Driving the Enterprise to Sustainable Excellence

A Shingo Process Overview

Gerhard Plenert

• Publisher: Productivity Press
• Year: 2021
• eBook ISBN: 9781000339949
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

This book presents a big-picture overview of the entire Shingo improvement process. It fully discusses the needs and benefits of the Shingo process, and what is required if you seek to execute the Shingo Model in your enterprise and focuses on creating an enduring organization-wide continuous improvement process. It gives the reader a discussion of the entire Shingo experience while most existing books on the model are course-specific.

There are numerous discussions, conference talks, and webinars of why the Shingo process is beneficial, and what types of improvements can be achieved, but the crucial material has not been assembled in one concise book, giving the executive, manager, or supervisor an overview and understanding of what the Shingo experience entails. The main purpose of this book. It is for the executives who want to understand their role in supporting and leading middle management with its implementation. Many executives from developing countries all over the world are seeking a concise definition of what the Shingo model is, and this book functions as the perfect primer. Even those who have attended and implemented the lessons from the Shingo Institute's courses would find this book a benefit as it serves perfectly as backup and reference material. In addition, this book helps anyone who has started their journey with the Shingo model and may be confused about what to do and expect -- It gives them a vision of what the continuing journey will look like. The Shingo process is being taught at numerous universities and this book could indeed serve as the appropriate textbook or supplemental reading.

Essentially, this book teaches an innovative and extremely successful approach to continuous improvement, referred to as the Shingo process. It is based on a set of universally accepted principles that are endorsed by improvement leaders such as Covey and companies such as Toyota. This book is not a detailed review or a replacement of the Shingo workshops. It is an overview of the entire Shingo process, starting with a discussion of the challenges that many of todays enterprises are experiencing.

The author, in his role as a PhD in economics, has studied industries and has worked closely with many of them attempting to understand their weaknesses. This book builds upon an understanding of these weaknesses. The book discusses how the over-all Shingo methodology fits into these organizations and highlights the benefits. The next step is then to discuss what requirements are necessary for an organization to get ready for a Shingo transformation. What are the steps that the organization needs to go through, and when will it know that it is ready to begin? The book briefly reviews the Shingo Insights and Principles and explains how the Shingo courses should be best utilized to facilitate the desired transformation. It suggests some alternative plans for over-all implementation based on the current state of the enterprise. It explains why there is no "one way" for successful implementation and how the implementation sequence needs to be customized. It also discusses the length of time needed for success and how this differs depending on the current enterprise environment.

Lastly the book explains how the implementation and Shingo training is never finished. It is an on-going process and success is defined by internal improvements, not by some arbitrary external benchmark. The book is intended to be educational, thought provoking, entertaining in its stories and examples, and a guideline towards the development of a plan for continuous improvement. This book is filled with stories and examples, showing successful and not so successful implementations. The stories are used to highlight many of the pitfalls that have arisen and may arise for you and which can be avoided if the reader is aware of them and knows how to watch for them.

Part I

The Growth of the Shingo Approach

1
A Personal Experience

When I began visiting companies and production plants, there was one thing I almost always used to tell company presidents, “The medicine I am prescribing for you is a miracle drug and very powerful, but there is one problem with it.”

“What problem?” they would say.

“The problem,” I would explain, “is that the medicine won’t work unless you take it. I may tell you wonderful things, but you’re not going to be successful unless you actually do what I’m telling you.”

Shigeo Shingo

The Story of a Drive to Enterprise Excellence

The author has a personal experience which took a factory from confusion to excellence over a period of about 18 years. The company is TREMEC (Transmissions Y Equipos Mecanicos, S. A. – Mexican Division of Clark Equipment Co.) in Queretaro, Mexico, where he was employed in 1980 and 1981 as Manager of Corporate Organizations and Systems. He managed the design, development, and implementation of Corporate Manufacturing Control Systems and was responsible for all information flow equipment. This position had him working with employees throughout the facility, including all the far reaches of the production plant.

After his employment at TREMEC, the author earned two master’s degrees and a PhD and went to work at a university, where publication of books and articles was critical. The author decided to write about his experiences at TREMEC, and these experiences were published in one of the premier production/operations management journals. In the first of these articles, “The Development of a Production System in Mexico,” published in Interfaces, Vol. 20, No. 3, May–June 1990, pp. 14–23, the author gave the reader a frank and open case study of this 6,000 employee factory in Mexico. It discussed numerous problems with installing a production control system in this environment. It compared the Mexican process with a similar process in the United States. It then extrapolated and made suggestions for developing country installations in general. The full article can be found at https://pubsonline.informs.org/doi/abs/10.1287/inte.20.3.14 (Figure 1.1)

FIGURE 1.1
TREMEC.

The article starts by saying,

In designing and installing a manufacturing system for a factory in Mexico, we had to address problems and considerations that are typical in implementing production systems for developing countries; for example, the unskilled work force and poor power supplies. Other problems in planning and developing arose from conditions and goals that differ from those in other developing countries; for example, poor employee-management relations. Many such problems can be avoided or solved with proper planning.

I will highlight several quotes from the lengthy article. These highlights demonstrate the struggles within TREMEC.

“The upper management of the firm is composed of United States citizens; the secondary levels of management are primarily Mexican citizens trained or educated in the United States. Also, several United States advisors have been sent by the home office or by a United States automobile manufacturer.” These advisors primarily acted like expeditors, trying to push product through the process.
Most of the workers are unskilled: they have difficulty filling out time sheets. Most production was kept on schedule by chasing particular jobs around the plant in an attempt to get them done quickly. Although TREMEC has education programs with full-time instructors and classrooms, the need for more complete education for factory workers far exceeds the capacity of these education facilities.
An adversarial relationship exists between top management and the heavily unionized labor force. The average unskilled worker resents his rich Mexican boss, who looks down on him. These workers also resent the Americans, who have to communicate with them through an interpreter, and who also make them feel inadequate.
The average worker has a set of (personal) goals that are quite different than those of the company. He doesn’t consider himself a part of the company, and he wants to spend as much time as possible with his family. This often means that after receiving a paycheck, he may not show up for work for several days. He’ll return when he feels a financial necessity to go to work again.
… production was scheduled using a computerized production control systems whose schedules were changed by the expeditors trying to push rush jobs through the plant. These altered schedules were then adjusted by the North American advisors … those schedules were overridden by top management.
Middle management positions … are often filled through nepotism.
Strikes occur frequently.
Deliveries of raw materials are sporadic. … Therefore raw materials are heavily stockpiled.
Equipment repair relies on scavenging for spare parts. … As a result, some of the machinery in the facility is usable only as a source for spare parts. … An enormous amount of scrap has accumulated due to obsolescence or to operational error. Gears that are several years old and red with rust are piled high in the yards.
Production schedules are generated using unreliable standards. Much of the problem with the standards centers around the poor processes used to collect data. The employees recording production data do not understand its purpose and do not understand the procedures for recording information.

At this point, the article goes into detail discussing the implementation of on MRP II (Manufacturing Resources Planning) system (the early version of ERP – Enterprise Resources Planning). It discusses communications, technology, electrical power, data inadequacies, conversion, and training issues. Next, the article goes through each of the concerns with the TREMEC working environment and makes some recommendations. These major concerns are listed and include:

1. 1. Unskilled work force – A recommendation for simplified input documents and input tools that do not require written information.
2. 2. Unskilled middle management – Training on manufacturing production and control topics, including what metrics are critical.
3. 3. Poor employee-management relations – Open sharing of information between all levels and helping them understand what the information is telling them.
4. 4. Machinery that is too old, causing numerous breakdowns, or too technologically new and is therefore poorly understood – The recommendation here centers on a discussion about capacity management and safety machine capacity.
5. 5. Poor power supplies – Power protection equipment and backup power systems.
6. 6. Difficulty in (electronic) communications – This solution recommends a separate computer/technology center so that when a strike occurs, the entire facility is not shut down.
7. 7. Poor or meaningless production standards – Improved data collection and manufacturing controls and efficiencies are recommended.
8. 8. A crisis management mentality – Improving data and information will reduce tension.
9. 9. High inventories – High inventories in raw materials, work in process, and finished goods need to be reduced and scrapped using tools like Lean’s 5S program.
10. 10. Poor routings – Improved data collection is critical.
11. 11. Errors in data collection – Simplify the data collection process minimizing the need for writing and increasing the use of automated data collection where button pushing is all that is needed.

The article then goes into a discussion of the inadequacies of the MRP II (ERP) environment, like employee relations and employee management. It criticizes the use of US methodologies to motivate and inspire Mexican citizens, not recognizing the critical cultural differences between the two. It also criticizes the lack of culturally sensitive training in all areas of the facility.

The article summarizes some final thoughts on systems implementations that were relevant then and are still relevant today. Here is a summary of the “Final Thoughts” listed in this article:

1. 1. “Any system that is not designed by a user will be only half effective.” Systems should not be designed and implemented without the user’s input.
2. 2. “Save the manual system. If nothing else, the manual system can serve as a back-up system if the computer system fails.” The two systems should mirror each other. There will be failures and shutdowns, but there should be logical workarounds.
3. 3. “Never computerize something that doesn’t work manually on a smaller and simpler scale. … The idea that changing a system instills discipline is false. Discipline is instilled by motivated management direction.” The computer system should never complicate life. If it doesn’t make things simpler for the user, the user will defeat it. Any time a system, computer or otherwise, doesn’t make life easier for the user, it fails. Remember the saying that,
   No matter how good a system is, if it isn’t easier to use than the previous system, and if the user isn’t involved and own the system, it will fail. Similarly, no matter how poor a system is, if it’s easier to use, and if the users have ownership in it, it will succeed!
4. 4. “Choose a software system first, never the hardware.”
5. 5. “When considering the three phases of a system: input, process, and output, always analyze the output first and define the user’s needs. Then analyze the required input to make sure the system’s output requirements can be met.”
6. 6. “The systems analyst is generally wrong in any disagreement with the users. The users have to live with the system, so give them what they want.”

It is important to note that the experience documented in this article occurred prior to the existence of the Shingo Institute, prior to the Shingo Principles, and prior to the Shingo Prize. The Shingo standard for excellence had not yet been developed. However, as the Shingo methodology developed, a transformation simultaneously occurred in TREMEC.

The author visited TREMEC between the publication of the first and the second articles, and the management of TREMEC was extremely upset with the author for the comments and concerns expressed in the first article. After visiting the plant the second time, the author published a second article, primarily focused on the changes and improvements that had already taken p...

Table of contents

• Cover
• Half-Title
• Title
• Copyright
• Dedication
• Contents
• Acknowledgments
• About the Author
• Introduction
• PART I The Growth of the Shingo Approach
• PART II The Shingo Methodology
• PART III Bringing It Home
• Index