation,
or simultaneous execution. Combination of
steps is the next most powerful kaizen step.
Costs of implementation would be minimal -
perhaps a slight change in layout, and additional
tools and training for workers. Make sure
you combine related steps; if you combine
incompatible processes, product or service
quality will surely be compromised. Do not
start with combination, and then proceed with
elimination. It is possible, if you do so,
that you might combine necessary with unnecessary
steps, or worse, two unnecessary steps --
clearly an exercise in futility.
The third kaizen step is examining all remaining
processes for possible change in sequence.
Note that some sequences are faster than others;
experiment with new and faster sequences that
would not alter product or service quality.
A better sequence would actually result in
cutting down transport time of people, goods,
or documents. In paperwork, it could cut down
red tape and bottlenecks. Try this example.
Every morning, before we leave for work, we
either take breakfast and dress up, or dress
up and take breakfast. If you follow one sequence
consistently everyday, try to reverse the
sequence tomorrow. See what happens, and find
out why one sequence is faster than the other,
and why you prefer one sequence over the other.
All three steps above are characterized by
no or minimal costs. If you could not reach
you kaizen or work improvement goal after
applying all three thoroughly, then your final
step is to add resources (investment), replace
steps (substitution), or do things faster.
The fourth step is more of using one's money,
than one's head. It is the costliest option
and therefore should be taken only as a last
resort. Unfortunately, many managers would
jump to this step, because little thinking
and analysis are required. The danger with
this impulse of skipping steps 1-3 is that
it is perfectly possible and probable to add
resources (man and machine) to do something
unnecessary -- like throwing good money after
bad. You also risk replacing an unnecessary
process with another unnecessary but more
efficient (faster) process.
The classic example or misapplication of work
simplification can be found in the computerization
of many systems. Computerization is clearly
step 4, because you have replaced a manual
system with a electronic one, and incurred
huge costs to do this. What is the bottom
line? Ask yourself or your managers how many
percent of the computer reports do you really
read and use? Typical answers would range
from 20%-50% - in short, frustration, filing
cabinets, and cluttered desks. Why so much
waste for so much money? Proponents of computerization,
overwhelmed by the technology, often skipped
the vital steps of elimination of unnecessary
manual reports and combination of the remaining
necessary reports to reduce their number --
before they computerize. Thus, even unnecessary
manual reports were computerized in the process
-- producing the same garbage faster and more
accurately. If the steps were followed correctly,
perhaps a smaller, leaner computer system
would be sufficient to turn out only the vital
reports managers would need for decision-making.
The moral of the story is: "Use your
head, not your money!". Good luck.