Gemba Keiei Chapter 21: Rationalization is Doing What is Rational

The title of this chapter is somewhat awkward. By another translation you could read it as “Improvement means doing what is rational” or “Kaizen means following reason”. But here Taiichi Ohno is engaging in a bit of word play. The Japanese for rationalization, in literal translation means “make it fit with reason” but it is better translated as “consolidation” or “improvement” or in today’s words. Theme of the chapter is that kaizen (rationalization) is what appears quite reasonable and rational and nothing particularly spectacular.

“When I was implementing the Ohno System, it was difficult to get people to understand what I was saying.” Taiichi Ohno’s response to people who didn’t understand him ranged from “If you can’t do what I say, get out of my sight” to “Just do it. Don’t worry. I’ll take responsibility.”

Ohno learned that it would take too long for his orders to go from factory manager to section manager to supervisor to team leader. Not only that but his verbal directives could change considerably because managers along the reporting chain would interpret the instructions in ways that suited them. Ohno says he began going directly to the foremen in the factory to give directives, and to go to them for direct feedback.

Of course the managers complained quite a bit about being bypassed but the foremen on the front lines were motivated because the factory manager came directly to them with a request to try something new. Ohno made sure that the foremen would tell their managers what Ohno had asked them to do. “This is how we educated the managers both from the top down and from the bottom up” says Taiichi Ohno.

Ohno scolded the managers when they simply reported what the foremen told them. He wanted them to think for themselves and try something in addition to what Ohno had instructed. If Ohno didn’t like what they tried, he still scolded them. It wasn’t easy being a manager in Ohno’s factory in those days.

No other company was implementing the Ohno System and no one knew what it should look like. Ohno would give orders in the morning and change directions by noon if it wasn’t working. He found engineers to be most stubborn and unwilling to change. The wise mend their ways so change and become wise, Ohno would tell them.

There was no factory where they could go see the Ohno System. It did not exist in those days. Ohno did have his people visit Nissan to learn about their production system. He would tell them not to copy it because then they would only be as good as Nissan. They must learn from it and make things better. But people would copy it anyway, so he stopped sending them to Nissan. Before long Nissan stopped accepting tours.

Ohno says that Nissan had purchased and moved a factory from the United States and American engineers had helped to set up the factory, so Nissan was probably more advanced than Toyota in those days. During the war, officer from the Japanese military would come with their bamboo spears and give orders to Nissan to produce, threatening “the Americans are coming”. The bamboo spears were carried instead of more modern weapons due to the severe lack of raw materials in Japan toward the end of the war.

Ohno says that Nissan was technically very knowledgeable but these experiences made them less willing to listen to the orders from other Japanese. It’s a very interesting statement, considering the fact that it took Carlos Ghosn, a French citizen of Lebanese descent born in Brazil, to bring Nissan out of bankruptcy and turn them around.

In 1956 or 1957 Ohno visited factories in the United States. “What they were doing was common sense. It was nothing special” he says. Visiting GM, Ford and American Motors, they all appeared to be doing what was common sense. Ohno observed that the “rationalized” or improved production lines were nothing spectacular and the more rationalized a production line was, the more it looked like common sense. “When you see a factory and think ‘wow!’ then this is not a very good factory. When you see a factory and think ‘this is common sense’ and of no value to the observer, I think that may be a sign that they have rationalized rather well” says Ohno.

In other words, if they make it look easy it’s probably a sure sign that a lot of hard work went into it.

Ohno says that it is hard for the Japanese to do what is common sense without putting up some resistance. Doing what is simple is difficult for them. “Rationalization is doing what is reasonable or rational, so there should be nothing that makes you say ‘wow!'” says Ohno. He gives examples of “rational” improvements such as using the rolling motion to move a round part or putting wheels on something heavy to make it easier to move.

Taiichi Ohno says “When something has been completely rationalized it should appear very simple, but people make the mistake of thinking too hard about it. Even the idea of saying ‘reduce inventory and work in process’ through rationalization does not make sense. If it’s rational there should be no work in process. If you have two pieces when you only need one, this is not rational.”