Chapter 1
Motor City Sadness

The Boeing 737 rose above the LaGuardia Airport tarmac. Across the East River was Manhattan's symphonic skyline. Below me, Queens was spread out like an abstract expressionist painting, something Jackson Pollock might have produced after a bad hangover. My girlfriend, Sarah, is rubbing off on me. She loves art and literature. When she isn't teaching kindergarten in Hoboken, she is guiding me through the Metropolitan, Guggenheim, and Frick galleries, and through the experimental art galleries that flourish in Brooklyn's nooks and crannies.

I don't mind at all. As an engineering student, my electives were usually art, literature, or psychology. My pals looked at me cockeyed but all that learning served me well when I became an auto plant manager.

Tom Papas is my name. Our family name is Papachristodoulou. My brother Harry and I shortened it, we said, to fit on the back of our football jerseys. Harry is a PhD biochemist, a big wheel in pharmaceuticals, where you can charge 80 bucks for a little pill. I'm plant manager of New Jersey Motor Manufacturing (NJMM), which is part of Taylor Motors. We transform substandard processes, a spaghetti-like supply chain, and rigid management system into the Desperado, a magical muscle car the public loves. What do we get for our efforts? Negative margins and a catastrophic balance sheet. But I don't have to tell you how Taylor Motors is doing. You've heard it all.

Rachel Armstrong, our formidable senior vice president, has summoned me to headquarters in Taylor City, a Motown suburb synonymous with our company. Would she offer me the job of Vice-President of Continuous Improvement again? I turned it down once before because of all the travel required-too hard on my children.

NJMM, and manufacturing in general, is one of Taylor Motors' few bright spots. During the past five years I've become the toast of the company, the superhero credited with resurrecting the NJMM plant, and regaining some luster for our brand. Superhero thinking is a problem for us. If something good happens, we assume heroism-as if the normal functioning of our management system is incapable of producing great results.

At NJMM we make our production numbers every day-with minimal overtime. Our quality is the best in the Taylor system, and world-class in our segment. (Still way behind Lexus, though.) The new Desperado sports car has been a hit and the brand has regained its mystique. Sales, however, are down 25 percent since the economy collapsed-better than most car brands. I've been able to keep all our people employed. But I fear that J. Ed Morgan, our nefarious CFO, may try to chop a shift.

When our plant was facing extinction five years ago, I told my team that we were going "back to school" to learn "Lean," the business system Toyota made famous, and that's been deepened and extended by the world's best companies

Our team members took it to heart, taking Lean books home with them, reading, reflecting, and practicing what they'd read. People are still learning. Not just managers, but also team leaders and team members. I made a deal with them. You do everything I ask of you, and I promise nobody will lose his or her job because of improvement work.

Since then, members of the NJMM team have become teachers through our on-site Lean Learning Centre. We've now put more than 200 senior managers, engineers, and team leaders through our "boot camps." As a result, there's a growing network of Lean learners in our manufacturing division. Losing a shift, if that's what Ed Morgan is planning, would be a terrible blow to NJMM morale, and would make a liar out of me.

The jet settled into its cruising altitude and the flight attendant offered us refreshments. It was a fine spring day. I had some water with ice and looked out the window at feathery clouds and a bright blue sky. I thought about how I got here.

We've been lucky at NJMM. Our sensei1 is Takinori (Andy) Saito, an ex-Toyota heavyweight I coaxed out of retirement.2 Andy has played Virgil to my Dante, leading us out of a manufacturing inferno. Every door that Andy opens leads to three other doors. At times I feel we're more screwed up than ever. Problems are painfully obvious, root causes elusive, and countermeasures-real countermeasures, not Band-Aids-rare. Yet we're winning quality and productivity awards! I always feel, "How could they give us an award? We have so many problems.."

Socrates expressed it well: The more I know, the more I realize I don't know. Andy laughed when I told him. "Tom-san, I have been practicing for 40 years-and I still feel like a beginner!"

Toyota's recent fall from grace clearly pained Andy and reinforced how difficult it was to sustain Lean excellence. "To support growth, we must grow senseis, Tom-san ."

Andy was encouraged that Toyota had applied its core principle-Stop production, don't ship junk-while they sought root causes. He was heartened that Toyota had accepted responsibility and not thrown their supplier under the bus. There was much reflection in Toyoda City, he told me. Hansei, the Japanese call it; the sincere acknowledgement of mistakes and weakness, and the commitment to improve.

I had a number of chats with my pal Dean Formica, who was Paint Shop General Manager at Toyota's Kentucky plant.

It was an emotional topic for him. "Lots of soul-searching around here, Tommy. We've had two tough years in a row, after 60 good ones."

"What's the root cause, Dino?"

"I agree with Saito-san. We've grown faster than our ability to develop senseis. Our system is a way of thinking and being. You can't absorb it overnight. You need to study for years under the guidance of a capable teacher."

"You certainly have lost senseis," I commented. "People like me have benefited. Working with Andy has changed my life."

"We miss him," Dean said.

I felt a twinge of guilt. "I can imagine . So what's next?" "We're going to bear down and relearn our system. Toyota University is up and running. I've signed up to be an instructor. We're going to do everything we can to regain our customers' trust. I love this company ."

Andy taught me to draw things out, to express ideas and learning points with simple sketches. My journals are full of them. Figure 1.1 shows my factory doodle.

FIGURE 1.1 New Jersey Motor Manufacturing

We've tried to connect our processes-Stamping, Welding, Paint, and Assembly-with simple visual management. That means using kanbans-simple signals that tell suppliers what to make. In Stamping, kanbans are triangular pieces of metal that tell operators what to make, how many, and where to deliver it. In my dad's restaurant, kanbans are the chits that waiters and waitresses push through the serving window. In your car, the gas gauge acts as a kanban, telling you when it's time to fill up.

For us, customer means anyone in our downstream process, and supplier means anyone in the upstream process. Suppliers in our plant provide the volume, mix, and sequence that the customer consumes. But here's the catch, they supply only at the required rate and quality level, no more, no less. "Simple handshakes," we call it. We also try to make problems noticeable and involve all team members in their solutions, rather than trying to pin the blame on individuals. Pretty simple, really.

Andy taught us that a problem is simply a deviation from a standard, and that problems were treasures. Problems tell us how we can improve. Each year we try to focus our improvement work through strategy deployment or hoshin kanri, the world's most powerful planning and execution system.3 We found strategy deployment tough the first few years but are getting the hang of it. In a nutshell, it involves:

• Defining True North, your strategic and philosophical objective.
• Identifying the obstacles preventing you from achieving True North.
• Engaging everybody in the company in the solution.
• Applying and sharing what you've learned.

Again, pretty simple-but hard to do. I've learned that complexity is a crude state. Simplicity marks the end of a process of refining.

Our factory is a part of a vast management system that includes marketing, design, engineering, the supply chain, and our dealer network, not to mention all our business processes, including Finance, Purchasing, Information Technology, Human Resources, and Planning and Scheduling. We have 10 global design centers and 8 global engineering centers. Our supply chain comprises hundreds of Tier 1, 2, and 3 suppliers in a spaghetti-like distribution system.

FIGURE 1.2 Taylor Motors

See my Taylor Motors sketch in Figure 1.2.

So how do we get out of our current mess? Fixing our factories is necessary-but not sufficient. In my view, manufacturing is no longer the constraint. The remedy lies in dispersing the thick fog that envelops our entire company. By fog I mean the lack of transparency and communication, the absence of...