Business Management Articles / Quality Management

USE YOUR HEAD, NOT YOUR MONEY

by 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 work environment.

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.