Toyota kata's: the missing link for success of Lean within SME's.

Toyota kata's: the missing link for success of Lean within SME's.

An action research towards applicable routines.

Master Thesis, July 2012

Jelle Bouwkamp S1598597

Master Technology Management, Rijksuniversiteit Groningen Research object: Muelink & Grol BV, Groningen

Supervisors Muelink & Grol J. Slagter

J. Wiersma

Supervisor Rijksuniversiteit Groningen Prof. dr. ir. J. Slomp

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Full understanding of the use of Kata cannot be achieved by a brief description, which in fact should detract the true meaning of the concept. However, if any attempt of trying to do this only as much as touches the first step towards full understanding, it is worthy of trying.

Considering the theme of research, as far as I know a study concerning the contribution of kata’s towards the implementation of Lean manufacturing principles within a SME is not conducted before. This, according to my opinion makes it even more interesting.

The process of struggling towards a solid research structure and exploration of an interesting and relevant research topic consisted of much feedback sessions and discussion with my mentor at the university. It even led to my decision to reject the entire first design. However, I actually enjoyed this turning point because of the recent acquired insight of the “learning journey”. I like to think of it as the quest for the holy grail, in my opinion it is not the grail that is important, it is the quest. The similarities with this statement and the actual research topic are striking, as you will experience. I want to make use of this preface to thank my supervisors at both Muelink & Grol and the University. From the university I like to thank Jannes Slomp for his supervision, support, interesting discussions but above all his valuable insights that enabled me to see the wider perspective. Gratitude goes towards professor Roodbergen for taking the role as second supervisor and assessor. From Muelink & Grol, I owe especially gratitude towards Johan Wiersma for his support and the pleasant cooperation, I enjoyed and learned from all discussions and new insights he shared with me. The following people may not go unnoticed; Jelle Slagter for providing this opportunity and sharing his knowledge, Richard Kramer for his enthusiasm and support and Hans Naasz for his pleasant cooperation. Furthermore, I thank the people who were involved with the improvement project for their openness towards my questions.

Finally, I owe everything to my wife Dorien. Without her support during my entire study and master thesis, I would not have succeeded.

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Small to medium enterprises (SME’s) often experience great difficulty to implement lean manufacturing principles. They mostly owe their existence by the possibility of offering a large product variation and engineering to order. This makes achieving for example the one-piece-flow principle more difficult than within a larger company that operates in a mass-production environment. Moreover, there is less knowledge and there are less recourses available within SME’s than in their larger counterparts. In which the implementation of such principles are more commonly known to be successful.

Routines similar to that used at Toyota, which are called kata’s, have proven to break with this impasse within this research. By creating routines to establish a clear target condition, which in turn leads to its obstacles. The use of a quick iterative method deals with the obstacles by experimenting, obstacles that are commonly assumed too difficult and avoided within a SME. This can be done without a protracted and costly analysis. Moreover, by establishing and continuing these routines the lean principle of continuous improvement can be achieved and practiced within SME’s.

These results are obtained by an action research within the packaging department at Muelink & Grol BV. This is done by answering the research question, which is defined as:

How can the routines that are used at Toyota to continuous improve their processes -called kata’s- contribute to successful implementation of Lean Manufacturing principles within SME’s?

The improvement routine is mainly driven by the following questions: 1. What is the target condition? (The challenge)

2. What is the actual condition now?

3. What obstacles are now preventing you from reaching the target condition and which are addressed at the moment?

4. What is your next step? (Start of next PDCA cycle)

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Preface ii

Management Summary iii Part I: Research Design 1

1 Introduction 2 1.1 Problem Statement 2 1.2 Research Object 3 1.3 Structure Report 5 2 Theoretical Framework 6 2.1 Explanation of Concepts 6

2.2 Continuous Improvement In SME’s 6 2.3 Toyota Kata 7

2.4 Redesign of Facilities Layout 9 2.5 Theoretical framework elaborated 10

3 Causal Model and Methodology 11

3.1 Causal Model and Sub-Questions 11 3.2 Research Methodology 12

3.3 Research Overview 14 3.4 Validation 15

Part II: Case Muelink & Grol 16

4 Preliminary Findings Evaluation 17

4.1 Preliminary Study 17

4.2 Kata’s within and after Preliminary study 19 4.3 Practical Application of Kata 20

4.4 Reflection on Results 22

5 Scope of case at M&G 23

5.1 Current Situation 23

5.2 Scope of Case and Causal Model 24 5.3 Focus of Processes 25

6 Establishment Target and Current Conditions 26

6.3 Reflection with and without Kata’s 32

7 Improvement Actions and Results 33

7.1 Start of Improvements M&G 33 7.2 Contribution of Kata’s 36 7.3 Results Improvements 40 7.4 Results Questionnaire 43 8 Research Conclusions 44 8.1 Answers to Sub-Questions 44 8.2 Research Conclusion 44 8.3 Research Limitations 45 8.4 Further Research 45 9 References 46 10 Appendices 49

Appendix A: Interview Company situation and preliminary study 49 Appendix B: Pareto Analysis 50

Appendix C: Process Flow of Telescopic Wall Terminal 51

Appendix D: Examples of Current Condition of the packaging department 52 Appendix E: Discussion of the Lean Game 53

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The problem statement discusses the theme of the research and its purpose. At the end the research question is given.

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Ever since Womack and Jones (1990) titled the successful Toyota production system as ‘Lean Manufacturing’, it has become a popular method within the western manufacturing companies. The general production system of Toyota and its well-known techniques such as takt time or kanban are subject of research for more than two decades. Despite all the effort of copying and studying the Toyota improvement methods, no organization has ever matched the performance of this Japanese precursor (Rother, 2010). Over time, these techniques evolved at Toyota and in turn the Western companies copied these evolved states within their manufacturing companies. At that point, in time these techniques are even further evolved or adapted. Rother however, discusses with new insights in his book ‘Toyota Kata’ the answer to why and how these techniques arise and evolve. In short, the routines, patterns and its resulting behavior that are conducted on a daily basis within Toyota are called kata’s. However, as will become clear this behavior emanates from the clearly structured responsibilities culture, which is enhanced by the coaching kata. Contradicting with the enormous popularity of Lean little is written in literature about the implementation in small- to medium sized enterprises (SME’s) (Timans et al., 2012). Moreover, that small amount of research that is conducted to Lean implementation within the SME’s is showing disappointing results. Research towards SME’s within the Netherlands by Timans et al. (2012) found that 59% of their respondents were Lean oriented though they lack the means and knowledge for successful implementation. Achanga et al. (2006) study towards critical success factors for Lean implementation within SME’s in the UK found that Lean manufacturing had not been adopted by a meaningful number of SME’s because of the lack of the right factors. Could new insight concerning the routines that are used at Toyota to continuous improve their process be the solution to aid in the implementation of Lean within SME’s? Therefore, the theme of research concerns Kata within SME’s. These concepts are further explained at the theoretical framework.

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The objective specifies what the client can expect from the investigator (Verschuren, 1986). The objective determines the direction of the research. This is the instrument trough which the results can be evaluated. The results have to be a solution to this objective. The purpose of this research is to give insight in the way of how Lean is implemented within SME’s and to identify how kata can aid in this implementation. The latter concerns which patterns and routines are used during the implementation of Lean techniques, a more detailed explanation is given by the theoretical framework. Thus, in what way is the perspective of the Toyota kata relevant for SME’s? In order to achieve this, the research will observe the current implementation of Lean techniques at a SME and participate in the process of implementation. This will have a strong influence on the methodology, which is discussed in the methodology chapter.

In the first place, this research aims to contribute to the scientific literature by researching literature about the theoretical concepts and contexts. Eventually new insight of the use of kata for Lean implementation within SME’s can be a possible outcome of this research. In order to achieve such an outcome a case of continuous improvement at a SME will be evaluated from a theoretical framework, the Toyota Kata framework.

With probability bordering on certainty one can say; a study concerning the contribution of kata towards the implementation of Lean manufacturing principles within a SME has never been carried out before. At this stage, the research question (RQ) can be derived from the section above.

GENERAL RESEARCH QUESTION

How can the routines that are used at Toyota to continuous improve their processes -called kata’s- contribute to successful implementation of Lean Manufacturing principles within SME’s?

Important to note is that the choice of a SME as research object is based on its main characteristic of a low volume high variety environment, this will be discussed within the theoretical framework.

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The case part of the research as discussed above will be conducted within M&G. This section provides a brief introduction of the flue gas industry, company and relevance. Later on in the report, the case will be discussed in more detail.

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Since the dawn of humanity, they are ever seeking for solutions to warm their homes. From a fire in the cave with just a hole in the roof – thousands of years ago- to the highly innovative concentric flue gas systems of the 21st century. Central heating has become an essential part of our lives. The ever-increasing demand for central heating systems creates a demand for exhaust disposal solutions. Essential to gas powered central heating systems are the presence of oxygen and the absence of the waste product of combustion. Thus, such a system needs a continuous supply of fresh air and a continuous disposal of the exhaust gasses. This is solved by flue gas systems. Which are based on the basic principle of lower pressure outside the outlet of the flue pipe.

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M&G can be considered according to EU Commission a SME because SME organizations have less than 250 employees. M&G is the leading manufacturer in Europe of Flue Gas Systems. It is founded in 1932 and developed over the years an extensive knowledge of legislation in several countries in and outside Europe.1 It started with two plumbers named Wijma & Grol who started an eponymous plumbing company in Groningen.2 A few years later Mr. Muelink joined the company and the name changed in Muelink & Grol. The company started with the production of some minor plumbing products. Eventually they also started selling these materials to other plumbing companies. A production company was born. The plumbing disappeared to focus entirely on production. The production expanded to all kind of metal products and pipes. This was the start of the flue gas pipes for the exhaust outlet of heating systems. The entire evolution of the flue gas systems -as discussed before- were successfully followed and adapted at M&G. As a result, M&G is now the leading manufacturer in Europe. Their product portfolio consists out of a wide range of pipes, bends, wall- and roof terminals and connectors. The materials used are aluminum, stainless steel, galvanized steel and plastics. Most of the customers of M&G are big companies in the heating market. Some of the 150 different customers are for example, Valiant, Nefit, Remeha, Ideal and Intergas. The plant is located in Groningen and consists out of three buildings. The production processes can roughly be divided in plastics, assembly, coating and packaging. The basic plastic processes are extruding, injection molding, mirror welding and pipe belling. Assembly consists out of some packaging and assembly activities and so are some of the metal works such as cutting, drilling and sawing. M&G has around 150 permanent employees of which about half of them are direct production employees. The other half are sales, logistics, engineering, management and other supporting roles. Furthermore, there are about 50 temporary employees involved with production.

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Due to high economic pressure and price competition it is important for M&G to continuous improve their processes in order to remain the leading manufacturer. With over 7 million households in Holland and 80% of which use central heating3, it is a competitive market. The output of the company in terms of cost price per product of the company is lacking. This functional problem is not subject to perceptions of any kind. One of the projects that involve Lean improvement implementation at M&G concerns a routing, work-in-progress and efficiency problem. Now it is often unclear where and why inventory of finished products is waiting before and after the packaging department. There seems to be unnecessary build up of inventory at the department. Part of the case in this study will focus on how the packaging department can be made more efficient and better equipped. The concepts involved with this problem includes: Lean Manufacturing Philosophy, a vision of identifying and eliminating wastes towards getting flow in value streams (Womack et al., 1990), and all necessary related tools that may be applicable. Tools such as Pull Production are widely described in literature. Pull is based on the principle that no one upstream should produce anything until a sign from a customer downstream (Womack and Jones, 1996). Knowledge of Technology Management is needed to fill this knowledge gap at M&G. In the end, M&G is directing its efforts to complete integration of the Lean manufacturing philosophy in the entire company. One of the first Lean measures concerns the change of the packaging department. It will most likely raise further improvement questions in the various departments before (and after) the packing department. These first improvements at the packaging department will be the launch for efficiency improvements of the entire production process. Considering the aim of this research this project is an applicable case for the study of the contribution of kata to the implementation of Lean principles.

1 _{www.muelink-grol.com, www.m-ggroup.com}

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Two years ago a management technology student, W. van der Goot conducted a research at the packaging department at M&G. The research was focused on the efficiency of the packaging department. In more detail, the focus was on the causes of the low efficiency. He defined and researched three properties within the packaging department; the organization and layout, working methods and planning. The main tools in this analysis are work sampling and the principle of the seven wastes of Lean (Ohno, 1988). His research question at the time was about which factors are causing the low efficiency at the packaging department and what Lean manufacturing principles can be used to increase the efficiency. In context of the research at hand, this preliminary study may be of great value when evaluated to its level of implementation. The level of implementation implies which of the results are implemented and which are not, even more important; why?

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The report is divided into two parts. This is because of the more general character of the research design, which is described in the first part, and the more case specific research object in the second part.

Part I: Research Design

First, this chapter introduced the research theme, which resulted in the research question, and the research object. The second chapter discusses the theoretical framework that creates a knowledge base for the research. This will be used as a perspective for the evaluation of the research question. From this knowledge base the causal model arises which is described in the third chapter. Furthermore, that chapter discusses the methodology that is used during the research and how the validity of the research will be ensured.

Part II: Case Muelink & Grol

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This chapter discusses the theoretical framework that will form the perspective from which the

continuous improvement at the research object will be evaluated. In order to discuss this framework

it is needed to briefly explain some terminology derived from literature that is used in this study. The remaining paragraphs of this chapter discuss the literary derived theoretical concepts used as a framework for this study.

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The subsequent terminologies are the most prominent and important concepts that are used throughout this report and therefore briefly explained in this section.

Lean manufacturing was first mentioned by Womack and Jones (1990) as a better way of organizing the production operation, product development and the entire supply chain. It was pioneered by Toyota after World War II and can be referred to as the Toyota Production System (TPS). Womack and Jones defined Lean as doing more and more with less and less. In short, the Lean manufacturing philosophy is focused on improving and creating a flow of the value added activities within a supply chain and eliminating the non-value adding activities. Womack and Jones (2003) recognized five Lean principles that underlie the Lean philosophy. Specify Value for customer, Identify the Value Stream which concerns all the actions needed to bring a product to the customer. Create flow also referred to as one-piece flow to move parts from one value adding activity directly to the next. Create Pull which means that the customer must pull the product. The last important principle that often tends to be forgotten is Pursue Perfection. The latter concerns also continuous improving every process of the supply chain. As Rother (2010) stated; Continuous improvement ≠ projects and workshops. This gives a rather good example of on how this concept is often thought of. One is not continuous improving when he follows an improving workshop –such as kaizen workshops- every week. On the contrary, there is no end to improving every process at every time to reduce costs, space, time and mistakes. Kata’s are altogether the set of routines, patterns, structure and behavior, which enables and create the company’s culture which in turn enables continuous improvement.

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SME’

Literature is consulted in order to determine a valid judgment of the status of continuous improvement within SME’s. The pressure on manufacturing firms is increasing through globalization and new technologies. Moreover, new entrants contribute to the pressure on the manufacturing markets (Umble et al., 2003). This can happen because these markets have fewer barriers (through the increasing competition by globalization) for new entrants, which makes a SME’s more vulnerable (Porter, 1985). Higher competition urges SME’s to become more efficient. This urges the SME’s for the adoption of efficiency improvement tools such as are offered by the Lean manufacturing philosophy. It is rather unfortunate that Achanga et al. (2005) concludes negative on this matter. They researched the critical success factors (CSF’s) for Lean implementation within SME’s. Findings show that there is a lack of funding and leadership for the adoption of Lean within the small and medium enterprises.

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It is commonly known that Toyota is successful in continuous improving on a daily basis. However, how do they do this? Note that together with the discussion of the status of Lean within SME’s, this theoretical framework is a further elaboration of the research theme as described in section 1.1.1. Western companies are trying to copy all the counter measures that are created through Lean implementations at companies such as Toyota. However, there are no examples known of companies that are that good in continuous improving as Toyota. What are they doing differently than other companies? This is answered by the Japanese term ‘kata’. Toyota’s Kata concerns altogether the improvement culture, behavior, routines, habits, structures and patterns of thinking that are practiced every day which in turn enable the continuous improvement at Toyota (Rother, 2010 pXVI). The obtained routines and behavior of continuous improvement by experimenting (Spear, 1999) are the actual reason for the superior results at Toyota. The behavioral patterns -as are practiced within Toyota- are not visible or described, it has to be recognized. Copying the visible practices of Toyota can be referred to as reversed engineering. However, this reverse engineering does not make an organization adaptive or continuous improving. Moreover, the use of the commonly know Lean tools can serve the right purpose though without the right mindset it may become a purpose in itself which increases the danger of sub optimization (Van Goubergen, 2012, handouts). Competitive advantage is obtained by the companies’ abilities to understand conditions and to create solutions and adaptation. According to Soltero (2011), the secret ingredient of continual improvement is the ability to create an adaptive workforce. Toyota’s kata is the way of achieving it. Rother distinguished various variants of kata i.e. improving kata, coaching kata and maintenance kata. Moreover, Soltero (2012) distinguishes between problem solving and improvement kata’s. The subsequent sections of this paragraph discuss the distinctive elements of the improvement and coaching kata’s.

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The improvement kata must be continuously practiced and serves two purposes (Soltero, 2011), (Rother, 2010). As the name implies the first purpose of improvement kata concerns the direction of the improvements. Second, the solutions and knowledge learned from these improvement steps will form the starting point for the next problem. Consequently, the problem identification is used as a platform for teaching the problem solving technique. This iterative process is conducted by the PDCA cycle (plan-do-change-act) which will be further elaborated within the methodology sections later on.

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No improvement efforts are made within Toyota when there is no target condition to be pursued (Rother, 2010, p77). In order to reach continuous improvements, target conditions have to be set and reset continuously concordant with the overall vision of the company. According to Rother a target condition contains information about how a process should operate, what the intended normal pattern is, which situations has to be reached at a certain point in time and what should be the next step, displayed in Figure 1. The obstacles and problems to reach the target conditions can be recognized by the target condition itself. The overall vision keeps the improvements processes in the direction. Current Condition Next Target Condition Vision Problems and Obstacles

1. This is defined in advance. How this process should operate. The intended normal pattern of operation.

2. So we can recognize true problems and obstacles, and work through them.

Avoiding obstacles result in not achieving the target condition aligned with a certain vision. Then, a new target condition has to be set which does not lead to the former vision, and will in turn raise other problems and obstacles. The vision must thereby also be changed. The proper way of dealing with the problems is to understand them and eliminate its causes, not avoiding them.

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Rother compared the iteration by small steps with the landing of an airplane. When an airplane is going to descend in order to land, for the passengers it might be comfortable to know that the pilots still can control and adapt the course of the descending airplane. However, that the airplane is going to land is a fact and the target condition is the airplane safely on the ground. The process of landing an airplane consists out of adapting by controlling the course in small steps instead of dropping like a brick from the sky. Figure 2 displays the process that when the target condition is clear it should be reached by small steps. The way towards the target condition is called the gray zone. Rother observed the process of moving through the gray zone and defined it as the unclear path that has to be taken. However, when one want to see further into the gray zone one has to take the first step and use this information to plan the next step and repeat this process until the target condition is reached. Toyota moves through the gray zone with the adapted PDCA cycle method, which is described at the methodology section. Toyota obtained their superior position by experimenting (Spear, 1999). Experimenting is needed for the incremental way of improving of the improvement kata to explore technical possibilities. It is also needed for the coaching kata, which is explained below. It benefits by experimenting through the combination of training and doing by the mentee in real time.

Current Condition

Target Condition

Figure 2 Moving towards the target condition.

At Toyota, they summarize the movement towards a target condition into five questions. The five

questions are the base of the repetitive taking of steps towards the desired condition, they are stated

below. The questions are addressed by Rother as “minikata” for the approach of any situation and will aid in learning the improvement kata;

1. What is the target condition? (The challenge) 2. What is the actual condition now?

3. What obstacles are preventing you from reaching the target condition and which are addressed now?

4. What is your next step? (Start of next PDCA cycle)

5. When can we go and see what we have learned from taking that step?

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Kata’s as are not extensively discussed in literature except for Rother, this in contrast to social studies towards implementation of various change projects. Knowledge on the latter subject can be valuable when introducing the elements of the kata’s within a SME.

Rousseau and Tijoriwala (1999) discussed in their research on how employees -based on the social accounts theory- interpret reasons for change. The communication towards the employees of the managerial reasons for change is strongly related to the success of its implementation. Social accounts are defined as the managerial justification and excuses that are used to explain action undertaken by persons or firms (Sitkin and Bies, 1993). In a situation where employees have strong relational contracts and commitment towards management, managerial accounts may be enough to legitimize change and is more likely to result in motivating employee participation. In a more complex situation, this may not be enough. The authors’ findings suggest that often the employees interpret the reasons as different messages according to the nature of relationship with the organization. This is one way of assessing the current situation and the likelihood of success. Important findings by Rousseau and Tijoriwala (1999) are summed up as; first, implementations of organizational change are less successful with less communication of the reasons for the change. Second, when employees have strong relational contracts and commitment towards management, managerial accounts may be enough to legitimize change and is more likely to result in motivating employee participation. Third, the assumption of conscious deliberately resisting to change is not true. However, results of failed implementation can lead to resistance for future attempts of the same concept (Benders and Van Veen, 2001). Lean is a rather fragile term in this process. Misuse can happen when a change manager uses the Lean terminology as a label for getting things done. This can happen when for example the goal of a change manager is head count reduction, as described in the case by Benders and Slomp (2009). The authors expressed the danger of the use of the label ‘Lean’ as: “If any way of improving performance is called ‘Lean’, the specific philosophy of the Toyota

Production System becomes but one way of doing so, and its specific strengths lose their attractiveness.” Lean must not be a goal itself but the way of achieving a goal. Fourth, employees are

less likely to resist change when they perceive that the benefit of change exceeds their personal costs. In this situation the justification of the reasons for change have to be in the form of demonstrable benefits and valued consequences over time. The message of this section is that the promotion of reasons for change is important to consider when introducing the kata’s.

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Research on manufacturing systems found that 30-70% of the products costs can be attributed to material-handling expense (Rosenblatt, 1986), (Sule, 1991). Along with the findings o f Tompkins and White (1984) that material-handlings are mostly between 20-50% of the total manufacturing company’s operating budget, the motivation for an optimal arrangement of the facility’s layout is high. An optimal arrangement can thus result in a high decrease of product costs and in turn enhance the company’s competitive position. Moreover, Nicol and Hollier (1983) stated that even established manufacturing companies should change their layout every 2 or 3 years due to changes in processes. The design of facilities in an optimal manner is defined by Heragu (2008) as the physical arrangement of departments that minimizes the movement of personnel and material between departments. This will result in a decrease in material-handling costs and an increase in efficiency and productivity. Furthermore, he identified some other factors that can be considered as reasons for a redesign.

• Reducing obstructions for flow of people and material of the value stream. • Utilizing the available space effectively and efficiently.

• Facilitating communication and supervision.

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The theories described above are forming the base of this research. From the theoretical framework, a conceptual model arises and is discussed in the next chapter. This section briefly summarizes the discussed theories in order to get a clear image concerning the conceptual model. The foregoing section states the importance of the communication of change; this will not emerge in the conceptual model. However, it is important knowledge concerning communication towards the research object. This is part of the context of which the researcher must be notified. A different element of the context is that this research is conducted within a SME. The preliminary study and the discussed communication of change and CSF’s are also part of this context. The principles from Lean Manufacturing are used as a philosophy with a set of tools to accomplish an efficiency improvement at the research object. (The need for the efficiency improvement is stated in the introduction.) The role of the kata’s is their contribution to accomplish this successful efficiency improvement. Besides this, the mentioned theories describe the kata’s as the way of achieving a continuous improvement culture. This part of the theoretical framework shows a chance of researching the latter relation in a specific context. From literature about kata’s, certain elements can be derived as characterizing for the identification and introduction of kata’s:

 The five questions (from 2.3.3) as a routine towards conducting and learning the improvement kata.

 Establishing routines of setting target conditions as clear goals for the improvement kata.

 Performing small steps to achieve the target conditions.

 Experimenting and trial and error form the base of conducting the small steps.

 Mentor-mentee structures of the coaching kata, which also must enable and support the trial

and error practices within the improvement kata.

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Methodology is needed to give guidance to the research. It will aid in the design of an efficient and justifiable research apart from what the objective of the research will be (De Leeuw, 2003). One of the most important aspects of research is the justification of choices and questions and the degree in which the research can be reproduced. It will deliver testable and logical new theory, which in turn can result into new insights (Eisenhardt, 1989). First, the conceptual model, which is derived from the theoretical framework, is discussed. In short, this chapter explains how the research question will be answered. The research question as is defined in the introduction:

How can the routines that are used at Toyota to continuous improve their processes -called kata’s- contribute to successful implementation of Lean Manufacturing principles within SME’s?

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The conceptual model shows the knowledge elements that are needed for the research. First, a causal model shows the demarcation of the research component. Second, it shows the selection of the properties. Third, it shows the relationships between the properties. Fourth, it shows what elements and relations are needed or already known to achieve the objective. The model used for this research is stated in Figure 3. The model is derived from the theoretical framework. First, note that the Lean principles are displayed in a certain context. This context is the case specific situation such as the existence of a preliminary study at the research object. The latter can be evaluated to judge the current situation of the research object concerning the theme of kata’s. The use of Lean principles and techniques must provide an efficiency improvement within the object of research. This relation is thoroughly discussed and tested in literature and practice. This knowledge is used during the research to achieve efficiency improvement. A moderating relation is expected to affect the foregoing relation. This is displayed as ‘kata’s’. Thus, the research is focused on the contribution of this property towards the efficiency improvement by means of the Lean principles. The last relation is shown as the impact of the use of kata’s on the continuous improvement culture.

Efficiency Improvement Kata’s Lean Principles Continuous Improvement Culture Context i.e. Preliminary Study

Figure 3 Causal Conceptual Model

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The measurability of the causal properties, which are used throughout the research, is defined per property.

Lean Principles – Can be identified by the use of its associated tools and techniques, the existence of waste elimination tools and most important the visibility of a continuous flow in the processes.

Efficiency Improvement – Can be identified by decrease in any form of wastes such as unnecessary

transport, motion or work in progress levels. However, as Slack and Lewis (2008) stated, there are commonly five performance indicators to be distinguished, which may not be negatively influenced by this research. These other indicators are quality, speed, reliability, flexibility and costs.

Kata’s – Can be identified by the appearance of the elements as discussed in section 2.7.

Continuous improvement Culture – Can be expresses as the amount of effort put into continuous

SUB-QUESTIONS

1) What is the level of implementation of the preliminary recommendations?

a) Are there any elements of kata’s to be identified with respect to the preliminary recommendations and its level of implementation?

b) What practical application of kata’s could have positively contributed to the level of implementation of the preliminary recommendations?

2) What is the current situation of the research object and which focus can be made? 3) How are the target and current conditions set?

a) Are there any kata elements to be identified within this process?

b) Could the introduction of kata elements positively contribute to this process? 4) How is the target condition reached?

a) Are there any kata elements to be identified within this process?

b) Could the introduction of kata elements positively contribute to this process?

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This paragraph will discuss how the sub-questions will be answered. The methodology that is used for this research is based on action research. First, case based research is briefly explained in order to obtain full understanding the action research methodology.

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Flynn et al. (1980) introduced a generic methodology for empirical research in operations management. It does not allow any iterative steps between the stages. Stuart et al. (2002) developed a generic model as a case research methodology to assess how such an approach should be performed. At first case-based research seems to be applicable for this case by its character of grounding theoretical concepts on reality. However, its emphasis is on observation and field interviews with no influence or interference by the researcher. Given the motivation of this research, this research demands a more active approach.

Action research (AR) can be seen as a variant of case research, though whereas a case researcher is an independent observer, an action researcher according to Benbasat et al. (1987) is more of an observer and participant of the implementation of a system. He becomes also a participant of the process of change, which is also the subject of research. Thus, the action researcher is in action rather than performing research about the action. The sequence of events of which AR is performed is planning, gathering data and take action, feedback the action and take another action. Furthermore, the important outcomes of the AR are not only solutions but also important learning’s that contribute to theory building (Coughlan and Coghlan, 2002). They state that AR is a challenging and complex approach of research. The change of an organization gives the researcher time pressure and responsibilities. Journal keeping and evaluating are therefore very important tools. The model of AR (Westbrook, 1994) is depicted in Figure 4. In contrast to the case-based research, it allows for iteration between the stages.

Design research around key methods Decide broad area of investigation Focus First collaborator(s):  Focus area of investigation  Refine research method Develop Subsequent collaborator(s):  Repeat mehtod  Develop theory Apply Express theory as applicable technique; Final applications Evaluate results Disseminate results Action research/theory building

3.2.2 S

A

R

The stages as are displayed in the action research figure are briefly described in order to structure the use of the methodology. First, the ‘broad area of investigation’ can be identified within the introduction of this report. It is described as the theme and relevance of research. Secondly, this section is part of the ‘design of research’. The key methods are described in the theoretical framework and are expanded with the methodology. These first two stages are commonly found in most research methodologies. The third and active part of the methodology concerns the ‘focus,

develop and apply’. This stage is about conducting a repetitive cycle of planning, implementation and

evaluation in order to generate new theories and experience. This repetitive part will be conducted through another research technique; the PDCA cycle which is discussed in the next section. The final stage is the ‘evaluation and dissemination’ of the research. The evaluation is one of the most important stages within action research in order to secure its validity. Furthermore, the new theories and result are in the end to be proven applicable for practice or further research and disseminated.

3.2.3 PDCA

C

In order to conduct the repetitive part of the research methodology a second method is used. As is stated earlier, this technique is used for the action part of the research. The PDCA cycle (Plan-Do-Check-Act) is a scientific method first described in a different version by Shewhart (1939) as “steps in a dynamic scientific process of acquiring knowledge”. Nowadays, Rother (2010) identified it as the experimental methodology that is used for moving toward a target condition. As is discussed earlier, the incremental steps can be conducted by scientific experiment. In order to do this, Toyota uses an adapted version of the PDCA cycle, shown in Figure 5. Toyota added “Go and See" because of the importance to always check the actual situation in every step.

ACT PLAN DO CHECK OR STUDY Go And See

1. Define what you expect to do and to happen. This is the hypothesis or prediction.

2. Test the hypothesis, i.e., try to run the process according to plan. Observe closely. 3. Compare actual

outcome with expected outcome.

4. Standardize/stabilize what works, or begin the PDCA cycle again.

Figure 5 PDCA cycle, with addition of Toyota "Go and See", derived from Rother, 2010.

3.2.4 R

T

This research will make use of a set of techniques in order give an answer to the research question and to conduct the action based case study. These techniques with its purpose are stated below, in Table 1. Note that the techniques are in italics. The table continues on the next page.

RESEARCH SUB-TOPIC (FROM THE SUB

-QUESTIONS)

RESEARCH TECHNIQUE CH.

1. Level of

implementation of preliminary study.

Semi-structured interviews and informal meetings with people

involved i.e. the operations manager. And observation of the current situation. This can be seen as a reflective case study.

4

1A. Elements of kata’s within the preliminary recommendations.

Relevant knowledge of literature about kata’s is needed to

assess the preliminary study.

4

1B. Practical application of kata’s.

Relevant knowledge of literature about kata’s is needed to

search for practical applications.

Continuation of table 2. Current situation and focus.

The focus of the case can be derived from the observations and

interviews of the comparison described chapter 4. Furthermore,

the focus of processes within the case is obtained by a pareto

analysis.

5

3. Target and current conditions.

Through project meetings, the target conditions will be determined. The current condition can be observed and mapped according to its value stream mapping. The obstacles and restrictions in processes are to be filmed and analyzed. A comparison is made with and without the use if kata’s

6

4. Steps towards the target condition.

With relevant knowledge of literature about kata’s and Lean

principles and techniques the steps towards improvements will

be conducted by the PDCA cycle method and is observed and

evaluated. The action researcher will take an active role within

the meetings. A comparison is made with and without the use of kata’s

7

3,4A. Identification of kata elements.

The identification of kata elements will be researched by

observation and evaluation during the implementation of

improvements. Furthermore, another important technique is a

personal log that will aid in the identification of the elements

afterwards.

7

3,4B. Introduction and contribution of kata elements.

The introduction of kata elements will take place through the entire research by informal meetings. However, experiments will be used to test new techniques or layouts. Evaluation of these results and other kata elements are used to assess its contribution to the success of improvements. By a questionnaire, an evaluation of results is conducted and to test the willingness to adopt coaching kata in the future.

7

Table 1 Research techniques and its purposes

3.3 R

O

Figure 6 displays the use of the research methodology and the position of the active part of the methodology. The research question is central to the research, and has the desired output of new theory about the contribution of kata’s for the implementation of Lean principles. The action part that discusses the kata elements is conducted at the research object. Note that the preliminary research displays a link with the latter. This is because of the similarity of both the research objects. However, the evaluation of this earlier study is not part of the action-based research because of its reflective character. Literature is discussed within the theoretical framework, and delivers the knowledge elements and part of the motivation for this research.

Kata contribution to Lean implementation in SME’s Kata Elements at Case at SME Literature R e s e a rc h Action Research New Theory Preliminary Study

3.3.1 D

As discussed earlier the documentation is of crucial importance. This report is the most important

deliverable and will be delivered at the end of the research. Furthermore, there will be two

presentations of the results. The first will be at M&G and will be focused on the results and future steps. The second presentation is also the defense of this master thesis at the university. Other deliverables are the meetings of progression with the mentors at both university and M&G. The general restrictions to this research are stated below.

• Research duration is 6 months. • This report is written in English.

• The emphasis of this research is on the contribution of kata to the implementation of Lean principles within SME’s.

• The case study that is needed for this research is conducted at Muelink & Grol and focuses on the implementation of Lean principles at the packaging department.

3.4 V

There are four logical tests for judging the research design for scientific value. These validity tests are shortly described in this section to provide guidelines for enhancing reliability and validity according to (Yin, 1989). These tests are continuously used for evaluation during the research. However, they are not all relevant for action research. In this research, these four tests are mainly used for the validity of the research design. At the end, a more specific validity test for action research is outlined.

3.4.1 V

First, construct validity is the test to which extend the establishments of measures for the research concepts are correct. This validity is enhanced by a clear description of how the data is collected and the reason of why measures are used. Furthermore, an important factor of construct validity is the use of key informants who reviews the draft versions. Second, Internal validity is determined by the level of correct causal relationships between the concepts of the research. Note that in this case of action research, these first two tests are mainly concerned with the research design. Thirdly, external

validity is established through existence of generic results of the research. Thus, this test is also

relevant for the validity of the outcomes of this research. This research design is aimed on a generic research question. The more specific focus of the research object is only introduced at the case part of the research, and the questions are stated in such a way that the results have to be generalized in order to answer the main research question. The last test described by Yin is reliability and is defined as the degree to which the operation of research can be repeated. This normally asks for a clear chain of evidence and a clear reproducible methodology. However, because the action part of this research is more subject to its researchers’ input, reliability of the action part more complex to obtain.

3.4.2 V

P

II:

C

M

&

G

Kata contribution to Lean implementation in SME’s Kata Elements at Case at SME Literature R e s e a rc h

4 P

F

E

M&G is the research object as is stated in the introduction of this report. Part II of the thesis discusses the action research that is conducted at M&G. This part starts with an evaluation of the preliminary study. The evaluation is made in order to answer the first sub-questions and to identify the

past and current roles of kata’s. In this regard, the preliminary study is an important part of the context of the current situation at M&G. The study reveals some of the causing issues of the efficiency lack. Moreover, this evaluation is made to form a bridge with the scope of the current research. The purpose of this discussion is to learn from previous experiences at the research object. For example, the causal model that is derived from the preliminary study will be used to adapt the current conceptual causal model described in the previous chapter. The sub-questions that direct this chapter are:

1) What is the level of implementation of the preliminary recommendations?

a) Are there any elements of kata’s to be identified with respect to the preliminary recommendations and its level of implementation?

b) What practical application of kata’s could have positively contributed to the level of implementation of the preliminary recommendations?

The questions are answered using semi-structured interviews and informal meetings with amongst others the operations manager. The observation of the current situation is needed to get insight in the current level of the preliminary recommendations. Relevant knowledge of literature about kata’s is needed to assess its possible occurrence within the preliminary study and to search for its practical applications. In other words, this chapter can be seen as a reflective case study.

4.1 P

S

The preliminary research was conducted two years ago. A technology management student, W. van der Goot, conducted this research in order to graduate. At the time, M&G had appointed a team of people who were to implement Lean solutions. Naturally the supervision of the graduation internship was mentored and supervised by this Lean focused team. The research was focused on the efficiency of the packaging department. In more detail; the focus on the causes of the low efficiency. In short, he defined three properties within the packaging department; the organization and layout, working methods and planning. The main tools in this analysis are work sampling and the principle of the seven wastes of Lean (Ohno, 1988). In his research, much can be read about the implementation of a new ERP system SAP, which causes a lot of uncertainty for his research in terms of future implementation questions. In fact, SAP is operating today. This leaves the planning issues at the time as non-relevant today. Other planning issues may be arising but not in the form that is described in the preliminary study. The research question at the time was about which factors are causing the low efficiency at the packaging department and what Lean manufacturing principles could be used to increase the efficiency. The next section discusses the preliminary research findings.

4.1.1 P

From observations, analysis and literature research, Van der Goot concluded a list of causes that are responsible for the low efficiency. Table 2 and 3 shows the research findings and its current status. The wastes are classified according to the seven wastes of Lean (Ohno, 1988). The two properties of the packaging department –as defined according to the initial causal model in the preliminary study- are stated in the first column. The causes that are observed and analyzed are stated according to their waste classification in the third column. The last column shows if the causes of the low

efficiency are solved in the current situation at the start of this research. This is done by observation, informal meetings and semi-structured interviews.

PROPERTY WASTE CAUSE OF LOW EFFICIENCY SOLVED?

Organisation and layout

Transport  Assembly on different stations as the packaging itself.

 Sticker machine and other tools at distance.

No No Motion  Big and small orders are processed together.

 Most of the orders are divided over different stations. No No

Table 2 Causes of low efficiency in Organization and layout - by Van der Goot, 2010.

At the start of the current research, the causes of low efficiency described above were not solved. The causes were not adopted from the report and not translated into a clear goal or improvement project. These preliminary research findings indicate some of the potential obstacles. Table 3 shows the causes of low efficiency that are part of the work method. The author defined work method as; all the actions and operations that are conducted at the packaging department.

PROPERTY WASTE CAUSE OF LOW EFFICIENCY SOLVED?

Work method

Transport  No overview in transport activities. No

Over Processing

 Read/write unclear pick lists.

 Work meetings for problem solving.

 Piling up pallets with unfinished orders.

 Marking lines on the pick lists.

Yes Yes No Yes

Wait  Parts not available or difficult to find. No

Defects  Defect parts

 Faults on pick lists

Yes Yes

Inventory  Five days of WIP No

Motion  Workspace not ergonomically

 Search for parts

No No Other

Aspects

 Employees responsible for packaging and work preparation

 Problem and ideas of the employees not communicated

No No

Table 3 Causes of low efficiency in Work method - by Van der Goot, 2010.

Note that some of the causes mentioned above are solved. However, this is not achieved by the recommended changes of the preliminary study. The solved causes are not observed anymore because of various changes over time such as the implementation of SAP and the integration of the two separate packaging locations into one. The latter was not mentioned or recommended in the preliminary study. As became clear from the informal meetings this change was based on an attempt to decrease the intern transport. The actual intern transport between the two locations is eliminated at a cost of more complex routings within the residual location.

This proves that some improvement changes take place though not by a clear formulated target or improvement roadmap derived from the preliminary thesis, as the interview with the operation manager indicated. The semi-structured interview can be found in Appendix A: Interview Company situation and preliminary study.

Facilities Layout

Lean Principles

Efficiency Packaging Department M&G

Figure 7 The causal model, derived from the preliminary research of Van der Goot, 2010.

The derived causal model will be used for the refinement of the conceptual causal model of the current research as is discussed in the next chapter.

4.1.2 R

R

In order to determine the level of implementation of the preliminary research recommendation this section first discusses the actual recommendations.

One can conclude that most of the recommendations would not have been sufficient for the current situation. For example, the recommendations concerning a new layout are based on the old situation of two different packaging locations. The actual integration of both locations within M&G was not included within the recommendations. Furthermore, the new layout would only change the location of the packaging of the orders with the highest amount of different non-spray coated parts. This is remarkable because of the speculated emphasis on creating flow and couple the packaging directly to the preceding spray coating department. The latter can be identified as a solution to eliminate the wastes -in the form of unnecessary motion and buffer inventory- between the two departments. Another remarkable research contradiction is the use of the research unit ‘order size’ expressed in terms of amount of boxes. In fact, one of the conclusions states that by the use of this variable it is not possible to balance any packaging assembly lines because the different actions to pack the boxes are not taken into account.

Summarized can be said that the preliminary study offers no solid implementable redesign. This conclusion needed to assess the reasons for the current level of implementation. However, the value of the preliminary study lies in the fact of the recognition that the efficiency within the packaging department can be improved by altering the layout and creating flow in the processes. The next recommendations are more relevant. Conduct further research towards the clustering of product families. In addition, recalculate the actual processing times, and the focus to rearrange the assembly lines. Together, those recommendations could be the start of a series of improvement efforts. Discussions pointed out that the study remained unattended. One reason is the change in management team shortly after the research was completed. This makes its evaluation of the recommendations’ implementation level with respect to the use of kata’s more difficult. Despite the fact that the preliminary study did not offered implementable recommendations, it should have lead to the start various improvement efforts. However, the study remained unattended and the improvement efforts never took place.

4.2 K

’

P

The kata elements as are described in the theoretical framework are used for the identification of its existence within the research findings and its implementation.

clear description of the value stream. Fourth, it does not describe a roadmap for taking steps towards the target condition. Moreover, there is also no indication of some form of coaching kata. The reflection on these results will be discussed within the reflection.

Moreover, there are no signs found within the meetings, interviews and observations that indicate any form of elements similar to kata’s within the preceding two years after the preliminary study. These outcomes are import contextual factors to take into account at the start of the following action research. The lack of implementation of the preliminary research findings can but partly attributed to the lack kata’s. Also to no direct implementable recommendations, and a change in management, the latter resulted loss of attention towards the preliminary study.

4.3 P

A

K

What practical application of kata’s could have positively contributed to the level of implementation of the preliminary recommendations? With knowledge of the conclusions about the implementation of preliminary research described above, it is interesting how kata’s could have aided in the success of the implementations. Moreover, since the following action research involves taking the actual steps it becomes even more important to search for a practical way of introducing and testing the elements of kata’s. Soltero (2012) describes three tools as a teaching and learning aid. The tools are derived and adapted from Rother (2010) and described in the next section. The first tool concerns the ‘improvement kata card’.

FRAMING QUESTIONS IMPROVEMENT KATA CARD [SIDE 1]

1. What is the target condition? (The challenge)

 What do we expect to be happening?

 List the conditions.

2. What is the actual condition now? (Go and See)

 Is the description of the current condition measurable?  Block diagram, same every cycle?

 Takt, cycle times, cycle times vary?

 Output fluctuation, one-piece flow, staffing.  Capacity/shifts, number of operators?

 List the actual conditions.

3. What obstacles are now preventing you from reaching the target condition and which are addressed now?

 Compare current vs. target conditions.

 Focus on one obstacle at the time. Do not worry about finding the biggest obstacle; keep cycling fast and you find it.

THE NEXT EXPERIMENT [Side 2]

4. What is your next step? (Start of next PDCA cycle)

 Take only one step at the time, but do so in rapid cycles.

 The next step does not have to be the most beneficial, biggest, or most important. Most important is that you take a step.

 Many next steps are further analysis, not countermeasures.

 If next step is more analysis, what do we expect to learn?

 If next step is a countermeasure, what do we expect to happen? PREPARE FOR REFLECTION

5. When can we go and see what we have learned from taking that step?

 As soon as possible. Today is not too soon. How about we go and take the next step now? (Strive for rapid cycles!)

4.3.1 I

K

C

The improvement kata card is depicted in Figure 8. Note that the five questions are discussed in section 2.3.3. The card will guide the practitioner in the right direction of the improvement kata. As is discussed the improvement kata must be aligned with an overall vision in order to set a target condition. The vision within the case research is to improve the operations towards flow, and to reach continuous improvement. This vision will be further elaborated in the next chapter. With a vision set, the first three framing questions (side 1) will be focused on this vision to prevent the practitioners from setting the wrong target condition. This can be filled in on the target condition form in the next section. The framing questions format the scope for a series of experiments that are conducted with aid of the last two questions (side 2) and a PDCA cycle form.

4.3.2 T

C

F

PDCA

C

F

The next tool is the target condition form. This tool is an aiding tool for the first three framing question of the kata improvement card. The tool is depicted in Figure 9. On the right hand side, the target conditions can be listed as an answer to the first question. With knowledge of the target condition, the current condition can be observed considering the criteria used for the target condition. For example, with the overall vision of creating one-piece-flow, an element of the target condition must be a certain output number of product per unit of time (Nicholas, 1998). With this element in mind, the current output number must be observed and described within the current condition. Because of this sequence, it is getting less complicated to know where to start with the observations within the current situation. The comparison with the target and current condition will show which obstacles and challenges to overcome. Finally, the last two questions can be filled in the PDCA cycle form ( Figure 10). This form is to be repetitively used until the target condition is met.

TARGET CONDITION FORM

Process: Challenge: TC Date:

Current Condition

Target Condition

Figure 9 Target condition form. Adopted from Soltero (2012).

PDCA CYCLES FORM

Process: Process Metric:

Trial

Dates Trial/Test What do I expect? Result What did I learn?

4.4 R

R