It was Kaizen Week in the paper, apparently, as the word appeared twice — first in this article about Ford and now in this article about the Japanese automakers.
It’s no surprise that the Japanese are struggling in this global economic crisis period. They’re not immune to huge drops in sales:
Japan’s Big 3 aren’t as bad off as some of their Detroit brethren. No talk of bankruptcy contingencies like General Motors (GM) or Chrysler or mass layoffs. But their fiscal years drew to a sorry close Tuesday. Toyota predicts it will post a net loss of $3.8 billion, its first net loss for a year since it started reporting the result in 1963. Nissan has been on track for a $2.8 billion loss. Honda expects to be in the black, but with operating profit down 81.1%.
If this were the WSJ, they’d be going into their “see, just in time doesn’t work” mode, as they often do.
So, as with the Detroit automakers, cost cutting is the rage:
“Everything is up for grabs at this point. There is nothing we aren’t looking at,” says Irv Miller, a Toyota vice president. Already, Toyota has suspended costly dealer events.
Honda is pulling back from sponsorships, events and advertising. Honda’s criterion for cuts? “We have a saying: D.I.S.C. â€šÃ„Ã® Does It Sell Cars?” Executive President Dick Colliver says.
Honda could also ask, “does it add value?” from a customer perspective.
Are they laying off employees? Well, yes and no:
Trying to find ways to cut payroll costs without breaking their no-layoff pledges, Toyota and Honda have created voluntary buyout programs. Both are cutting salaried worker pay and bonuses and shortening factory workweeks. Honda, for instance, announced 13 more non-production days through July to trim production by 62,000 vehicles.
And although there are no involuntary layoffs among permanent staff, neither company has had any qualms about letting go “temporary” workers, who may work the lines full time but have not achieved full-time status.
Here’s the Kaizen example — note that “kaizen” means “continuous improvement,” not necessarily a week-long “kaizen event”:
Sales troubles and cutbacks are bringing no letup in the Japanese fixation on continuous self-improvement, kaizen, and elimination of waste, muda.
At Toyota’s Torrance headquarters, the computer room was too warm. The easy answer would be to dial down the air conditioning. But following the company’s principles, workers tracked down the root cause, a blocked duct. By following kaizen, a problem was fixed without extra cost, spokeswoman Sona Iliffe-Moon says.
Workers also found they had excess office supplies languishing on shelves â€šÃ„Ã® a clear call for muda. So they created an intranet trading post: Workers with too much of something â€šÃ„Ã® file folders, binders, Sharpies, copier toner, whatever â€šÃ„Ã® list it, and employees in other departments can come by to trade or plunder.
“It might seem small, but if one department uses the excess of another department, there’s some significant cost savings,” Iliffe-Moon says. “All these cost savings add up.”
The computer room example is nice example of “root cause problem solving.” Seems much more sophisticated than GM “saving money” by not replacing batteries in clocks… keep in mind, also, this example was from California, not Japan.
The “supplies exchange” seems like a good idea that any large organization could adopt, even hospitals, with all of the different departments… who’s got extra latex-free gloves??
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