In my previous three posts, I covered Rule-in-Use 1, Rule-in-Use 2 and Rule-in-Use 3 as outlined in Steven Spear’s 1999 Ph.D. dissertation on the Toyota Production System.
Rule 1: guides the design and performance of all individual activities.
Rule 1 states: design and perform every activity so that it is structured and self-diagnostic.
Rule 2: guides the design and operation of connections between activities.
Rule 2 states: design and operate the connection between every person who or every machine that supplies a good, service or information and the customer who receives the specific item so that the connection is direct, ‘binary”, and self-diagnostic.
Rule 3: guides the design and operation of flow paths (systems of connected activities) over which goods, services or information take form within or among organizations.
Rule 3 states: Each good, service and piece of information must have a pre-specified, simple, self-diagnostic flow path over which it will travel as it takes form.
I will now cover the final two rules in Spear’s quiver.
Rule 4: guides the improvement of individual value-adding activities.
Rule 4 states: include activity-improvement in the work content of each supplier. Assign a specific, capable person to teach the supplier to improve his own work by solving actual problems when and where they occur. Design and do all improvement activities so that they are experiments – Structured, Self-Diagnostic (Hypothesis-testing) Activities. Continue to improve the activity until it is IDEAL.
Rule 5: guides the improvement of connections between activities and of flow-paths over which goods, services and information take form.
Rule 5 states: Resolve connection and flow-path problems that affect a customer-supplier in the smallest possible group that includes the affected individuals. Conversely, form groups based on the expected nature and frequency of problems. Use Structured, Self-Diagnostic Activities to improve. Continue to improve until production and delivery is IDEAL.
Asleep yet? Sorry about that – but I’ve got to get Spear’s actual words on paper before we get into a little brighter discussion about what it all means to us, in real life. But this should wake you up a little bit – here is what Spear means when he uses the term “IDEAL”.
An activity or a system of activities is IDEAL if it always produces and delivers:
- Production and delivery of defect-free goods, services and information,
- Piece by piece (or service by service) in batches of one,
- Performed on-demand and not in anticipation of demand,
- With immediate responses to requests,
- Without waste on the part of the supplier, and
- Without threats to the supplier’s physical, emotional or professional safety.
This is perfection from the Lean/TPS perspective. Every problem solving and improvement effort must try to come one step closer to this nirvana of system process behavior. Rules-in-Use 4 and 5 provide a road map on how to accomplish this.
[This is also, of course, one version of Toyota’s “True North”. I received a slightly shorter version when I was fortunate to have Mr. Hajime Ohba, President of the Toyota Supplier Support Center (TSSC), visit one of my facilities about the same time that Spear finished his Ph.D. at Harvard. (I discussed what I learned from Mr. Ohba in previous posts here and here). It turns out that Mr. Ohba was Spear’s primary liaison with Toyota while doing his research for this dissertation. So I can vouch for Spear’s representation of Toyota’s IDEAL.]
I would like to draw your attention to item 6, which concerns safety. These three modes of safety are very representative of Toyota’s culture and are completely missed by too many Lean advocates. “Physical” means what we usually ascribe to this term – no physical injury. “Emotional” refers to the emphasis on problem identification and resolution: the work environment must always be “blame free” when discovering problems and trying to solve those problem (even if unsuccessful). “Professional” means that even when/if continuous improvement results in the need for fewer workers, people cannot be fired, receive a pay cut or be punished in any way due to these improvement efforts. In fact, TSSC, when it agrees to work with a company, would require the company to sign a contract to this effect.
Spear later recognized that there was not a real reason to have separate rules for activities and connections/flow paths (Rules 4 and 5). They both used the same methods to achieve improvement. In his 1999 article published in the Harvard Business Review, Decoding the DNA of the Toyota Production System, he had combined the two rules into one.
It’s probably worthwhile to show you those 4 “simplified” Rules in the HBR article in contrast to the more detailed Rules-in-Use outlined above. While they probably do give us a little clearer understanding of “what” the rules are intended to accomplish, they don’t do as good of a job explaining “how” those accomplishments are to be attained.
The Four Rules
The tacit knowledge that underlies the Toyota Production System can be captured in four basic rules. These rules guide the design, operation, and improvement of every activity, connection, and pathway for every product and service. The rules are as follows:
All work shall be highly speciﬁed as to content, sequence, timing, and outcome.
Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses.
The pathway for every product and service must be simple and direct.
Any improvement must be made in accordance with the scientiﬁc method, under the guidance of a teacher, at the lowest possible level in the organization.
All the rules require that activities, connections, and ﬂow paths have built-in tests to signal problems automatically. It is the continual response to problems that makes this seemingly rigid system so ﬂexible and adaptable to changing circumstances.
I have emphasized that last paragraph for a reason. I will come back to this a little later after I have bored you with some more dry, but necessary, stuff from Spear’s dissertation. (By the way, not all of Spear’s dissertation is dry and boring. Quite the contrary. His Chapter 7, which covers his day to day experiences in the various plants, is quite interesting and enlightening – and comprises a little over half of his entire thesis):
Rule 4 and Rule 5: Hypothesis-testing improvement activities, done at the lowest possible level, moving production and delivery closer to the IDEAL.
- To be a hypothesis test, an improvement must be designed and executed so that the expected effect of the change (in an activity, connection, or flow-path) can be compared with the actual effect of implementing the change. People whose behavior is guided by the Rules-in-Use do this by:
- Representing the current condition (how an activity, or a connection or flow-path is actually operated in practice) diagrammatically, textually, and numerically.
- Identifying problems (symptoms and believed causes) in the current conditions.
- Proposing counter-measures: changes in the design of an activity, connection, or flow-path to remove the causes identified in the current condition.
- Articulating a target condition, a diagrammatic, textual, and numeric representation of how an activity should be performed or a connection or flow-path should be operated with the inclusion of the counter-measures.
- To be done in the smallest organizational unit: improvement must be done by the person who performs the activity or by the person who manages the smallest group that includes the connection or the flow-path.
It should if you are at all acquainted with Mike Rother’s “Toyota Kata”. Go to the website link and click on “Improvement Kata” at the top. See any similarities? The words “Current Condition” and “Target Condition” are in both. The word “Experiments” is in Spear’s original Rule 4. And, of course, Rother’s “Challenge” means the same thing as Spear’s “IDEAL”. The logic is the same.
Now click on Rother’s “Coaching Kata” button and take a quick look. Then read the following from Spear’s 1999 HBR article:
How Toyota’s Workers Learn the Rules
If the rules of the Toyota Production System aren’t explicit, how are they transmitted? Toyota’s managers don’t tell workers and supervisors speciﬁcally how to do their work. Rather, they use a teaching and learning approach that allows their workers to discover the rules as a consequence of solving problems. For example, the supervisor teaching a person the principles of the ﬁrst rule will come to the work site and, while the person is doing his or her job, ask a series of questions:
- How do you do this work?
- How do you know you are doing this work correctly?
- How do you know that the outcome is free of defects?
- What do you do if you have a problem?
This continuing process gives the person increasingly deeper insights into his or her own speciﬁc work. From many experiences of this sort, the person gradually learns to generalize how to design all activities according to the principles embodied in rule 1. All the rules are taught in a similar Socratic fashion of iterative questioning and problem solving. Although this method is particularly effective for teaching, it leads to knowledge that is implicit. Consequently, the Toyota Production System has so far been transferred successfully only when managers have been able and willing to engage in a similar process of questioning to facilitate learning by doing.
See the similarities? You should. In fact, Rother states the following on his website:
“The Improvement Kata pattern comes from research on Toyota’s management system, which is explained in the business book Toyota Kata.”
Rother’s excellent book was written in 2009, ten years after Spear’s dissertation and HBR article were published. Rother acknowledges Spear’s influence early in the first chapter of the book, where he states:
“Beyond benchmarking, a deeper look inside Toyota did not take place until Steven Spear conducted research at Toyota for his Harvard Business School doctoral dissertation, which was published in 1999. It describes how Toyota’s superior results spring more from routines of continuous improvement via experimentation than from the tools and practices that benchmarkers had seen. Spear pointed out that many of those tools and practices are, in fact, countermeasures developed out of Toyota’s continuous improvement routines, which was one of the impulses for the research that led to this book”.
Of course, Rother’s “Toyota’s continuous improvement routines” are Spear’s Rules-in-Use. And Rother’s “Toyota Kata” is the application of Rules 4 and 5 to the “production system” at hand, whether that system is manufacturing, services, banking, medical, etc., it doesn’t matter. Just identify the current condition of that system, note any problems that are keeping you from achieving standard work or taking you one step closer to the “IDEAL” state, identify a target condition you want to achieve and design countermeasures to implement to try to achieve that state through experimentation. And keep trying until the target condition is achieved. Or as Taiichi Ohno put it, much more succinctly:
“Standardized work at Toyota is a framework for kaizen improvements. We start by adopting some kind – any kind – of work standards for a job. Then we tackle one improvement after another, trial and error.”
And most important of all, this improvement work (per Spear) is:
“To be done in the smallest organizational unit: improvement must be done by the person who performs the activity or by the person who manages the smallest group that includes the connection or the flow-path.”
In other words, at the Gemba by the people in the Gemba. Remember, Rules 4 and 5 are there to make Rules 1,2 and 3 work. Each of those rules have a self-diagnostic test built into the rule structure. This is to make problems visible at the Gemba. Rules 4 and 5 are there to provide a structure for solving those visible problems by the people in the Gemba.
But remember, this structure was not invented by Spear or rediscovered by Rother. This structure was embedded within Toyota decades before Spear came along. If we go back to a 1977 paper written by the Toyota Production Control Department, this structure was evident even then. (I covered this paper in some detail in several previous posts. But the two that primarily deal with this topic can be found here and here). Here is a quote from that 1977 paper that lays the issue out quite clearly:
“Therefore, Toyota is endeavouring to make up a working place where not only the managers and foremen but also all workers can detect trouble. This is called ‘visible control’. Through visible control, all workers are taking positive steps to improve a lot of waste they have found. And the authority and responsibility for running and improving the workshop have been delegated to the workers themselves, which is the most distinctive feature of Toyota’s respect for human system.”
These Rules and the embedded structure built around them have been utilized within Toyota for a very long time. But we didn’t notice. And we wonder why Lean doesn’t work for us.
And here’s why they work for Toyota!
Remember, the thesis behind this thread series is that TPS, as developed and practiced by Toyota, reduces the complexity and simplifies the operation and management of “complex adaptive systems”. We’ve previously shown how Rules 1, 2 and 3 helps us achieve that end. Now we will see if Rules 4 and 5 takes us even further.
For an in-depth discussion of “complex adaptive systems”, please go back to my 5-part series on “Simplifying the Complex” (see Table of Contents). But for your easy reference, I will again layout the 4 key attributes and general system dynamics of a complex adaptive system:
Complex systems begin with individual components called autonomous agents, which make decisions and produce results in the system. To be complex, a system:
- Requires diversity in the types of agents. If they are diverse, they will respond differently to various inputs, producing more varied results.
- Requires connectedness. …The agents must have a way to contact one another.
- Requires interdependence, which means that the agents influence one another.
- Requires adaptation. In complex systems, adaptation means more than change; rather it refers specifically to learning.
To understand how a complex system operates, it is necessary to think about the strength of each of these four elements. …At a setting of one, the system is uninteresting. It may have the elements of complexity, but nothing much is going on. Diversity is low, connectedness and interdependence are weak and the result is almost no adaptation or learning taking place. At a setting of ten, the system is chaotic. Agents receive too much information from too many sources and are stymied in their decision making by conflicting and overwhelming signals. Where complexity is most intriguing is…. the “interesting in-between”. This means the dials are set somewhere between three and seven, with each dial different from the others. This allows a good flow of information, interaction and learning among diverse agents, but not so much that the system becomes chaotic. This is the heart of complexity – a system that continuously produces surprising results without breaking down.
Remember, complexity is not necessarily measured by the quantity of each of these four attributes that exist in a given system, but by how much total energy must be expended to make the system work (or not work) with the actual attributes contained within the system. And what is this energy I am referring too? That would be the human effort, money and time required to operate and manage that system.
And as we learned in earlier posts, complex systems tend to add complexity over time to tackle more and more problems. That requires exponentially more of that magic energy. In order to avoid eventual collapse, we have only two options: 1) get more of that human effort, money and time, or 2) simplify the system.
And if properly understood and applied, Spear’s Rules-in-Use should help us reach that “interesting in-between” mentioned above by actually simplifying our production system.
Recall that we’ve already made some observations with respect to how the various Rules-in-Use relate to the four attributes of complex systems. Rule 1 relates to attribute 1, diversity of activities. Rule 2 and attribute 2 both relate to connectedness. And Rule 3 is directly related to attribute 3 with respect to the interdependencies of the various connected activities along given flow paths.
Well, guess what? Rules 4 and 5 are directly related to attribute 4, adaptation and learning. In fact, Rules 4 and 5 allow us to learn and adapt specifically to the independent behavior of the first three attributes. Rules 4 and 5 tie the whole system together. What more could you ask for?
Remember that last paragraph in Spear’s discussion on Hypotheses Testing that I highlighted? Well, let’s look at it again. Compare that statement to the last sentence in the complex system summary referring to that “interesting in-between”.
“All the rules require that activities, connections, and ﬂow paths have built-in tests to signal problems automatically. It is the continual response to problems that makes this seemingly rigid system so ﬂexible and adaptable to changing circumstances.”
“This allows a good flow of information, interaction and learning among diverse agents, but not so much that the system becomes chaotic. This is the heart of complexity – a system that continuously produces surprising results without breaking down.”
This brings us back to the core principles of TPS. This brings us back to the two pillars of the TPS House – Just-in-time and Jidoka. Rules 1, 2 and 3 represent the JIT pillar by trying to create a JIT system flow. But this flow creation is fighting against the stark realities of diversity of activities, the connectedness, or lack thereof, of various human and mechanical processes all while being interdependent with each other causing unpredictable outcomes.
A recipe for chaos? Assuredly!
But Rules 4 and 5 represent the Jidoka pillar: detect, stop and report abnormalities. Then try to remove the abnormalities by problem-solving and improving the activity, connection or flow path with the aid of the Jidoka pillar foundation, Kaizen. And all this should be done at the lowest possible level.
But another thing that the Lean aficionados forgot, or never learned, is that we are not trying to avoid the “stop”. While we are trying very hard to create the JIT flow, if it stops, we need to make that “flow stop” visible. We are then presented with the wonderful opportunity to find out “why” it stops, in real time. We are now more likely see the root-cause of the stop and implement counter-measures to improve the system and prevent future stops. But if the interruption in flow is not visible, we lose that very valuable opportunity – and we learn nothing.
Rules 1, 2 and 3 try to create the flow, but they also make the flow stoppage visible. That is why takt time is built into the first three rules and is an integral part of standard work. Takt makes flow visible. Then Rules 4 and 5 can be used to find the root-cause and put a “stop” to the stops. Or as Taiichi Ohno so rightfully put it:
“A production line that does not stop is either a perfect line or a line with big problems. When many people are assigned to a line and the flow does not stop, it means that problems are not surfacing. This is bad. …There is no reason to fear a line stop.”
But doesn’t all this “stoppage” just add to the complexity of our system? I thought we were supposed to simplify the system. How can we produce good product if the processes are always stopping on us? What a pain!
But that’s the point. We only want to pass on “good” product as we progress through our system. If “bad” product is made, the system must stop. And counter-measures put in place. Mike Rother expresses this concept very eloquently:
“Toyota is achieving quality excellence, for example, not because a process is done the same way each time, but because Toyota is striving to achieve the target condition of the process being done the same way each time. The difference is subtle, but it’s important if you want to understand and successfully emulate Toyota’s success.”
But “bad product” is only one of the attributes we are trying to address. The 5 Rules-in-Use also address “bad processes”. That also falls under the banner of “quality excellence” and is a focus of Jidoka.
Unfortunately, Jidoka is not well understood in the general Lean community. I have had discussions with Lean “gurus” who have told me that they really do not see a practical use for Jidoka in their everyday Lean efforts. In fact, Spear made a mention of this phenomena in the middle of his thesis. Here are his words:
“As I will also discuss elsewhere, though “jidoka” is of great importance to those trained to use TPS, and though the observations of jidoka greatly affected the form and content of the Rules-in-Use, jidoka has been virtually unnoticed by the academic literature. For instance, when I did a key word search in ABI Inform for articles with TPS or “lean manufacturing” terms, only 5 of 2,374 (0.5%) mentioned jidoka.”
The academic world does not understand Jidoka. Then the academic world does not understand TPS!
While Spear does point out that this data was based on “academic literature”, you have to remember that the current Lean movement was started by academics, Womack and Jones, in 1996 with their book “Lean Thinking”. While the word “Lean” was occasionally used to describe TPS since 1988 (by the same MIT academic group), it did not really become a vernacular term until the 1996 book became popular.
On the rare occasion when you do hear the word Jidoka used by the Lean practitioners, they almost always refer to it as promoting “product quality”. But “process quality” is even more important – by a long shot. If you have “process quality” you will almost always achieve “product quality”. The only exception may be if product design is faulty. But then again, that may just mean your product development “process” is faulty.
So the real focus of Jidoka is process quality. The Rules-in-Use also focus on process quality. “Defect-free” product or service is but a sub-heading. As Rother states: “Toyota is striving to achieve the target condition of the process being done the same way each time”. Yes, it’s subtle, but oh so important.
But back to complexity. How do the Rules in Use reduce complexity and lead to simplification? I covered this in some detail in my posts on Rules 1, 2 and 3 but Rules 4 and 5 really make the whole concept work. They provide the Jidoka/Kaizen to Rules 1, 2 and 3. How do they do that? By simplifying the processes underlying the 4 attributes of complex systems.
By having self-diagnostic tests in every rule, which triggers a stop when problems occur, and having a sound, repeatable methodology for problem solving, the Rules-in-Use, over time, reduces the diversity or variability in agent process activities. This tests that effective process connections exist where they are needed and are eliminated where they are not needed and reduces the interactions and thus interdependencies between processes. Adaptation and learning are maximized.
The human effort, money and time required to operate and manage that system are reduced. Less energy is required to run the system. This is the definition of simplicity in the world of complexity theory
But I’m afraid the Lean world is running in the opposite direction. Due to the preponderance of academics and consultants in today’s Lean community, simplicity is contrary to their business models. Simplicity implies you can do it on your own (which I did). But who is going to pay the big bucks for someone to teach them what they can learn fairly quickly with a focused “go and see” and “trial and error” attitude. No, complexity must be sold to engender the “fear factor” that generates big bucks for them.
Here is my favorite slogan, created by Bob Emiliani, that illustrates this pervasive dominance by the elite class with respect to Lean:
Sad but true.
And if you have read any of my earlier posts, you know my affection for the basic “TPS House” created by John Shook. But I was shocked when I discovered the latest iterations of this concept as illustrated in this 2016 version of the “House of Lean”.
Talk about the “fear factor”. This can give you nightmares for weeks.
But there is hope. I ran across this version of a “Lean House” from a Michigan Tech website. They nailed it!
Where is the excited “Respect for People” guy pointing to? The Jidoka pillar sitting atop the Kaizen foundation, of course. Sound familiar?
I will close with a quote from Albert Einstein – the master at conquering complexity!
“Strive for a solution as simple as possible, but no simpler.”
Or better yet, how about this quote from a guy who turned the whole world upside down with respect to “systems thinking” – Charles Darwin!
“It is not the strongest nor the most intelligent of species that survives, but the one that is most adaptable to change”