Book review: “Workplace Management” by Taiichi Ohno

The Toyota Production System is the seed of Lean thinking. Two people were principally responsible for creating the Toyota Production System: Shigeo Shingo and Taiichi Ohno (principally Ohno). At the beginning (before the approach was proven) it was in fact called the “Ohno Production System.” In trying to learn more about Lean, I wanted to read something by Taiichi Ohno himself, so I read Workplace Management.

The book, written in 1982, has many very short chapters, addressing the common problems we encounter in the working world–particularly challenges stemming from flawed conventional wisdom. It’s not a good introductory book to Lean. For that, please see the Lean section of yesterday’s Recommended IT Management books post. However, for me the experience of reading this book was very powerful. Ohno speaks to many concepts that I’ve seen reflected in Lean books, but in contrast to those Lean books Ohno is speaking about his underlying principles.

In the March 2013 “Riding the Maturity Model Wave” presentation, I had one slide (slide #12) that was just a picture. I asked the audience to say to themselves what the picture was, trying to convey the importance of mental models. Two people looking at that same picture may see different things: a trumpet, a cornet, a musical instrument, a PowerPoint slide. Our communications challenges begin with us having different backgrounds and mental models for things. Ohno speaks to this issue by saying that, unless we observe the work ourselves, and understand it, we work with illusions–with flawed mental models.

He also talks a good deal about the flaws in metrics, particularly accounting-based metrics. If you make decisions based on the accounting numbers, you can simplify the issue to the extent that you make poor decisions. For example, accountants may encourage purchasing new capital equipment when the old equipment has depreciated–but any continued use you get out of the old equipment is pure profit. Or, accounting may make a process appear to be expensive or cheap based on arbitrary divisions (e.g. where the line is drawn between transportation and manufacturing).

Another flaw in many metrics is that they presume that capacity scales linearly: that making 10,001 units costs 1/10,000 more than making 10,000 units. In fact, you may have to buy an additional machine–making your capacity 20,000 units–and there are stair-step costs both ways. A machine that makes 10,000 units/month will only be worthwhile if your customers are buying close to 10,000 units/month. If customers are only buying 2,000 units a month, you are paying for 8,000 units of excess capacity.

He also talks about how to encourage people to think differently about their work. I wouldn’t do this, but it was interesting to read his approach to yelling at supervisors in front of their teams: he felt it make everyone pay more attention and rally behind their boss. In a similar vein, he contrasted how people could go to Brazil and tell them to make improvements, and they would make the improvements because an outsider was insisting on them. It’s hard for me to imagine selling people on the Toyota Production System when it had never existed–he mentions how he could succeed because the Chairman of the Board of Toyota (and the Chairman’s advisor) supported his efforts.

In particular, I was interested in Ohno’s approach to technology, automation, and robots. I didn’t expect a book from 1982 to talk much about computers or materials resource planning (MRP) systems. He presented several useful concepts for me: “autonomation” as error-proofed automation, where the system detects errors and stops working rather than creating defective product. Another was that if you introduce robots to a line, you may lose your ability to improve as new workers learn how to use the robots but not how to tune them–and you will likely lose your ability to perform without the robot when times are bad.

  • abebe geremew

    the role of quality management to reduce cost ?

    • John Borwick

      The role of traditional quality management is to eliminate defects, hopefully through prevention. Its two processes are quality assurance and quality control.

      However, Lean is a little bigger than traditional quality management: its goals are to remove waste and increase value for customers, and it has techniques for doing so at operational, tactical, and strategic levels. Lean tries to reduce waste while improving value for customer.

      In Ohno’s book he talks about the profit equation and ways to look at it. His preferred way of looking at the profit equation (I believe) was “PROFIT = SELL PRICE – COST”, to focus on costs and driving down costs to improve profit. (He says this in opposition to, for example, “COST + PROFIT = SELL PRICE” which can imply to people that you add a fixed amount of profit to your costs to get your sell price.