Operations Management Development Division (OMDD) in the United
States,which taught TPS to suppliers but now was a resource internally
as well. Georgetown employees can engage in a two- to three-year
rotation in OMDD, doing projects at suppliers to deeply learn TPS.
One way Georgetown used OMDD was to require all managers, even
at the highest levels, to lead shorter kaizen projects at suppliers and get
their hands dirty in a new environment with painfully honest critiques
from OMDD’s TPS masters. They did a one-week process-level kaizen
and then a two-week systems-level-material-and-information-flow
kaizen. Managers who led the supplier kaizen activities were expected to
lead four similar activities per year in their own areas back at Georgetown.
To develop in-house knowledge, Georgetown set up an Operations
Development Group (ODG) internally. Group leaders, area managers,
and managers could rotate through for two to three years to get in-
depth TPS experience doing kaizen projects in the plant. Each area of
the plant has a TPS specialist who has direct experience or mentored
expertise from this group assigned to work on medium-sized projects.
Through hoshin kanri, aggressive goals were set for each plant in
- For example, to become globally competitive on price, the
engine plant set a target of reducing total cost by 40 percent by
- Through kaizen, the engine plant had reduced the workforce
size from 1,017 to 930 people between 2000 and 2003. But cutting
direct labor was not going to get a 40 percent cost reduction. That
required a major analysis of all costs, for labor, depreciation, mainte-
nance, indirect materials, facilities, and purchased parts and materials.
Cost targets were established in each area, adding up to 40 percent
when achieved. To make it more challenging, the engine plant had
similarly aggressive targets in safety, quality, and product launches.
The 2005 hoshin kanri was to be the best in North America at effi-
ciency and effectiveness. This required breakthrough kaizen and a
rededication to the Toyota Way. The Georgetown plants had the ben-
efit of benchmarking their sister plants in Japan, which were already
considerably ahead on these metrics. The engine plant could bench-
mark the Kamigo plant, note the significant gaps, study the root
cause of the gaps, and develop specific action plans to close the gap.
Each plant at Georgetown used benchmarking in this way. Some of
the approaches taken at the engine plant were:
◆ Minimize machine complexity through some new developments in
machining technology at Toyota. This would increase operational
availability.
◆ Use the “cabbage patch” approach to make operations more visual.
This included a review of machined scrapped parts, laying out all
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