Process Improvement Japan News issue #3

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In This Issue:

1) On Employee Engagement - We speak with Mr. Yamauchi, Toyota`s fmr. Snr. Managing Director & current Aisin Seki Vice Chairman.

2) CASE STUDY 1 - Game Theory explains how Toyota`s CCC21 policy damaged the spirt of kaizen & The Toyota Way.

3) CASE STUDY 2 - Angela Corriero shows how not engaging management can have dire consequences.

4) SPOTLIGHT: Kozo Sakano, Co-founder of Process Improvement Japan- A profile of his 25+ year career assisting the globalization of the Toyota Group & Lean Training in Japan.

Employee Engagement

An interview with Aisin Seki`s Executive Vice Chairman, (fmr. TMC Snr. Managing Director) Yasuhito Yamauchi.
Left Photo: Angela Corriero, Process Improvement Japan, left; Mr. Yasuhito Yamauchi, Aisin Seki center; Kozo Sakano, Process Improvement Japan, right

John Fraser, Lean 6 Sigma Black Belt in the UK had questions:
1. What is the single biggest success factor when engineering a culture of change and continuous improvement?
2. What is the best way to manage people who are resistant to change?
3. What has Toyota done in terms of communications to support organizational change?

Process Improvement Japan approached Toyota Motor Corporation`s former Senior Managing Director, Mr. Yasuhito Yamauchi to gain his perspective.

The Success Factor:

Line Workers must be empowered.
Work must be delegated. Authority must be delegated. Workers must have the freedom to make decisions (within reasonable limits). Targets will be met by waste elimination (TPS`s 7 kinds). In order to eliminate waste continually, and thus have a continuous improvement system, there must be employee engagement.

How to inspire employee engagement? Make it Real

In Japanese, Gheeno or 技能 means skill or technique. For artisans, it`s easy to see their talent and skill. In mass production, on the other hand, what is Gheeno? It`s the skill of tightening nuts for example. But it`s so much more than that. A worker with good Gheeno has the ability to quickly recognize abnormalities and prevent defects from passing to the next process. The next level of Gheeno is the ability to fix a problem. A worker with good Gheeno is able to work in many processes and make good kaizen suggestions.

For the full interview, click here.


Game Theory explains how Toyota`s CCC21 policy damaged the spirt of kaizen & The Toyota Way

In 2000, Toyota initiated an aggressive cost saving strategy known as Construction of Cost Competitiveness in the 21st Century (CCC21).

Cost reduction at all costs
CCC21 was credited as having saved Toyota 1,000,000,000,000 yen between 2000 and 2003. (Jon Miller, By 2007, Toyota became the world`s biggest car maker. (

Sounds great, right? Well, let`s step back a bit and take a look at what happened: CCC21 required a severe 30% cost reduction all the way down to the smallest supplier. "If we didn't comply with the request they might take away business. We had no choice but to achieve it," The president of a small supplier was quoted as saying. He was forced to release 20% of his workforce that year. (Chunichi Newspaper, May 11, 2008)

In a simple game theory matrix, it is intuitively easy to see how the drastic measures taken to comply with CCC21 would interfere with the spirit of kaizen and employee engagement; therefore, quality right through Toyota`s supply chain.

For the full case study, click here.


Management need a vested interest to be engaged too.

While speaking with Mr. Yamauchi about employee engagement, Angela Corriero realized her strategic and costly error in Africa.
"I had played the wrong game with management.

In 2007 in Addis Ababa, Ethiopia, I consulted for a small company with 90 employees. I had thought everything was going very well. After just a few months, profits were up 23%, workers were energized and morale was good.

Incentives included increased respect, recognition, new uniforms, a previously unpaid bonus was paid, weekly meetings to discuss issues and improvements. Staff thanked me for the better working conditions and began to smile as they worked. Customer numbers rose. I was in heaven. But not for long... There was a management revolt brewing. The resistance to change from management was overwhelming. While interviewing Mr. Yamauchi, I had the sudden realization of what I had done wrong. I had taken management for granted. Just like other workers, they need a vested interest, they need to be vitalized and accountability for their role in kaizen and QC activities must be part of the management system. It is clear, when you take a close look at Toyota`s management & development strategy.

For the full story, click here.


Sakano became involved in Japan`s manufacturing industry in 1985 when, after the Plaza Agreement, the yen appreciated drastically. Toyota could not continue exporting from Japan, therefore, they initiated their massive globalization effort. Sakano played a key role for over two decades at Toyota Gosei & Aisan Industries on their international communications, legal & training development, cross cultural orientation and public relations. This included the internationalization of TQM, Kaizen and process improvement methodologies.

Above Photo: Center, Dr. Shiba, creator of the Shiba Triangle. To his right, Kozo Sakano.

Sakano had the fortune of meeting with and attending Dr. Shiba`s executive seminar on his management philosophy at the 2003 TQM Symposium in Hakone, Japan.
“Dr. Shiba is a great man. He really inspired Toyota`s leaders to think. He spoke passionately.” Sakano recalls.

For Kozo Sakano`s full profile, click here

Comments? Ideas? Feedback? We`d love to hear from you. Just reply to this newsletter. We look forward to hearing from you.

See you next month!

Angela and Sakano,