Kaizen on Crisis Situations

Why do disasters or crises such as accidents, mishaps, etc., be they health or equipment break-downs or even a terrorist attack occur or recur? 

In fact, why do undesirable situations in general occur or recur? Read how Kaizen unfolds this dilemma.

(Extract from the Book "TPM in 10 days: Total Productive Maintenance For Reliable and Just-In-Time Value delivery to Customer"..Authored by Shyam Talawadekar)

A Typical Crisis Situation depicts Urgency

''A-TMT-bus-brakes-fail, hits-pedestrians'', the news that I read some time ago reported that: ''The Thane Municipal Corporation's Transport (TMT) wing was once again in limelight, thanks to the poor condition of the buses. A TMT bus hit a two-wheeler on 12 December 2009 morning near Castle Mill Naka. Apparently, the brakes of the bus failed. The driver couldn't get control of the bus and thus hit the two-wheeler.''

Few weeks before this incident, a major accident was averted when the wheel of another bus of the same TMT dislodged itself. The bus went 'out of service' for a week thereafter. Exactly similar accident repeated a couple of weeks later.

What is the common thread between the two incidences? The 'poor quality of equipment' and thereby resultant 'poor quality of service'. It is worth noting the cost implications of such accidents, apart from the intangible 'loss to lives'.

First of all the TMT itself may be heading towards going out of service. It is in a major crisis today. It is fighting for its own survival. Apart from corresponding 'business cost' to the kitty of parent body TMC (Thane Municipal Corporation); it's going to be a loss of jobs for many. In 'quality' parlance, such 'losses' are called as Cost of Quality (CoQ).

What is the Cost-of-Quality (CoQ) of a Crisis?

To elaborate the CoQ concept as a KRA, let me recall another incident in connection with (unfortunately) the TMT again. "Thirty-two people were killed when a TMT bus plunged into the Chena river": reported the DNA & timesofindia.indiatimes.com (3 May 2006).

What are the costs associated with the incidence in the above picture? 

The costs associated with the external-customer could be: 

- Tangible and intangible costs of 'Lost-Customers' (those who might avoid traveling by TMT service prospectively),

- Tangible and intangible costs due to passengers that get killed (35 numbers as per First-Information-Report), 

- Compensation to the diseased (Rs 30 lakh), 

- Expenditure on emergency urgent first-aid treatment to the injured, 

- Long-term treatment of the injured including rehabilitation, etc. 

- Tangible and intangible costs (due to '50 doctors that over-worked round the clock in order to handle the emergency and urgency', 

- Tangible and intangible costs of 'Permanent disability', 

- Postmortem expenditure for the diseased, 

- Tangible costs of 'Bus Failure and Damage', 

- Expenditure for conducting an inquiry of the incidence as well as handling legal cases, etc.

Above costs are the undesired impact while delivering service expected  by the external-customer. The list of such costs may be unending if one chooses to analyze cost-implications with reference to other stakeholders associated with the corresponding supplier's business such as - the public and society in general, - the tax-payers, - the internal customers such as the maintenance & administrative staff engaged in the resultant fire-fighting, etc. Such costs associated with an abnormality are known as CoQ. 

The components of Cost-of-Quality (CoQ) such as above fall under four categories: 

1/ Costs of external-failure such as that cited in the case of bus-accident above. This also includes legal costs for inquiries instituted as a post-mortem of the crisis.

2/ Costs of internal-failure in above case are the costs due to break-down of the vehicle in the bus-depot itself (ultimately reducing its capacity to deploy it in service as an external-failure cost), costs to fix the breakdown itself, costs of scrapping the spares damaged due to mishandling internally. 

3/ Costs of appraisal in above case are the - costs incurred to take test-run of the bus before putting it in service, - costs of staff and processes employed to inspect/audit the adequacy and compliance of quality and quantity of work and workmanship as per standards/procedures.

4/ Costs of prevention in above case are the costs required to (preventively/proactively) undertake improvement or failure-prevention activities & corresponding education/training for the same.

First two components are the 'cost-of-poor-quality' (CoPQ) that are incurred after the failure. 

Last two components are the 'cost-of-good-quality' (CoGQ) or you can say 'investment' required to prevent a failure.

Can you imagine the magnitude of CoQ of failures and crisis in everyday life?

An article (in Economic Times 21.05.2005) reported costs due to traffic jams in USA as in the table. These are actually external-failure costs. Another article (in Economic Times 08.09.2003) reported that India accounts for 8-10% of total road accidents in the world. It costs the nation’s exchequer a whopping Rs. 55,000 crore every year.

In fact, inefficient activities cost a lot to an economy. World Bank report (DNA 18.07.2013) says that environmental degradation costs India 5.7% of its GDP (equivalent to Rs 3.75 lakh crore each year. It goes on to suggest that India can make green growth a reality by putting in place strategies to reduce environmental degradation at the minimal cost, rather 'cost-of-good-quality' (CoGQ) 'investment' in Kaizen-language, of 0.02% to 0.04% of average annual GDP growth rate. 

Environmental Degradation costs India 5.7% of its GDP (Rs 3.75 Lakh crore) each year ! ..... World-Bank

How can a crisis be averted?

A crisis can be averted by doing 'what-is-important' rather than staying put in handling what-'seems'-urgent, 'what-is-routine' and fire-fighting 'that-is-urgent'!

Why do crises such as accidents, mishaps, failures, traffic jams, etc. as in pictures above and even calamities that we claim as natural such as floods, droughts, etc. keep recurring? 

Why do they occur in the first place? Is there a way in which corresponding colossal-losses can be prevented proactively?

Manager of every other workplace (rather every individual at the personal level) should find answers to such questions contextually and tangibly in terms of losses in productivity, quality, cost, delivery (PQCD), etc. The answers in terms of causes of crises shall not only be an eye-opener in themselves but shall also indicate scope for improvement in eliminating them.

By deep diving, asking a few 'why-why' questions inquisitively going beyond the symptoms (rather the secondary causes), one can unearth 'Cause-Effect' linkage of most crisis situations along-with their root-causes.

Many Indians might remember the massive fire that broke out at Indian Oil Corporation's fuel depot in Sitapura Jaipur on 29 October 2009. ‘The fire may cost IOC Rs 300 crore’ reported the www.ndtv.com/news. Why did the fire break out in first place? As per the first information report, the fire broke out because of a leaking-pipe, seemingly a secondary cause.

In any case, root-causes shall be evident with the help of 5-why & 5w1h (what-where-who-when-why-how) analysis as in the picture.

5-why & 5w1h (what-where-who-when-why-how) analysis

For Various Posters such as above: Click here to see Table of Contents. 

Pictures here-above are PURPOSELY KEPT  in LOW RESOLUTION. Click here to see Actual Resolution YOU will GET.

Similarly, in case of brake-failure of the TMT bus in-crisis above, root-cause of failure can be traced back to lack of preventive maintenance as in the table. The effect of not 'investing' in 'cost-of-good-quality' is always evident in terms of 'cost-of-poor-quality'.

5-why analysis 

(Usually, root-causes get revealed even before asking a 'why' question the fifth time)

'Complacent' workplaces such as above pay scant attention to and usually discard 'root-cause level working' as 'trivia' and 'idiosyncratic'. They prefer to dwell in the status-quo of doing 'the-way-it-was-done-yesterday' or attending to fire-fighting. They wait for a crisis to happen and wait for an external force upon them to undertake a change. 

Kaizen Approach averts crises!

Taking a cue from the '1-30-300 Safety-Maintenance-Pyramid' in the picture here, any one or a multiple of such root-causes (i.e. answers to 'why-why-questions' such as above) actually may hide a 'potential crisis'. Even a low probability cause can turn sporadically into a high probability one resulting in a big crisis. This phenomenon may also be called as '300-level abnormalities' or gaps in 'seed-stage' of a crisis or in layman's language as '300-Shortcuts' or gaps as '300-seeds' of an ensuing fatal accident. 

'Safety-Maintenance-Pyramid' in Kaizen Philosophy

 (Extract from the Book "World-Of-Kaizen: A Total Quality Culture For Survival" Authored by Shyam Talawadekar)

In fact even after facing a crisis, complacent people as also complacent companies that nurture 'Fire-fighter' attitude hardly go beyond finding 1st-Aid kind of temporary solutions as short-cuts. Sometimes even that they don't do. Instead of calling 'fire-brigade', funnily the confused site-staff locks the room itself that is under fire. A Kaizen needed to tackle such inadequate training may be is to have a 'pocket-card' with staff or 'displays' at 'point-of-use' outlining 'action-steps & check-points' to handle Gemba-specific emergencies.

Knowing the consequences of 'potential crisis', world-class companies, however, do make conscious and systematic efforts to nurture the work-culture of spotting 'root-cause/s' i.e. '300-level' abnormalities such as, say, 'searching-for-tool' itself as 'criminal-wasteful-activity'. Such wastes are called as 'non-value-activities' (NVA) in quality parlance that are considered more important to be eliminated. Because otherwise, the NVAs do create emergencies in the form of crisis/fires. To help unearth and treat the NVAs urgently as an important activity is where Japanese-management innovations, Kaizen and it's tools like 5-why & 5w1h (what-where-who-when-why-how analysis), 5-S, TPM, Pokayoke (on the short-cuts as failures), etc. come to help. 

5-S (used along-with 5-why & 5w1h) is one of the most commonsense zero-investment techniques to capture abnormalities ('plan') and to 'do' suitable Kaizens on 'failure-modes' at root-cause level. For instance, under Seiton-leg of 5-S practice, creating a designated place for a tool at its point-of-use is an Instant©Kaizen on ('why' should he 'search-for-tool' as) a typical failure-mode. 

Why focus on such 'small' Kaizens (as uninitiated people in Kaizen prefer to call it as)? Because otherwise as Toyota firmly believes, if a problem is not caught when it's 'small' it might lead to a crisis such as say a fire or say a fatal accident as above. In fact, Toyota's enhanced focus on such 'small' Kaizens (apparently more in proportion to 'big' Kaizens) could be one reason why some uninitiated people in Kaizen misunderstand the Kaizen as 'small' improvement/s instead of as a work-culture improvement process. 

A typical Distant©Kaizen in above case could be a Big-Kaizen (or Kaikaku): e.g. Installing a CCTV-Speed-surveillance mechanism in accident-prone zones on road. 

Big-Kaizens are also called as Kaikaku, the term introduced in lean vocabulary to clear confusion or demystify misunderstandings about 'smallness' of Kaizen. Toyota, however, considers both the Instant©Kaizens as well as the Distant©Kaizens or both the 'small' Kaizens as well as Big-Kaizens as Kaizens. So why not call Kaizens as small-step Kaizens and big-step Kaizens instead of misunderstanding Kaizens as 'small' improvements.

Comparison of Big-step Kaizens with Small-step Kaizens

Big-step-Kaizens such as innovations thrive on Small-step Kaizens. Distant©Kaizens thrive on Small-step Instant©Kaizens.

So doing 'what-is-important', before it forces itself in the form of fire-fighting crisis (needing 'urgent' attention) is the only way to avert a crisis. In fact, Kaizen approach provides ways-&-means to manage both the prevention of crises as well as quick relief from crises. As against the myth that Kaizen means 'small improvements', it's a combination of both small-&-big and a combination of Instant©Kaizen & Distant©Kaizen as needed. As against another myth that Kaizen is a soft voluntary-approach, the way it is evolved today, it's ways-&-means are composed of a judicious balance of both the intrinsic motivation as well as extrinsic motivation such as carrot-&-stick where needed. The former part is typical of eastern-approach and the later part is a typical of western-approach though.

Who invented the Kaizen-approach?

Toyota is undoubtedly the best known rather the pioneer company that has seamlessly integrated most problem-solving tools under Kaizen-umbrella. Best known as Kaizen-culture approach, Toyota has done it in such a unique way that it could not only bring in behavioral changes that brought about total-employee-engagement in working at preventive as well as proactive level in their intrinsic business processes but also brought about change-for-better at 'the-self' level. 

As a result, the employees became better self-managed in their personal life as well: A holistic balance in enhancing an individual's as well as a team's IQ-EQ-SQ level. Toyota also involved all their stakeholders in the improvement process bringing about the holistic growth of the business itself. 

Kaizen is an objective-oriented philosophy of continual improvements done in a holistic manner. It's a never-ending process of making continuous improvements aiming at achieving a moving-target of zero-defect in a given field of choice with its related KRA-measure for a product, a process or a business design and delivery. In a typical improvement cycle, Step-1 is to stabilize a given level of performance by standardizing with the help of SDCA-cycle. Then undertake Step-2 i.e. a PDCA-cycle of improvement to challenge the stabilized-standards attained in Step-1 in order to attain next level of performance. Step-3 is to go back to Step-1 until the company on Kaizen journey itself becomes a benchmark. Simultaneously, apply Step-1-2-3: the continuous-improvement-process in other KRAs so as to ultimately take the continual-improvement process company-wide. 

In a corporate context, it may be a dream of committed leaders like Eiji-Toyoda-San who promoted the 'TOYOTA-Way' (a combination of JIT & Kaizen-culture) to be the benchmark by continually improving across it's value-streams. 

Achieving such audacious dreams are possible if taken beyond 'the-self' level by the involvement of all the stakeholders. And this is possible only if 'dreams' are - evolved in the form of 'vision' statements, - powerfully communicated and - strategically deployed across levels of all the stakeholders through consistently demonstrated actions by the corresponding leaders themselves. Very often, however, 'dreams' & 'visions' evolved may be apt but their communication does not go beyond 'preaching' them with posters, slogans, etc. Kaizen philosophy warrants a Gemba-Kaizen approach. It involves communication of 'dreams' by 'living' them through 'practice' rather than 'preaching'. Gemba-Kaizen approach involves communication of dreams face-to-face through visible actions by leadership across & upto the grass-root level employees.

Toyota Japan developed the Kaizen philosophy as an actionable approach in the 1940s. It has been evolving it on-goingly even in today's context with a larger mission of being planet-friendly in whatever it does. That is also a reason why Toyota is highly regarded across businesses and societies across the world. It is highly deceptive though for most companies claiming to have 'planet-friendly' missions to claim that 'we also practice Kaizen and are on the same track'!

                            (Extract from Book "How to Enable a Change Process?" ©Copyright by Shyam Talawadekar)

A few more relevant crises* issues to learn the importance of Kaizen-Culture there-from:

*One may find numerous such crises issues in work life or a typical business context. It could be a missed delivery, a major plant breakdown, a fire or a major quality rejection. Preventing such crises by preventing the causes at the root level is the essence of Kaizen culture!