PROBLEM SOLVING TOWARDS THE IDEAL

These materials are from Jeffrey K. Liker and the book, Developing Lean Leaders at All Levels.

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Welcome to what may be the most important module in this course (https://toyotawaytoleanleadership.com). I'll be talking about problem-solving and a way of visually representing problem-solving. You may have heard this referred to as A3 reporting or A3 storytelling. I will be referring to it as A3 thinking; that is, it’s a way of thinking rather than documenting problem-solving on a piece of paper. 

This is the most important module because in the Toyota Way, problem-solving drives continuous improvement and showing respect for people. Problem-solving is the core skill of a Lean leader and it is the skill most leaders lack.

You'll see as we go through this module that the Toyota Way of problem-solving and the method I talk about in my books is different from what you might think.

If I ask you to brainstorm words and terms that come to mind when you consider problem-solving, you might say firefighting; you might say confronting a crisis; you might say confronting an emergency. 

When Toyota discusses problem-solving, they discuss the gap between the desired state and the current state.

We want to be the automakers producing the best quality and the safest autos in the world. The gap is closing with other automakers; we need to increase that gap by getting better.

So for Toyota, problem-solving is aspirational and it involves improvement; it's not simply reacting to the problem of the day through firefighting. 

PROBLEM-SOLVING

Problem-solving your way to an ideal state is the way that Toyota does anything that involves continuous improvement.

The improvement could be as tiny as needing to reorganize this shelf containing parts for the assembler to reduce some wasted time; some reach time, some walking time. Or the improvement could be as grand as wanting to start a new brand like the Scion brand, which I'll discuss at the end of this course as an example.

It could be that we need to innovate and we need to reduce by half the time it takes for us to design and build a die for stamping out a certain auto body part. 

Starts with thinking about a series of steps.

We think of problem-solving as taking a series of steps--what we talk about as continuous improvement toward an ideal state--and you've got to define the ideal state.

Toyota has their ideals for the company as a whole, and they are shown in the Toyota Way model we discussed, which is showing respect for people, making continuous improvements and respecting the foundational values.

It can also be in the form of a specific problem such as the case of Scion?the desire to attract the youngest buyers within the United States auto industry. 

 To start however, I'm going to start by building this model of how you go from where you are towards the purpose, and the purpose should be both a business purpose and a people purpose. 

As an example, a purpose to get the best quarterly returns so your shareholders are happy; this is a business purpose and that's not a people purpose.

Toyota may say we want to close the quality and safety gaps because our competitors are getting better; that sounds a bit more aspirational and inspiring than saying we want to make our shareholders rich.

Toyota also has a people purpose, which is to develop people at all levels to be better problem solvers; to be better at continuous improvement; to have more confidence in themselves; to take on challenging targets that they have no idea how they're going to reach. The people purpose is very general; it’s the purpose of your business both for your people and it includes your partners. 

Then you define the ideal state. You ask what would it look like if we achieve perfection, and we know we can't achieve perfection; perfection is true north, the ideal. 

What we therefore must do is to set a challenging but achievable target to get to the ideal state. 

Later I'll take about an example where Gary Convis was asked to lead an effort to reduce Toyota warranty cost in the United States by 60%. At that point Toyota was already the best in the industry and had the lowest warranty cost.

It seemed like an impossible challenge, but Gary said yes I will take it on and he began the problem-solving process. 

 The target can be a result that you want to achieve, or it can be defined as a target condition, as Mike Rother explains in Toyota Kata. 

As an example, we may want to focus on a result, we might want to have the most flexible plant with perfect on-time delivery. As a condition we might want mixed-model production, which can be adjusted to the customer demand rate – the takt - without any change in the productivity level. That's something visible, that you can measure, you can observe; it gives you a condition to strive for, and if it's achieved, will lead to the result you want. 

PLAN–DO–CHECK-ACT

In order to figure out where to start, you have to know what your baseline is; in other words, what is the current state?

 In Lean we emphasize Genchi Genbutsu or go to the Gemba. We emphasize going and seeing and deeply understanding the current condition. That includes looking at data, collecting data; it includes direct observation; it includes talking to the people within the affected area and spending time?spending more than the usual one or two minutes as you blast through the facility. 

When you understand your target and you understand your current condition, the gap then becomes your challenge. You're going to achieve the challenge through the following approach: plan, do, check, act, (PDCA) which we'll discuss in more detail in the sections to come.

Plan, do, check, act is the problem-solving process which involves thinking and it is a philosophy; it suggests that we're going to start with a plan which eventually leads to countermeasures. Toyota uses the term countermeasures because they don’t know if they are going to work. Leaders don't know if their re-actions are going to work until they do something and try it, and then they check what actually happened and based on the check and what they learn from that, they decide on further action. 

So we're doing PDCA starting from the current state heading toward the target, and we're going to do that by setting intermediate targets. 

So, for example, if I'm on an assembly line, I may have a goal to reduce the quality defects by one half by the end of the year. I will perhaps spread that over the year.

To set my intermediate targets, since I have decided that I'm going to spread that over the year, I'm going to perhaps pick one job and a time. Then for each job I'm going to cut the defects first by 25% and then by 50% and then by 75%. Then by moving to the next job (part number) and using this approach I will then have achieved 100% of my target, which is a 50% reduction in quality defects over all.

I'm spreading out the problem-solving process into steps. For the first step, for example, I take one job and I want to reduce defects; I'm going to view that as my first pilot, my first experiment.

We're going to go through the PDCA process and find the root cause of the problem and come up with countermeasures and then go through the steps of do, check, and act. Based on that we find, we will then decide on our second step; we’d like our second step to be better than our first step, that is, we'd like to learn something.

 So, instead of developing a detailed plan that gets us from the current state to the target and executing the plan, we're going to learn our way step by step through the target.

At times, we might even go backwards, we might find an experiment failed, but then we're going to pick ourselves up and we're going to try another PDCA loop.

There is a big difference between PDCA learning and progressing step by step as compared to coming up with a fourteen-step road map and detailed plan where people are expected to execute this plan which was created by the experts. There is a huge difference between these two mind sets. 

It's the difference between the Toyota Way of thinking/philosophy and traditional western thinking, where in the west we usually need to follow the plan set by the experts.

In the Toyota Way, we move gradually toward the target condition using the people who are in the area; the people who know the condition best, and we work with their local leadership, who receive guidance from their senior leadership to experiment every day and move gradually to this target condition.

Now that may be a reason why there is confusion about Kaizen. The confusion is that continuous improvement or Kaizen means making a lot of little changes. I also get the question, but what about big changes? Sometimes that is called Kaikaku rather than Kaizen.

My strong belief, my experience, is that it's very unusual for Kaikaku to be done in one step. In fact, a 60% reduction in warranty for all of North America was a Kaikaku for Gary Convis. But the way he achieved the Kaikaku was through a great deal of Kaizen, many small steps, PDCA every step of the way. 

LEARN YOUR WAY

So PDCA-ing is the big process that we want--overall PDCA from the current state to the target--but it also requires many small PDCAs to get there. What happens when we create an aggressive target? We produce tension when we set an aggressive target which seems out of reach with our current process. Done properly, this tension becomes aspirational and builds excitement.

The creative tension leads to creativity. Think about John F Kennedy’s goal of putting a man on the moon before the Russians could. That goal created a huge amount of creative tension; NASA not only solved that problem, but they invented so many things that we use today. All that invention, all that creative energy, was caused by the tension between having a target we understand, we relate to and are desperate to achieve, and our understanding of the current state and where we are. 

George Trachilis: Jeff would you say that the big PDCA cycle and the three little ones could be called a mother and three baby A3s. Would you make that distinction or how would you describe it? 

Jeff Liker: Well George asked me a question and came up with an interesting way of thinking about this, which is that the big PDCA could be considered the mother and then small PDCAs could be the children and as a metaphor that's just fine.

So, as an example, let's say that Toyota has started the process of developing the next generation Camry. The entire process of developing a Camry at a large scale is a mother PDCA; it is a huge PDCA. There is a process of defining what the customer wants, what the problem is, developing a vision for the vehicle, and then determining some of the features that will be in that vehicle. The features could be referred to as the countermeasures which would surprise and delight the customers and put the Camry ahead of the competitive vehicles. Then that is executed and checked and there is learning, and more reflection and learning from that, so that there can be further action on the next vehicle. So one PDCA loop takes a couple of years, but then gets broken down further.

If I'm the engineer who's responsible for the bumper of the car, then I'm going to go through a PDCA for the bumper again?one large one from start to finish. Many small PDCAs will be required to design the features of that bumper. This ends up being broken this down as small as we want. For example, the breakdown could be an hour’s worth of work or even a minute's worth of work. In product development, you wouldn't get down to a minute, but within a factory you would. 

One Minute Review

·        Jeff says this is the most important module of the course, www.toyotawaytoleanleadership.com.

·        The reason is because problem-solving is the core skill of a Lean Leader. 

·        Problem-solving should be associated with the desire to close a gap between the current state and a desired state.

·        Plan–Do- Check-Act is how you make your way from the current to the target condition.

·        One key distinction between the Toyota Way and traditional western philosophy is the difference in problem-solving processes.

·        The Toyota Way is about “learning your way” to the target.

·        Being desperate to achieve a target, like getting a man on the moon, can cause a lot of creative tension.

·        NASA solved that problem and in the process invented many things we use today.

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