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Take a Spin with Toyota--Dickeson

January 2005
There's TPS, the Toyota Production System, and LEAN Manufacturing, which are basically development ideas of Taiichi Ohno of Toyota. Then there's the Six Sigma System strongly espoused by Jack Welch of General Electric, and The Great Game of Business, developed to a fine art by Jack Stack. If that isn't enough, add in ABC, Activity Based Costing, thought by some to be the answer to a maiden's prayer for manufacturing.

By the way, don't forget TOC, the Theory of Constraints, by Eliyahu Goldratt. Also don't overlook SQC, Statistical Quality Control of W. Edwards Deming, for continuing improvement of manufacturing. Oops, we almost forgot to mention Don Wheeler and his Understanding Variation touting the usefulness of XmR charting. There are probably a dozen more that we've omitted!

Then there are the 30,000-plus commercial printing industry shops and the 60 or more suppliers of computer systems. These plants and suppliers rely on the centuries old, double-entry general ledger system, coupled with the deceptive single-entry cost accounting scheme of BHR, Budgeted Hourly Rates. These cost schemes are derivatives of the systems developed for General Motors' Sloan and others in the early 20th century to assist mass production control.

All of these have a common objective: to improve the productivity of manufacturing. They purport to do this by providing some form of statistical base for people to make better decisions. These decisions come down to influencing physical actions of people, most often the people doing the actual work of adding a value to raw materials to make a finished product.

Election of the particular system to use for influencing the physical action of workers in a manufacturing plant seems to be a conscious, or oftentimes unconscious, decision of top management of a plant or company. Usually these decisions have been in place long enough to have become the "culture of the group"— the paradigm of "the way we do things here." Often, months, maybe even years, are required to change a culture that has become habit.

Even when a new top dog takes over or a merger occurs, the culture of the company goes on, just as it has, for years. It's tough, and takes time to shift the way people have made decisions. Mergers quite often fail to achieve synergies planned because of the entrenched cultures of disparate companies.

Do You Know Jack?

Take Jack Stack's scheme of involving plant people in the financial reporting of companies. Think you could get that idea across in a printing company? Especially a company run by an old guy who's held the numbers close to his vest all these years? Or a company run by the child or children of the founder who have that parent for a model?

And how would a press feeder suddenly feel if given the monthly income statement and balance sheet of his company? Would the feeder know how to make a better decision? I believe he would after several months' indoctrination in the relationship of numbers in financial statements—several months! People are smarter than we give them credit for being.

And how would the estimator in a printing plant feel if you showed him or her that budgeted hourly rates had only traces of reality. It'd take months, if ever, to bring him/her to the realization that hourly costs of a job don't relate to the income statement.

Okay. Follow Jack Stack if you will, but be prepared for a year or two to change the culture of the company. And answer the question of whether or not you want people to rely on budgeted hourly rates in making decisions.

Or, let's say that you believe in the logic of a Toyota system and want to follow it in your plant. Before you make that first move, I strongly suggest that you read "Learning to Lead at Toyota" by Steven Spear in the Harvard Business Review of May 2004. Follow Bob Dallis, a highly trained and experienced man, through his three months of training to become an upper level manager of a Toyota plant in this country.

The "Toyota Way" isn't easily learned, although it is highly effective in increasing the productivity, and continuing to increase the productivity, of an automobile factory. Then ask yourself if your company has the astounding culture of a Toyota that has been polishing and perfecting its paradigm since the 1980's.

Maybe you do have that nested culture of experimentation at the worker level of your plant—but I doubt it. The Toyota paradigm is revolutionary and it's little wonder that it has become the foremost auto manufacturer in the world.

Okay. So let's try the GE system of Six Sigma quality in your plant. But first we should get someone trained as a "black belt" in the system so that we have someone who can adapt it to the plant and tell us where to start, what data we should be collecting, how we should report it, and so on.

I've read several different treatises on Six Sigma and still can't say I understand it. I know the method looks at a manufactured product from a customer's point of view, not the plant's. It looks at the failure rate of a product at a very, very high level.

Six sigma is operational at a very few commercial printing plants. I can't tell you how effective it's been or the impact on net revenues. But I will say that I sure like the sound of it. It's bound to please customers, if you can make it work. In fact there's something good to be said about nearly all of these modern systems. We know that Toyota is gaining market share annually from domestic competitors. It really pains me that we in printing are still laboring with these ancient systems for our daily decisions.

About the Author

Roger Dickeson is a printing consultant in Sylmar, CA. He can be reached at You can receive a free copy of his book Monday Morning Manager by requesting a copy by e-mail.


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