I first heard the term Kaikaku over ten years ago when travelling with a
Toyota Sensei around Japan, while researching our
Lean Thinking
book.
As we visited several showpiece suppliers to Toyota we kept asking when
they made the switch from batch logic to flow: when they installed their
Heijunka boards, pull systems etc.
Each time the answer was in the early 1970s, just after Taiichi Ohno’s
team began spreading lean to Toyota’s key suppliers. While they were
continuing to do lots of Kaizen, the fundamental layout and logic was set
in place at that time. Kaikaku came first, before Kaizen. That is when they
made the fundamental shift that set them off in the right direction.
I worry that not enough organisations in the west trying to follow their
example have grasped the difference between Kaikaku and Kaizen. Kaikaku for me is the embodiment of a different logic in the flow of orders
and in the flow of products through the business: a commitment to
levelling orders, to pull rather than push and to a rapid flow from door to
door. Made in such a way that there is no possibility of reverting to old
batch and push ways of thinking.
If the logic in the heads of management has not changed along with the
physical operations then things will easily slide backwards and no amount
of Kaizen will get you out of that hole. Bottom up lean transformations
keep bumping up against the problem of bringing the rest of the
organisation with them on their journey to lean.
What is missing is process leadership at the top. Top management focuses
on strategic thinking and financial thinking but not on processes thinking.
Chief Executives spend much of their time asking what customers can be
served profitably from the firm’s existing assets, knowledge base and
geography, and buying and selling assets accordingly. Chief Financial
Officers and department heads ask how the firm’s resources can best be
deployed within its business units, functions and departments. But there is
no such thing as a Chief Process Officer!
The reason this is important is not just to support Kaikaku and Kaizen in
operations and logistics. Kaikaku needs to be taken up a level and applied
to the redesign of each value stream. Competing against low cost imports
from China and elsewhere and achieving much higher levels of availability
at the point of sale means creating lean, responsive value streams across
several organisations. Serving time poor customers means rethinking
distribution channels and how to support customers using their products.
The redesign of the core value creating processes is too important to
delegate. As we describe in
Lean Solutions, the most promising approach
is to create a small team, led by a high potential executive, operating
initially outside the normal departmental structure and reporting to the
top. They must be free to challenge the conventional wisdom, the firm’s
current assets and relationships. Their job is to evaluate the core value
creating processes of the organisation from the standpoint of the
customer, and to work out how to flow value to the customer smoothly
and with minimum effort.
A member of this team then becomes the Value Stream Manager for each
value stream, leading the operational design and its roll out across the
business. Working out the operational detail means involving staff who will
run this new value stream in defining customer value and drawing the
future state map, so they can see the whole process, understand the logic
behind it and the need for change and see the virtue of the new process.
Over time this Office of Value Stream Managers or Process Office (as
distinct from the lean improvement group supporting Kaizen activities) will
become the way to articulate the needs of each process to the functions
across the business. Most staff will continue to work in their functions. But
the core design, production and support value streams become the
customers for their work. Now resolving conflicting demands for resources
from the functions will be based on value stream plans and not just the
result of a power struggle for budgets, of chimney costing within each
function or measures of asset utilisation.
The whole organisation can then
unite around the core objective of creating value for customers profitably.
Who are the process leaders in your organisation? What does your
organisation look like from a process perspective?
Yours sincerely
Professor Daniel T Jones
Professor Daniel T Jones
