Taiichi Ohno's Kaizen Spirit

I recently purchased an excellent book titled The Origin of Toyota’s Strength: Taiichi Ohno’s Kaizen Spirit. It is a commemorative book, first published in 1990 to honor the passing of Taiichi Ohno in 1990. The book consists of memorials, reprints of lectures, interviews, and articles published in years prior. It was assembled into book form by the editors of Nikkan Kogyo Shimbun (The Daily Industrial News) and published by Toshitake Chino and Nikkan Kogyo Shimbun. A collector’s edition of the book, published in 2005, includes a compact disc recording of one of Taiichi Ohno’s lectures (in Japanese). This is the edition in my possession. I highly recommend the book!

The Introduction says:

…we must not forget that the Toyota Production System is not just a method for improving the workplace, but also an extremely excellent management philosophy.

People need to remember that, and also know with certainty that Lean ≠ TPS. The Introduction goes on to say:

This book follows the footsteps of Taiichi Ohno (1912-1990), the creator of the Toyota Production System, and delves into the origins and essence of his ideas through his sayings, lectures, interviews, and other documents. His words and ideas still shine brightly today.

His words and ideas absolutely still shine brightly today!

The book is organized in four parts. What follows below are selected quotes by Taiichi Ohno, unless otherwise noted, that I found to be both new and interesting, followed by critical commentary. The quotes are presented in the order of the sections in the book. Please carefully study them. Note that all translations are made using Google Translate technology as it existed as of late August 2024. Skilled human interpretation of Japanese to English language would almost surely produce better results.

Part 1 – Talking About Taiichi Ohno

This section is authored by Fujio Cho, former Toyota president and chairman of Toyota, who “became Taiichi Ohno’s subordinate” in 1961. His job then was to determine whether to insource or outsource parts production. This is a wonderful chapter that gives deep, reflective insights into what it was like to be Taiichi Ohno’s subordinate.

“He was known for being a very scary person who would yell at people on the shop floor and scold them. Everyone called him ‘the god of the shop floor,’ ‘the bearded old man,’ and ‘scary’… Well, when Mr. Ohno actually arrived, he immediately started teaching us, regardless of my worries and expectations. Each and every thing he said was completely unexpected, and at first we were all confused, and to be honest, it took us quite a while to understand.” (p. 6, 7)

Comment: Often in business we face scary bosses who are confusing, difficult to understand, and say things that are unexpected. Yet the difference is they do not teach in a way that defies conventional wisdom and which challenges people to think and understand. It is usually conventional wisdom stated in ways that are confusing, difficult to understand, or unexpected, and scares people into doing what the boss wants or just doing something to please the boss.

“I think the first thing that came up in criticism was the ‘temporary outsourcing’ system [also known as ‘shop assist’]. This was a system where when the in-house factory was temporarily unable to produce the work, the work was outsourced for a set period of time, and then returned to the in-house process. It was very convenient and was often used at the time. I was suddenly told, ‘Why are you doing something so stupid?’ but I didn’t understand why it was stupid.” (p. 7)

Comment: Ohno-san challenged the common practice of shop assist at Toyota because he saw it as unfair to the suppliers to occasionally give them small quantities of work and then take it away a short time later. The supplier needs various resources to do the work, and then the work goes away it messes up the supplier’s costs and resources. Ohno-san immediately banned short-term, small quantity shop assist. He instructed Cho-san to do the opposite: “choose mass-produced items as much as possible when outsourcing” so the supplier had a stable workload (respect for supplier). Also, companies often use shop assist for things they cannot make well and then expect suppliers to do it better and cheaper. Ohno-san again thought the opposite: The company should figure out how to make the item well and cheaply, and teach suppliers how to do it. This is how you develop suppliers, whom the company shares both destiny and prosperity — a perspective that managers in most companies do not share. Teaching is a regular theme of Ohno-san’s work.

“However, despite all the effort and effort put into making these things [charts of machine output], Ohno would not even look at them. Instead, he scolded me, saying, ‘You keep making stupid calculations, it’s a problem.’ He asked me, ‘Why should past performance be the basis for the future?’, and I had no answer. He told me, ‘If you have the time to do this, go and see the actual site’.” (p. 9)

Comment: Taiichi Ohno’s scoldings were likely driven in part by the difficulty he faced in watching people struggle in their development to see things differently. The scoldings were his dramatic form of tough love guidance that was central to his unique method of educating people. Ohno-san knows numbers well and recognizes their limitations as well as how they can keep people firmly attached to the status quo. So instead, go see the problem firsthand and figure out ways to improve the process rather than basing decisions on numbers and charts. They do not inform anyone of what the real problem is.

“Everything was like this. I was not the only one who was confused. With all due respect, my superiors at the time, the section chiefs and department heads, did not seem to understand it either.” (p. 9)

Comment: It is immediately apparent that Ohno-san’s basic way of thinking is that people should not do what everyone else does. They must think differently; do the opposite and see what happens. Learn from that and teach others. How else can you make progress? Ohno-san did not want his subordinates (who were typically very young with just a few years of work experience) to infer causal relationships from numbers, make estimates, or think in terms of probabilities. And he did not want people to take shortcuts. This is what happens when people rely on preconceptions, heuristics, models, theories, or ideologies (shortcuts to avoid thinking). Instead, immediately go to the genba to understand and quickly correct the problem.

“…Ohno-san teased us by saying, ‘You guys have been destroying opportunities for improvement up until now.’ Mr. Suzumura, who was Ohno-san’s first disciple and later became my direct boss, told us, ‘When you do your work, the company loses. The best thing for the company is to keep quiet and do nothing.’ I spent the time muttering to myself that this is what it means to have no place to stand.” (p. 10)

Comment: Ohno-san’s perspective is that if you do what everyone else does, you destroy opportunities for improvement. Suzumura-san’s perspective is that work, as it is typically done, causes the company to lose. So, “do nothing” of your job and instead do something that helps the company avoid losses.

“Especially for an office worker like me, I was worried about what I could do [on the genba], since I had never even heard the term IE [industrial engineering]. In response, Ohno said, ‘Improving the workplace is not particularly difficult. All you have to do is fix the obvious things as if they were obvious,’ and ‘It’s actually a good thing because office workers don’t spend money on improvements because they don’t have the knowledge.’ Suzumura strangely encouraged me, saying, ‘If a complete amateur like you thinks something is a waste on the workplace, it’s really a waste. So don’t worry’.” (p. 11)

Comment: Ohno-san appreciated the beauty and utility of how not knowing what you are seeing prompts both curiosity to learn more (discovery) and to ask why. This is why kaizen teams are cross-functional, and contain members who are unfamiliar with the process. They see things that people familiar with production work do not. When a problem arises, most production workers think they need to spend money to solve it. Office workers are less inclined to think that way because they do not come from a capital intensive genba.

“These are things I could never have understood while sitting at a desk in production control.” (p. 13)

Comment: Cho-san is referring to part shortages, overproduction, defects, breakdowns, etc. These are things that you can never understand while sitting at a desk in finance, sales, engineering, etc. That is why cross-functional representation is needed in kaizen teams. But often, these people are afraid of the genba and afraid they will look stupid. That could happen, but these are very small prices to pay to help the company avoid losses. And invariably when kaizen done right, people have fun and want to participate on kaizen teams again and again. Why? Because you gain not just a feeling of accomplishment, but you know for certain that you have actually done important things.

“Every day was an education. Mr. Suzumura would often tell me, ‘Normally, you pay tuition to receive an education. You are receiving an education while receiving a salary. Be grateful for your good fortune’.” (p. 14)

Comment: Indeed, it is good fortune, one that most people do not take advantage of. However, it is not all employee’s fault because top leaders do not see things as Ohno-san and Suzumura-san do. Though, it is partly their fault for not demanding better from their top leaders. Of course, this is not easy to do on an individual basis, but on a collective basis it will get leaders’ attention. Let it be known you want a much better education at work.

“I cannot express how much he taught me: respect for humanity, the psychology of working people, the fact that wisdom is infinite, what manufacturing costs are, how to think about economics, the mindset of workers on the factory floor, the importance of sales and the role of the manufacturing department, capital investment, automation, quality, training of outsourced manufacturers, and even how to live as a man.” (p. 14)

Comment: Many people mistakenly believe Ohno-san was one-dimensional, focused solely on production. Through experience and reflection, he saw how things were connected. Most business leaders — past, present , and likely future — either do not see such connections or have no interest in such connections. In doing so, they institutionalize losses and fail to train and educate the people and suppliers that contribute to the company’s survival.

“…in-house production factories should always be a model for outsourcing. In essence, cost reduction is about eliminating waste (cost includes the total cost of all production and business activities). And the activity of eliminating waste depends on how much knowledge people can use. In-house production factories must use their knowledge and push forward with improvements, especially in times of difficulty. This means that a hasty shift to outsourcing is out of the question.” (p. 15)

Comment: Needless to say, this is far from the perspective of most CEOs for the last 50 years. Not only has outsourcing been the thing to do, more in good times than bad, the knowledge that people can use is typically limited to doing whatever their job description says they should do. Losing knowledge and expertise has been a feature of executive outsourcing groupthink, not a bug. In doing so, they further institutionalize losses. By not knowing what is going on at the genba, business leaders become inured to losses. At best, they view such losses as a routine cost of doing business, rather than as costs to be avoided.

“This reflects Mr. Ohno’s lifelong attitude of wanting to teach and nurture anyone, no matter how young they may be, who is willing to learn… For us, Mr. Ohno was not only a great businessman but also a great educator.” (p. 15, 16)

Comment: Ohno-san was a boss who cared about people. His scoldings were part of his unique teaching method (because he had a vision for operations, developing people, etc.) and it was very much appreciated by his subordinates. He quickly got their full attention and it would prompt them to later reflect deeply on his words: What is he saying? What does that mean? What is the real problem? Where is the waste? It seems such reflection rarely occurs today in other companies because bosses do not have a vision and do not know enough to educate their young subordinates.

This concludes the section written by Fujio Cho. The next section of Part 1 is an interview of Kosuke Ikebuchi, Senior Advisor and Chief Engineer, Toyota Motor Corporation.

“The way he scolded me was incredibly serious, like raging fire. At the time, there were only two of us at the site, myself and Mr. Ohno, and I was severely scolded for the inspection work. Mr. Ohno’s way of thinking was that inspection is not part of manufacturing. Quality is not guaranteed through inspection. In other words, if you can make things through the process, there is no need for inspection. (p. 19, 20)

Comment: Quality is a serious matter. This quote also reveals the idea and practice of “building in quality” which still, to this day, few people outside of Toyota thoroughly understand. They instead rely on inspectors — a separate job function. Quality is not improved when you rely on inspectors. Instead quality must be built into the process, with the worker serving the dual role as part maker and inspector, using quick one-touch inspection methods to validate conformance of the part to specifications. “Building in quality” means 100 percent inspection — not statistical sampling — the opposite of what W. Edwards Deming taught.

Those who were not scolded were reassigned due to their lack of ability. He clearly stated, ‘I will not get angry at those who are not worth getting angry at.’… He gets angry at anyone, whether they’re a junior or a department head. He gets angry in the same way. I think it’s fair. No matter how much he loves his beloved disciple, if something happens he gets angry like a raging fire and doesn’t hold back. I thought that was really amazing. Even so, some people may have thought that they were the only ones being scolded, but that’s not because he’s angry at them, but because they don’t do it. He’s scolding them for not solving things and for having a bad attitude, and I think that’s how great he is. Being scolded means there is hope” (p. 21)

Comment: Ohno-san was hard on people, but not indiscriminately so. He had distinct purposes in mind: “make an impact and get people thinking,” as Ikebuchi-san said. He wanted to get people to think differently and do things differently than how people would typically think and do things. His scoldings were intended to force people to challenge their own preconceptions, heuristics, models, theories, or ideologies. Why? Much of what we know comes from what we have learned from other people (social learning), not from our own efforts to learn. If everyone thinks a certain way of doing something is right and good (especially if leaders make that claim), then we likely will not question it. Yet much of what we learn from other people, such as the work that goes on in a company regarding people, processes, machines, etc., is wrong and so we have to question it. It is impossible to eliminate waste and other losses if you do not do that. Ohno-san also wanted to eliminate people’s habit of taking shortcuts, which perpetuated waste. His education method was unpleasant. It was tough love. But it was effective and it created something entirely new: TPS. The people who experienced scoldings were deeply appreciative because it elevated them to much higher levels of consciousness and capability.

“Automobile companies have to deal with so many partners and parts, and they have to do everything without mistakes, so they need incredible discipline… That’s exactly what the Toyota Production System is all about. It’s a system that allows people to get by without making strange decisions. In that sense, there are very few mistakes. Things that can be judged by looking at them with your own eyes can be mistaken if they are black boxes. I think the on-site system [manage at the genba] makes it very difficult to make such mistakes.” (p. 32)

Comment: In most other companies, strange decisions are commonplace, so much so that it is strange when strange decisions are not made. Strange decisions are made using metaphysical information that exists in the office — on paper and in computers — and those strange decisions then lead to many mistakes. If you are connected to the material world [the genba] you are less likely to make strange decisions and the resulting mistakes.

“However, he [Ohno] does not say things like, ‘They’re doing well.’ He says things like, ‘They were doing such stupid things over there. I don’t know what it’s like now, but they were doing really stupid things,’ or, ‘Maybe they’ve gotten a little better,’ or, ‘Come and take a look.’ In the end, this ends up being a compliment. He probably didn’t mean it as a compliment, but he just says they’re a little better than the others. (p. 35)

Comment: Ohno-san was blunt and not known to hand out compliments. That’s because if he said you did a good job, you would stop thinking about how the work could be done better. People seek approval, and when they get it the status quo is sure to follow. The message is to keep thinking about ways to improve the process, not just for the sake of improving the process, but to develop yourself and reduce the company’s losses. That is what you are paid to do; reduce losses, not increase losses.

“One day, a veteran foreman who had become a section manager said to me, ‘Hey guys, I’m going to take you to Mr. Ohno’s house.” So when about 10 of us visited, we found out that he was completely different from the company. He was sitting on a chair holding a cat — a big, ugly cat — and holding a cat and being so affectionate with it, there must be a kind side to him.” (p. 36)

Comment: It is not surprising that Ohno-san was a different man at work than when he was at home. The difference is at work he had clear purposes in mind. Other managers are surely nice at home as well. But at work, what is their purpose? Do they have a purpose other than surveillance or to check one’s work? Do they do anything to eliminate the company’s losses? Do they challenge their subordinates to think? Do they personally educate their subordinates? Taiichi Ohno’s management lessons are valuable for any manager. But it is likely that most managers have too much pride and too little knowledge of people and the genba to do what Ohno-san did, even without the scolding.

Part 2 – Taiichi Ohno’s Trajectory

This section begins with a reprint of an article by a journalist named Tsune Noguchi. It outlines Ohno-san’s technical high school education, obtaining his first job at Toyota Boshoku, and his realization of the large productivity gap between America and Japan. Quoting Tsune Noguchi-san:

Ohno’s intuition that the reason for Japan’s low industrial productivity (productivity of goods) was not due to inferior machines and equipment, but that the problem lay in the way people were used, the way they worked, and the way they were trained, was extremely unique and original, breaking away from the Western way of thinking and common sense that places machines and equipment at the center of technology (systems) when thinking about manufacturing mechanisms and productivity. Ohno intuitively saw that ‘ultimately, manufacturing is about developing people’ and ‘the essence of technology lies in people,’ and predicted that ‘unless human productivity is increased, the productivity of goods will not improve.’ He had these thoughts before 1943, when Toyoda Boshoku was absorbed into Toyota Motor Corporation during the war and he himself transferred to Toyota Motor Co., Ltd.” (p. 41)

Comment: Isn’t it surprising that over 80 years later, this perspective remains uncommon? For many years now, U.S. economists, business leaders, politicians, and others have complained about low productivity, yet do they understand that “developing people” and “the essence of technology lies in people”? It is likely they do not. They tend to think of people and technology separately and have a very poor understanding of the work itself. If they remain incurious to the wisdom of Taiichi Ohno, and ignore the pressing need to think and do things differently, then all they can do is complain, misunderstand the problem, and misdirect (waste) resources in their misguided search for solutions.

“A machine becomes obsolete from the day it is installed in a factory. Unless humans improve it constantly through human wisdom, the machine is truly useless… The reason American automakers became weak is because they relied on ready-made machines and fell into the trap of believing that machines are all-powerful,” (p. 44)

Comment: Part of the uniqueness to TPS that is little discussed is the mindset related to machines — to make them an extension of humans; a “human-centered view of technology.” Toyota people developed the capability to build machines in-house specific to their needs. When they buy machines from machine tool makers, Toyota people are careful to include features and specifications that are particular to its needs. They also constantly modify machines (both electrical and mechanical) as times, technology, and needs change. These internal capabilities give them an important competitive edge over companies who merely buy general purpose machines from machine tool makers. Most Western companies would view developing and maintaining such in-house expertise as unnecessary added labor expense and a distraction from other priorities. In Toyota’s view, it is essential knowledge, skill-building, and wisdom that is central to the efficient production of high-quality parts (i.e., “built-in quality” and “zero defects”).

“Kiichiro Toyoda certainly proposed the idea of ’just-in-time’ as a method of ‘ideal manufacturing.’ However, he did not clearly explain how to put this idea into practice on the manufacturing floor or how to integrate it into a unique production philosophy or production system. This was a task entrusted to his successor [Ohno], who resonated with his idea, inherited it, and was determined to faithfully put it into practice and make it a reality.” (p. 46)

Comment: This quote from Noguchi-san helps us better realize Ohno-san’s talent in turning Toyoda-san’s idea into reality. Coupled with Sakichi Toyoda’s idea of jidoka (autonomation; automation with a human touch), Ohno-san added multiple machine handling, multi-skilled workers, kaizen, standard work charts, standardized work, kanban, andon, etc. — some of which came from his prior employment at Toyoda Boshoku — which in a remarkably short time (1947-1973) resulted in the creation of a unique flow production system that later evolved into an overall management system.

“I wanted to do everything that was the opposite of how America did things, so I thought about the differences between Japan and America in terms of ways of thinking, national character, and lifestyles. For example, there are quite a lot of things that are completely opposite between Japanese and Westerners. Even when beckoning someone, Japanese people turn their palms down and say, ‘Come on!’, while Westerners would do the opposite and turn their palms up and say, ‘Come on! When collecting dead leaves like pine needles, Japanese people use brooms to pull them towards them, while Westerners push them. We also use saws in completely opposite ways. When using a saw, Japanese people put more force when pulling, while Westerners put more force when pushing. I’m sure there are exceptions, but Westerners tend to have a ‘pushing culture’ whereas Japanese people have a ‘pulling culture’ (Ohno).

Comment: Here’s another example of opposite: Japanese books, such as this one, are typically published with the pages sequenced opposite to that of Western books (left-to-right instead of right-to-left). These remarkable words from Ohno-san give you a sense of his keen insights and his motivation for doing things that were opposite to the usual way of doing things. Too often, people do things the way they have always been done. They trust the time-tested social heuristic that it is best to follow the herd than to go against it and thus avoid the risk being ridiculed or ostracized. It also reveals Ohno-san’s fortitude, his resistance to criticism, and the confidence he had in his vision(s). Making significant progress means having to break with the status quo, and not by just do something different but by do the opposite. People in top leadership positions are particularly averse to doing the opposite because of the social pressure they face from their peers to conform to the status quo. They likely recognize the need for major changes (doing opposite things), but decline to do it. The result is they accept greater risk and manage a workforce that underperforms because it senses the need for change but is frustrated that change is routinely thwarted. This situation is more one of stewardship than leadership, habit than innovation, and status quo than progress.

“In a word, it can be called the ‘idea of efficiency,’ but when you include the view of technology and humanity that is the basis of it, it has a depth and breadth that cannot be expressed in the word ‘efficiency’.” (p. 56)

Comment: This quote from Noguchi-san helps us understand that the word “efficiency” does not properly capture the result of TPS. The word “efficiency” is generally understood as a cold, mechanical, “business is business” term devoid of human care and concerns. The connection to humanity and integrating humans with technology distinguishes TPS from other management systems that strive for efficient use of resources.

“American automakers had no doubt that push-type mass production was the best automobile production method in the world. They never considered that there might be a better production method than their own. They would simply adopt any good ideas or suggestions they had and continually improve their [existing] production system. They would constantly change their production system through daily improvement activities, just like in Japanese factories. Neither managers nor the people on the factory floor had the idea of challenging themselves to achieve higher goals [of flow production].” (p. 59)

Comment: Not having “the idea of challenging themselves to achieve higher goals” by doing the opposite is a clear failure of leadership, for which U.S. automakers and their employees suffered greatly for some 35 years because they succeeding in making things that did not sell well. It is legendary how in Toyota’s joint venture with General Motors, call NUMMI, GM management would send people from Detroit to the Fremont, California factory to learn TPS. After learning the basics of TPS, they would return to Detroit and face a wall of management resistance as they tried to apply what they learned in GM factories. If you keep improving a fundamentally bad system, one that does not reflect the actual buyers’ marketplace, it is likely to get only worse, especially as times, circumstances, technology, employees, and customers change.

“[Toyota] IE [industrial engineering] and rationalization [kaizen] are like laying the foundations beneath the ground… without a solid foundation a building will be like a castle built on sand.” (p. 63)

Comment: It is very important to not get confused between industrial engineering as a discipline and Toyota’s industrial engineering concepts and methods, which include kaizen. Toyota industrial engineering is directed towards cost reduction by eliminating waste, unevenness, and unreasonableness, and creating flows of material and information inside the company and between the company and suppliers and the company and auto dealers. Traditional industrial engineering does not do that. Thus, the Toyota production system is built in this solid technical foundation. Other companies do not have this type of solid foundation, so they become vulnerable to changes in market condition. They are castles built on sand.

“Ohno believed that the ‘biggest challenge in manufacturing’ was to train on-site workers to ‘discover abnormalities with their own eyes and solve problems with their own judgment’.” (p. 66)

Comment: Though leaders should be in frequent touch with the genba, they cannot know all the problems that exist there and certainly do not have the first-hand knowledge needed to correct abnormalities (defects, stagnation, etc). So “on-site [genba] workers” have to be trained to become skilled at identifying and solving problems quickly using Toyota IE methods and kaizen. In other companies, leaders are far removed from the genba. Yet by looking at numbers and reports, they think they know what the problems are and dictate solutions. Invariably, the solutions cause great disruptions because they do not reflect what the actual problem is. Despite being a very poor method of problem-solving, it is nonetheless considered by generations of top leaders to be both good and right. For sure, Ohno-san would scold them and say, “Why are you doing something so stupid?”

“When people become wealthy, they inevitably lose their efforts to improve and their spirit of challenge. Fewer young people will devote their lives to manufacturing. At that time, how do we attract young people to the manufacturing industry? This is the moment of truth for manufacturers. Will they simply rely on machinery and systems because of the labor shortage, or will they continue to value human resource development no matter how difficult it may be? I believe that this is where manufacturers’ fates will be decided.” (p. 66)

Comment: As the cliché goes, “success breeds complacency.” Ohno said these words long ago, and in the U.S. we have indeed had difficulty attracting people to the manufacturing industry and devoting their lives to manufacturing. While wealth may be part of the problem, the bigger problems is that manufacturing can be an unpleasant place to work because of constant layoffs. These are caused by top managers looking at numbers and reports which mislead them into thinking they know what the problems are. Surely Ohno-san would scold then and say, “You keep making stupid calculations, it’s a problem.” In almost all cases, the solutions top leaders dictate are: lay people off, squeeze suppliers on price, and close plants. This common and habitual set of solutions should inform everyone that the top leaders have no idea what the actual problems are owing to their near-total lack of interest in the genba.

This section concludes with 12 pages of tables that present a highly detailed chronology of Taiichi Ohno’s career, complete with the dates of specific developments of TPS. Of particular interest are details about Ohno’s work history from 1932 through the late 1970s. It also includes four pages of photographs of Ohno-san throughout his life, from when he was born to his time as vice president at Toyota. As a youth he played soccer and baseball. Later he also skied, payed tennis, and golf. It is clear from the photos that Taiichi Ohno was a tall man, probably six feet. That likely contributed to his intimidating presence.

Part 3 – Quotations, Lectures and Interviews

This section contains 26 pages of quotes by Taiichi Ohno. People who are familiar with Taiichi Ohno’s books Toyota Production System, Workplace Management, and Just-in-Time for Today and Tomorrow will be familiar with some of the quotes contained in this volume. Here are a few quotes that I thought were particularly interesting:

“Assembly line work and flow work: Flow production is when the process progresses while the goods are flowing, but if the goods are simply transported using a conveyer, it is not flow production but drift production. Drift production creates many isolated islands and does not make effective use of waiting time.” (p. 92)

Comment: If translated correctly, I have never heard of “drift production.” I interpret this as meaning that the flow of parts must be synchronized to the flow of the assembly line. If the flow of parts are not synchronized, then different parts drift to the assembly line at different times creating isolated islands. This, in turn, causes waiting time which detracts from productive assembly work.

“In times of low growth, overproduction is a sin”

Comment: In times of high growth, everything a seller makes can be sold. Usually, under these conditions, the economy is good and there is not much competition. It is a sellers’ market, so overproduction is not a sin. In times of low growth, the economic conditions may be good or bad, and there is a lot of competition. It is a buyers’ market. Overproduction is a sin because items are produced that cannot be sold or which can only be sold at cost or less than cost (price wars). It also is a waste of physical and material resources. Overproduction results in losses to the company, particularly loss of profits. Consequently, business leaders must recognize the market that they serve and produce accordingly. Though, it would be a big mistake for a company to engage in batch-and-queue production in times of high growth and switch to flow production (TPS) in times of low growth. A company will have lower costs, better quality, and faster response to market conditions with flow production, whether the market is high growth or low growth.

“Create a system where you lose money if you make bad things.” (p. 99)

Comment: Unfortunately, due to peculiarities in accounting practice (numbers) and tax practice (more numbers), a company can create a production system (batch-and-queue) where they make money by making bad things. How long they can do that is questionable, but eventually it will likely to lead to ruin. If top leaders view ruin undesirable for themselves or their successors, then it would be wise for them to do as Ohno-san says: “Create a system where you lose money if you make bad things.” If you do that, you will be motivated to not make bad things and you will make money. Yet, creating a TPS-like flow production is a big challenge which, to date, most top leaders would rather avoid. They refuse to do the opposite of what they know.

“Rationalization is about making the obvious things possible without strain. A rationalized factory looks obvious.” (p. 101)

Comment: The practice of kaizen (rationalization) is to make work easier (less strain). In a factory where the work flows, it will be evident that the work is performed more easily than in a factory where the work does not flow (batch-and-queue production). A factory, or any workplace, with kaizen occurring every day to make work easier and improve flow, looks like the obvious way to produce items. Ohno’s words parallel those of another pioneer of flow production, Frank George Woollard, who worked at Morris Motors in the U.K. in the 1920s and 1930s. He said: “When one sees a flow-line lay-out it is only natural to exclaim: ‘Well! How else would you do it?’ A tribute to the logic of the method.” Yet, when one sees batch-and-queue production, one can only exclaim, “What a mess! I don’t understand what is going on here. How do you guys make any money?”

“Efficiency is about how the process progresses, not how much sweat you put into it.” (p. 102)

Comment: For about a century, the word “efficiency” has been a pejorative term suggesting dehumanization and the advance of industry at the expense of humanity along the lines of the Charlie Chaplin film, Modern Times. People mistakenly think that this is what Ohno-san means by “efficiency.” An efficient process — the combination of people and machines — is one that flows smoothly and without strain. An inefficient process is one where material and information is deficient or accumulates and stagnates, which requires people to sweat to fix problems and get on schedule. The Toyota production system reflects the true meaning of the word “efficiency.”

“If people don’t suffer, they won’t have good wisdom.” (p. 103)

Comment: What Ohno-san is referring to here is learning-by-doing. It entails a bit of suffering to figure out how to solve difficult problems by trial and error (kaizen). Sometimes you have to wrack your brain to come up with ideas to try. It can be very frustrating at times. But, the result of that suffering is the accrual of “good wisdom.” Wisdom is a treasure. It means you have developed know-how; you know how to do things that others do not know how to do — not just talk about it. That makes you an excellent problem-solver with respect to improvement and puts you in a position to use your wisdom to educate others. That is what Taiichi Ohno did. He developed wisdom through hands-on kaizen practice and then he educated his subordinates. Through their own suffering they developed wisdom and then educated others.

The more manufacturing processes there are, the more intermediate warehouses there are, the more wholesalers there are, the more expensive the product becomes.

Comment: This is not an exact quote of Ohno-san; it is a summation of a few quotes. These words are important because they express the reality that the more steps in a process and the more equipment and infrastructure there is to make and sell a product, the more expensive the product is. Therefore, manufacturing should be done in the fewest number of steps (consistent with making it the cheapest and easiest way); products should be made just-in-time to reduce or eliminate warehouses; and business-to-business trading should be reduced to the fewest number of entities as possible. Taking these steps respect the consumers of the goods.

The next section is titled, “See the Origins of Taiichi Ohno’s Ideas. It includes four lectures and one interview spanning 93 pages. Here are some highlights:

“About Controls”, March 1960: “I too often feel angry at my own lack of control when I visit the work site, and I end up exploding because I am unable to contain myself. The people I deal with are the ones who are the target of this anger. I would like to take this opportunity to apologize to them, and at the same time, apologize in advance for the fact that this will likely continue in the future. (p. 114)

Comment: Ohno-san recognizes that his style upsets people. But he will keep scolding people owing to the necessity of making progress every day and to help the company survive tough competition.

“About Controls”, March 1960: “In our company, where we have a strong sense of responsibility, we do not focus on ‘achieving’ our goals, but rather on ‘getting closer to them.’ If we can make adjustments between departments so that the whole thing runs smoothly, it seems like there is still room for growth.” (p. 115)

Comment: This is a very interesting and different perspective. In most companies, achieving the goal is what matters most — nobody cares how you do it, just reach the goal. This framing suggests the goal must be achieved in one giant leap, with little concern for the method, good or bad, that led to achieving the goal. If you achieve the goal you get rewarded. If you do not, you get replaced. “Getting closer to the goal” is an entirely different framing of the challenge that people face. It suggests getting to the goal a little bit more each day, and that the reward is not achieving the goal but in having made steady progress. And because departments in a company are connected by people and flows of material and information, adjustments must constantly be made to make things flow more smoothly.

“Play and Productivity,’ September 1971: “Rationalization and productivity improvement without play are ineffective.” (p. 118)

Comment: What Ohno means by “play” is slack or looseness. If you kaizen a process to the point where people have no “play,” they will feel cramped or squeezed. But the opposite, too much “play” is no good either, because “you will feel lazy.” The point is that when humans are involved, there must be a balance between efficiency (“how the process progresses”) and respect for the operator; i.e., not making them sweat.

“Ingenuity,” June 1976″ (p. 120): “I often say that wisdom does not come unless there is a problem. Even if people are doing something very wrong, as long as they are not in trouble, most people will not realize that what they are doing, or what they are making others do, is wrong. For such people, the status quo is good, and therefore they have no desire to change it. Not only will there be no progress, but if they think that others are making progress, they may even feel like they are regressing… it is not easy to willingly put yourself in a difficult situation. When that happens, someone has to create a difficult situation for someone else… but if you are told to ‘go ahead and make something when you have no [new] people, no [new] equipment, and no [new] materials, you are forced into a very difficult situation. You have to use your ingenuity… It is not a matter of inspiration, but of science, and if you have the perseverance, anyone can do it. The boss must continue to make his subordinates suffer, and it is from these constant difficulties that the skill is born.”

Comment: Ohno-san says many important things in this passage that help describe the essence of Toyota’s kaizen mindset and methods. First, he explains how the status quo comes into being. People do wrong things, but as long as they do not get into trouble they think there is no need to change. It is only when faced with a very difficult problem — thrust into a difficult situation such as having to make something with few resources or no additional resources — that you are forced to think differently. When this happens, you must do the opposite of what everyone else does to solve the same problem, which is they spend money (hire more people, buy new equipment, etc.). Instead of spending money, use the vastness of human ingenuity to solve the problem. And rather than wait for very difficult problems to arise naturally, Ohno-san would intentionally “make his subordinates suffer” by putting them into dire circumstances such that they were forced to use their ingenuity to solve difficult problems. He would tell his subordinates to achieve a target with no additional resources; that they should spend ideas instead of spending money. Under such conditions, people begin to rapidly develop wisdom. The wisdom they gain elevates their thinking and capabilities to solve even more challenging problems in the future. Wisdom obtained through human ingenuity when forced into dire circumstances is how Toyota went from nothing in 1947 to being a global automotive business 25 years later. This is Toyota kaizen, which unfortunately most people in Lean world have long seen fit to ignore, probably because they simply do not understand it.

The next section is a lecture titled, “Multi-Processing is an Effective Way to Prevent Overproduction,” February 1987. Here are some highlights:

“The Toyota Production System is the product of groping around in the dark… We knew that doing the same thing as America wasn’t going to work, but at the time we weren’t even thinking about competing with America. We were groping around in the dark trying to think of ways we could survive on a small scale..” (p. 123)

Comment: The first sentence is a subsection heading, which I include here because it is so striking. It explains both the humble origins of TPS and the trial and error fashion in which TPS was created. Most other business leaders would immediately shut down such strange activities if they found out about it. But notice that “groping around in the dark” was also a search for ways to survive the tough automobile industry in the midst of ever-changing economic and market conditions. Survival, which is never guaranteed, is a recurring theme in Toyota leaders’ thinking, even today. In U.S.-style business, however, survival is not a consideration by the top executive because at any time the business could be sold, merged, or liquidated, whichever outcome is more advantageous to shareholders. Under such circumstances, creation of anything — especially of the “groping around” type — is under constant threat of termination. But that is often how new discoveries are made and how new systems are created.

“When looking for various kinds of waste, the book Toyota Production System says that there are seven types of waste. I didn’t mean to say seven types, but rather to say, ‘Waste is like a habit. Even if you think you don’t have any habits, other people may see you as having seven habits, and you may still have seven or eight habits. So even if you think you’ve gotten rid of waste, there are still seven or eight of them floating around.’ But before I knew it, I ended up saying, ‘There are seven types of waste.’ Since my name is in it, I can’t say, ‘That’s wrong,’ so seven or eight would be fine, but when I wrote that book, about 20 years ago, I wrote about what Toyota was doing, so you can just assume that at the time, only seven types were found. (p. 128)

Comment: This is a revelatory passage! This lecture was given by Ohno-san in 1987. The Japanese edition of Toyota Production System (Toyota Seisan Hoshiki) was published in 1978. So, that means Ohno-san wrote the manuscript for the book in 1967, a time when the understanding of waste at Toyota was limited to seven types: overproduction, waiting, transportation, processing itself, inventory, movement, and creating defects. Post-1967, it became apparent to Ohno-san and his disciples that there were many other types of waste. So, for those who think there are only seven types of waste, think again! Also, I find it interesting that Ohno drafted the manuscript 11 years before he retired from Toyota. While he may have had the intention for a book to be published, he may also have written it to clarify various thoughts or aspects of TPS in his own mind based on the prior 20 years (1947-1967) of work.

“The most important thing in the manufacture of automobiles is how to procure tens of thousands of parts just in time, and if this was not done, it would be impossible for Japan to produce small quantities of automobiles more cheaply than the United States.” (p. 131)

Comment: This shows you the importance of Just-in-Time. It seems few people understand that part of the benefit of JIT is to be able to make small quantities cheaply. And to do that, you have to reduce set-up time, queue time, and transportation time from hours to minutes or seconds. In batch-and-queue production, the only way to make things cheaply is to produce items in very large quantities (see my presentation “How Flow Destroys Economies of Scale“). There is no way to produce small quantities cheaply in batch-and-queue production. Therefore, JIT enabled a much smaller company, Toyota, to compete against much larger companies such as Ford and General Motors selling autos in Japan, even before Toyota entered the U.S. market. This is a big lesson that startups can learn from.

The next section is from an interview titled, “The Ideal Frontline Supervisor in an Age of Diversification,” 1979. Here are some highlights:

“It is often said that management can be done with knowledge. However, a supervisor must have the ability and charm to lead his subordinates. In that sense, a supervisor must first study to become the kind of person that subordinates will follow. I don’t think it’s enough to have skill alone. He must become the kind of person that his subordinates will say, ‘I can follow whatever that guy says.’… any troubles on the line that occur in terms of quality or during the process are all handled by the supervisors. You say that Toyota is not doing anything particularly unusual, but that is what makes it different from other companies. And through that, they have built relationships of trust with the workers and acquired the skills and technical knowledge to lead them. I think that’s what makes them different.” (p. 138)

Comment: In addition to skills and technical knowledge, we see the great responsibility that frontline supervisors have. Supervisors and workers must respect and trust one another. We also have an interesting contrast between how Ohno-san thinks frontline supervisors should treat their subordinates versus how he treats his subordinates. But the difference is in the work that the frontline supervisors do compared to what Ohno-san did. In his role as educator, Ohno-san had a vastly different approach to charming his subordinates.

“Another thing I used to stress is that a supervisor should not supervise the actions of his subordinates, but the flow of work…. The supervisor makes sure that what has been decided is done and followed, and the most important thing is standard work… Then they let people complain about it. ‘It’s decided like this, but wouldn’t it be better to do it like this? If you do it like this, efficiency will go up.’ The people who are doing it know best. So if you listen to the opinions of such people, standard work will change drastically.” (p. 139)

Comment: In this passage, Ohno-san makes clear that the supervisor is in charge of the workers, the work, the workers’ output, and, most importantly, the flow of work. However, to be a good supervisor, you must listen to the workers because they have lots of ideas for how to improve the flow of work.

“In the end, if you only copy the form, but do not put any soul into it, no matter how much you say that the supervisor is the manager of the field [genba], the effectiveness will not improve at all… I think that thorough elimination of waste was the first step in putting it into practice. To do that, you had to first instill a change in the way of thinking among supervisors.(p. 140, 141)

Comment: Putting your soul into eliminating waste, improving productivity, and supervising workers skillfully begins with changing frontline supervisors’ way of thinking. That is because the frontline is where the work is performed and thus where much of waste exists, and eliminating waste requires the cooperation of the workers which in turn requires mutual respect and trust.

“Toyota has an improvement team, which consists of repairmen and improvers. The improvement team’s job is to carry out the work that is given to them from the field… But repair is not good. There are three different versions of the same word ‘zen’: improvement, repair, and maintenance. The characters for ‘zen’ are all different. The ‘zen’ in ‘maintenance’ is the whole of completeness, but ‘improvement’ is the character for ‘to make better’ and ‘repair’ is the character for ‘repair.’ So maintenance and improvement are okay, but repair is not. For example, if a machine stops working, you need to find out why it stopped working and thoroughly investigate the cause so that it doesn’t stop again for the same reason.” (p. 146)

Comment: These are interesting details about the word “zen.” There are many such distinctions made by Ohno-san in the book, which is one of the things that makes it so difficult to understand TPS. Even those who think they know it well, based on books written in English or from experience, have a lot more to learn. When it comes to TPS, do not be overconfident in what you know. You will be easily fooled.

“Toyota Motor Corporation provides technical training to all of its partner factories in the vicinity. In addition, supervisors from each company come to Toyota Motor Corporation for a three-week training program. This means that the supervisor must actually do it on the shop floor and then go back to their own company and teach the people on the shop floor. The supervisor must do it on one or two items, and they can do it. However, the person who is being made to do it has to do it from morning to night. If you don’t show them that you can do the positioning yourself at this speed, they won’t trust you. That’s why you have to come to Toyota and work on the line from morning to night, just like the workers.” (p. 148)

Comment: This is called “learn by doing,” but to a much higher level of rigor and proficiency that is usually the case in most companies. This is how mutual respect and trust is gained between frontline supervisors and workers.

The next section is a lecture titled, “Site Management in the Age of Automation,” 1984. Here are some highlights:

“I think that it is necessary to clearly separate the purpose and the means in everything. In reality, there are many cases where people get absorbed in something and forget the purpose, and mistake the means for the purpose.” (p. 155)

Comment: People often focus on the means to get something done — i.e., “we need a new machine” — without understanding the purpose. Is it to reduce costs? Is it to replace labor? Is it to increase output? And rather than specifying an expensive machine with lots of just-in-case features, which costs more money, specify only that which fulfills the purpose. One should be careful to ensure that the means does not exceed the purpose or that it does not achieve the purpose.

“The purpose of automating operations is to ensure that costs do not increase, even if they do not decrease. This may be an issue that goes beyond automation, but using robots for extremely dangerous or unhygienic work should be done even if it means ignoring the cost, and it is also important in terms of respecting human beings… In the end, jobs may be taken over by robots or automated equipment. I think this will become a social problem. In this age of automation, we must take many things into consideration when deciding to introduce machines.” (p. 158, 159)

Comment: This is a good example of how some rules in TPS, such as automating to reduce costs, should be violated if it preserves the health and well-being of people. And you should think about our planet as well. The main point is to not be dogmatic, but instead carefully think about the desired action and its consequences in relation to its purpose.

“You should keep this in mind. When automating to reduce costs, you should think of this as an investment in automation, or in other words, automation that keeps the costs of automation as low as possible. Where you can install equipment with your own money, it will directly impact business performance. However, if you have to install equipment with borrowed money, even if you install the same machine for the same job, one machine will not accrue interest and the other will. If you install it with your own money, you will only have to pay depreciation costs. However, if you borrow money from a bank to install a machine, the bank will not lend it to you interest-free when you start production with it. You still have to pay interest.” (p. 159)

Comment: This passage speaks to the hidden cost of buying equipment using loaned money, which increases the cost of the parts produced and increases costs to the company. To make parts as cheaply as possible, you should pay for the equipment with your money. Or, maybe there is a cheaper way to perform the function of the equipment by building it yourself, without all unnecessary extra functions that machine builders add to the machine to increase the price and their profits. Or, perhaps you can buy a less expensive, stripped-down version of the machine and modify it according to your needs. The point is to always have costs (and people) in mind when automating.

“I always say that you should incorporate the wisdom of the workplace into the machines you buy…. Even if you use the machine exactly as it was purchased and produce the product exactly as it is listed in the catalog, you are not incorporating any of the wisdom of the workplace. I often visit the workplace and am shown a variety of new machines. When that happens, if you ask if it is exactly as it was purchased and you reply “Huh,” you will have to be furious right then and there. The idea is that if you don’t have some kind of wisdom that is different from other companies or your peers, you won’t be able to win the competition.” (p. 162-163)

Comment: What Ohno is alluding to here is that on-site management should be modifying machines via machine kaizen to improve how they are used, to improve quality, to improve productivity, to improve safety, and to reduce costs. Just because the manufacturer designs a machine to be used a certain way does not mean you have to use it that way. You must think instead of just doing what others say you should do. Incorporating “the wisdom of the workplace into the machines you buy” and in the work itself will improve your competitiveness. Most other companies do not think about this.

The next section is a lecture titled, “Paving the Way for Survival With the Toyota Production System,” February 1987. Here are some highlights:

“Well, no matter how much I complain here, the Minister of Finance is not going to be impressed, so I’m just complaining, but in the end, we shouldn’t rely on the government’s policies to do something about it, and I think the most important thing is for each manager to have the mindset that they have to survive on their own.” (p. 176)

Comment: This pertains to a lengthy discussion about trade friction between Japan and the United States, exchange rates, and the fluctuating value of the yen. Ohno makes the point that some aspects of trade are beyond the control of the company, and so each manager (each manager!) must do what they can via kaizen to figure out how to survive. Rather than complain, they must use their wisdom to survive difficult times.

“To implement the Toyota Production System, you must discard your previous thinking” (p. 177)

Comment: These words are a section subheading. I include it here as a strong reminder that to succeed with TPS, you must break free of your previous thinking — specifically, your preconceptions. The preconceptions of classical management and those associated with batch-and-queue production must all be challenged. Some preconceptions will survive the challenge, but most will not. As you have hopefully learned from earlier quotes, TPS is a fundamental change in both thinking and doing; a major departure from classical management and batch-and-queue processing.

“…you can’t just continue doing things the way you have been doing them up until now, thinking that they are all good. You need to reconsider the way you have been doing things up until now, thinking that this is what has happened, and if you continue doing things the way you have been doing them up until now, the deficit will get even bigger.” (p. 179)

Comment: This passage is in relation to a company that is losing its competitive advantage due to high costs caused by depreciation of the yen. The choice is clear: keep doing what you are doing and you will likely have to exit that line of business and lose several decades of accumulated technical knowledge, or admit that you must change your thinking and how you do things. Too many leaders are content to exit the business because doing so is much easier than changing how they think and do things. This is a disservice to the advancement of management practice and to society.

“The factory there has been very profitable up until now, and they have several machining centers, but when you install these types of machines, it’s only natural that they have to do batch production. So, remove these machines from the line, bring out the old machines that have been gathering dust in the warehouse, and, although it may not be called a rattle lathe, line up the machines in the order of the processes, even if they are single-purpose lathes. Then, if you implement what is called flow production, the large piles of machines that you had been building up thinking you could do things cheaply will end up with nothing in your inventory or in-process goods, to take the extreme.” (p. 180-181)

Comment: That is a quick and simple explanation of how you exit batch-and-queue production and begin flow production. Use right-sized single-purpose machines, rather than large multipurpose purpose machines, and arrange them in the sequence in which value is added, and transfer parts from one person or machine to another quickly like a handoff on American football. Of course, there is more to do — set-up reduction, standard work, yamazumi charts, visual controls, kanban system, total productive maintenance, etc., but that is the basic idea.

“However, there are probably only a few people in the world who can increase productivity even when the numbers are reduced. There are already countless people who can increase productivity and increase production volume… The problem in America is that high-performance machines increase productivity, but when you say increase in productivity, you end up making too much. You can make more than the number of products that customers want.” (p. 183)

Comment: There are two important points here: 1. Anyone can increase productivity when production volume increases, but it takes wisdom and ingenuity to increase productivity and reduce costs when volumes are down. Kaizen is the method by which wisdom and ingenuity are developed. Companies that cannot increase productivity and reduce costs when volumes are down have no wisdom and ingenuity. 2. In addition to being very expensive, the big high-performance machines compel people to overproduce, and the machines almost assuredly perform more functions that are needed to produce the part. When production volumes decline, companies that have these machines incur big losses.

“The more parts there are, the more you buy, just in time, so you don’t have to buy anything you need next month this month.” (p. 185)

Comment: From these few words, you can imagine how much less capital it takes to operate a business that purchases parts just-in-time versus a business that buys months of material well in advance of actual need. For all the complaining the CEOs have about high costs, most refuse to create a TPS-like system of Just-in-Time that would substantially reduce costs. Their unwillingness to challenge their preconceptions consigns them to perpetually complain about costs, which propels them to get rid of people and automate with machines that overproduce. They cannot escape high costs with that simplistic strategy.

“The Toyota Production System is about studying how to make something as cheaply as possible, but there is no set definition of what the Toyota Production System is.” (p. 187)

Comment: In TPS, “cheaply as possible” must always be understood from a total cost perspective, not necessarily a unit cost perspective. The low unit cost perspective dominates the thinking in classical management, which is why they always have cost problems (due to expensive equipment, overproduction, etc). In TPS, “cheaply as possible” also means meeting all quality requirements. The words “there is no set definition of what the Toyota Production System” should remind you that TPS evolves as times and circumstances change. TPS is not set in stone, either in definition, thinking, or practice.

In summarizing section 3, it provides many important new technical details about the mindset and operation of the Toyota Production System compared to other books that I have read.

Part 4 – Live Recording of Taiichi Ohno

The compact disc that came with the book is a recording of a lecture by Taiichi Ohno titled “Kaizen is the Crystallization of Japan’s Unique Wisdom,” October 1986. It was interesting to hear Ohno-san’s calm voice delivering the lecture in Japanese. I always thought it was strange that Taiichi Ohno never used the word “kaizen” in his writings given its fundamental importance as the primary method for creating TPS. Instead, he used the word “rationalization.” In context, “rationalization” seems to mean “to make right” or “to correct.” I suspect by using the word “rationalization,” he was trying to protect Toyota’s wisdom and ingenuity advantage over its competitors and imitators. But by 1986, and with the NUMMI joint venture with General Motors having begun two years earlier, perhaps it was no longer necessary to obfuscate. It is exciting to finally read Ohno-san talking about kaizen in the transcript of the lecture. Here are some highlights.

“There is a similar word in English, ‘improvement,’ but what does ‘kaizen’ mean?… I believe that the existence of the word ‘kaizen’ and the development of Japanese industry are all thanks to this Japanese word. I asked a person who is good at interpreting what the difference is between ‘kaizen’ [in Japanese] and ‘improvement’ in English, and he interpreted it as ‘improvement’ meaning to use money to make something better, and ‘kaizen’ meaning to use your brain to make something better.” (pp. 191-192)

Comment: This is a fundamental difference in perspective, again reflecting the opposite way of thinking. For most organizations, “improvement” means to spend money in some way to alleviate one or more problems (“make something better”). It could mean hiring more people, adding a new building, buying new machinery, buying new software, etc. This course of action in no way challenges people to think. Instead it promotes a continuation of not thinking or continuing to think in the same old way, and reveals the lack of confidence that top leaders have in the creative abilities of employees. To them, people are simply labor, not creative individuals who could do more for the company if challenged correctly. If, on the other hand, you have the view that people are intrinsically thoughtful and creative and that their human capabilities can be brought to the forefront of problem-solving, then you have the opportunity to use human intelligence to solve difficult problems and develop wisdom. You recognize that people’s brains are vastly underutilized, and also that given the right environment and training, they really enjoy the challenge of using their brains and that they have fun creatively solving difficult problems.

I think we need to clearly distinguish between knowledge and wisdom. People in the field confuse wisdom and knowledge. Knowledge can be bought with money. For example, you can go to school, pay tuition, or buy and read books. With money, you can get as much knowledge as you want. However, wisdom cannot be bought with money. The word ‘wisdom’ is written with the character for ‘blessing’… However, it all depends on whether or not you have the techniques to extract this wisdom… And the thing that people in the field need to be careful of is that past experiences fill the brain and make it difficult for wisdom to come out.” (p. 195)

Comment: “People in the field” means the general population. Past experiences form the basis of one’s preconceptions. Most past experiences are detrimental to the emergence of wisdom due to the strength of one’s preconceptions. Toyota’s technique for “extracting” wisdom from people is kaizen. Kaizen is the method by which old preconceptions are challenged, broken, and eliminated.

“In the end, humans will come up with some kind of wisdom when they are in a difficult situation.” (p. 197)

Comment: To “draw out the seeds of wisdom,” the manager must close off the old avenue of always wanting to spend money to solve difficult problems. The manager must challenge people to spend ideas, to use their creativity, to solve problems. That is how people develop wisdom.

“As the old saying goes, little by little makes a big difference when it comes to improvements that actually have a big effect. You must never neglect small suggestions or small improvements. For this reason, the role of the group leader is very important.” (p. 200)

Comment: In typical classical management fashion, managers want home runs and ignore singles (“small suggestions or small improvements”). In TPS, even small improvements are important because they contribute to an accumulation of individual and group learning over time that will help solve bigger problems later. Individually, it can be difficult to come up with small suggestions or small improvements. That is why kaizen is composed of cross-functional teams; to come up with many ideas for improvement that team members quickly try out. The development of wisdom can happen to many people at the same time.

“When you make one improvement, the next bud will definitely sprout from underneath, but if you are happy with the first one, you won’t be able to see the next bud, and you will be stuck… Don’t be complacent just because you’ve improved in comparison to others… Improvements, waste, and the ability to find them are infinite until we both die… Good ideas don’t come easily, so you have to think that what you’re doing now is bad, that there is waste, and that there is still room for improvement.” (p. 205, 206)

Comment: Let’s unpack this passage. Making one improvement and thinking you have done a good job and can now stop is a common, but wrong, way to think. You must keep thinking about what the next improvement might be, even if no problem is apparent. You do this to avoid complacency, and because waste is ever present even if you cannot yet see it. And even if everyone tells you what you are doing is perfect, you must take the view that it is bad, that there is waste, and that you and your team can improve it. Kaizen will draw out the seeds of you wisdom.

Final Thoughts

This is the third book about Taiichi Ohno that I have studied and provided critical commentary on (the other books are Album of Management Revolution and Taiichi Ohno’s Records: Founder of the Toyota Production System). It is easy to think that these books are mere hagiographies, but they cannot be classified as that. While the books are rightly laudatory due to his accomplishments, they also report Taiichi Ohno’s idiosyncrasies and flaws. Overall, it is clear that in my reading of these books, Ohno-san’s remarkable work is worthy of even greater praise than I previously thought from having carefully studied his three English-translated books for nearly 25 years. Taiichi Ohno is sui generis.

What we learn from this book is what Taiichi Ohno was really like from those who directly reported to him. We also learn additional and very important details about Taiichi Ohno’s way of thinking, what his intentions were, and what he hoped to accomplish. And one of the primary things he wanted to accomplish was to educate others in his unique way of thinking and doing things. And to do that he had to withstand a lot of criticism.

In Part 1, Kosuke Ikebuchi said an interesting thing: “Ohno, who is such a stickler for rules, is the only one who doesn’t wear a hat. He said, ‘I complain a lot and do a lot of things, so I might be attacked in ambush,’ so he was defenseless and didn’t wear a hat, and he was like, ‘I’m just ready to take on anyone from anywhere’.” (p. 35)

From this passage, two things of interest come to mind: 1. Ohno-san wanted to be easily identified and all but invited people to approach him and challenge his way of thinking and doing things, which he would vigorously defend, probably in part by scolding them. 2. In Japan, young school children wear yellow hats, while of course teachers do not. Perhaps Ohno-san’s uncovered head was a subtle reminder of who was the teacher and who were the students.

From Chihiro Nakao, one of Ohno-san’s later disciples, I learned that sometime in the 1960s, Ohno-san always wore a suit and tie and no longer got his hands dirty. This too could be evidence of his view that part of his role as a top operations manager was to educate others.

On page 75 of the tables that trace Taiichi Ohno’s career (Part 2 – Taiichi Ohno’s Trajectory), it says: “He [Ohno-san] returned from the Motomachi Factory to the main factory. Around this time [1960], Fujio Cho, Kosuke Ikebuchi, Junichi Yoshikawa, and Susumu Uchikawa, who would later become the core of Ohno’s direct disciples who would come to be known as the ‘Ohno School,’ were assigned to the factory and received instruction from Ohno.”

Today, corporate training and education is almost exclusively online and outsourced. Most managers do not see it as their responsibility to educate their subordinates, especially in opposite ways of thinking and doing things. Most likely they would get fired for doing that. If anything, managers train, educate, and mentor subordinates in the usual way of doing things — archaic classical management and batch-and-queue production. This, of courses, leads to little or no progress — and not just in productivity, but all facets of business. And the valiant work that kaizen consultants do to teach people opposite ways of thinking and doing things are often soon be undone by managers who seek to preserve the old ways of thinking and doing things.

I imagine Taiichi Ohno, if he were alive today, would be disappointed with the Western interpretation of TPS known as “Lean,” how Lean is mostly understood today as tools for workers’ toolkit, the near-total absence of Just-in-time, and the lack of senior management interest in the extraordinarily innovative management practice that he and his disciples created: the Toyota Production System, a vastly improved system of management suited to the reality of buyers’ markets. Ohno-san’s vision, his penetrating logic, his extraordinary eye for detail, and his perseverance are truly remarkable. The books Ohno-san wrote (Toyota Production System, Workplace Management , and Just-in-Time for Today and Tomorrow), as good as they are, do not do justice to his brilliance.

Having read the books Album of Management Revolution, Taiichi Ohno’s Records: Founder of the Toyota Production System, and The Origin of Toyota’s Strength: Taiichi Ohno’s Improvement Spirit, I now understand more clearly than ever why Chihiro Nakao, the disciple, refers to Taiichi Ohno as “Master.”

I am left to wonder, who are today’s Taiichi Ohnos? Who has the vision, penetrating logic, extraordinary eye for detail, and perseverance to create TPS-like management systems and educate subordinates in ways similar to how Ohno-san did. Or create something better than TPS. As time has passed, classical management remains in full force, barely scratched by the innovation known as TPS. The gap between what is and what should be in terms of management thinking and practice remains as large as ever, despite the massive effort over the last 50 years to bring TPS to life in companies worldwide. Today, we know why that gap exists. The next step is figuring out what to do about it. Kaizen will “draw out the seeds of wisdom” that are needed to solve this difficult problem.