What was the spark that ignited the Japanese Kaizen Revolution? As Dr. Edwards Deming clearly testified, the flow diagram below, Production viewed as a System, is ‘the spark that in 1950 and onward turned Japan around. It displayed to top management and to engineers a system of production. The Japanese had knowledge, great knowledge, but it was in bits and pieces, uncoordinated. This flow diagram directed their knowledge and efforts into a system of production, geared to the market- namely prediction of needs of customers.’ The entire world has been impacted by this revolution.
This straightforward flow diagram was present on every blackboard at every conference with top management in Japan from 1950 onward. Japan’s engineers studied and implemented the spirit of this flow diagram. As such, constructive positive changes were ignited when Japan’s engineers and top management grasped how to apply their knowledge. Dr. S. Moriguti of Tokyo denoted that 80% of Japan’s capital was in attendance at every conference with top management from 1950 and on.
As we discuss the components of this diagram I must point out that you can refer back to the static image or you can view the animated movie of Production Viewed as a System, shown below. The movie imbues the real spirit of this flow diagram as a dynamic process of continuous improvement. I created the animated movie because I think it is too easy for one to look at the static diagram and interpret it as a one cycle process, even though the diagram depicts production as a continuously improved system. Think of it this way. If you were to look at a still picture of an Apache helicopter, you would see just a static image of an Apache helicopter, the rotors, the fuselage, armament pods, etc. However, if you see a video of an Apache helicopter, you view the entire war machine in action, a complex aerodynamic system capable of precision weapons deployment.
Let’s examine the Production Viewed as a System diagram (I will refer to it from now on as the PVS diagram), the spark that ignited the Japanese Kaizen Revolution.
Birth of a Concept
The PVS diagram begins with concepts regarding a potential service or product. What may the customer need? Can we cost effectively manufacture the product? Will it fill a market void? Can we compete? Consumer research provides the much needed market predictions that must be considered when examining these product ideas. We are at the all-too-important 0-the Stage (a very important topic to be considered in a later post).
Prediction Leads to Design
Prediction gives rise to design of the product or service. Will our market participation be adequate? Will it empower us to stay in this business? This ever-flowing cycle includes observations on customer usage and product feasibility. This analytical motion results in redesign and re-engineering efforts. Hence a new prediction. And so the cycle perpetuates, design and redesign. As the PVS video shows, the heart of this process is continual learning with continual transformation, always active and ever-flowing. To stop is business death, to endeavor is commercial life.
Regarding a product or service, utilization of the PVS flow diagram imparts a continuous improvement feedback loop. Continual learning goes hand-in-hand with continuous improvement. The two are essentially the Siamese twins of kaizen business endeavors. With this process, one is empowered to witness the impact of redesign on costs, sales, and customer evaluation.
As the diagram and video show, all components of the system must work in concert with each other. It helps to view Production as a System in terms of your body’s circulatory system. Your heart, veins, arteries, & blood can be thought of as the flow of material and information that enables the all-important life required by your brain, liver, brain, stomach, etc. Without this flow, one literally dies. So to with a production system. For the flow diagram to work, the stream of information and material from one system component must correspond to and complement the input requirements of the downstream stages. In short, the mission is for materials to enter at the front of the process, and to emerge at the end as a practical good or service. One must note that the PVS diagram illustrates not only the flow of material in the production system, but also the stream of vital information required to manage the system. Just like your body’s blood flow, this information flows and interacts with all components of the system. Marketing shares with Engineering & Production, Purchasing shares with Quality & Engineering, etc. All information is shared with all components who are in need. In addition, the PVS flow diagram helps one in quantitatively predicting what system components will be affected by a proposed change in one or more components.
The PVS diagram is actually a renewed vision of a company’s (or institution’s) organization chart. In fact, it is much more powerful and constructive in comparison to the traditional pyramid chart. The outmoded pyramid chart only denotes the chain of command, accountability of an organization. The pyramid chart does not demonstrate how one’s efforts interact with the work of their co-workers. Sadly, the customer does not even enter into the pyramid chart. The one message conveyed by it is that one’s top priority is to satisfy their supervisor. Sadly stated, the pyramid chart promotes the fragmentation of the organization. Through fragmentation, each component turns into an individua profit center. In the end, the system is destroyed.
In contrast, the PVS flow diagram engenders adaptation and improvement. At it’s heart, the PVS diagram is a process for learning. This illustration reveals to people what their jobs truly are and how they can best interact with one another as members of a system. People come to understand how their efforts contribute to the system. More importantly, each worker can engage their mind as well as their manual labor. In and of itself, this empowerment enables one to take joy in their work.
14 Common Examples of Cooperation
For a well managed system, competition leads to loss whereas cooperation generates gain. With competition, everyone is pulling in opposite directions, counteractive movements in a chain of frustration. Cooperation is key. I want to quote 14 common examples of cooperation provided by Dr. Deming from his The New Economics, pp. 90-92. These great examples will open your eyes to the beauty of the PVS concept.
- The time of day, based on Greenwich mean time. You and your competitor and your customers use the same time signals.
- The date, 29 November, based on the international date line. You and your competitor and your customers use the same date.
- Red and green traffic lights, the same meaning the world over, the red light above the green.
- The metric system, used the world over.
- The ratio of the focal length of a lens to it’s diameter refers the world over to wavelength 546 nanometers.
- The American Society for Testing and Materials (A.S.T.M.) and other standardizing bodies. Here in my hand is a magnifying glass, with a light. Press a button, illumination. If the batteries need replacement, I may buy AAA batteries anywhere in this world. The will fit. I may get stung on quality, but they will fit. What if I had to order tailor-made batteries? I would not own the instrument.
- Licensing of a process or product to some other company.
- Companies make parts and products for each other. Almost any chemical company is dependent on competitors for intermediate products. Automotive companies make parts or even whole engines or transmissions for each other. I have in mind a division in one of our automotive companies in which a competitor is this division’s best customer.
- A large data-processing company does work for small companies that are not equipped for some jobs. Both companies wins, and the customer too.
- Meetings of scientists and other professional people, at which speakers and participants contribute to other members’ new theory and methods, with exchange of theory and experience.
- Journals, articles in which authors share with the world new ideas, new methods, new results.
- A railway car may move from Halifax to Montreal to Boston to Toronto, back down through Buffalo, Kansas City, Miami, Houston, into Mexico, to San Diego, Los Angeles, San Francisco, Portland, Seattle, Vancouver, Calgary, Saskatoon, Edmonton, Winnipeg, Duluth, Chicago, Kansas City- same gauge, matching systems of brakes and drawbars. Result: lower costs of transportation, more dependable performance.
- Cooperation between professional men and women, any of them ready to help another.
- We buy a light bulb, or an electric heater, curling iron, refrigerator, 110 volts, 60 cycles. This is standard voltage over all North America, and the plug will fit our outlet. Result: advantages of mass production; also convenience.
The reader may note that the result of every example of cooperation is that everybody wins.
In Contrast: Destruction of a System
Now, let us view the PVS diagram from a different perspective. Break the diagram down into individual, independent, competitive components. Zero to minimal cooperation. Consumer research is an island onto itself, product design is an independent department, production is on it’s own, and each vendor/supplier is operating for themselves, etc. Each and every component competes with the others. As Dr. Deming stated ‘Each one now does his best, by some competitive measure, to make a mark for himself. Can anyone blame him? This is his only hope for survival.’ In the end, the system is annihilated, yielding loss of an immeasurable size.
I have seen this happen on a first-hand basis. The following is a real life example. It is intended only as an example to learn from (I wish only the best for the business described herein). Some time ago, I worked as a scientist for the division of a Fortune 500 company. The division leaders believed in competition between departments and between individual employees. These leaders believed said behavior would bring great breakthroughs for the division. They actually encouraged competition and empowered it by providing large (in some cases very large), financial rewards and bonuses to chosen individuals based upon project reviews. When some new technical achievement occurred you commonly heard the leaders ask ‘Who did this’, seeking out an individual to credit for the achievement, always looking for one hero. Never mind that 600+ employees worked for said division. The results were disastrous. Infighting abounded in abundance. Managers jockeyed for position. I once went into a different department’s laboratory in order to borrow some equipment. I found one of the technicians building a personal computer for his home during work hours. Let us call him John (not his name). I asked John what he was doing. John said that another technician in his group received a large financial bonus for work that he felt he should have gotten credit for. John indicated that he had decided to work at only 40% of his capacity since he had been slighted. I asked John whether or not he was concerned that his supervisor would catch him. John said no because he believed that his boss was too stupid (not the case). John’s actions were never discovered. Due to corporate competition, the company failed to achieve it’s long term goals and was eventually sold. Multiple layoffs occurred, bringing suffering to many. The parent company has been and is experiencing a long-term downward economic spiral. As a side note, I believe that in their heart-of-hearts the divisional leaders meant well and acted with good intentions. They just had never studied Dr. Deming’s methodologies. However, the best intentions of well-educated men brought upon the worst of results.
Dr. Edwards Deming provides an extensive discussion of the Production Viewed as a System flow diagram in his book The New Economics. This concept, the spark that ignited the Japanese Kaizen Revolution, continues to positively influence businesses around the world. The contents of this post were derived from The New Economics, Chapter 3: Introduction to a System. The below bibliographic reference is provided as an additional resource for recommend reading and contemplation.
- Edwards Deming, The New Economics for Industry, Government, Education (Cambridge, MA: Massachusetts Institute of Technology, Center for Advanced Educational Services, 1993), pp. 50-93.
- KAIZEN DEFINITION: kai·zen \kīzən\ noun: a Japanese business philosophy for the continuous improvement of working practices, manufacturing processes, personal efficiency, etc.