If your organization is beginning the “LEAN Journey” or if you are having difficulty executing your Kanban ordering, perhaps this blog volume 20 will help you. These formulas for “standard/ordering” and “inter-process” Kanban were derived from work we did at Toyota Industrial Equipment (TIEM) during the early days of the 1990’s, but may also be relevant in your organization. As you might suspect, the standard Kanban calculation formula is generally meant for external ordering, and the inter-process Kanban calculation is generally used only when material is transferred (moved) internally. When reviewing these formulas to be used as guides, I have presented the suggested formulas and considerations. These formulas have been used in a variety of JIT and Kanban driven environments since I left Toyota (TIEM) and have helped create enormous value in the form of: shorter order lead times, shorter processing time, less inventory expense, less handling, less space, better quality, lower engineering costs, less overall waste, lower financial costs, etc. for those who choose to take deployment seriously. The use of Kanban must be executed with high discipline! Anything less is likely to result in errors and shortages of supply. The implementation of Kanban alone in an organization is not likely to produce the intended benefits mentioned above! This is where the culture of many organizations MUST be tackled at the same time (as discussed in our previous blogs). Every associate must understand the seriousness of their actions and the consequences of not performing their role in the overall process.
True value creationrequires that every associate understand their role in executing to plan AND perform that role as intended!
As has been stated in other articles/blogs, this example of methods used or previously used at a Toyota operation are only meant as examples for consideration in your organization. Hopefully you will benefit from this and previous “ideas” we have included in our blog postings.
In prior volumes of From the Archives of a Common Sensei, volumes 1 through 7 we discussed various methods to better understand and to analyze our various organizations. Although some of the terminology included may reference manufacturing, healthcare or another sector, the analysis concepts are essentially the same, or at least similar. In digging through my “archives” I came across a paper I wrote thirty-three years ago (1988), early into my relationship with Japanese business and the emergence of early Toyota and Toyoda manufacturing growth in the United States. I researched and wrote a paper to better understand the “Dynamics of Japanese Management Techniques”, and the differences when compared to management practices in Western companies (at least at that time). I was surprised by the interest shown by several from the Japanese business community at the time. The comment was even made that I had developed a better understanding of the differences than they had understood. Many of the principles and attributes of Japanese Companies are still valid and present in Japanese companies today. Many Western companies have also adopted the best of the Japanese companies, however, there is still plenty of room for improvement. Before someone points out that some changes have taken place in Japanese companies as they move toward working with Western business, I understand that! I will also state that we have had more to gain by learning the best practices from the Toyota businesses than they have had by learning Western business practices.
Below I have included Appendix A (Culture and Management) and Appendix B (Japanese Manager vs American Manager) of the above paper for easy review and emphasis. I have found these two documents to be on target and enlightening. Think of the results if the best of both East and West values and practices were incorporated into your organization? I have been fortunate that several of the organizations I have worked with (or mentored), in the US and in several countries in Europe, have made the leap to incorporate the best of East and West management practices leading to inclusiveness and high performing teams that produce highly effective and value creating results for customers and investors.
Both lists deserve recognition be given to their authors: Appendix A – Milton Feldman in 1972; Appendix B – Yasuko Hirata in 1975.
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