INTERVIEW – Having started to explore TPS in the mid-1970s, Freddy Ballé is one of the great pioneers of our movement. Here, he shares what he learned about Toyota over the past 40 years.
Interviewee: Freddy Ballé, lean pioneer and author
Interviewer: Catherine Chabiron, lean coach and member of Institut Lean France
Catherine Chabiron: Freddy, you are known worldwide as the co-author of the Gold Mine trilogy, but you are also a lean pioneer in France, having influenced at least two generations of French lean thinkers. Over the past 40 years, you have had developed an impressive track record of lean transformations. What caught your attention and convinced you to start this life-long investigation?
Freddy Ballé: The starting point was my assignment in Mexico in the early 1970s as Deputy Manager for Renault Mexicana. What struck me back then was the fact that, when faced with quality issues on a car (and we were), the hours we spent on rework exceeded the time we spent on the final assembly. I could sense something was wrong, but could not pinpoint what was at fault in the process. Let’s say this alerted me to Renault quality and made me curious about the existence of other systems.
CC: Where was your first encounter with Toyota and TPS?
FB: You will be surprised to know it was in Africa! In the mid 1970s, one of my colleagues from Renault warned me that an obscure Japanese competitor was dumping prices there and asked for my help to prove this was the case. However, our investigation demonstrated the opposite: not only was Toyota (it was them, indeed) selling cars at lower prices than ours, but they were also making a profit.
At that time, provided a product launch was not underway, we could easily visit a competitor’s plant. When we went to see Toyota’s, we were confronted with a puzzling situation. It was quite obvious that they were far more productive than we were, with one production line delivering 600 cars per day with half the staff we had for the same output and the same type of operation.
Yet, as we walked down the production line, we couldn’t figure out what was different. For example, we would follow a stamping line of door panels through a shopstock, from which the stamped panels were taken to the next step. In Renault, the next step would have been to move allthe door panels to a central warehouse, so it was natural for us to assume that Toyota did it the same way. What we didn’t see during our visit was that door panels were sent directly to the next production step – welding. There was no central warehouse where semi-finished products would wait for days or even weeks.
CC: When did you sense there was something big in there?
FB: Assessing a competitor with your own system in mind is extremely difficult: we simply did not understand what they were doing when looking at their operations with our own set of binoculars. They simply did not focus on the same things. They were obsessed with their work-in-process, stock level and the flexibility necessary to reduce it. They told us, for example, that on the large presses, their SMED was half an hour when ours was five hours minimum. They even gave us a demonstration.
In the same way, at Renault we were measuring output from our lines by the number of cars produced compared to the capacity we had on the line. Toyota was measuring the time the line stopped for quality reasons against the theoretical production time, which gave them a permanent measure of quality.
I was puzzled, but progressively started to get to the idea behind this different way of working: Toyota was targeting flexible production lines to easily switch from one variant to another. They were also learning to work with small batches to reduce the lead-time for customers and enforcing quality checks at each station. (Whenever a defect was detected, the team leader was summoned for help. In case of failure to fix the problem, the line would be stopped!) Things at Renault were different: defects were listed on a piece of paper, but the car would proceed along the line and only at the end would it be taken to a large repair station. There, defects were corrected (provided they had been correctly reported, collected and understood to begin with).
Toyota was also very focused on what we now call “motion kaizen”: to reduce the number of steps and gestures the operator had to perform at his station (any useless motion is a waste). The larger the containers of components along the line, the longer the assembly workstations – and higher the number of steps the operator has to perform. Toyota’s sharp outlook on useless movements led to a switch to small containers.
I have a story about this. Years later, at the time when I had moved to Valeo as Industrial VP, Toyota was eager to penetrate the European market and had therefore developed close relationships with a number of automotive equipment manufacturers in Europe. We received a visit from “the” Toyota TPS expert and I asked the Branch Manager of the plant we visited to participate. Already engaged with a customer, he was extremely reluctant but I insisted he come along to the gemba. Without saying a word, our TPS master walked along the line observing the operators. He then took a small box of clips (used to assemble the car headlights) and moved it by a few centimeters. He then stepped back and observed the operator’s motions again. He moved it a second time, closer to the operator, and eventually appeared satisfied. My Branch Manager took me aside and gave me hell: “You had me postpone an important meeting for a mute old man, whose sole contribution to our production efficiency is to move clip boxes by a few inches!”
CC: Would you say that this paradigm difference in production also stemmed from Toyota’s history? The company had very difficult beginnings, in a small country where mountains often limit the space available for large industrial sites, and with a small domestic market.
FB: Yes, it certainly does. Furthermore, Toyota experienced major quality issues on their very early models and, just as they were ramping up, the Second World War broke. After the conflict, they suffered heavy financial losses and strikes. All of this led them to re-think their approach: “How can we get everyone to worry about quality and work on it all the time?”. This is how they came up with concepts inspired by Edwards Deming like production cells, quality circles and andon.
At Renault, the production line was solely looked at in terms of output. Quality only appeared as a final step. In fact, quality essentially meant managing rework based on a list of problems in upstream processes. In Toyota’s vision, the same production line was conceived as a string of production cells. With five to seven operators, each cell checks its own quality with the clear understanding that operators should stop the entire line if they failed to fix a defect. This way, the defect can’t move to the next workstation.
As time passed, I have seen many versions of a modernized Renault approach: defects are reported in an IT system instead of paper. However, unless they are killed there and then, defects are likely to be overseen and delivered to the customer. From design to assembly, kaizen is key.
CC: What did you learn from Toyota about product design?
FB: The first thing I learned was to pay attention to the customer and how he or she was using our products. You will have heard, like I did, plenty of stories on how Toyota’s Japanese engineers learned from their customers. Getting ready to design the Lexus, they went over to study at close hand representative premium services in the US. Similarly, for six months Honda studied hundreds of families taking kids to school and collecting them, before proposing a new van with rear sliding doors. They had a hard time convincing their Management Board, who feared the van would be identified as a truck instead of a family car. It turned out to be one of their greatest successes.
While I was at Renault, I was involved in the company’s efforts to enter the German market: we improved our designs after spending time watching people getting in or out of cars. This helped us to gain market share there. But I also learned the hard way that things can go the other way. After moving from Valeo to Faurecia, I remember presenting a prototype for our new dashboard to Audi, whose answer was clear: “This is a dashboard for Renault, not for Audi.”
Toyota relies on the role of the Chief Engineer. The CE has customer preferences and constraints in mind at all times. He helps define the product concept and fights for it, while taking into account advice and suggestions from functional experts. We are very far from the classical project manager, whose role tends to be limited to checks on deliverables and reporting on budget and milestones. The first thing the Chief Engineer does – aided by a small team – is to go to the plant producing the current model, discuss with the operators and learn from them about current quality or assembly problems, and work with them on reducing or eliminating them in the new model.
Toyota has also promoted a set-based approach in development. Our R&D departments are still reluctant to study parallel options, which they consider too costly. So, they end up selecting one solution to then discover too late it doesn’t work. This is where the real cost is, because you have to start all over again or launch something with a bug or not at the level expected. With their first Prius electro-magnetic system, for example, Toyota started with 80 potential solutions, tested them, came to an agreement on 40 and then, through further tests, halved those until it could choose one option. One more argument goes in favor of set-based concurrent engineering: the quality of the design typically relies heavily on the designer’s expertise, which this approach enriches through continuous and efficient problem solving.
CC: I heard you say that quality is the starting point of any industrial process and that kaizen is the key to it. Can you share more thoughts on kaizen, please?
FB: As I mentioned before, the key to understanding Toyota’s success is their 5 to 7-strong cells and their team leaders. At Renault, we were checking the actual output against the production plan at the end of the day. Toyota made me realize that a permanent check throughout the day is far more efficient. The part boards objective is by the hour, as is your opportunity to ask why an objective has not been achieved, if necessary. This enables management to see things that could not otherwise be seen, react faster to them, investigate wherever necessary, and collect fresh data. Doing this at the end of the day is too late, because you will have already forgotten what happened in the morning.
At Valeo, we implemented this type of cell, encouraging operators to think about their own tasks and work environment. With limited investment, operators progressively defined very efficient team standards, started to track their safety, follow the takt time on part boards and comment on any gap. When spotted, they displayed the problems and how to solve them. As Valeo grew both organically and through acquisitions, the team cells and their efficient standards made onboarding of small structures much easier.
None of this can work, however, without management at the gemba, checking on quality or gaps versus takt time, supporting initiatives, and asking questions. When management helps solve the problems exposed by the front line, operators gradually become more involved and positive. They also learn to work as a team: they will identify problems together, act together and feel responsible for product quality and takt time.
CC: The team leader is a key role in the organization of the cell. How do you identify those team leaders?
FB: The team leader is a coordinator, not a boss. Expertise on the product and technology is key. A team leader needs his peers to acknowledge this expertise. And yet you might still find you have not made the best choice. Experience taught me that the 5S exercise reveals the best team leaders: during it, those operators who show more ability to see problems and suggest options are not necessarily the person initially earmarked for the job. The right person is often the quiet and reserved one. That you don’t usually hear from.
CC: What about kanbans?
FB: Kanbans give you the takt time, they are the pace maker operators work to.
Kanbans also have unexpected consequences on the assembly line. When visiting Toyota I was particularly struck by their assembly lines. I once asked if they balanced out the workstations on the line taking into account the work content of the operators as we did at Renault. The answer I got was: “Yes, we not only take into account the work content, but also the kanbans”.
It took me some time to understand that this answer was about the components feeding the line. Large batches of similar cars, for example, with the same components (such as air conditioning) could not have worked with kanbans. In Toyota, the lines were replenished using small trains and kanban signals. They used small containers fed by flow racks and regulated by kanbans. This led them to further work on the SMED and redefine the production batch sizes. The kanbans and the replenishment rate directly contributed to the flexibility of the line.
When we started discussing kanbans at Renault, an engineer (who was completely missing the point) suggested to enter the Digital Age and design IT kanbans from the start. I am totally in favor of using computers when they are truly needed and for the added value they bring, but their role should be contained. Cardboard kanbans are strong visual tools that tell you whether you have a problem or not as you walk by. With an IT system, anomalies in the data are only seen by people somewhere in an office, when and if they take the time to check.
CC: How do you explain Toyota’s ability to retain its leading position both in operational efficiency and innovation over time?
FB: In Toyota, kaizen culture explains it all. Worrying about quality and takt time all the time, everywhere, has ingrained the idea that everything can be improved. We all know the story about Ohno’s circle: he would draw a circle on the factory floor using a piece of chalk and keep managers standing there, inside the circle, until they could think of five ideas for improvement.
In the same way, in product development, when you are faced with a difficult problem and someone comes to you and tells you he or she has found a solution, try answering like our engineers were answered while being trained by Toyota: “Not good enough, I want you to come up with three solutions and tell me how to select the best one.” This here is one of Toyota’s strengths.
CC: What would be your advice to CEOs, out of your 40 years of lean experience?
FB: First of all, lean management is built on sand if the vision behind the tools and routines is not properly understood. This is particularly true with Industy 4.0 or Digital factory, amongst the latest fashionable trends in industry. Digital parts boards do not have space for hourly comments on gaps. I am sure the defects recorded online will feed into magnificent Paretos, but the really important thing is actually to prevent passing the defect over to the next workstation, display which problem the cell is working on, and check on the learning progress.
My second point will not come as a surprise considering my experience at Valeo. I would say that implementing kaizen and pulled flows required extreme determination from both the CEO and myself. For most people, small batches and a set-based approach are counter-intuitive. To establish them, you will have to fight preconceptions, which requires will and the ability to explain why. You also need to dig in the details with your teams, give them a broader view whenever they are stuck, and find new angles with them. I call it the “the helicopter” method: to see where a box of headlight clips should be positioned and, when needed, to step back and be able to check if the flow of the whole line is efficient.
CEOs and managers not only go to the gemba to see things and enforce solutions, but also to learn how to adopt a Socratic line of questioning – not so easy when one has been educated and trained to respond to problems with immediate solutions and tactics.
CC: Socratic questioning?
FB: Learning your way in offices and on the shopfloor, you start seeing problems, waste or unattended issues. Refrain from saying (or even thinking): “That’s stupid, let’s do something about it immediately!” If you want people – whoever they are – to grow, you must encourage them to notice when there is a problem, weigh out options, try out solutions, and learn by doing. Ask questions such as: “Why do it that way?” or “Why is this part lying there?”. With their answers to your questions, help them identify the problem. Add new questions leading them to formulate even more questions, such as “Is there another way to do this?”.
Problem solving is the art of questioning. Whether you start an A3 or any other form of problem solving, the key point is the agreement reached by the team on the question: “What problem are we trying to solve?” Think also of the 5 Why’s: the answer to each should be facts – checked through tests or investigations on the gemba – and not opinions, or even assumptions made by brainstorming in an office.
I have recently started to study Japanese again, and I have discovered by pure chance that shitsu means quality and shitsumon means question. Interesting, isn’t it?
Freddy Ballé started visiting Toyota plants in Japan in the mid-1970s while head of product planning and later manufacturing engineering at Renault, where he worked for 30 years. Upon leaving Renault, he pioneered the full lean system implementation at Valeo as Technical Vice President, then at Sommer-Allibert as CEO, and later at Faurecia as Technical VP. He is co-author with his son Michael of The Gold Mine trilogy.
Catherine Chabiron is a lean coach and member of the Institut Lean France. She previously held the role of Director of IS Governance at Faurecia, a large French industrial group, working for eight years at the heart of the IS department’s lean transformation.