According to Merriam-Webster, ethics is the discipline of dealing with good and bad. If you look beyond the tools and the jargon of the Toyota Production System (TPS), this is exactly what you will find; TPS is a system for defining good and bad, and right and wrong in a production environment. When we understand this, everything about TPS is obvious. Highlight the behaviors you want to encourage and make it easy to see when you deviate from these norms; there is little subtlety or art. We have the means, authority and moral obligation to evolve the system to match our business ethics, our basic code of excellence and our system for serving our customers.
Right versus wrong – it’s that simple! There are tools and techniques for achieving what TPS founder Taiichi Ohno defined as right and wrong. His 14 principles are the gold standard, the tenets of our doctrine if you will. But the core learning of Lean is to define how you want your processes to run and then make it visible when the process deviates from this definition. In essence, we apply an ethical doctrine to our business and judge how well we conform to those ethics. Establish a vision for what is the right way to do business, and then teach people how to follow that vision.
TPS is not a complete set of ethics. It doesn’t need to be. If you look closely you will see that TPS evolved out of the religious and ethical traditions of Japan. There are elements of Zen, Shinto and Tao embedded in the mechanics of TPS and these traditions are broader than the business world. TPS enhances our moral and religious traditions with rules and philosophies for how we should treat our customers, suppliers, employees, and even the products and services we provide. In the West, we have lauded business – even elevated it to a pseudo-religious status. TPS puts business in its place as an integrated part of the human condition.
What are the basic tenets of this system of ethics? What is its creed?
Principle 1: Respect Value
Value is not price or cost but rather the worth that your customer places in the products and services you provide them. This worth is related to cost, but they are different. It is important to remember that value can only come from the customer. Creation of value is the sole aim of business and all things that interfere with the creation of value should be avoided.
Principle 2: Respect for People
Value can only be created through human action. Most organizations mistakenly believe that employees are interchangeable and replaceable. What companies fail to realize is that there is an enormous amount of undocumented know-how in their employees. The mechanics of how to produce products can be captured but unless the emotional qualities of the business relationship are addressed, the product your company produces is ultimately a commodity subject to the whim of the market. To truly excel, we need to make our customers feel good about the business they do with us, and this demands a pride in workmanship.
When we respect all of the people in our value stream (including customers, employees, suppliers and regulators), we engage their minds in the products and services we sell. By engaging their minds and not just their hands, we drive ownership and passion for doing the right things. That passion for what is right translates into win-win solutions for everyone in the supply chain – and, therefore, creates value.
Principle 3: Respect for Time
Everything other than time can be purchased. Capital can be raised or retired. Employees can be hired and furloughed. Materials and equipment can be purchased and sold. But time is finite and unrecoverable; no more can be acquired and once spent it is gone forever. Time is the limiting commodity. Everything else can be warehoused, flexed up and down to meet demand, or recovered. All activities must be designed to make the absolute best use of time. Being sensitive to the finite resource of time, for all parties in the supply chain, is fundamental to process excellence.
Principle 4: Respect for Gemba
The gemba or workplace (note, this is a crude translation of the term) is the place and the systems that people use to generate all value. Value does not come into being through random acts; it must be purposefully constructed by employees and suppliers for customers. It is a complex social process bringing about the interaction of time, value and people. Knowing the gemba and living in the gemba is also fundamental to process excellence. The better we understand this complex interaction, the better we are at delivering value.
Principle 5: Respect for Problems
Most companies equate process excellence with the elimination of problems but this is not necessarily a healthy stance. All processes will eventually have problems, it is the second law of thermodynamics – entropy increases. What differentiates quality organizations is how they deal with problems.
In Western society we don’t focus on our problems – we shun them. Problems are seen as barriers and impediments to excellence. If we practice TPS, however, we know that problems give us insight into the gemba. The presence of problems reminds us that we have more to learn about how our business works and gives us opportunities to improve the value we deliver to our customers. By embracing issues and solving our problems we improve the people, we improve the use of our time, we improve our gemba and we improve the value we are able to create.
This is perhaps the most difficult challenge any organization faces when embracing Lean. Problems are not something to eliminate. We need to find all our problems. We need to study every problem and learn their lessons. Finally, we need to understand that we can never eliminate all the problems but we can manage them and use them to make us stronger.
Taiichi Ohno expanded these five tenets into TPS as did W. Edwards Deming with total quality management. They all deal, however, with the same key foundations. More importantly, it’s not the work we do, the products we make, or even how we do the job that’s important – what matters most is how we think about the job we do and for whom we do it.