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Do Toyota’s Recent Challenges Indicate That Lean Does Not Work?

I have not been getting this question so much these days, but it is still relevant. I posted some comments on LinkedIn that I will copy here with a few additions.

First of all Toyota uses TPS (Toyota Production System) and TBP (Toyota Business Practices) and recently started using the term “lean” in conversation, but lean as we know it is really just a copy of TPS. Before Ican answer the question I want to clarify one thing….people LOVE a good story and controversy and gossip and so forth so the FACTS are glossed over in favor of the good story. If we step back and look at the facts we have to see that with a greater number of vehicles produced comes a higher probability of defects (1% of 10 million is greater than 1% of 100,000) even if the actual defect rate per vehicle is constant. So while it appears to be more of a problem proportionately it is not. But again to the public that is beside the point.

Also the complexity of modern vehicles and thus the possibility of failure has increased over the years. The possibility of failure modes has increased with the advent of computers and technology. Again, to the public they can’t see that even though complexity has increased the actual number of complaints per vehicle has remained fairly constant over time, which is actually then an improvement.

Never mind those things, and also the fact that in the US anyway with the issues it has been proven that the media fabricated stories, people overreacted, there were frauds, etc. all blowing the situation out of proportion. I suggest you get a copy of Jeff Liker’s book “Toyota Under Fire” and see how the media falsified things. Also it must be noted that the issue was based in the US and the defects were isolated from each other indicating individual failures rather than systemic breakdown of the system.

Step back and look at other indicators such as JD Powers and overall satisfaction and Consumer Reports, etc. The quality level is actually very good. Perfect, NO, but not showing a systemic decline. Some isolated events which can happen when designing and building a complex product where thousands (millions?) of opportunities for failure can occur somewhere along that process (design to build and all the way throughout the supply chain). But again the FACTS don’t change the minds of people wanting to tell a good story.

There is no doubt that every organization has problems- even Toyota. In fact that is the primary focus at Toyota- to find problems and correct them. I suggest a quick Google search of Toyota leader interviews from 5 or more years ago and note that every interview is full of concern for the challenges, problems, etc. I remember one about 5 years ago with Watanabe in Wall Street Journal I think where he was talking about the future and the challenges and what he was worried about. Very gloomy. And that was when Toyota was just at the top and having great success. Almost the same day was an interview in USA today with Rich Wagner of GM talking about GM’s “Sunny Future” just around the corner. (That was before they went to Congress to ask for a bailout).

Toyota leaders always talk about the “bad stuff”, the problems or potential and what they need to watch out for. Over and over I heard this message in my time with Toyota. Every year we “went back to basics” to make sure we didn’t overlook any problems. So I mention to people that Toyota NEVER said they have no problems. I always heard them say “We have many problems.”

Why do people who are working to implement lean think that in doing so they will have no problems? Inexperience. In time they will come to understand that the whole system is designed to show problems or potential problems.

A problem is defined as a gap between where we are (actual state) and where we want to be (desired state or future state). At Toyota we often referred to the “Ideal State” as the desired state. When I would mention to my trainer the ideal state was not possible I was reminded that “We strive for the ideal state. Whether we can achieve it or not is not the point. We still strive for it.” So the ideal state is actually a state of PERFECTION. Zero defects, zero waste, zero time, etc. In our minds we know this is not a real possibility, but we have to understand the concept.

If we set the ideal state as the future state, then what percentage of our processes are at the ideal state? ZERO! Therefore, EVERYTHING is a problem by definition! As I was taught, there is NO SHORTAGE of problems! If we understand this idea then we understand that lean does not mean fewer problems, it will show us that we have many problems. The important thing is to work of the critical ones and to make OVERALL improvements that provide long-term prosperity of the organization and for the benefit of the employees, customers and the community.

This is the Toyota philosophy, and I believe it is just as much alive today as ever. BUT as Toyota grows and expands they face real challenges in growing and maintaining the system as the system is continually being compressed and stressed. Keep in mind that they system is DESIGNED to break at the weakest point so that kaizen can be applied to strengthen the ENTIRE system. Seems crazy, but the system is supposed to fail (but the worst place to find the failure is AFTER the process in this case at the customer).

These are all lessons I learned. I don’t try to defend Toyota (or lean). I share facts and discuss the situation as a problem solver. The facts indicate that there is NOT an overall systemic failure of the system (though there are some weaknesses for sure such as communication), but isolated failure events. So TPS is not broken, but there are some signs that perhaps Toyota stretched the processes to the failure point and now they know some things need to be corrected.

Every story needs a backstory and in the case of Toyota the backstory is that the company arose like a Phoenix from the ashes in the 1950’s and had always had a mindset that a crisis is a perfect opportunity to drive people and the organization forward. What is important is to learn from the problem.

Taichi Ohno is often quoted as saying something like “no problem is the problem” or “there is nothing more pitiful than a man who does not know what his problems are.” The Toyota mindset of pursuing the ideal state means that there is and always will be a gap from the current performance and the ideal state. Not knowing which of the potential problems to work on is the first challenge- the first problem. There will be many more.

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