Monday, December 31, 2012

What is the Ringo-sho process, and how does it fit into Lean?

I would like to wish each and everyone one of my readers a Happy New Year, I hope I can continue to bring more value-added posts to you in 2013!

So my last post of the year is shared from my contribution on hosted by Michael Balle'.

The question is in regard to the Ringo-sho process.   Some of you may be saying "what is that?"  It is a Japanese term and was used during my time at Toyota. 

The question on the website is from:
Lean Global Network: Can you clarify the role of “ringi” in lean?"What is Ringi? The Lean Edge has discussed Nemawashi, but could you clarify the practice of Ringi? How is this linked to A3? How widespread is its use within Toyota? Should that practice be adopted by lean thinkers?"                                                                  

I will have to admit when I saw the word Ringi in this question, it brought back many memories of my time at Toyota (TMMK). It’s not a word I’ve used or heard much since my time there, even though the thinking behind it could be more common if expressed differently.
As others have mentioned above Ringi or (Ringi-sho) is not necessarily a Toyota creation, it is a Japanese term which when translated (with help from John Shook) means:

A high-level formal authorization/approval process, usually for major policy matters, major projects and represents formal agreement (through nemawashi) of the authorizing parties (always including finance). It is a specific application of A3 (as a document size), used to (to repeat) garner formal authorization for those major policy matters and projects. It is finalized in a formal A3 called a ringi-sho (sho means “document”) that is signed by the authorizers, usually the top executives of the related departments or affected areas or functions of the company.
So as you can see no matter what you decide to label this process (remember its not about what we call these “tools” its the thinking behind them) the importance of it seems to reside around the “approval process” of a project described at a high level which needs financial authorization at an executive level as well buy-in.

It is often necessary to link the project to the Hoshin Kanri goals in order to measure the key performance indicator impact (i.e – Cost, Productivity, Quality, Safety, and Human Resources) otherwise known as ROI (Return on investment) this could be spread over several years. I think a common misnomer about Ringi-sho is because its linked to A3 its often label as a problem solving A3 and this is not necessarily the case. It could stem from a problem happening which a proposal or project could evolve from but a Ringi-sho is more about the financial aspect and approval process at the highest affected levels.

Once a Ringi-sho has been approved then its given a Ringi-sho account number, this number is then attached to any spending / cost around this designated project through Accounting. This project could be a few months in time to a couple of years depending upon the complexity of the project and everything it entails.

So Sammy’s example above touches on capital type expenditures as in- (equipment, buildings, expansions, company events and services). Usually a Ringi-sho is created for higher dollar projects that could be in any range. This could be an area where your specific company could set their own parameters around when you needed high level approval for finances or not.

The important aspect to remember is the relationship to Hoshin Kanri (Strategy Deployment), so once its approved financially and all signatures are completed then it begins to cascade downward to the related areas/departments who will begin to follow through with the project plan and this is where you could see the spawning of the “kanri cycle” which are micro PDCA activities that will take place in order to see the project from start to finish lead by the originator of the Ringi-sho. Each one of these Kanri-cycles could have a status report to ensure that the project stays on task, any contingencies should be reported at this point if it could effect the project plan.

Once a Ringi-sho is deemed “closed” meaning that the project is completed in regard to the financial aspect, then the account number is then closed as well. If at any point in the future some unforeseen cost arises that are related to that closed project a new Ringi-sho would have to be approved for addition funds.

So in the world of “Lean” I believe this “approval process” can be very value added to any company ensuring that funds are spent appropriately for ROI, and communication and authorization to all related parties become a standard practice.

This summarization of Ringi-sho is strictly based on my 10 yrs experience working in production at TMMK and dealing with projects related to the Plastics department and how we used this process to ensure proper approval and allocation of budgets all related to our department Hoshin as it related to the Plant Hoshin (TMMK).

Until next time,
Tracey Richardson
Last post of 2012 - Happy New Year!!!  

Sunday, December 30, 2012

Caused versus Created gap A3's (Problem Solving vs Proposal / Strategy)

I thought I would share this short video clip I  did at the Lean Enterprise Institute (LEI) @leandotorg in Cambridge, MA.

This clip gives a brief description of "caused" versus "created" gaps, and which A3 format do you use for each one.

I teach several different types of courses for LEI, 3 of them particularly involve training around Problem Solving A3's:
  • Managing to Learn A3 (2-day)
  • Lean Problem Solving (1 day)
  • Problem Solving aligning People, Purpose and Process
Each of these courses we discuss Problem Solving A3's "caused gaps".    What I am finding is participants often bring "created gap" problem to class.   This video was an attempt to try and clarify the difference between the two, and to enhance the class experience by select the right type of problem.  I hope this is helpful not only for LEI courses, but in general to know there are different types of problems!

Please take a look!!

Until next time,
Tracey Richardson

Saturday, December 15, 2012

Why has the Lean movement largely failed to capture the imagination of the sales team?

Hello everyone, this month's post is being shared from where I participate with fellow lean practitioners.

The question on the site is by:

Joel Stanwood: Why has the Lean movement largely failed to capture the imagination of the sales team?  Most management teams who testify to having implemented Lean will describe financial impact in terms of shop floor efficiency improvement – direct labor productivity, overtime reduction, inventory velocity, floor space utilization, etc. Paradoxically, in terms of company economics, the most alluring promise of Lean is to boost sales, delivering ever higher variable contribution margins while delighting customers and winning in the marketplace. Yet the language of Lean to unlock the growth engine of the company rarely enters the sales vernacular, and in general, sales professionals are far less likely to have participated in Kaizen. Why has the Lean movement largely failed to capture the imagination of the sales team?

My response:

This is a good question and one that doesn’t facilitate itself for such a linear answer. I think all the responses so far have talked about many different ideas based on all our experiences out there with various industry and gives our readers some good perspectives to build on.
I suppose being part of Toyota in the beginning (1988) when we were setting up the systems at TMMK we realized Toyota Motor Sales (TMS) wasn’t necessarily part of our manufacturing plant (meaning onsite), they were a separate entity as Jeff and others described, but they determined our pull system. We were always told that every car we made was sold and TMS wouldn’t have us build to be building- that would go against the rules right? Many do not see this concept or believe its a feasible way to do business.
Toyota made it very easy for us to understand expectations (standards) and we designed our systems around this “pull” from the customer which we referred to as “takt time”. We got as low as 53 seconds a car at one time due to the pull from TMS orders and worked numerous hours of overtime and saturday’s to keep the customer happy based on that demand and/or the opposite if things slowed down. Our systems were “flexible” so we could adapt to change if the market changed. This happened several times in my time there and we were able to adapt with minimal to any downtime at all, just some good ole PDCA planning and thinking..
We learned we would never be a 24/7 shift producer, we would have only 2 shifts, that had the capability for overtime if necessary and also preventative maintenance (PM) to ensure our equipment could meet expectation with the high demand and lean environment we had. We all knew the “design to sell” value stream and ran “just in time”. You would never see Toyota hire manpower for full capacity production this was why the culture had flexibility embedded first and foremost, and was an essential element of the success of TPS. Time and seconds were important so we learned to value each one.
All of this took understanding the entire value stream from order to customer. Some of you have referenced design-make-sell.
I think to add to that thought Toyota recently has added “service” to this value stream, if you think about it, a service department can greatly impact sales of a product so although they are not part of the actual sales or manufacturing they need to understand the impact of their role in the value stream even after the sale. An important aspect many do not teach or discuss but if you reflect on the past few years you can see how sales could be affected by the lack of understanding in service very easily.
In my experience going to companies outside of the “Toyota” standard (which sits up on a pedestal to many) is eye opening in how removed sales and aspects around leveling and development are not included in their thinking and/or planning. To me it should be one of the first areas to learn since many are measured on “results” their sales, or what some call throughput, but the problem is they forget the process that gets them there and that is dangerous. The ole “process vs results” thing- imagine that.
So what I have seen in the past few years traveling around the US that sales are slowly becoming part of the learning sessions, at least where Im going, or ones that attend conferences I hear more often in class now-, “Im from sales”, I believe a pull has begun and my thinking is this:
If a company has sales as a part of the company, meaning they happen to be internal and are sitting next to accounting and/or the payroll folks then it “should” be easier to see the affects of their decision making, but unfortunately its not. The dangers I witnessed by sales not understanding or going to see the value stream even when its right next to them is they commit a product to a customer, without asking if its feasible, where it fits in the leveling process for manufacturing, lead times, manpower, or cost perspectives. To me this creates a “push” system for an organization, by sales having an entire lack of awareness to the entire value stream then they promise promise promise and when it gets funneled to production, they are like ” we cant do this, why did you tell them we could”, so several things can happen. (there are many that trickle down from this)
1. We prioritize orders by client size, order, or money
2. We push the “not so important” (in their minds) orders in “delay mode”
3. Or we miss the order completely putting at risk the reliability of the company
4. We overnight ship product which can result in very high costs
When these things happen then each day is just a reactive hodge-podge of getting what ever work we can put out and meet as many customers as I can. If no one is tracking the “pain to the organization” in regard to the key performance indicators then it can never get back tracked to sales lack of understanding. This can impact morale, costs, job security, company reliability and throughput.
So I feel its a slow pull, but one none the less, of a company seeing the need for sales to understand the entire value stream from design, make, sell, service and how to have “repeat” and addition sales (growth). Having sales understand this can be a paradigm shift in thinking for organizations on who are attending “learning sessions” whether its from a consultant, at a conference, or self learning from all the great books many here have written.
I believe when companies can get away from push production and embed pull production based on the sales departments improved understanding you will begin to see great things. I’ve began to embed this discussion at a awareness level to begin an understanding of the horizontal – vertical alignment of an organization.
I really appreciate the question, its not an easy one to answer without us all going out to ask deep questions regarding a company’s value stream and capacity, the more that is stressed the more I think we will see a slow change in sales becoming a valuable part of the value stream and the pull being the norm versus the abnormal. I hope this helps, this is my perspective based on my experience with some companies and working with their sales and also my time with Toyota to have a comparison.
Until next time,
Tracey Richardson