Taiichi Ohno

Taiichi Ohno (February 29, 1912 – May 28, 1990) is considered to be the father of the Toyota Production System (TPS) and thus a hugely important figure in the Japanese post-war industrial renaissance.

Born in Dalian, eastern China in 1912, Ohno graduated from Nagoya Technical High School as a mechanical engineer before joining Toyota in 1932. He initially worked in Toyota Spinning and Weaving. He transferred into Toyota Motor Company in 1943 at a time when Toyota’s productivity was well below that of America’s Detroit-based motor industry, going on to become a machine shop manager in 1949. Then, during the formative period of the TPS (roughly 1945-1965 when Toyota was fighting to survive) Ohno came to the fore. The President of Toyota, Toyoda Kiichiro had set a remarkable challenge the day World War II ended:

Catch up with America in three years. Otherwise, the automobile industry of Japan will not survive.

Ohno 1988 p3

Toyota was verging on bankruptcy during much of this period and could not afford major investments in new equipment or massive inventories. Despite these constraints, Ohno’s leadership instituted a new way of thinking and a new work culture in the company. He decided that there was no reason other than inefficiency and wastefulness as to why Toyota’s productivity should be lower than that of their US competitors. From being named as director in 1954, he rose through all of the senior ranks of the company until becoming executive vice president in 1975. In the early 1980s, Ohno retired from Toyota and became president of Toyota Gosei, a Toyota subsidiary and supplier. He died in Toyota City in 1990.

What is commonly known about Ohno and Toyota from “The Machine…”

The tale of the superior performance of Toyota over its mass-producing competitors was first brought to widespread Western attention by ‘The Machine that Changed the World’ (Womack, Jones and Roos 2007, first published 1990). The success of this book triggered much attention into finding:

a better way to organize and manage customer relations, the supply chain, product development, and production operations.

Womack and Jones 1996 p9

It documented the history of management thinking in the automotive history, from the early craft manufacturers, to the mass production techniques exemplified by Ford/GM, before telling the story of the TPS’s creation (circa 1945-65) and that of Toyota’s ‘production genius’ Ohno (Womack et al 2007 p48). Through necessity, Ohno had developed a contrasting approach to the mass production of the US firms. Competitive advantage could not be won by Toyota through taking on the American giants at their own game – by competing to achieve economies of scale. Through experimenting firstly with simple die-change techniques (ways of stamping metal sheets), Ohno was able to perfect the whole process until it could be reduced from taking one day down to 3 minutes. In doing so, he made the first of a series of counter-intuitive discoveries: it cost less per part to make small batches of stampings than to produce in large batches. Ohno sought to understand more as to why fewer units and greater variety actually meant lower costs. He found that true costs of production were end-to-end, and that more variation in his line left fewer parts tied up in inventories and work in progress. Whilst the unit cost for each product was higher, the total production costs were considerably lower (Womack et al 2007 p52). As Ohno said,

To think that mass-produced items are cheaper per unit is understandable, but wrong.

Ohno 1988 p68

Ohno was able to realise over time that economy of flow was superior to economy of scale, and to see this flow, he needed to understand his organisation as a system.

The US supermarket as inspiration 

Ohno was famous for experimenting with various ways of setting up equipment to produce items in a timely manner. But he got a whole new perspective on ‘just-in-time’ production when he visited the US in 1956. Ohno went to the US to visit automobile plants, but he was most impressed by the US supermarkets that he had been researching since the late 1940s (Ohno 1988 p26). Japan did not have many self-service stores yet, so Ohno marvelled at the way customers chose exactly what they wanted and in the quantities that they wanted.

In later years, Ohno often described his production system in terms of the supermarket. Each production line arrayed its diverse output for the following line to choose from, like merchandise on supermarket shelves. Each line became the customer for the preceding line. And each line became a supermarket for the following line. The following line would come and choose the items it needed and only those items. The preceding line would produce only the replacement items for the ones that the following line had selected.

This format, then, was a pull system, driven by the needs of the following lines. It contrasted with conventional push systems, which were driven by the output of preceding lines. Ohno developed a number of tools for operating his production format in a systematic framework. The best known of those tools is the kanban system, which provides for conveying information in and between processes on instruction cards.

The TPS: developed as a matter of necessity

Near the end of his life, Ohno was asked by a journalist from ‘The Economist’ why the TPS had developed. In a characteristically frank way, he responded that the TPS was ‘the last fart of the ferret’ (apparently, when a ferret is cornered it emits a powerful odour, similar to that of a skunk). The TPS’s development in adversity stood it in good stead, emerging as a structured, systematic response to all of the challenges that Toyota faced post-1945. Whilst over time, the internal and external context (strikes, Korean War, oil shocks) for Toyota changed greatly, Ohno’s approach remained unwavering: his focus was always on eliminating waste and the improvement of the system. When, towards the end of his life, Ohno was asked, ‘What is Toyota doing now?’ he responded:

All we are doing is looking at the time line,’ he said, ‘from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value adding wastes.

Ohno 1988 pix

Ohno’s method of leadership

Ohno’s method of leadership was described as having placed people as first and foremost in the company, instead of the conventional assumptions that companies are mechanisms which need capital, generate cost and attract revenue. His method was radical in assuming that machines and systems should serve the people, their masters, rather than the other way round.

Figure 2 Ohno’s Method (from Nakane and Hall 2002)

Ohno’s favourite word was ‘understanding’, meaning ‘to approach an objective positively and comprehend its nature’ (Ohno 1988 p57). His method was developed as the way of achieving such understanding of his work as a system. Ohno described the workings of business as systemic and similar to the human body where the nerves:
’cause us to salivate when we see tasty food.’ Ohno 1988 p57

It is the recognition of the systemic nature of an organisation that led him to try and fashion the TPS as the equivalent of a nervous system, responding to external stimuli by ‘making judgements autonomously at the lowest possible level’. He emphasised that:

Management’s role is leadership, developing all the people to autonomously work toward common ends.

He also advocated that all should ‘strive for a targeted ideal system’, but to remember that conditions change and that ‘all systems are transient, so people and systems must be flexible and adaptive, not just ‘optimal.’

Ohno’s method leads to organising for people and process flows, around problem seeing and problem solving, rather than for control. Proximity to the direct action is a requirement for the support workers and managers, so that internal processes can be linked back to the customer’s perspective. Nakane and Hall compare the workings of Toyota to what a military organisation calls ‘readiness’: the development of first-line people to run and to improve processes autonomously, so that everyone’s contribution is maximised within the umbrella organisation. This enables the organisation to be excellent by conventional measures, but also to retain the ability to be nimble and flexible when required.

Ohno understood that the Toyota Production System was just that – a system; the failure to appreciate that starting-place leads many to fail to grasp what is, without doubt, a significant opportunity for learning and improvement. Ohno should therefore be seen in the tradition of the systems thinkers, who recognise how the parts of an organisation combine to produce the whole and who constantly search for feedback on how they are performing. It is only when this systems perspective is understood that organisations can realise their potential to perform like Toyota.

‘Ohno-san never explained’

By all accounts, Ohno could be a difficult character. He was described as a ‘doer’s coach’ as opposed to a consultant or professor, and he was certainly not a conventional manager. He preferred a role close to the action, disliking the office. Ohno met regular resistance when he first set out to persuade the company to radically change its manufacturing processes. It is said it took Ohno 25 years to spread the innovations of the TPS throughout Toyota and its first tier suppliers. Even in the machine shop that he directly managed, it reportedly took him about 8 years to finally get things moving. The workers were not cooperative with what they called his ‘goofy’ changes. Rumour has it that they would groan and say ‘Oh no, here comes Mr Moustache!’ when they saw him (Hutzinger 2008).

Ohno had a reputation for creating fear in others. John Bicheno of the University of Buckingham says that:

there are still some older Japanese that worked with Ohno – and virtually all who have worked with these guys say that they give orders, are highly critical, and expect it to be done’.

Michikazu Tanaka gave this account of Ohno’s firm-but-fair approach to learning in the workplace (from Fujimoto and Shimokawa eds 2009 p49):

‘No one ever got a scolding from Ohno-san for getting something wrong as long as they were doing their best. But he’d turn red in the face and deliver a severe tongue-lashing to someone who was slacking and made excuses for messing something up… The way to pass this spirit (of Gemba gembutsu: going to see problems first-hand) on to the next generation is to go out into the workplace and scold people. If someone screws up, take them into the workplace, show them exactly what’s gone wrong, and give them a good scolding. When someone gets a scolding in the workplace while looking at what’s actually happened, they can’t make any excuses. The scolding presents the person with a higher standard to meet. On the other hand, you can’t be strict all the time. Ohno-san cautioned me one time after I’d been scolding people in the workplace. “You need to be careful not to discourage people who already have the right motivation.” I asked him what he meant, and he replied, “Motivated people want to do things, even when they think they can’t. And some things really are impossible for some people. At times like that, motivated people can get discouraged. So even if you say something strict, you also want to find an opportunity to extend a helping hand.”’

Extending a helping hand lets people know that you value their effort, even if they were unsuccessful. [Managers] who never extend a helping hand can never earn the trust of their subordinates. We need to accompany strictness with a readiness to help. And to do that, we need to know what’s going on in the workplace. If you don’t know what’s happening in the workplace, you can’t do anything for the people there. Managers who are happy when problems stop showing up and operating rates rise are no good. Managers need to let their people know that they’re happy to see problems show up. Ordinary people tend to want to hide problems. We shouldn’t ever think badly of people who reveal one problem after another. We should welcome situations where problems become clear.

Ohno’s desire to drive out waste from the Toyota system was ruthless. There is a story (see Norman Bodek interview, n.d.) that one day Ohno walked into one of the large warehouses and said to the staff of managers around him:

Get rid of this warehouse and in one year I will come back and look! I want to see this warehouse made into a machine shop and I want to see everyone trained as machinists.

When he returned one year later, the building had sure enough become a machine shop. Ohno had not told them how to do it. Instead, he just demanded that they do it. As Tanaka said,

Ohno-san never explained his reasons, so the only way to learn was by doing.

Fujimoto and Shimokawa eds 2009 p57

In later years, he became a mentor to Toyota’s TPS leaders one-on-one, or in small groups, sending them out to see reality, understand it thoroughly, and in turn to develop supervisors and working people to improve the processes around them themselves (Nakane and Hall 2002). All of Ohno’s students remember thinking that they had mastered the TPS only to have another penetrating question send them out to learn more. It has been said that near the end of his career, his manner had remained so challenging that it caused him to be politely pushed aside by Toyota into his role with one of the suppliers.

Guidance for managers: go and see!

Here are some extracts from an account given by Michikazu Tanaka of his time working closely with Taiichi Ohno. Tanaka was a production manager at Daihatsu, another Japanese auto company which worked closely with Toyota in the 1960s (from Fujimoto and Shimokawa eds 2009). Tanaka talks warmly and with obvious reverence for his mentor:

Gemba gembutsu [also genchi gembutsu: a commitment to seeing things (gembutsu) firsthand as they really are in the workplace (gemba or genchi)] was absolutely fundamental to Ohno-san’s approach. He never rendered judgment simply on the basis of hearing about something. He always insisted on going to the place in question and having a look. On occasions when we might press him for an opinion, he’d say, “You’re the one who has seen the thing. You know better than I do. How could I talk about something that I haven’t seen?”

 (Ohno would assign individuals from Toyota to assist Daihatsu with their kaizen. On one occasion, he assigned a Toyota production engineer to help with some automation kaizen. Tanaka wondered how it would help them.) 

…for a week he did nothing at all. He simply watched what was happening in the workplace. On the Monday of his second week at our plant, he came by my desk and described his impressions and his plans as follows.

“I watched the activity in your workplace carefully for a week, and I saw that people are working extremely well. I struggled to think of something that I could do for you, and my conclusion was that I have no role to play here.

I stopped by Ohno-san’s house on the way home Friday evening and told him what I have just told you. He said, ‘Your problem is that you’re trying to think of something to teach the people at Daihatsu. You don’t need to teach them anything. What you need to do there is help make the work easier for the operators. That’s your job.”

… Ohno: “When you go out into the workplace, you should be looking for things that you can do for your people there. You’ve got no business in the workplace if you’re just there to be there. You’ve got to be looking for changes you can make for the benefit of the people who are working there.”

Finding and eliminating waste

Here’s an example of Ohno-san’s approach. He was observing the work on an engine assembly line one time when he was a plant manager, and he noticed that one of the workers needed to lift a heavy engine block once during each work cycle. Ohno-san wondered why that was necessary. He called the production chief over and ordered him to go find out what was going on. The production chief came back and reported that the roller conveyor was broken.

“What in the world do you think you’re doing here?” shouted Ohno-san. “We don’t hire people to lift engine blocks. You go check and see right now if you’re not sitting on other problems just like this one.” The production chief soon reported three similar problems, and he received the predictable scolding from Ohno-san. “You’re out here on the floor every day, but you’re not really seeing anything: whether your people are having problems with something, whether waste is happening, whether you have overburden somewhere.”

Ohno-san insisted that only about half of the activity in a typical workplace was value-added work. The rest was just spinning wheels, not making any money for the company. He taught us to see. I took a fresh look at the workplace, and I could see that he was right, that waste was happening everywhere.

Commitment of senior managers

When Ohno-san gave guidance to companies, he always started with the president. ‘All the training in the world will come to nothing unless senior management displays a strong commitment. If you demonstrate the right commitment, I’ll provide your people with the training they need.

Don’t rely on written reports: case studies are no substitute for knowledge

Ohno-san hated written materials. If you took him some papers to see, he might go through the motions of looking at them, but he wouldn’t really pay any attention at all. You’d be trying to explain something in the documents, and you could tell from his eye movements that he couldn’t care less. When you got done, he’d hand the papers right back to you. He’d give really detailed instructions in the workplace, but he almost never had anything to say in response to written reports. I never saw any papers on Ohno-san’s desk. That’s no exaggeration. Literally, no papers at all. The only documents I ever saw him pay any attention to were the factual records of production and sales results: things like how many vehicles we sold yesterday, how many vehicles our plants produced yesterday, what the operating rates were, and so on. Those numbers were records of actual results, so they were indisputable facts. Ohno-san had no interest in any other written materials. He only trusted things that he could confirm with his own eyes.

I visited Ohno-san one time at Toyoda Boshoku (Toyoda Spinning and Weaving) when he was the chairman there. He was in a foul mood and promptly let me know why.
‘Some guys in charge of kaizen at Toyota were just here. They said they were going to hold a jamboree to introduce case studies and that they wanted me to come. I got angry and told them that kaizen is about eliminating waste. I asked why they would hold a kaizen event that entailed the waste of preparing a lot of useless materials. People can see the kaizen in the workplace. I told them that they didn’t have a clue. Their job is to eliminate waste, and they’re the ones creating waste.’

The group responsible for kaizen at our company came to me sometime after that encounter with Ohno-san and asked for some materials. I refused and told them how angry Ohno-san would be at such a request. They insisted that they needed to make a report about the kaizen activities.

I asked why they needed to make a report when people could see the actual kaizen in the workplace. I told them to show people the kaizen in practice. We have too many people these days who don’t understand the workplace. They’ve got that tinfoil over their eyes. They think a lot, but they don’t see. I urge you to make a special effort to see what’s happening in the workplace. That’s where the facts are. And the truth is hidden in the facts. Our job is to get a handle on the truth.

Evaluating people

The way you evaluate people shapes their behaviour. Production at the Takaoka Plant slumped one time [on account of weak demand], and the plant was operating only half days. At times like that, the people should simply take the rest of the day off. But when I went to the workplace, I found the lights on and people sweeping up and getting ready for the next shift. I noted that they were wasting electricity and asked what they were doing. They answered that their evaluations would suffer if they weren’t doing something that looked like work all the time. When you’ve got idiots for managers, people in the workplace end up wasting money.

References

Interview with Norman Bodek downloaded from http://www.strategosinc.com/nbodek.htm – accessed 02/07/15

Huntzinger J presentation at TWI Summit, May 2008 http://twisummit.com/twisummit_old_page/TWI-Ohno%27s%20Vehicle%20to%20TPS%20-%20TWI%20Summit%202008.pdf – accessed 03/07/2015

Nakane and Hall 2002 ‘Ohno’s method: Creating a survival work culture’ Target magazine vol 18, no 1 http://www.ame.org/sites/default/files/target_articles/02-18-1-Ohnos_Method.pdf – accessed 02/07/15

Ohno, T 1988 ‘Toyota Production System’ Productivity Press: Portland, Oregon

Shimokawa K and Fujimoto T eds 2009 ‘The Birth of Lean: Conversations with Taiichi Ohno, Eiji Toyoda, and other figures who shaped Toyota management’ The Lean Enterprise Institute: Cambridge, Massachussetts

Womack J, Jones D, Roos D, (2007) “The Machine That Changed the World” Simon and Schuster: London. First published in 1990.

Womack, J. P. and D. T. Jones 1996 ‘Lean Thinking’ Simon & Schuster: New York