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It’s All About Supporting the Core Value Stream

I have illustrated throughout the article applications to service operations. Some of the specific, detailed tools of TPS may be harder to apply.

It would not make sense, for example, for a lawyer to sit at his or her desk waiting for a material handler to deliver a kanban asking for the next legal brief. However, most lawyers have many repetitive processes that can benefit from a value stream perspective. Analyze the process from the customer’s perspective, draw a current state map showing the waste, define the future process flow in a future state map, develop an implementation plan along with roles and responsibilities, track progress visually, and focus on continuously improving the process. To be effective, it may be necessary to reorganize around value streams. These simple steps will take you a long way.

As I have stated since Using Operational Excellence as a Strategic Weapon, the key to applying TPS in any environment is to focus on the value-added operations and work to eliminate waste. As you have learned in this chapter, this is a bit more challenging for a service operation, because defining the customers and understanding their needs can be tricky. But with extra effort, it can be done.

When Glenn Uminger, an accountant, was given the assignment to set up the first management accounting system for the Toyota plant in Georgetown, Kentucky, he was advised that he must first understand the Toyota Production System. He spent six months in Japan and in other U.S. plants learning by doing—actually working in manufacturing. It became evident to Uminger that he did not need to set up the same complex accounting system he had set up at a former company. He explained:

If the system I set up in the parts supplier I previously worked for was a 10 in complexity, the Toyota system I set up was a 3. It was simpler and far more efficient.

The system was simpler because Uminger took the time to understand the manufacturing system, the customer for which he was a supplier of services. He needed to build an accounting system that supported the real needs of the actual manufacturing system that Toyota set up. Through genchi genbutsu, he developed a deep understanding of the Toyota Production System in action. He learned that Toyota’s system is based on pull and has so little inventory that the complex inventory tracking systems his former company used were unnecessary. And the arduous and expensive task of taking physical inventory could be greatly streamlined. Toyota does physical inventory twice per year and uses the work teams to facilitate it. Tags are prepared for the work teams for inventory counting and the team leader does a count in 10 minutes at the end of the shift and writes the numbers on the tags. Someone from accounting collects the tags and enters them in the computer. That same evening the inventory count is completed. They spend a few hours twice a year and it is done!

Because of his experience of implementing the accounting system at the Toyota plant, Uminger had developed such a deep understanding of TPS that they put him in charge of creating a TPS office to do projects to improve operations in the plant and teach TPS. He then became the material logistics manager to apply TPS to the logistics network and became responsible for that network for all of North America.

The point is that it is impossible to define value in a service operation without first understanding its core value stream. Some service operations are the core value stream, as we saw in the case of the Canada Post Corporation. In a legal office, the lawyers are part of the core value stream. Once you define the core value stream, then all support service operations must view their roles as supporting the core value stream. The leaner the core value stream, the leaner the support operations can be. Generally, it is recommended to start by applying TPS to the core value stream and then branch out to the support functions.

In the final chapter, we will discuss how to learn the broader lessons of the Toyota Way and apply them to your company. It is this broader philosophy—the way Toyota leads people and partners, solves problems, and learns—that is the most difficult for organizations to adapt, develop, and sustain.

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