In this episode of the podcast, the topic is Lean Manufacturing. Our guest is Michel Baudin, author, and owner of Takt Times Group. In this conversation, we talk about how industrial engineering equals the engineering of human work and why manufacturing and industrial engineering education needs to change because it has drifted away from industrial work and a future where manufacturing is not going away.

If you like this show, subscribe at augmentedpodcast.co. If you like this episode, you might also like Episode 84 on The Evolution of Lean with Professor Torbjørn Netland from ETH Zürich.

Augmented is a podcast for industry leaders, process engineers, and shop floor operators, hosted by futurist Trond Arne Undheim and presented by Tulip.

Follow the podcast on Twitter or LinkedIn.

Trond's Takeaway:

Lean manufacturing might mean many things, but industrial work has largely been a consistent practice over several hundred years, which is not necessarily a bad thing. Having said that, if we want to go about improving it, we might want to stay pretty close to the workforce and not sit in statistics labs far removed from it. Efficiency is tied to work practices, and they cannot be optimized beyond what the workforce can handle or want to deal with. As we attempt to be lean, whatever we mean by that, we need to remember that work is a thoroughly human endeavor.

Transcript

TROND: Welcome to another episode of the Augmented Podcast. Augmented brings industrial conversations that matter, serving up the most relevant conversations on industrial tech. Our vision is a world where technology will restore the agility of frontline workers.

In this episode of the podcast, the topic is Lean Manufacturing. Our guest is Michel Baudin, author, and owner of Takt Times Group. In this conversation, we talk about how industrial engineering equals the engineering of human work and why manufacturing and industrial engineering education needs to change because it has drifted away from industrial work and a future where manufacturing is not going away.

Augmented is a podcast for industrial leaders, process engineers, and shop floor operators hosted by futurist Trond Arne Undheim and presented by Tulip. Michel, welcome. How are you?

MICHEL: Fine, thank you. How about yourself?

TROND: Things are good. Things are looking up. I'm excited to talk about lean manufacturing with you, having had such a rich, professional background. Michel, you're French. You originally, I think, were thinking of becoming a probability researcher, or you were actually, and then you went to Japan and studied Toyota. You have had this career in English, German, Japanese sort of consulting all the way back from 1987 onwards on exciting topics, lean manufacturing, and especially implementing it, right? The real deal.

You've authored at least four technical books that I know about. And I think you listed probably a while back, having written 900 blog posts. You've been very busy. You are the owner of the Takt Times Group, which is a consulting firm on lean manufacturing. And you love math, but you have this very interesting attitude, which we'll talk about, which is math is great, but it's not always the best communication tool. Tell me a little about that to start off. You're a probability researcher that doesn't use math; I think that's fascinating.

MICHEL: I use it, but I don't brag about it with people that it turns off. So I have to be in the closet for this because people who work in manufacturing usually focus on concrete things, things that they can see and touch, and abstraction is not something that they respond well to. So whenever you explain a principle, my approach is to state this principle and then dig into some very specific examples right away; otherwise, I'm losing the people I'm talking to. But anyway, that's what I've had to do.

TROND: So, did I capture your background okay? I mean, you've had a very international life so far. I hope it's been enjoyable and not just professional because you've spent your time in Germany, and Japan, and in the U.S., So you're really enjoying the different kinds of manufacturing environments. Or is it that you just want to be close to where it's all happening?

MICHEL: I've enjoyed living in many different countries. And so you mentioned I'm French. I was born and raised in France, but I'm an American citizen, and I spent most of my life in the U.S. I think of myself as being part French, part American, part German, part Japanese. Because when I'm in a country, I tend to immerse myself in the culture; I don't stay aloof from it.

TROND: Well, I'm curious about that because in the abstract... so if we are in the world of math, then you could maybe say that efficiency techniques are global; that was the idea. Some people have that idea, let's say, that efficiency is a global thing, and there's one thing called efficiency, and everybody should just learn it because then it's all better. It seems to me that because you spent a lot of time in three different places, it shows up differently.

MICHEL: I don't use the word efficiency so much because it's limited. There are techniques to improve manufacturing performance in every aspect of it, efficiency only being one of them, and these techniques are pretty universal. Now, when you're trying to help people in different countries, it's a postulate. You have to postulate what works in one place will work in another. So far, I haven't found any reason to believe otherwise.

I have encountered many people who are saying things like, "This is country X, and these techniques don't work because our people are from country X." It's one of the most common techniques to refuse to implement anything new. The fact is the Toyota Production System wasn't supposed to be applicable to American workers until Toyota applied it with American workers in its joint venture with GM in the early 1980s at NUMMI specifically. It became a showcase.

Later, Toyota opened its own factory in the U.S. in Georgetown, Kentucky, and applied the system there. And then, a few years later, it opened its own factory in France, and it worked with French workers. So it's really the idea that this only works in certain cultures or this only works in Japan. It's just the reality is different. It works pretty much everywhere.

TROND: Well, that's fascinating, though, because, like you said, you have immersed yourself in these different factory and industrial cultures, if you may, and you are implementing lean in all of them or advising on lean methods. Why don't we start with that, then, perhaps? Tell me a little bit, what is lean to you?

MICHEL: Lean to me...and I use the term less and less because I think over the past 30 years, it's lost a lot of its meaning. When it first came out, it was the latest in a number of labels that have been applied to the same thing. In the early 1980s, you talked about just-in-time then there was world-class manufacturing. A number of different terms were used and never really caught on. This one caught on.

And the way I took it, I took it to mean generic versions of the Toyota Production System. There are very good reasons why you can't call what you're proposing to a company that makes frozen foods a Toyota Production System. There are also very strong reasons why you can't even go to a car company and do this. It's very awkward for a car company to openly admit to be using a competitor's system. So you have to have a label that refers to the content but doesn't refer to where it's coming from.

TROND: So for you, at the basic level, if you strip away everything, it still is essentially the Toyota Production System, and lean is just to you, I'm just paraphrasing, it's a convenient wrapping for a way to explain it in a way that's non-threatening. But it is essentially the lessons from the Toyota Production System from a while back.

MICHEL: That's the way I took it. That's why I adopted this label in the early 1990s, but a lot of time has elapsed since then. Because it became popular, very many people started using that label. And the content they were putting under it was pretty much...they were attaching this label to whatever they were doing. It has lost a great deal of its meaning which is why at this point, I rarely refer to it.

TROND: So you're saying a lot of people are attaching lean to whatever they're doing, I mean, understandably so, Michel, right? Because it's become a very successful term. It sells books. It sells consulting. It does refer back to something that you think is real. So can you understand why people would do this if you are in consulting, or even in teaching, or you work in an industry, and you're managing something, why people would resort to this label?

MICHEL: First of all, consultants have to have a brand name for what they're selling. It was useful. As a brand name, you have to call what you're offering by a given name, and clients look for this. It's a keyword they look for, and that's how they find you. So it's really necessary. I'm not criticizing consultants for using that.

TROND: No, no, I understand it. And, I mean, you're also a little bit in a glass box in the sense that you are within the general tent of lean yourself. So I understand that. I fully understand it.

MICHEL: What happens when it's successful is that more and more people jump on this bandwagon and say, okay, I'm going to offer a lean. When you look at what they're saying, it does not reflect the original content. By about 2000s, it had evolved into...what most consultants were offering was drawing value stream maps and organizing Kaizen events. Those two keywords are absent from the Toyota Production System.

TROND: Can you explain...so this is interesting. Because I was going to ask you exactly this, what are the types of elements that you react to the most that you feel is really...because one thing is to say it diverged from the original content, but if it is kind of a valuable extension of something...but you're saying value streams and the Kaizens, the Kaizen practices they have very little to do with the Toyota Production System in your reading.

MICHEL: That's right. The value stream mapping is a new name for a technique that they call; I mean the translation of the original name is, Materials and Information Flow Analysis (MIFA), Mono to Joho no Nagare in Japanese, flow of materials and information. So that's one idea.

And there is a particular graphic convention that has actually evolved from Toyota that became the value stream mapping graphic convention, but it never was in the Toyota context. Mike Rother's own admission (He wrote Learning to See, which promoted this technique.) said it was not an important topic at Toyota. It has some uses, but if you go on factory tours in Japan, you don't see a lot of value stream maps.

And so it's been taken...it was a specific tool for a specific purpose like figuring out how to work with a particular supplier. And then it was made into this supposedly all-powerful analytical tool that is the first thing that you have to do when you go into a factory is map its value streams, so that's taking a very small part of what Toyota does and make it into this big thing.

As for Kaizen Events, it's actually an American invention. It's something that came out of...in the early 1990s; there were a number of executives who were frustrated with the slow pace of lean implementation with other methods. So they came up with this format they called the Kaizen Blitz, that became the Kaizen events. It's also traced back to some Japanese consulting firms, which found this particular format as a convenient way to make good use of a trip from Japan to the U.S. They would organize one-week events at their clients because it was a good way to justify essentially the cost and the trouble of flying over.

TROND: I'm going to go with your story here. So let's say these two are kind of examples for you of things diverting from the original content. Why don't we speak about what the original content then is for a minute? What is the core of the Toyota production method or of lean in its original form for you?

MICHEL: Well, the Toyota Production System is something I'm very interested in and still studying. And it's not a static thing. It's something that, for example, the first publication about it was from the early 1970s, an internal document from Toyota with its suppliers. And then there have been many, many other publications about it through the decades. And it's changed in nature, and the concepts of manufacturing have evolved.

By definition, the Toyota Production System is what Toyota does. They're very good at making cars. And so it's always important to try to keep up with what it is they're doing, knowing that there is a 5 to 10-year gap between the time they come up with new concepts and the time that the rest of the world gets to know about them.

And so, in the early 1990s, there were essentially concepts of how to organize production lines, how to lay out production lines, how to design operator workstations. And there were concepts on how to regulate and manage the flow of materials and the flow of information between stations and lines and between suppliers and customers. And there was also an approach to the management of people and the whole human resource management aspect of hiring people for careers, having career plans for everybody, including shop floor operators, managing to improve the operations based on this infrastructure.

So it's a very rich concept, and it encompasses every aspect of manufacturing, logistics, and production control, all the way to accountability. So it's compared with other things like the Theory of Constraints or TPM that are much more limited in scope. There is an approach to quality that Toyota has. The quality improvement is not all of the Toyota Production System. It's a complete system for making a product covering all the bases.

TROND: Let me just pick up on one thing, so you're saying it's a complete system. So one thing you pointed out was the HR aspect, and hiring people for careers is one thing, but you also said the career plans for shop floor operators. So I took two things from that, and I was going to ask about this because this has been used as one example of why you cannot implement the Toyota Production System in the same way in different countries, namely because that is one aspect of society that a company doesn't fully control because it is regulated.

So, for example, in Europe and in France, which you know, really well, and Germany, you know, employment is regulated in a different way. If a company was going to have the same HR policy in three different factories in three different countries, they would have to have, first of all, obviously, follow the national regulation. But then they would have to add things on top of that that would, you know, specific employee protections that are perhaps not part, for example, of U.S. work culture. So that's one thing I wanted to kind of point to.

But the other thing is interesting. So you said career plans for shop floor operators meaning Toyota has a plan for even the basic level worker meaning the operators, the people who are on the floor. And that seems to me a little bit distinct. Because in the modern workplace, it is at least commonly thought that you spend more time both training and caring about people who are making career progression.

And you don't always start at the bottom. You sort of hope that the smart people or whatever, the people who are doing the best job, are starting to advance, and then you invest in those people. But you're saying...is there something here in the Toyota Production System that cares about everybody?

MICHEL: Yes. But let me be clear about something. The way Toyota manages HR is not something that there are a lot of publications about. There's probably a good reason for this is because they probably consider it to be their crown jewel, and they're not that keen to everybody knowing about it. A lot of the publications about it are quite old. But there's nothing in the regulations and labor laws of any country that prevent you from doing more for your employees than you're required to.

TROND: That's a great point. That's a great point.

MICHEL: So there are laws that forbid you from doing less than certain things, but they're not laws that prevent you from doing more. There is no rule that you have to offer career plans for production operators because there's nothing preventing you from doing it. In a completely different situation, a large company making personal products ranging from soap to frozen foods...I won't name what the company is, but they have a policy of not being committed to their workers. Essentially, if business is good, you hire people. If there's a downturn, you lay people off.

They wanted to migrate from the situation where you have a lot of low-skilled employees that are essentially temps to a situation where they have higher level of qualification and fewer people. So the question is, how do you manage the transition? The way this company eventually did it in this particular plant was to define a new category of employee like, say, technical operator.

And a technical operator will be recruited at higher a level of education than the general population of operators. They will be given more training in both hard skills and soft skills and the specific processes they're going to be running, and some additional training on how to manage the quality of these processes, that sort of thing. But at the level of a production operator, they will be put in charge of these processes. And this small group would be separate job categories than the others. And gradually, this evolves to a situation where you only hire into this group. You don't hire any more of the traditional operators.

And then, you provide a transition path for the other operators to become members of that group so that over a period of time, gradually, the general population of less skilled, less stable operator shrinks. And you end up over a number of years with a situation where all of the operators that you have are these highly trained operators who are there for the duration. So that's one kind of pattern on how you can manage this kind of transition.

TROND: Super interesting. Can I ask you a basic question? So you've been in this consulting part of this venture, you know, of this world for a long time. Where do you typically start? When do you get called, or when do you sign up to help a company, at what stage? What sort of challenge do they have? Do you visit them and tell them they do have a challenge? What is the typical problem a company might have that you can help with or that you choose to help with?

MICHEL: There are a lot of different situations. One particular case was a company in defense electronics in the U.S. had a facility in Indiana, and they were migrating all this work to a new facility in Florida. What they told me...they called me in, and they told me that they wanted to take the opportunity of this move to change the way they were doing production. Generally, my answer to that would be, well, it's really difficult to combine a geographical change of facility with an improvement in the way you do the work. Normally, you improve first where you are. You don't try to combine transformation and migration.

TROND: It's a funny thing, I would say. It seems like the opposite of what you should be doing to try to make one change at a time.

MICHEL: But there were several circumstances that made it work. You can have general principles, and when you're in a real situation, it doesn't always apply. One is the circumstances under which they were doing this migration was such that the people in the old plant were in an environment where there was a labor shortage, so none of them had any problem finding jobs elsewhere if they didn't want to move to Florida. If they wanted to move to Florida, they could, if they didn't want to move to Florida, they had to leave the company, but there were plenty of other companies hiring around.

And so there was not this kind of tension due to people losing their jobs and not having an alternative. And then, the transition was announced way ahead of time, so they had something like a 15-month period to plan for their transfer. And to my great surprise, the operators in the old plan were perfectly...were very helpful in figuring out the design for the new lines and contributed ideas. And there was no resentment of that situation.

TROND: In this particular example and in other examples, to what extent is production, you know, process redesign a technology challenge, and to what extent is it a human workforce challenge? Or do you not separate the two?

MICHEL: I try not to separate the two because you really have to consider them jointly. A technical solution that nobody wants to apply is not going to be helpful. And something everybody wants to apply but that doesn't work, is not going to be helpful either. So you have to consider both. And in this transition, by the way, between these two plants, most of the labor difficulties were in the new plant, not in the old one, because this plant became a section of the new plant. And none of the other lines in that new plant did anything similar, so it stood out as being very different from what all the other lines did.

What all the other lines did is you had a structure that is common in electronics assembly where you have rows of benches at which people sat and did one operation, and then the parts were moved in batches between these rows of benches. And instead of that, we put cells where the parts moved one at a time between different operations. And it was also organized so that it could be expanded from the current volume of work to higher volume of work. And so a lot more went into the design.

I was a consultant there, but I don't claim credit for the final design. It was the design of the people from the company. They actually got a prize within the company for having done something that was exceptionally good. And when I spoke with them a few years later, they had gone from having something like 20% of the space used for production in the new facility to having it completely full because they were able to expand this concept.

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TROND: Michel, I know that you have a consulting life and a consulting hat, but you also have a teaching hat and a teaching passion. Why did you write this recent textbook which is coming out on Routledge this fall, I believe, with Torbjø Netland from ETH? It's an Introduction to Manufacturing but with a very specific kind of industrial engineering perspective.

You told me when we talked earlier that there's a really specific reason why you wrote this textbook, and you have some very, I guess, strong views or worries about how manufacturing education, but perhaps the way it's taught really needs to change. And you feel like some schools are drifting away from the core. What's happening there?

MICHEL: Well, industrial engineering as a discipline is about 100 years old, take or leave a decade or two. It started out as...the way I describe it is the engineering of human work in the manufacturing environment. And it expanded to fields other than manufacturing, even at the time of pioneers like Frank and Lillian Gilbreth.

For example, we know the way operating rooms in hospitals work with the surgeon being assisted by nurses who hand all the tools to the surgeon; that particular form of organization is due to Frank and Lillian Gilbreth, industrial engineers who looked at the way operating rooms worked and figured that you really don't want to leave a patient with his belly open on the table while the surgeon goes to fetch the tool. You got to have some people giving the tools to the surgeon so that the surgeon can keep operating on the patient.

It sounds obvious now, but it wasn't obvious in 1910. And so they were immediately some applications outside of manufacturing, but the bulk of the work was on manufacturing. And the way it's evolved, especially in the past few decades, is that it's gotten away from that focus on human work. And when you look at the research interests of the academics in this field, you find that it's completely dominated by operations research and math.

TROND: So we're back to the math. [chuckles] So I find it fascinating that...well, you obviously have a deep insight into it, so you are sensitized to the challenges of overfocusing on one technical discipline as kind of the mantra and the fodder, I guess, the research data for all kinds of processes. I mean, why is math such a big problem, and what do you mean by human work in industrial manufacturing? Because to many people, the advanced work right now is about digitization, digitalization, and it has to do with machines and computers, and one would assume with big data or at least with data. Are you arguing against that trend?

MICHEL: No. I mean, if you ask the question of what is human work? The classical answer that I would give is what happens when the guy picks up the wrench. That's one answer. But what happens when the operator sees an alarm message on the control screen of a machine, that's a different answer, a more modern answer. So you had people with the torque wrench applying the right torque to a bolt manually, and then the torque wrench would tell him when the torque was achieved. That's one form of human work.

But monitoring and looking after multiple machines that are connected and have a central control system is also human work. You also have people doing it. And they have to feed these machines. They have to make sure that the machines have the right kinds of tools and dyes available to them. They have to maintain these machines. They have to program these machines, and they have to monitor them during production. And one particular problem with automatic systems is micro stoppages. Are you familiar with that term?

TROND: Well, explain it to all of us, micro stoppages. I mean stoppages, obviously, anything that stops the production line, whether it's a minor, major, I mean, that would be what I think you are saying.

MICHEL: Well, if it's a big problem, the operator doesn't solve it. The operator calls maintenance, and maintenance sends somebody to solve it. Micro stoppage is a problem that's small enough for the operator to deal with. And so, in daily life or in any office life, one very common micro stoppage problem is the copier, right? You tell the copier to print 20 collated copies of a document, and you walk away expecting to find these 20 copies ready when you come back. It doesn't happen because there are some paper jams and so you have to clear the paper jam and restart.

You have a lot of things like that in production where parts jam and shoots and stop coming down in automatic system. You have all sorts of issues like this which cause production lines to stop in a way that the operator can resolve in half a minute or a minute and restart. What these things cause is that you have to have an operator there.

And so if you really want to have an automatic system that are fire and forget...when you press a button, you move away to do something else while the machine goes through an automatic cycle. When that automatic cycle is finished, you come back. Micro stoppages prevent you from doing that. And they're very difficult to avoid, but they're a major problem, even today.

TROND: Michel, I wanted to keep talking about the educational part. But before that, I just wanted to benefit from your experience here and ask you a much more basic question which is so you're writing this textbook about the future or introducing prospective students to industrial engineering and manufacturing.

My question is, historically, factories were a very, very big part of manufacturing. Nowadays, meaning in the last few years after the pandemic and other things, a lot of us start to spend a lot more time on an issue, which I'm assuming you have spent a lifetime working on as well, which is supply chain which goes far beyond the factory because it's not located in any one factory, if anything, it's a system of many factories, and it's obviously the supplies of material flows into the factory.

And the reason I'm asking you about this is in thinking about the future, which I'll ask you about in a second, a lot of people are sort of factory of the future, this and that. And there are visions about how this is going to change. But it strikes me that manufacturing is and has always been so much more than the factory. What are the components that you really worry about? So, humans, you worry about humans. And you worry about materials. And then you obviously have to worry about the physical infrastructures that are regulating these things. What else goes into it on the macro level? What is this book about, I guess?

MICHEL: We're talking about supply chains as well because, as you mentioned, they're a very important part of manufacturing. And when you design a manufacturing system to make a product, you have to make decisions about your products, about components of your product, and what you make in-house, and what you buy from the outside.

And there's a major difference between supply chain issues relating to customers, on one hand, the suppliers on the other. It's not just suppliers; it's both sides, incoming supply chain and the outgoing as well. One major difference with what happens in the factory is that you don't control what other people decide, what other organizations decide. So when you manage a supply chain, you have to manage a network of organizations that are independent businesses.

How do you get this network of independent businesses to work with you, to cooperate with you, to make your manufacturing successful? That is a big challenge in supply chain management. Inside a factory, that's an environment you control. It's your organization. What management says is supposed to go; it doesn't always, but it's supposed to go. And you have a lot more control over what happens inside than over what happens in the supply chain.

And how much control you have over what happens in the supply chain depends greatly on your size. For example, if you're a small customer of a special kind of alloy that only has one manufacturer in the world, you're a very small customer to a very large manufacturer, a metals company. You're not in a position of strength to get that supplier to work with you.

If you're a car company making 10 million cars a year and you're dealing with a company that is making forgings for engine parts, you have a lot of control. You have a lot of influence. You represent a large part of their business. They can't afford to lose you. You can't afford to lose them. You can replace them if they don't perform. They can't afford to lose you. They might go out of business if they did. So it's a very different kind of position to be in.

And so when you deal with that sort of thing, you have to think through, what is my position with respect to suppliers and customers? Where is it? Where's the driving influence? And it's not always...power in a supply chain is not always resident with the company that does the final assembly of consumer products. In electronics, for example, semiconductor manufacturers are much more key than people who assemble computers.

TROND: I wanted to ask you a little bit about the trends and how these things are evolving in the next decade and beyond that. And one example you gave me earlier when we talked was pilots and jetliners because manufacturing in...well, the aviation industry is an example of an industry that, yes, it has an enormous amount of high tech. It's a very advanced science-based development that has produced air travel. But yet these pilots...and I experienced it this summer, a pilot strike stops everything.

So the role of people changes as we move into more advanced manufacturing. But people don't always disappear. What do you see as the biggest challenge of manufacturing and the role of manufacturing in the emerging society? What is going to happen here?
MICHEL: What I think is going to happen is that in many countries, the manufacturing sector will remain a large part of the economy, but as economies advance, it will have a shrinking share of the labor market. So it's a distant future, maybe like that of agriculture, where 2% of the population does the work necessary to feed everybody else.

And manufacturing is now about 10% of GDP in the U.S., 20% in Germany and Japan, about 10% in England, France, Italy. In China, we don't really know because they don't separate manufacturing from industry. And industry is a broader category that includes mining, and it includes road construction, et cetera. They don't separate out manufacturing, but really, it's a big sector of the economy.

And so it can remain a big sector, that's not a problem. But you have to think through a transition where the number of people that you employ doing this kind of work goes down, their level of qualifications go up, and the nature of the work they do evolves towards telling machines what to do and maintaining machines. So telling machines what to do can be programming machines when you develop processes, or it can be scheduling what work the machines do.

TROND: Is that incidentally why you have gone into teaching in a kind of an academic setting or at least influencing curriculum in an academic setting so much that you see a role here in the future? Beyond what's happening in factories today, you're quite concerned about what might happen in factories ten years from now, 20 years from now when these students become, I guess, managers, right? Because that's what happens if you get education in management at a good school, reading your hopefully great textbook. It takes a little time because you trickle down and become a manager and a leader in industry.

So I guess my question then is, what is it that you want these people to know ten years from now when they become leaders? What sort of manufacturing processes should they foster? It is something where humans still matter for sure, and machines will have a bigger part of it. But there's things we need to do differently, you think?

MICHEL: The airline pilot metaphor, you know, you have this $300 million piece of equipment. And how much money you make from operating it depends on these two people who are in the pilot's cabin. You have to pay attention to the work of people. And in most factories, the work of people today is an afterthought. So you put in machines. You put in production lines without thinking how will people get from the entrance of the building to where they actually work?

TROND: I was going to say it's a fascinating example you had with the airline industry in the sense that, I mean, honestly, even in the old industrial revolution, these machines were expensive, but I guess even more so. I don't know if you've done any research on this, but the amount of dollars invested per worker presumably has to go up in this future you are talking about here where we're increasingly monitoring machines, even these perhaps in the past viewed as low-skilled jobs or operator jobs.

I mean, you are operating, maybe not airplanes, but you're operating industrial 3D printers that cost hundreds of thousands of dollars with presuming error rates that could be catastrophic, either for you, for the production line, or for the product you're making.

MICHEL: Or photolithography machines that cost millions.

TROND: Right. But then that begs the question for me, Michel, how on earth is it possible? If you are right about this that education has been somewhat neglected and skills has been neglected, how's that even explainable? If you are a responsible factory manager or executive of a large manufacturing firm, how could it have gotten...and I'm obviously paraphrasing here. I don't know if you think it's that bad. But how could it get this bad that you actually had to come out and say it's a massive problem?

MICHEL: What happens is that you hear a lot about systems thinking, which, to me, it's pretty obvious there's more to a factory or more to a manufacturing system, to supply chain than the collection of its components; it's pretty obvious. And when you change the way a supplier delivers parts, it has an impact over what happens at the assembly workstations where these components are being used, for example.

You have to think of the whole as a system. And you have to think about whenever you make any changes to it; you have to think through how these changes affect the whole. What's happening is that there has been a great deal of specialization of skills; I'm not talking about factory workers here. I'm talking about engineers and managers that have been put into silos where they run production control. They become production control manager in the factory. Their next career move is to become production control manager in the factory of a different company.

TROND: So here's my open-ended question to you; you're sort of saying that industrial engineering, in one sense, needs to go back to its roots where it was. But the other side of the coin here is you're also talking about a world that's changing drastically. So my question is, the industrial engineer of the future, what kind of a person is this ideally, and what sort of skill sets and what sort of awareness does this person have?

MICHEL: The skill sets that this person should have are both technical and managerial. It's management and technology considered together. So they may not be able to write code, or they may not be able to design how to cut a piece of metal, or how to tweak the electrical properties of a circuit, but they know the importance of these things. They've been exposed to them through their education and career. And they have an appreciation for what they are.

So, for example, one particular task that has to be done in every manufacturing organization is technical data management. You have to manage the problem definition, the process definitions, which machines you use to do what, down to the process program that these machines run. All of this is data, technical data that has to be managed, put under revision control. And you'd expect someone with training in industrial engineering to understand the importance of revision control on this.

If you change something to the cutting program of a milling machine, you may affect what happens elsewhere. You may affect the mechanical properties of the product and make it difficult to do a subsequent operation later. And that's why before you implement this change in production, you have to have a vetting process that results in revision management. So I would expect an industrial engineer to understand that.

TROND: Well, you would expect an industrial engineer to understand that, but, I mean, some of the challenges that come from these observations that you're making here they impact all operators, not just engineers. And they certainly impact managers because they are about this whole system that you are explaining. So it sounds to me that you're mounting a pretty significant challenge to the future manufacturers, not just in skills development but in evolving the entire industrial system.

Because if we're going to make this wonderful spacecraft, and solve the environmental crisis, and build these new, wonderful machines that everybody expects that are going to come churning out every decade, we certainly need an upskilled workforce, but we need a whole system that works differently, don't we?

MICHEL: Yes. Can I give you a couple of examples?

TROND: Yeah.

MICHEL: One company outsourced the production of a particular component to a supplier then there were technical problems with actually producing this component with the supplier. So the customer company sent a couple of engineers to the supplier, and they found some problems with the drawing that had been provided to the supplier. And they made manual corrections to the drawings, the copies of the drawing in possession of the supplier. And it worked. It solved the immediate problem. But then, at the customer company, they didn't have the exact drawing. The only place with the exact drawings was at the suppliers. And a few years later, they wanted to terminate this supplier.

TROND: Aha.

MICHEL: You can see the situation. You want people to be able to understand that you just don't do that sort of thing.

TROND: Right. So there are so many kinds of multiple dependencies that start to develop in a manufacturing production line, yeah.

MICHEL: And then you find a company that's a subcontractor to the aircraft industry. And you find out they route parts through a process that has about 15 different operations. And the way they route these parts is they print a traveler that is 50 pages long, and it's on paper. And the measurements they make on the parts that they're required to make by their customer they actually record by hand on this paper. What's wrong with this picture?

TROND: So yeah, multiple challenges here.

MICHEL: Yes.

TROND: Are you sensing that these things are fixable? Are you optimistic in terms of this awareness of all aspects of the systems changing both among managers and next-generation industrial engineers, and perhaps even among the operators themselves to realize they're getting a more and more central role in the production system?

MICHEL: I won't try to prophesy what will happen to industry as a whole but what I'm confident about is that the companies that know how to address these problems will be dominant. Those are the sort of basic mistakes that really hurt you and hurt your competitive position. So there will be a selection over time that will eliminate people who do these kinds of mistakes.

TROND: Michel, I don't want to put you on the spot here. And you have spent your career researching and tracking Toyota as an excellent, excellent manufacturer that has graciously taught other manufacturers a lot. And also, people have copied and tried to teach them Toyota methods, even if Toyota wasn't trying to teach everyone.

Are there any other either individual companies or things that you would point to for the eager learner who is trying to stay on top of these things? I mean, so lean, obviously, and the Toyota Production System is still a reference point. But are there any other sources that in your career or as you're looking at the future where there is something to learn here?

MICHEL: Oh yes. Toyota is a great source of information, but it's by far...it's not the only one. One of the key parts of Toyota's management system is Hoshin Planning. Hoshin Planning didn't come from Toyota; it came from Bridgestone tires. And so that's one case where a different company came up with a particular method.

Honda is a remarkable company as well, so there are things to learn from Honda. HP was, under the leadership of its founders, a remarkable company. And they had their own way of doing things which they called The HP Way. Companies have recruited a lot of people...electronic companies have recruited a lot of people out of HP. And you feel when you meet the old timers who have experienced The HP Way, they feel nostalgia for it. And there were a lot of good things in The HP Way. They're worth learning about. So I also believe that it's worth learning about historical examples because history is still with us in a lot of ways.

The Ford Model T plant of 100 years ago was a model for a lot of things at the time. It also had some pretty serious flaws, namely, its flexibility. And you still see people putting up the modern-day equivalent of a Model T plant with new products and new technology but without thinking about the need. That particular plant may have to be converted in the not-too-distant future into making a different product. So it's always worth looking at examples from 100 years ago, even today, not for the sake of history but because, in a lot of ways, history is still with us.

TROND: Well, on that note, history is still with us; I thank you for this, Michel. And I shall remember to forget the right things, right? So history is still with us, but [laughs] you got to know what to remember and what to forget. Thank you so much.

MICHEL: Culture is what remains once you've forgotten everything.

TROND: [laughs] On that note, Michel, thank you so much for your time here and for sharing from your remarkable journey. Thank you.

MICHEL: You're welcome.

TROND: You have just listened to another episode of the Augmented Podcast with host Trond Arne Undheim. The topic was Lean Manufacturing. Our guest was Michel Baudin, author, and owner of The Takt Times Group. In this conversation, we talked about how industrial engineering equals the engineering of human work and why manufacturing and industrial engineering education needs to change because it has drifted away from industrial work. And indeed, we are looking at a future where manufacturing is not going away.

My takeaway is that lean manufacturing might mean many things, but industrial work has largely been a consistent practice over several hundred years, which is not necessarily a bad thing. Having said that, if we want to go about improving it, we might want to stay pretty close to the workforce and not sit in statistics labs far removed from it. Efficiency is tied to work practices, and they cannot be optimized beyond what the workforce can handle or want to deal with. As we attempt to be lean, whatever we mean by that, we need to remember that work is a thoroughly human endeavor. Thanks for listening.

If you liked the show, subscribe at augmentedpodcast.co or in your preferred podcast player, and rate us with five stars. If you liked this episode, you might also like Episode 84 on The Evolution of Lean with Professor Torbjørn Netland from ETH Zürich. Hopefully, you'll find something awesome in these or in other episodes, and if so, do let us know by messaging us because we would love to share your thoughts with other listeners.

The Augmented Podcast is created in association with Tulip, the frontline operation platform connecting people, machines, devices, and systems used in a production or logistics process in a physical location. Tulip is democratizing technology and empowering those closest to operations to solve problems. Tulip is also hiring, and you can find Tulip at tulip.co.

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Augmented — industrial conversations that matter. See you next time.

Special Guest: Michel Baudin.

The topic is "The People Side of Lean." Our guest is Jeffrey Liker, academic, consultant, and best-selling author of The Toyota Way. In this conversation, we talk about how to develop internal organizational capability and problem-solving skills on the frontline.

If you liked this show, subscribe at augmentedpodcast.co. If you liked this episode, you might also like Episode 84 on The Evolution of Lean.

Augmented is a podcast for industry leaders, process engineers, and shop floor operators, hosted by futurist Trond Arne Undheim and presented by Tulip.

Follow the podcast on Twitter or LinkedIn.

Trond's Takeaway:

Lean is about motivating people to succeed in an industrial organization more than it is about a bundle of techniques to avoid waste on a factory production line. The goal is to have workers always asking themselves if there is a better way.

Transcript:

TROND: Welcome to another episode of the Augmented Podcast. Augmented brings industrial conversations that matter, serving up the most relevant conversations on industrial tech. Our vision is a world where technology will restore the agility of frontline workers.

In this episode of the podcast, the topic is the People Side of Lean. Our guest is Jeffrey Liker, academic, consultant, and best-selling author of The Toyota Way. In this conversation, we talk about how to develop internal organizational capability, problem-solving skills on the frontline.

Augmented is a podcast for industry leaders, process engineers, and shop floor operators, hosted by futurist Trond Arne Undheim and presented by Tulip. Jeffrey, how are you? Welcome to the podcast.

JEFFREY: Thank you.

TROND: So I think some people in this audience will have read your book or have heard of your book and your books but especially the one that I mentioned, Toyota. So I think we'll talk about that a little bit. But you started out as an engineering undergrad at Northeastern, and you got yourself a Ph.D. in sociology. And then I've been reading up on you and listening to some of the stuff on the musical side of things. I think we both are guitarists.

JEFFREY: Oh, is that right?

TROND: Yeah, yeah, classical guitar in my case. So I was wondering about that.

JEFFREY: So I play also a classical guitar now. I played folk and rock earlier when I was young. But for the last more than ten years, I've been only studying classical guitar.

TROND: Well, so then we share a bunch of hours practicing the etude, so Fernando Sor, and eventually getting to the Villa-Lobos stuff. So the reason I bring that up, of course, beyond it's wonderful to talk about this kind of stuff with, you know, there aren't that many classical guitarists out there. But you said something that I thought maybe you could comment on later. But this idea of what happened to you during your studies of classical guitar actually plays into what you later brought into your professional life in terms of teaching you something about practicing in particular ways. So I hope you can get into that.

But obviously, you've then become a professor. You are a speaker and an advisor, and an author of this bestseller, The Toyota Way. Now you run some consulting. And I guess I'm curious; this was a very, very brief attempt at summarizing where you got into this. What was it that brought you into manufacturing in the first place? I mean, surely, it wasn't just classical guitar because that's not a linear path. [laughs]

JEFFREY: No. So for undergraduate, I had basically studied industrial engineering because I didn't really know what I wanted to do with my life. And my father was an engineer. And then I literally took a course catalog and just started reading the descriptions of different kinds of engineering. And industrial engineering was the only one that mentioned people. And in theory, industrial engineering is a systems perspective which integrates people, materials, methods, machines, the four Ms.

And in the description from Northeastern University, they said it's as much about human organization as it is about tools and techniques. So that appealed to me. When I got to Northeastern...I was not a particularly good high school student. So I didn't have a lot of choices of what colleges I went to, so Northeastern was pretty easy to get into. But they had a cooperative education program where you go to school, and you work. You go back and forth between school and work and had a pretty elaborate system for setting you up with jobs.

I got one of the better jobs, which was at a company called General Foods Corporation at the time, and they make things like Jell-O, and Gravy Train dog food, and Birds Eye vegetables, and a lot of other household names, Kool-Aid, all automated processes, even at that time in the 1970s. And they had been experimenting with something called socio-technical systems, which is supposed to be what I was interested in, which is bringing together the social and technical, which no one at Northeastern University had any interest in except me.

But I was very interested in this dog food plant where they were written up as a case study pioneer. And the basic essence of it was to give groups of people who are responsible, for example, for some automated processes to make a certain line of Gravy Train dog food, give them responsibility for all their processes, and they called them autonomous workgroups. And what we try to do is as much as possible, give them all the responsibility so they can work autonomously without having to go and find the engineer or deal with other support functions, which takes time and is kind of a waste.

So that fascinated me. I studied it. I wrote papers about it even in courses where it didn't fit. But the closest I could get to the social side was through sociology courses which I took as soon as I was able to take electives, which was about my third year. And I got to know a sociology professor closely and ultimately decided to get a Ph.D. in sociology and did that successfully, published papers in sociology journals at a pretty high level. And then discovered it was really hard to get a job.

TROND: Right. [laughs]

JEFFREY: And there happened to be an advertisement from an industrial engineering department at University of Michigan for someone with a Ph.D. in a social science and an undergraduate degree in industrial engineering. And I was probably the only person in the world that fit the job. And they were so excited to hear from me because they had almost given up. And I ended up getting that job quickly then getting to Michigan excited because it's a great university.

I had a low teaching load. They paid more than sociology departments. So it was like a dream job. Except once I got there, I realized that I had no idea what I was supposed to be doing [chuckles] because it wasn't a sociology department. And I had gotten away from industry. In fact, I was studying family development and life’s course development, and more personal psychology and sociology stuff. So I was as far away as I could be. So I had to kind of figure out what to do next.

And fortunately, being at Michigan and also being unique, a lot of people contacted me and wanted me to be part of their projects. And one of them was a U.S.-Japan auto study comparing the U.S.-Japan auto industry going at the same time as a study at MIT and Harvard that ultimately led to the book The Machine That Changed the World, which defined lean manufacturing. So this was sort of a competitive program. And they asked me to be part of it, and that's what led to my learning about Toyota. I mean, I studied Toyota, Nissan, Mazda mainly and compared them to GM, Ford, and Chrysler. But it was clear that Toyota was different and special.

And ultimately, then I learned about the Toyota Production System. And from my perspective, not from people in Toyota, but from my perspective, what they had done is really solve the problem of socio-technical systems. Because what I was seeing at General Foods was workers who were responsible for technical process and then were given autonomy to run the process, but there was nothing really socio-technical about it. There was a technical system, and then there was social system autonomous work groups and not particularly connected in a certain way.

But the Toyota Production System truly was a system that was designed to integrate people with the technical system, which included things like stamping, and welding, and painting, which were fairly automated as well as assembly, which is purely manual. And Toyota had developed this back in the 1940s when it was a lone company and then continued to evolve it.

And the main pillars are just-in-time and built-in quality. They have a house, and then the foundation is stable and standardized processes. And in the center are people who are continuously improving. Now, the socio-technical part the connection is that just-in-time for Toyota means that we're trying to flow value to the customer without interruption.

So if what they do is turn raw materials into cars that you drive, then anything that's turning material into a component or car physically is value-added, and everything else is waste. And so things like defects where you have to do rework are waste. And machines are shut down, so we have to wait for the machines to get fixed; that's waste. And inventory sitting in piles doing nothing is waste. So the opposite of waste is a perfect process.

And Toyota also was smart enough, and all that they figured out was more like folk learning or craft learning. It was learning from doing and experience and common sense. And they didn't particularly care about linking it to academic theories or learning from academic theories, for that matter.

So their common sense view is that the world is complicated. Humans are really bad at predicting the future. So the best we can do is to get in the ballpark with what we think is a good process and then run it and see how it fails. And then the failures are what lead to then the connection of people who have to solve the problems through creative thinking. So that was the integration that I did not see before that.

TROND: Just one thing that strikes me...because nowadays, comparing the U.S. or Europe and Asia in terms of business practices, it's sort of like, oh, of course, you have to compare them because they are culturally different. But it strikes me that in the automotive industry, was it immediately really clear to you at the outset that there would be such striking differences between the Japanese and the U.S. auto industry? Or is that actually something that had to be studied? Or was it something that was known, but no one really knew exactly what the differences were?

JEFFREY: So it wasn't like the American auto companies figured out that if they get good at using chopsticks, they'll be good at making cars. They weren't looking for something peculiar in Japanese culture. But they were addressing the more general problem, which was that Japanese companies were making small fuel-efficient cars at low cost with high quality. And none of the American companies could do that. The costs were higher. The quality was terrible compared to Japan. They took a long time to do everything, including developing cars.

So somehow, the Japanese were purported, they weren't convinced this was true, but according to the evidence, the Japanese were purported to be better at just about everything. And the Americans wanted to know why particularly. And at that time, there had been an oil crisis, and there was a demand for small cars. The real question they were interested in is how could they make small cars that were competitive with the Japanese? So they had to understand what the Japanese were doing.

Now, they realized that some of what the Japanese were doing were purely technical things that had nothing to do with culture. And then there was also a level of attention to detail and motivation that maybe was, for some reason, peculiar to Japan. But they needed to figure out how to replicate it in the United States.

And then, in addition to that, they had Americans like Dr. Deming, who had gone to Japan and taught the Japanese supposedly quality control methods. And Japanese companies had taken quality control methods that were created in the United States more seriously than the American companies. So part of it was relearning what came from America to Japan and got done better. So it wasn't necessarily this kind of strange place, and how can we emulate this strange culture?

TROND: Right. But that becomes then your challenge then, right? Because what you then discover is that your field is immensely important to this because what you then went on to do is...and I guess part of your consulting work has been developing internal organizational capability. These are skills that particular organizations, namely Toyota, had in Japan. So you're thinking that this then became...it's like a learning process, the Japanese learned some lessons, and then the whole rest of the automotive industry then they were trying to relearn those lessons. Is that sort of what has been happening then in the 30 years after that?

JEFFREY: Yeah, the basic question was, why are they so good? Why are we so bad? And how can we get better in America? Then there were lots of answers to that question coming from different people in different places. My particular answer was that Toyota especially had developed a socio-technical system that was extremely effective, that was centered on people who were developed to have the skills of problem-solving and continuous improvement. And while the study was going on, they were doing a study out of MIT that led to The Machine That Changed the World.

And around that same time, a joint venture between Toyota and General Motors had been formed called NUMMI. It was in California. And in their first year, it was launched in 1983, and in the first year, they had taken what was the worst General Motors plant in the world, with the worst attendance, the worst morale, workers who were fighting against supervisors every day, including physically fighting with them, terrible quality, and General Motors had closed the plant because it was so bad.

And then, in the joint venture, they reopened the plant and took back 80% of the same workers who were like the worst of the worst of American workers. And within a year, Toyota had turned the plant around so that it was the best in North America with the best workers.

TROND: That's crazy, right? Because wouldn't some of the research thesis in either your study or in the MIT study, The Machine That Changed the World, would have to have been around technology or at least some sort of ingenious plan that these people had, you know, some secret sauce that someone had? Would you say that these two research teams were surprised at finding that the people was the key to the difference here or motivating people in a different way?

JEFFREY: Well, frankly, I think I probably had a better grasp that people were really the key than most other researchers because of my background and my interest in human-centered manufacturing. So I was kind of looking for that. And it was what the Toyota people would say...whenever they made a presentation or whenever you interviewed them, they would say, "People are kind of distracted by the tools and methods, but really at the center are people."

And generally, most people listening to them didn't believe it, or it didn't register. Because Toyota did have cool stuff, like, for example, something called a kanban system, which is how do you move material around in the factory? They have thousands of parts that have to all be moved and orchestrated in complicated ways. And Toyota did it with physical cards.

And the concept was a pulse system that the worker; when they see that they're getting low on parts, they take a card and they post it. They put it in a box, and then the material handler picks it up. And they said, okay, they need another bin of these. On my next route, I'll bring a bin of whatever cards I get.

So they were replenishing the line based on a signal from the operator saying, "I need more." So it was a signal from the person who knows best what they need. And it also, from Toyota's point of view, put the employee in the driver's seat because now they're controlling their supply in addition to controlling their work process. And it didn't require that you predict the future all the time because who knows what is happening on the line and where they're backed up, and where they maybe have too many parts, and they don't need more? But the worker knows. He knows when he needs it and when he doesn't.

It was kind of an ingenious system, but the fact that you had these cards moving all over the factory and thousands of parts are moving just to the right place at the right time based on these cards, that was fascinating. So a lot of the consumers were more interested in that than they were in the people aspect, even though Toyota kept talking about the people aspect.

TROND: But so this is my question, then there was more than one element that they were doing right.

JEFFREY: There were multiple elements, yeah.

TROND: There were multiple elements. Some of them were structural or visual, famously.

JEFFREY: Right.

TROND: But you then started focusing, I guess, on not just the people aspect, but you started structuring that thinking because the obvious question must have been, how can we do some of this ourselves? And I guess that's my question is once you and the team started figuring out okay, there are some systematic differences here in the way they motivate people, handle the teams, but also structure, honestly, the organizational incentives minute by minute, how then did you think about transferring this? Or were you, at this point, just really concerned about describing it?

JEFFREY: Like I said, I was kind of unusual in my background, being somewhere between industrial engineering and sociology and being in industrial engineering departments. So maybe I wasn't as constrained by some of the constraints of my academic colleagues. But I never believed this whole model that the university gathers information structures that formulates it, then tells the world what to do. I never thought that made any sense. And certainly, in the case of lean, it didn't, and it wasn't true.

So the way that companies were learning about this stuff was from consultants, largely, and from people who had worked for Toyota. So anybody who had worked for Toyota, even if they were driving a forklift truck, in some cases, suddenly became a hot commodity. I consulted to Ford, and they were developing the Ford Production System.

They were using a consulting firm, and all their consulting firm's business was to poach people from Toyota and then sell them as consultants to other companies. And that company literally had people every day of the week who were in their cars outside the gates of Toyota. And as people came out, they would start talking to them to try to find people that they could hire away from Toyota.

TROND: It's funny to hear you talking about that, Jeff, right? Because in some way, you, of all people, you're a little bit to blame for the fame of Toyota in that sense. I mean, you've sold a million books with The New Toyota --

JEFFREY: Well, that was --

TROND: I'm just saying it's a phenomenon here that people obsess over a company, but you were part of creating this movement and this enormous interest in this. [laughs]

JEFFREY: I didn’t feel that that was...I personally had a policy because I had a consulting company too. So I personally had a policy that I would not hire somebody away from Toyota unless they were leaving anyway. That was my personal policy. But the important point was that there were a lot of really well-trained people coming out of Toyota who really understood the whole system and had lived it. And they could go to any other company and do magic, and suddenly things got better. [laughs]

And what they were doing was setting up the structures and the tools, and they also were engaging the people and coaching the people. They were doing both simultaneously, and that's how they were trained. Toyota had sent an army of Japanese people to America. So every person who was in a leadership position had a one-on-one coach for years, a person whose only reason for being in the United States was to train them. So they got excellent training, and then they were able to use that training.

And then other people once they had worked with a company and then that company got good at lean, then, within that company, you'd spawn more consultants change agents. Like, there was a company that I was studying called Donnelly Mirrors that made exterior mirrors for cars. And one of the persons that was trained by a Toyota person became a plant manager. And he ended up then getting offered a job as the vice president of manufacturing for Merillat Kitchen Cabinets. And now he's the CEO of the parent company that owns Merillat. And he's transformed the entire company.

So little by little, this capability developed where most big companies in the world have hired people with lean experience. Sometimes it's second generation, sometimes third generation. And there are some very well-trained people. So the capability still resides within the people. And if you have someone who doesn't understand the system but they just set up a kanban system or they set up quality systems, and they try to imitate what they read in a book or what they learned in a course; usually, it doesn't work very well.

TROND: Well, that was going to be my next question. Because how scalable is this beyond the initial learnings of Toyota and the fact that it has relied so heavily on consulting? Because there is sort of an alternate discourse in a lot of organizational thinking these days that says, well, not just that the people are the key to it but actually, that as a leader, however much you know or how aware you are of people processes, it is the organization itself that kind of has to find the answers.

So there's perhaps some skepticism that you can come in and change a culture. Aren't there organizations that have such strong organizational practices, whether they are cultural in some meaningful way or they're simply this is the way they've done things that even one person who comes in has a hard time applying a Toyota method? What do you think about that kind of challenge?

JEFFREY: Okay, so, anyway, I think what you said is...how I would interpret it is it’s a gross oversimplification of reality. So first of all, in the second edition of The Toyota Way, because I realized from the first edition, which was fairly early back in the early 2000s, I realized that some people were taking my message as copy Toyota, even though I didn't say that in the book. And I specifically said not to do that, but I said it in the last chapter.

So I put out the second edition a year ago, and I say it in the first page or first few pages. I say, "Don't copy Toyota," and explain why. And then, throughout the book, I say that, and then, in the end, I say, "Develop your own system." So it's probably repeated a dozen times or more with the hope that maybe somebody would then not ask me after reading it, "So, are we supposed to copy Toyota?"

So the reason for that is because, as you said, you have your own culture. And you're in a different situation. You're in a different industry. You're starting in a different place. You're drawing on different labor. You have maybe plants around the world that are in different situations. So the other thing I said in the book, which is kind of interesting and counterintuitive, is I said, "Don't copy Toyota; even Toyota doesn't copy Toyota."

TROND: So what does that mean? Did they really not?

JEFFREY: What it means is that...because Toyota had this dilemma that they had developed this wonderful system in Japan that worked great, but they realized that in auto, you need to be global to survive. So when they set up NUMMI, that was the first experiment they did to try to bring their system to a different culture.

And in reality, if you look at some of the cultural dimensions that make lean work in Japan, the U.S. is almost opposite on every one of them, like, we're the worst case. So if you were a scientist and you said, let’s find the hardest place in the world to make this work and see if we can make it work, it would be the United States, particularly with General Motors workers already disaffected and turned off.

So Toyota's perspective was, let's go in with a blank sheet of paper and pretend we know nothing. We know what the total production system is and what we're trying to achieve with it. But beyond that, we don't know anything about the human resource system and how to set it up. And so they hired Americans, and they coached them. But they relied a lot on Americans, including bringing back the union leader of the most militant union in America. They brought him back.

TROND: Wow.

JEFFREY: And said, "You're a leader for a reason. They chose you. We need your help. We're going to teach you about our system, but you need to help make it work." So that created this sort of new thing, a new organizational entity in California. And then what Toyota learned from that was not a new solution that they then brought to every other plant, whether it was Czechoslovakia, or England, or China. But rather, they realized we need to evolve a cultural system every time we set up a plant, starting with the local culture. And we need to get good at doing that, and they got good at doing it.

So they have, I don't know, how many plants but over 100 plants around the world and in every culture you can imagine. And every one of them becomes the benchmark for that country as one of their best plants. And people come and visit it and are amazed by what they see. The basic principles are what I try to explain in The Toyota Way. The principles don't change. At some level, the principle is we need continuous improvement because we never know how things are going to fail until they fail. So we need to be responding to these problems as a curse. We need people at every level well trained at problem-solving.

And to get people to take on that additional responsibility, we need to treat people with a high level of respect. So their model, The Toyota Way, was simply respect for people and continuous improvement. And that won't change no matter where they go. And their concept of how to teach problem-solving doesn't change. And then their vision of just-in-time one-piece flow that doesn't change, and their vision of building in quality so that you don't allow outflows of poor quality beyond your workstation that doesn't change.

So there are some fundamental principles that don't change, but how exactly they are brought into the plant and what the human resource system looks like, there'll be sort of an amalgam between the Japanese model and the local model. But they, as quickly as possible, try to give local autonomy to people from that culture to become the plant managers, to become the leaders. And they develop those people; often, those people will go to Japan for periods of time.

TROND: So, Jeff, I want to move to...well, you say a lot of things with Toyota don't change because they adapt locally. So my next question is going to be about future outlook. But before we get there, can we pick up on this classical guitar lesson? So you were playing classical guitar. And there was something there that, at least you said that in one interview that I picked up on, something to do with the way that guitar study is meticulous practice, which both you and I know it is. You literally will sit plucking a string sometimes to hear the sound of that string. I believe that was the example.

So can you explain that again? Because, I don't know, maybe it was just me, but it resonated with me. And then you brought it back to how you actually best teach this stuff. Because you were so elaborate, but also you rolled off your tongue all these best practices of Toyota. And unless you either took your course or you are already literate in Toyota, no one can remember all these things, even though it's like six different lessons from Toyota or 14 in your book. It is a lot.

But on the other hand, when you are a worker, and you're super busy with your manager or just in the line here and you're trying to pick up on all these things, you discovered with a colleague, I guess, who was building on some of your work some ways that had something in common with how you best practice classical guitar. What is that all about?

JEFFREY: Well, so, first of all, like I said, the core skill that Toyota believes every person working for Toyota should have is what they call problem-solving. And that's the ability to, when they see a problem, to study what's really happening. Why is this problem occurring? And then try out ideas to close the gap between what should be happening and what is happening. And you can view that as running experiments. So the scientific mindset is one of I don't know. I need to collect the data and get the evidence.

And also, I don't know if my idea works until I test it and look at what happens and study what happens. So that was very much central in Toyota. And they also would talk about on-the-job development, and they were very skeptical of any classroom teaching or any conceptual, theoretical explanations. So the way you would learn something is you'd go to the shop floor and do it with a supervisor.

So the first lesson was to stand in a circle and just observe without preconceptions, kind of like playing one-string guitar. And the instructor would not tell you anything about what you should be looking for. But they would just ask you questions to try to dig deeper into what's really going on with the problems or why the problems are occurring. And the lesson length with guitar, you might be sweating after 20 minutes of intense practice. This lesson length was eight hours.

So for eight hours, you're just on the shop floor taking breaks for lunch and to go to the bathroom and in the same place just watching. So that was just an introductory lesson to open your mind to be able to see what's really happening. And then they would give you a task to, say, double the productivity of an area. And you would keep on trying. They would keep on asking questions, and eventually, you would achieve it. So this on-the-job development was learning by doing.

Now, later, I came to understand that the culture of Japan never really went beyond the craftsman era of the master-apprentice relationship. That's very central throughout Japan, whether you're making dolls, or you're wrapping gifts, or you're in a factory making a car. So the master-apprentice relationship system is similar to you having a guitar teacher. And then, if you start to look at modern psychology leadership books, popular leadership books, there's a fascination these days with the idea of habits, how people form habits and the role of habits in our lives.

So one of my former students, Mike Rother, who had become a lean practitioner, we had worked together at Ford, for example, and was very good at introducing the tools of lean and transforming a plant. He started to observe time after time that they do great work. He would check in a few months later, and everything they had done had fallen apart and wasn't being followed anymore. And his ultimate conclusion was that what they were missing was the habit of scientific thinking that Toyota put so much effort into. But he realized that it would be a bad solution to, say, find a Toyota culture --

TROND: Right. And go study scientific thinking. Yeah, exactly.

JEFFREY: Right. So he developed his own way in companies he was working with who let him experiment. He developed his own way of coaching people and developing coaches inside the company. And his ultimate vision was that every manager becomes a coach. They're a learner first, and they learn scientific thinking, then they coach others, which is what Toyota does.

But he needed more structure than Toyota had because the Toyota leaders just kind of learned this over the last 25 years working in the company. And he started to create this structure of practice routines, like drills we would have in guitar. And he also had studied mastery. There's a lot of research about how do you master any complex skill, and it was 10,000 hours of practice and that idea.

But what he discovered was that the key was deliberate practice, where you always know what you should be doing and comparing it to what you are doing, and then trying to close the gap. And that's what a good instructor will do is ask you to play this piece, realize that you're weak in certain areas, and then give you an exercise. And then you practice for a week and come back, and he listens again to decide whether you've mastered or not or whether he needs to go back, or we can move to the next step.

So whatever complex skill you're learning, whether it's guitar, playing a sport, or learning how to cook, a good teacher will break down the skill into small pieces. And then, you will practice those pieces until you get them right. And the teacher will judge whether you got them right or not. And then when you're ready, then you move on. And then, as you collect these skills, you start to learn to make nice music that sounds good.

So it turns out that Mike was developing this stuff when he came across a book on the martial arts. And they use the term kata, which is used in Japanese martial arts for these small practice routines, what you do repeatedly exactly as the master shows you. And the master won't let you move on until you've mastered that one kata. Then they'll move to the second kata and then third. And if you ask somebody in karate, "How many katas do you have?" They might say, "46," and you say, "Wow, you're really good. You've mastered 46 kata, like playing up through the 35th Sor exercise.

So he developed what he called the improvement kata, which is here is how you practice scientific thinking, breaking it down into pieces, practicing each piece, and then a coaching kata for what the coach does to coach the student. And the purpose of the scientific thinking is not to publish a paper in a journal but to achieve a life goal, which could be something at work, or it could be that I want to lose weight. It could be a personal goal, or I want to get a new job that pays more and is a better job. And it becomes an exploration process of setting the goal.

And then breaking down the goal into little pieces and then taking a step every day continuously toward, say, a weekly target and then setting the next week's target, and next week's target and you work your way up the mountain toward the goal. So that became known as Toyota Kata. He wrote a book called Toyota Kata.

And then, I put into my model in the new Toyota Way; in the center of the model, I put scientific thinking. And I said this is really the heart and soul of The Toyota Way. And you can get this but only by going back to school, but not school where you listen to lectures but school where you have to do something, and then you're getting coached by someone who knows what they're doing, who knows how to be a coach.

TROND: So my question following this, I think, will be interesting to you, or hopefully, because we've sort of gone through our conversation a little bit this way without jumping to the next step too quickly. Because the last question that I really have for you is, what are the implications of all of this? You have studied, you know, Toyota over years and then teaching academically, and in industry, you've taught these lessons. But what are the implications for the future development of, I guess, management practice in organizations, in manufacturing?

Given all that you just said and what you've previously iterated about Toyota's ideas that not a lot of things change or necessarily have to change, how then should leaders go about thinking about the future? And I'm going to put in a couple of more things there into the future. I mean, even just the role of digital, the role of technology, the role of automation, all of these things, that it's not like they are the future, but they are, I guess, they are things that have started to change.

And there are expectations that might have been brought into the company that these are new, very, very efficient improvement tools. But given everything that you just said about katas and the importance of practicing, how do you think and how do you teach preparing for the future of manufacturing?

JEFFREY: And I have been working with a variety of companies that have developed what you might call industry 4.0 technologies, digital technologies, and I teach classes where a lot of the students are executives from companies where in some cases, they have a dual role of lean plus digitalization. So they're right at the center of these two things.

And what I learned going back to my undergraduate industrial engineering days and then to my journey with Toyota, I was always interested in the centrality of people, whatever the tools are. And what I was seeing as an undergraduate was that most of the professors who were industrial engineers really didn't have much of a concept of people. They were just looking at techniques for improving efficiency as if the techniques had the power themselves.

And what I discovered with people in IT, and software development, and the digital movement is often they don't seem to have a conception of people. And people from their point of view are basically bad robots [laughs] that don't do what they're supposed to do repeatedly. So the ultimate view of some of the technologists who are interested in industry 4.0 is to eliminate the people as much as possible and eliminate human judgment by, for example, putting it into artificial intelligence and having the decisions made by computers.

I'm totally convinced from lots of different experiences with lots of different companies that the AI is extremely powerful and it's a breakthrough, but it's very weak compared to the human brain. And what the AI can do is to make some routine decisions, which frees up the person to deal with the bigger problems that aren't routine and can also provide useful data and even some insight that can help the person in improving the process.

So I still see people as the ultimate customer for the insights that come out of this digital stuff, Internet of Things, and all that. But in some cases, they can control a machine tool and make an automatic adjustment without any human intervention, but then the machine breaks down. And then the human has to come in and solve the problem.

So if you're thinking about digitalization as tools to...and sometimes have a closed loop control system without the person involved. But in addition, maybe, more importantly, to provide useful data to the human, suddenly, you have to think about the human and what makes us tick and what we respond to. And for example, it's very clear that we're much better at taking in visual information than text information. And that's one of the things that is part of the Toyota Production System is visual management.

So how can you make the results of what the AI system come up with very clear and simple, and visual so people can respond quickly to the problem? And most of these systems are really not very good. The human user interface is not well designed because they're not starting with the person. And the other thing is that there are physical processes. Sometimes I kind of make a sarcastic remark, like, by the way, the Internet of Things actually includes things.

TROND: [laughs]

JEFFREY: And there's a different skill set for designing machines and making machines work and repairing machines than there is for designing software. There are a lot of physical things that have to go on in a factory, changing over equipment, be it for making different parts. And the vision of the technologists might be we’ll automate all that, which may be true. Maybe 30 years from now, most of what I say about people will be irrelevant in a factory. I doubt it. But maybe it's 100 years from now, but it's going to be a long time.

And there was an interesting study, for example, that looked at the use of robots. And they looked at across the world jobs that could be done by a human or could be done by a robot. And they found that of all the jobs that could be done by a human or a robot, 3% were done by robots, 97%...so this kind of vision of the robots driven by artificial intelligence doing the work of people is really science fiction. It's mostly fiction at this point. At some point, it might become real, but it's got a long way to go.

So we still need to understand how to motivate, develop people. But particularly, the more complex the information becomes and the more information available, the more important it is to train people first of all in problem-solving and scientific thinking to use the data effectively and also to simplify the data because we're actually not very good at using a lot of data. We actually can't handle a lot of bits of data at a time like a computer can. So we need simple inputs that then allow us to use our creativity to solve the problem.

And most of the companies are not doing that very well. They're offering what they call digital solutions, and I hate that term, on the assumption that somehow the digital technology is the solution. And really, what the digital technology is is just information that can be an input to humans coming up with solutions that fit their situation at that time, not generic solutions.

TROND: It's fascinating that you started out with people. You went through all these experiences, and you are directly involved with digital developments. But you're still sticking to the people. We'll see how long that lasts. I think people, from the people I have interviewed, maybe self-selected here on the podcast, people and processes seem enormously important still in manufacturing.

Thank you for your perspective. It's been a very rich discussion. And I hope I can bring you back. And like you said if in X number of years people are somehow less important...well, I'm sure their role will change, will adjust. But you're suspecting that no matter what kind of technology we get, there will be some role, or there should be some role for people because you think the judgment even that comes into play is going to be crucial. Is that what I'm --

JEFFREY: There's one more thing I want to add. If you look at industry 4.0, it'll list these are the elements of industry 4.0, and they're all digital technologies. But there's something that's becoming increasingly popular called industry 5.0, where they're asking what's beyond industry 4.0? Which has barely been implemented. But why not look beyond it? Because we've talked about it enough that it must be real.

Once we kind of talk about something enough, we kind of lose interest in it. We want to go on to the next thing. So none of these things necessarily have been implemented very well and very broadly. But anyway, so industry 5.0 is about putting people back in the center. So I call it a rework loop. Uh-oh, we missed that the first time. Let's add it back in.

TROND: So then what's going to happen if that concludes? Are we going to then go back to some new version of industry 4.0, or will it --

JEFFREY: Well, industry 4.0 is largely a bunch of companies selling stuff and then a bunch of conferences. If you go and actually visit factories, they're still making things in the same way they've always made them. And then there's a monitor that has information on a screen. And the IT person will show you that monitor, and the person on the floor may not even know what it is. But there's a disconnect between a lot of these technologies and what's actually happening on the shop floor to make stuff.

And when they do have a success, they'll show you that success. You know, there's like hundreds of processes in the factory. And they'll show you the three that have industry 4.0 solutions in there. And so it's a long way before we start to see these technologies broadly, not only adopted but used effectively in a powerful way. And I think as that happens, we will notice that the companies that do the best with them have highly developed people.

TROND: Fantastic. That's a good ending there. I thank you so much. I believe you've made a difference here, arguing for the continued and continuing role of people. And thank you so much for these reflections.

JEFFREY: Welcome. Thank you. My pleasure.

TROND: You have just listened to another episode of the Augmented Podcast with host Trond Arne Undheim. The topic was the People Side of Lean. Our guest was Jeffrey Liker, academic, consultant, and best-selling author of The Toyota Way. In this conversation, we talked about how to develop internal organizational capability.

My takeaway is that Lean is about motivating people to succeed in an industrial organization more than it is about a bundle of techniques to avoid waste on a factory production line. The goal is to have workers always asking themselves if there is a better way.

Thanks for listening. If you liked the show, subscribe at augmentedpodcast.co or in your preferred podcast player, and rate us with five stars. If you liked this episode, you might also like Episode 84 on The Evolution of Lean. Hopefully, you will find something awesome in these or in other episodes. And if you do, let us know by messaging us, and we would love to share your thoughts with other listeners.

The Augmented Podcast is created in association with Tulip, the frontline operation platform that connects people, machines, devices, and systems used in a production or logistics process in a physical location. Tulip is democratizing technology and empowering those closest to operations to solve problems. Tulip is also hiring, and you can find Tulip at tulip.co.

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Augmented — industrial conversations that matter. See you next time.

Special Guest: Jeffrey Liker.