Examples of Applying the LTF

Toyota Car Servicing

Toyota Car Servicing – South Africa & Botswana

Part of our research with organisations is about defining problems and closing gaps. In our Learning value stream we have a world-wide “club” of Toyota dealers. They originally came together to learn how to apply the Toyota Way to their sales, service and parts operations.

In 2011 we started working with Halfway Toyota in South Africa and Botswana. (1620) UK Lean Summit 2014 – Lean Retailing: Transforming Car Retail – Terry O’Donoghue, Halfway Toyota – YouTube

The case is well documented as there are a number of talks on our YouTube Channel and a number of articles on LGN’s Planet Lean website.

At the highest level in the organisation, they needed to work through the real life challenges of Toyota’s strategy of becoming a mobility company. What does that mean for customers and the dealer processes they are responsible for?

When we use the Lean Transformation Framework we always start with the fundamental question “what problem are we trying to solve? To put the car retailer problem into context, Toyota has a global vision as follows: “Toyota will lead the way to the future of mobility, enriching lives around the work with the safest and most responsible ways of moving people. Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile. We will meet our challenging goals by engaging the talent and passion of people, who believe there is always a better way”

The question posed was how to balance the needs of the vehicle supplier with the needs of the car retailer or dealer. Early in their journey the senior team started to think this through using the Lean Transformation Framework. This illustration is from 2013. It is the second iteration of “purpose” that the senior team developed. Using the LTF inevitably led us to think about customer value. In Halfway’s Team X Strategy both customer value and the goals of the organisation are defined. The team settled on “guaranteeing hassle free mobility.” They defined that 100% customer fulfilment was a key to customer value. Purpose is now defined and gaps are understood at the organisational level.

Next we turn our attention to the first of our two pillars. We have called this” Operational or Process improvement.” It’s an area that’s familiar to lean thinkers. What we are doing here is focusing on the work that creates value for customers. This is often where many lean folks are most comfortable – and what many people see as being lean. But it is really only one element of the system. Here we are asking the question, “How do we do and improve the actual (value creating) work?” With hassle free mobility and 100% customer fulfilment as a purpose value was defined. For both their sales and service value streams this second version of the LTF highlighted the need to stabilize, make problems visible, focus on brilliant basics and be easy to do business with. As an example, the service department worked on while you wait service for predictable jobs.

In some sites that meant 2 technicians working on a car at the same time. Some sites had one bay, some sites used two. The technicians developed standardised work processes to service cars in agreed time, while the customer waits – the idea to provide hassle free mobility. Where sites drove improvement to meet the purpose the results were extraordinary. In 2012 one ramp completed 4 to 5 cars/day. That’s typical of the industry. By 2018, one ramp and one bay could complete 48 cars/day! More over lead time had been slashed from 8 hours to 20 minutes (door to door at 41 minutes including cleaning the vehicle.)

However to improve the work we must turn our attention to the second of our two pillars. We call this ”Capability Development.” Here we are asking the question, “How do we develop the capabilities we need?” Here our target condition is to build capability so people can do and improve themselves. At Halfway Terry articulated this as trying to develop 1067 problem solvers. Ie everyone in the organization solving problems. Taking the old skills matrix classifications we can look at ability from level 1 – having “Knowledge” through understanding, being capable, being able to do a job well, teach the job and coach others.

Interestingly it’s really only knowledge of work that is suitable to teach in a classroom – off the job training. Levels 2 through 4 are better taught with actual problems and situations on the job with mentoring from capable superiors. You can’t develop skill just by sitting in a classroom – you have to practice. Everyone in the organization solving problems. In addition to the problem solving activities, the example also highlights the spreading of the team leader concept to implement standardised work, the process they would use to align people to the purpose and the process for developing basic skills.

In the centre of our house our focus is on leadership and management. In particular we think about what management system we need and the leadership behaviours required to drive the transformation. This is tricky – there are elements of these dimensions within the transformation that aren’t as easy to see as perhaps understanding and improving the actual work to be done. But some elements of this are well known. One example is the the process for developing and deploying strategy – using hoshin kanri within the management system. A second example would be managing teams using processes such as daily team meetings or managing projects using oobeya rooms. It’s also possible to define what leadership behaviours we need. What’s more difficult to do is to understand how well this is being done on a daily basis. We ran a series of experiments not only to develop daily team meetings but to build their effectiveness. Early experiments focussed on visualisation, standardisation and heijunka. Part of the team meeting activity is around visualisation – but in particular developing PDCA in the visual management. The visualisation should start the process of highlighting problems. We’ve done some formal problem solving – through A3 training – but – at the gemba we’ve been looking at the way leaders interact with their teams to develop problem solving capability. To do this we’ve videoed team meetings and then watched them back with the people. It gives an insight into group dynamics and also the strengths and weaknesses of the meetings.

For the foundations of the house we refer to the basic thinking – the assumptions and mindset that underlies the entire system – and drives the transformation itself. This is really about the basic beliefs we, as individuals have about the way the transformation works. These beliefs and mindset constitute the culture of the organisation. To use a practical example – the senior team believed that the people closest to the work know most about it – and that we need to harness their knowledge so that problems can be solved by the people doing the work. Remember the task of creating 1067 problem solvers. This thinking leads to the design of experiments to test that hypothesis and develop people at all levels. If the thinking were not aligned in that direction – and the assumption made that actually only a few people should be coming up with solutions, then we would have a very different approach – perhaps we would develop a boot camp to train a select few on advanced lean techniques, create a continuous improvement organisation and identify “projects” that would give a return – but that wouldn’t necessarily develop the organisation thoroughly.

It isn’t always so easy to see and connect the underlying thinking with what we do or what we would like to do. For example, typically the underlying thinking in the dealer is to “upsell” – sell work in addition to that which the vehicle is booked in for. If the organisation now wants to focus on hassle free mobility and customer trust, lots of work must be done to undo the upsell thinking.

Working through each of the dimensions produced the a “house” very different in its intent from the TPS house – but based on some universal questions. What problem are we trying to solve? How do we do and improve the work? How do we develop the capabilities we need? What management system & leadership behaviours are required to support the new way of working? What basic assumptions or mindsets under lie this change?

Each of these questions is applicable to all organisations – from a developer and manufacturer of products, to a public service organization, to a retailer – you can apply these questions to a car producer, the fire brigade, or a seller and servicer of cars.