Lean BOK White Paper

The Significance of Problem-Solving

Don Klesser
11/2006

BACKGROUND
The development of a body-of-knowledge (BOK) for lean involves insight into the methods and
philosophies. Lean manufacturing, or lean, is based on the Toyota Production System (TPS), and
may appear well understood in terms of philosophy, elements, and methods. However, TPS itself
is subject to interpretation as to its’ approach and reasons for success. Much of this can be
explained as TPS was developed out of necessity in post-war Toyota, and not through intention
as new production system.

After the success of Toyota and other Japanese manufacturers in the late 1970’s, individuals tried
to capture the core for their accomplishments. Richard Schonberger’s 1986 book, “World Class
Manufacturing: The Lessons of Simplicity Applied”1, referring often to the Toyota System,
outlined lessons of simple processes, JIT, and quality as the basis for overall Japanese
manufacturing success. Later, Shigeo Shingo and Taiichi Ohno, both employed by Toyota,
provided their insights into the elements of Toyota System through several books.2, 3, 4 While the
books are enlightening concerning TPS philosophy, they are not clearly prescriptive as to its’
application.

In 1990, Womack, Roos and Jones interpreted the success of the Toyota Production System in
“The Machine that Changed the World: The Story of Lean Production”.5 At the same time, they
defined “lean manufacturing.” Again, this work was not a comprehensive body of knowledge.
Later however, Womack’s wrote, “Lean Thinking: Banish Waste and Create Wealth in Your
Corporation”.6 In this book, Womack defines an implementation roadmap for lean involving the
steps of Flow, the Value Stream, Flow, Pull and Perfection. Through the Lean Enterprise
Institute, Womack has further led the development of lean methods.

In a 1999 Harvard Business Review article, Steven Spear and H. Kent Bowen provided their
analysis of the Toyota System.7 They documented the System in four rules:
“Rule 1. All work shall be highly specified as to content, sequence, timing and outcome.
Rule 2. Every customer-supplier connection must be direct, and there must be an
unambiguous yes-or-no way to send requests and receive responses.
Rule 3. The pathway for every product and service must be simple and direct.
Rule 4. Any improvement must be made in accordance with the scientific method, under
the guidance of a teacher, and at the lowest level of the organization.”
In 2004, another former Toyota employee, Jeffrey Liker outlined his experience with TPS in his
book, “The Toyota Way”.8 He outlined four main principles and fourteen sub-principles as the
basis for the system. The four main principles are:
1. Philosophy as the Foundation.
2. The Right Process will Produce the Right Results.
3. Add Value to the Organization by Developing Your People and Partners.
4. Continuously Solving Root Problems Drives Organizational Learning.

These references, along with the addition of books and papers written by many others, and also
influence from other organizations, consultants, experts, practitioners, and companies that have
(successfully or unsuccessfully) implemented lean form the knowledge base for what the Toyota
Production System (or lean) is really about. From a methods standpoint, included are such
things as 5S, kaizen events, waste definitions, flow, and more advanced methods, such as cells
and kanbans. There are some difficulties in basing a BOK on methods alone. For example,
many of these methods fail fairly quickly in process improvement when applied to non-
manufacturing situations (e.g., the use of kanbans in healthcare?). Even manufacturing
companies experience difficulties with methods alone. Spear goes as far to say, “ . . . few
manufacturers have managed to imitate Toyota successfully . . . “ because “ . . . observers
confuse the tools and practices they see on their (Toyota) plant visits with the system itself.”9

This white paper will explore the significance of Spear’s interpretation, and the importance of
thinking and problem solving skills to success when applying the Toyota System, or lean, in both
manufacturing and non-manufacturing systems.

TPS PHILOSOPHY
In both “Decoding the DNA of the Toyota Production System” and “Learning to Lead”10, Spear
describes the development of philosophy as fundamental to the system, rather than the
application of methods. Likewise, Pascal Dennis11 and Jeffrey Liker, both former Toyota
employees, indicate the significance of a philosophical approach. Liker explains, “When I first
began learning about TPS, I was enamored of the power of one piece flow. . . . But along the
way, experienced leaders within Toyota kept telling me that these tools and techniques were not
key to TPS. Rather the power behind TPS is the company’s management commitment to
continuously invest in its people and promote a culture of continuous improvement. . . . After
studying Toyota for almost 20 years and observing the struggles companies have had applying
lean manufacturing, what these Toyota teachers (called sensi) told me is finally sinking in.”12

Further, one of the four principles outlined by Liker involves the continual solving of “root
problems”. To understand the impact of this principle requires an understanding of problem-
solving and its’ relationship to process standards and the scientific method.

PROBLEM-SOLVING
To begin, what is a ‘problem’? A problem is a result that differs from an expectation, a plan or a
standard. The definition consists of three factors: a result, the expected standard, and a gap
between the two. Of course, the gap could be either negative or positive, but many only consider
the gap a problem if it is the gap is ‘negative’. For example, if there exists a productivity

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standard in an operation, and the productivity for a daily shift exceeds (better than) the standard
– is this a problem?

The problem solving method in the Toyota Production System is fairly straightforward. Jeffrey
Liker, “The Toyota Way” shows the problem solving process as a funnel.13 At the top, the issue
in question is large and broad. As we work down through the funnel, the issue is refined,
through 5-whys, to identify the root cause or “point of cause”. Once root causes are identified,
appropriate solutions or countermeasures can be taken. The simplicity of this depiction is
deceiving due to rigor of its’ application.

STANDARDS
Unlike many companies that use standards for punitive measures, or only for training, TPS
standards are the basis for identifying problems (above), and improving. Imai stresses there “can
be no kaizen without standardization.”14 Standards remove variability from a process creating
stability and consistency. However, paradoxically, despite their objective to establish stability, in
TPS, standards are continually tested and modified as work methods are improved.

There are many types of standards, including written and visual standards. Examples of written
standards include standardized work, standard specifications and safety/environmental
specifications. Taiichi Ohno outlines the elements for the standard work procedure as cycle time,
sequence and standard inventory.15

Visual standards include 5S standards, color codes, and coded kanbans. The power of a visual
standard is the ability to quickly recognize when something meets (or does not meet) the
standard.

Finally, whereas standards could be considered ‘guidelines’, a TPS standard is an exacting

definition of how work is to be done – otherwise, a standard not followed defines a problem.
Spear states “ . . . . all work is highly specified as to content, sequence, timing and outcome.
When a car’s seat is installed, for instance, the bolts are always tightened in the same order, the
time it takes to turn each bolt is specified, and so is the torque to which the bolt is tightened.
Such exactness is applied . . . . to . . . all people regardless of their functional specialty or
hierarchical role.” Whereas, in “a typical U.S. auto plant . . . specifications actually allow --
even assume-- considerable variation in the way employees do their work.” 16

THE SCIENTIFIC METHOD AND PDCA

Plan-Do-Check-Act (PDCA, or even PDSA, where S=Study) is sometimes called the Shewhart,
or the Deming cycle. PDCA is also frequently termed the scientific method. In the “Team
Handbook”,17 the following is attributed to W. Edwards Deming:
PLAN - Plan a change or test aimed at an improvement (set an expectation).
DO - Carry it out, preferably on a small scale.
STUDY - Study the results, what did we learn?
ACT - Adopt the change (standardize . . .), or abandon it, or run through the cycle
again, possibly under different environmental conditions.

Linked with the problem-solving process, PDCA is used during implementation of solution(s).
First, the solution implementation is ‘planned’. The plan for implementation considers: who,

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when, how the solution will be implemented. Deming suggested that (small scale) pilots be
performed prior to applying a full solution. Also, the plan should include the methods and timing
for “Check” (or Study). In other words, when and how will the solution be tested for
effectiveness? In the end, the plan creates a standard for which the solution is compared against
– does the expected result (achieved through the solution) meet the plan?

Like problem-solving, P-D-C-A appears rather straightforward, however Pascal Dennis, “I once
asked a Toyota executive to tell me about the Plan-Do-Check-Act cycle. He responded, ‘Ah,
PDCA. It took me ten years to learn Plan, ten years for Do, and ten years each for Check and
Act. Now I begin to understand PDCA.”18 Pascal continues, “At Toyota, I came to understand a
peculiar thing - we do not teach the scientific method well in school. I have since realized that at
Toyota, the intimate understanding of the scientific method at each level is perhaps the
company’s greatest strength.”

PROBLEM-SOLVING AND PDCA IN USE

TPS operates at many integrated layers. At a basic level, work is defined by the standards.
Spear described the exacting nature of standards in the system, and when the standards cannot be
met, a problem is recognized. For example, defined inventory locations (also kanbans) are visual
standards for type and quantity of inventory in the area. This can be accomplished using color
coded inventory tags. If the color code does not match the location code, the ‘problem’ is readily
recognized. Also, each operation is defined as to the time standard to complete the tasks. In
TPS, this time is related to the TAKT time – that is, the rate of customer demand. If the tasks
cannot be completed within the allotted time, a problem situation is created.

If the problem situation cannot be corrected in short time, the operator can ask for assistance
through the ‘andon’. The andon signals the first level of assistance in the ‘help chain’, usually a
team leader19. Like any TPS process, the help chain itself is defined by timing, sequence,
outcome, etc. The team leader’s objective is to ensure that the process can be completed within
the standard time, and if a problem occurs, the leader implements countermeasures to achieve the
objective. The countermeasure would be the result of a ‘problem-solving’ activity, with the first
question related to ‘why’ the tasks cannot be completed on time.

As part of the initial investigation, the team leader may review operator’s sequence for
performing tasks compared to the standard work method. Since the operator should be following
the standard exactly, any variation indicates a ‘problem’ that needs to be corrected. Retraining
the operator may be the appropriate countermeasure; and the team leader would use a P-D-C-A
approach to plan implementation of the countermeasure. After implementation, the leader would
review the improvement (Check) to ensure that the desired result is achieved.

Since the help chain is a standardized process, there is also a defined plan when the leader cannot
‘solve’ the problem within an allotted amount of time. If the leader is expected to apply
countermeasures and place the operation back on standard within 15 minutes, but the goal is not
met, the next level of help chain is signaled. For example, if the delay is due to a supplier defect
the next level of contact may be the quality leader to develop an appropriate countermeasure.

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Spear explains that, in TPS, solutions to process problems are considered countermeasures rather
than permanent solutions, “Toyota does not consider any of the tools or practices--such as
kanbans or andon cords, which some many outsiders have observed and copied--as fundamental
to the Toyota Production System. Toyota uses them merely as temporary responses to specific
problems that will serve until a better approach is found or conditions change.”20

Notably, the best time to identify and solve a problem is before it becomes a bigger problem. In
an assembly line operation, such as installing seats in an auto plant, the line operates at a
specified feet/minute. Therefore, floor distance equates to time. To define standard timing for a
series of tasks, the floor can be painted to define the start point and end point (a visual standard).
Further, intermediate areas could be painted green, yellow and red (color standards). Standard
timing requires all of tasks be completed within the green area as the operator and auto moves
forward. The yellow area is a visual indicator to the operator highlighting the task needs
completed within the standard time, and before a problem actually occurs. However, if the tasks
are not completed at the red area, an andon signals that assistance is needed to solve a problem
related to an inability to meet the standard timing for the tasks. In batch-type operations, the
overall standard timing may be, for example, the completion of 100 parts in four hours, but the
‘yellow’ indicator may be defined as 75 parts required in 3 hours.

Another point to be made is that standards and problem-solving are not necessarily confined to
negative results. For example, the standard indicates the ‘best’ method for completing the tasks
within the allotted time. If the tasks are completed much faster (e.g., the operator is more
productive, such as producing at a rate of 120 parts/4 hours instead of 100 parts/4 hours) than the
standard, then another problem is recognized. Maybe the operator is not performing tasks in the
standard order; or maybe steps are being skipped which could cause a defect. At a more
philosophical level, this non-standard result is a waste of ‘overproduction’ since work is being
completed faster than the rate requested by the customer.

Over time, problems in the process and with the standard are identified and solved through the
problem solving process. Eventually the process problems are eliminated. This improvement
process is continual and incremental – this is kaizen. In fact, the pace of continuous
improvement can be accelerated only through the identification (and subsequent solving) of more
problems. In other words, the standards must be tightened so that more problems are found.
This is analogous to the suggestion that the ‘water must be lowered (tighter standards) in order to
reveal the rocks’ (the problems). In contrast, many companies may feel that the effectiveness of
continuous improvement is demonstrated through fewer problems. Pascal Dennis has described
a situation where a senior Toyota manager personally praised employees for identifying
problems (i.e., stopping the assembly line) in order to make Toyota a better organization.21

Through standards, processes become stable and consistent; problem solving activities further
stabilize the process. However, in TPS, the process are also continually being tested, but not in a
chaotic manner. Although, Spear does not acknowledge the use of P-D-C-A, he does however
describe these actions as the application of the scientific method. In “Learning to Lead”,22 he
provides an account of a supervisor improving processes by observing, planning for change in
the process, and monitoring the effects of the change (P-D-C-A). Improvements are typically
made by identifying and minimizing ‘waste’ in the process: can the level of inventory be

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reduced?, can work tasks be simplified?, can material handling be simplified?, etc. Ohno
describes the process as, “With any problem, I always ask why five times. This Toyota
procedure is actually adapted from Toyoda Sakichi’s habit of watching. We can talk about work
improvement, but unless we know production thoroughly we can accomplish nothing. Stand on
the production floor all day and watch – you will eventually discover what has to be done. I
cannot emphasize this too much.”23

Rather than a broad understanding of eliminating waste, however, the worker, in TPS, develops
an intrinsic understanding of the process and of the improvement process. Spear, “. . . of course,
many people trying to improve a process have some idea of what the problems and how to fix
them. The difference with TPS -- and this is key -- is that it seeks to fully understand both the
problem and the solution. For example, any manager might say, ‘Maybe the parts rack should be
closer to the assembler’s hand. If we move it here, I’ll bet it’ll shave a few seconds off the cycle’.
Were he to try this and find it shaved six seconds, he would probably be quite pleased and
consider the problem solved. But in the eyes of a Toyota manager, such a result would indicate
that the manager didn’t fully understand the work that he was trying to improve . . . . how many
seconds did he expect to save? Four? If the actual savings is six seconds . . . why was there a
two-second difference? . . . the discrepancy would prompt a deeper investigation into how a
process worked and, perhaps more important, how a particular person studied and improved the
process.”24

ADDITIONAL COMMENTS
Improvement in TPS is provided through the combination of problem-solving and P-D-C-A,
however, discipline in both areas is highly maintained. Shigeo Shingo provides his insight into
the shortcomings as many organizations attempt to apply TPS methods, including the weakness
of P-D-C-A . . . “As Deming’s plan-do-check cycle demonstrates, the control function of
management is missing in Western Management philosophies. Management functions must
encompass plan, control, and check; the do function lies beyond the control function, and it is
precisely in this process of control and do that many production problems arise. The lack of
awareness of the control function is a major defect in production management in Europe and the
United States.”25

Shingo’s provides this description of control, “The control function encompasses the control
exercised by managers who actually watch workers at their tasks and regulate their execution,
and control exercised by workers who keep in mind and try to follow standard work procedures
and correct any deviations from the standard.
“Managers and workers therefore continuously perform under the influence of the control
function. Moreover, sensors that detect abnormalities and defects can be used to supplement the
control function during implementation. In this use of sensors and the like lies the significance
of source control and poka-yoke (mistake-proofing), described later.”26

LEAN BODY OF KNOWLEDGE

This paper has attempted to show the significance of problem-solving and P-D-C-A in the Toyota
Production System. However, although Lean has its roots in the Toyota Production System, in

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some cases there may be more emphasis on the development of tools, such as kanban, 5S,
SMED, etc., rather than developing the strong relationship between process and process
knowledge developed through problem-solving and P-D-C-A. Robert Hall describes the
difference between TPS and lean, “The biggest differences relate to how TPS, much more than
lean, emphasizes developing people to solve basic process problems.” 27

This statement provides further understanding into the power of TPS as a process improvement
method. Standards stabilize processes improving the predictability of results. Results that do not
meet standards are met with a disciplined problem-solving effort. Through problem-solving, the
organization identifies and understands the causal relationships. Simultaneously, workers are
applying P-D-C-A for identifying ways to improve the process incrementally, primarily through
reduction of waste. The tools of TPS (or lean) are applied as outcome of these methods rather
than an application of a broad ‘lean approach’. Using improvement and re-standardization,
process results (productivity, quality, safety, etc.) continue to improve. Toyota’s success is
demonstration of persistent application of disciplined problem-solving and P-D-C-A on an
organizational basis.

Through this approach, the value of TPS as a universal process improvement method is seen.
Every organization, whether it manufactures or provides healthcare or banking services, or is
nonprofit, consists of processes. Any process task can be standardized through time, sequence,
and/or expected outcome; and with standardization, problem-solving and PDCA can be applied.
While the appropriate countermeasure may not involve kanbans or manufacturing cells, there are
whole other set of wastes and countermeasures that may be appropriate.

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1. Richard Schonberger, “World Class Manufacturing: The Lessons of Simplicity Applied”,
The Free Press, New York, N.Y., 1986.
2. Taiichi Ohno, “Toyota Production System: Beyond Large-Scale Production”, Productivity
Press, Portland, OR, 1988.
3. Shigeo Shingo, “Non-Stock Production: the Shingo System for Continuous Improvement”,
Productivity Press, Cambridge MA, 1988.
4. Shigeo Shingo, “The Sayings of Shigeo Shingo: Key Strategies for Plant Improvement”,
Productivity Press, Portland, OR, 1987.
5. James Womack, et al, “The Machine That Changed the World: The Story of Lean
Production”, 1991.
6. James Womack, “Lean Thinking: Banish Waste and Create Wealth in Your Corporation”,
Simon & Schuster, New York, NY, 1996.
7. “Decoding the DNA of the Toyota Production System”, Steven Spear and H. Kent Bowen,
Harvard Business Review, September, 1999.
8. Jeffrey Liker, “The Toyota Way”, McGraw-Hill, 2004.
9. Steven Spear, ibid.
10. “Learning to Lead at Toyota”, Steven Spear, Harvard Business Review, May, 2004.
11. Pascal Dennis, “Lean Production Simplified: A Plain-Language Guide to the World’s Most
Powerful Production System”, Productivity Press, Cambridge, MA 2002.
12. Liker, ibid., pg. 10.
13. Liker, ibid., pg. 256.
14. Masaki Imai, “Kaizen: The Key to Japan’s Competitive Success”, McGraw-Hill, New York,
NY, 1986.
15. Ohno, ibid., pg. 22.
16. Spear, “Decoding . . .”, ibid.
17. Peter Scholtes, et al, “The Team Handbook, Oriel, Madison, WI, 1996, pg. 5-25.
18. Dennis, ibid., pg. 17.
19. Personal notes, Alcoa University, 2000.
20. Spear, ibid.
21. Personal notes from Pascal Dennis, 2004.
22. Spear, “Learning . . .”, ibid.
23. Ohno, ibid., pg. 23.
24. Spear, “Decoding . . .”, ibid.
25. Shingo, “Non-Stock Production . . .”, ibid., pg. 23.
26. Shingo, ibid., pg. 225.
27. Robert Hall, “Target” magazine, AME, third quarter, 2004.