‘Lean’ lessons for Irish business from Toyota
The key differentiator between ‘Lean’ processes in Japan and Europe is that in Japan there is less focus on hard automation and more on the development of people, according to Dr. Richard Keegan, a fellow of the Institute of Engineers and manager of the competitiveness department at Enterprise Ireland.
Keegan had first exposed to the concept around 16 years ago in his capacity as the European advisor to the EU-Japan Centre for Industrial Co-operation when he went to a Toyota plant.
“Being an engineer and having the opportunity to see the Lean best practice in real life was an eye-opener. The first thing I noticed was all the flashing lights and incredible technologies, but I began to realize that underpinning it all was beautiful simplicity.
“People were actually engaged regarding improving themselves and their processes. Simply defined, Lean comes down to looking at what we’re trying to do, how are we doing it and what can we do to improve it.
“What’s interesting in Japan is that companies have constantly focused on developing their people and processes at the same time and don’t see Lean as a checkbook solution. However, more and more of Europe’s leading companies are beginning to realize that engaging the hearts and minds of people is more significant than simply utilizing what is known as Lean tools.”
The origins of Lean go right back to the 1920s when inventor and founder of the Toyota Corporation Sakichi Toyoda developed a loom and weaving machine that identified broken threads, motivated by trying to find ways to make it easier for his grandmother to produce cloth.
A production process centered on preserving value with less work, Lean as a management philosophy is mostly derived from the Toyota Production System (TPS), and Japan is regarded as the home of Lean. Formerly called ‘just-in-time production,’ TPS is an integrated socio-technical system developed by Toyota that comprises its management philosophy and practices.
“TPS came about because Toyota was battling against General Motors and Ford to service a very fragmented market with lots of variants regarding sizes and applications of vehicles without the resources the Americans had,” Keegan explains.
Nowadays, Lean is focused on providing customers with the best possible products at the best reasonable prices, at the best possible quality levels and at the best possible delivery times.
Having started in the manufacturing area, Lean has spread right along the value chain from sales through logistics, manufacturing, purchasing, administration, product design and development, and back to sales.
Taoiseach’s visit to Toyota plant
Last December, A Taoiseach Enda Kenny TD went to Toyota’s Motomachi plant in Japan to meet senior executives from Toyota Motor Corporation as part of the trade mission to Japan.
He traveled with a delegation of Irish business leaders to the Toyota plant, including Julie Sinnamon, CEO of Enterprise Ireland, CEO of Glen Dimplex Sean O’Driscoll and the Irish Ambassador to Japan John Neary. The objective of the meeting was to learn from Toyota’s Lean production processes and glean insights as to how this could be applied to industry in Ireland to support the country’s economic recovery.
“The visit marked the support given by Toyota to Irish companies in the past and the relationship between them, as well as showing the importance of best practice, efficiency and effectiveness for Irish business going forward. It was a very professional and insightful visit,” says Keegan.
“The Toyota plant in Wales had to go right through to the highest levels of the organization to arrange the visit, explain the background and reasoning behind hosting it. Positive contribution to society is one of Toyota’s core values, and the tour of the Motomachi plant was viewed in that light.”
Over the past four years, 1,000 Irish owner-managers have been to Toyota’s engine production facility in Deeside, North Wales with the support of the Toyota Lean Management Centre as part of Enterprise Ireland’s Lean programme.
“These visits expose those taking part to what good is and what really challenging means. What has been clear over the past four years is the plant’s focused and relentless approach to always trying to be better – the team keeps pushing themselves by looking at the facts as opposed to opinions,” says Keegan.
“In Ireland, we’re trying to take on the Lean business perspective, rather than purely Lean manufacturing in the belief that administration, sales, design, and all functions also need to be efficient. Since our pilot in 2009, we’ve supported a total of 565 projects across all sectors in three different levels – ‘Lean Start,’ Lean Plus’ and ‘Lean Transform.’
“Our effort is in trying to understand and engage with best practice globally so our client base can access this and be able to use it.”
Achieving a national step change in manufacturing capability is one of the three disruptive reforms outlined in the Irish Government’s Action Plan for Jobs 2014 and Lean is part of this.
“In 2014, we will continue to roll out our Lean offering to Enterprise Ireland clients as well as sharing knowledge with Local Enterprise Offices. Six visits to Toyota are planned this year, as well as visits to Audi and Bosch, which are also seen as leaders in the Lean space,” Keegan notes.
This article first appeared in the ‘Ireland Asia Business Yearbook 2014’, published by Asia Matters in association with Business & Leadership (B&L).
Asia Business Week Dublin (4-6 June), a joint initiative of Dublin City Council and Asia Matters, with Dublin Institute of Technology as an academic partner, is now booking with a reduced fee for B&L readers until 21 May.