Taichi Ohno: How Toyota started making world class cars

Taichi Ohno is known for bringing in just-in-time production practices and making Toyota a very efficient company. He hated waste and downtime. He came up with the seven wastes model that is still taught in many engineering schools.

Seven wastes that factories should try to avoid:

  1. Delay, waiting or time spent in a queue with no value being added
  2. Producing more than you need
  3. Over processing or undertaking non-value added activity
  4. Transportation
  5. Unnecessary movement or motion
  6. Inventory
  7. Defects in the Product.

But Ohno is also known to start a practice that added a lot of waiting on the assembly line.

Ohno added an andon cord to the assembly line.

What’s an andon cord?

It’s a cord any employee could pull and it would stop the whole assembly line!

If you saw any defect in the car, you pulled the cord and stopped the whole line. And then nothing would move till that problem was fixed.

When Ohno came up with the idea, there was a huge uproar. People thought it was the stupidest idea ever. How could you allow anyone to stop the line? As expected, production plummeted. Quotas were missed and revenue dropped. 

So why would a person who hated waiting implement such a rule that everyone despised?

The healing crisis

Adolf Jarisch and Karl Herxheimer are two doctors who faced a crisis. They found that people with syphilis would stop their antibiotic treatment midway. Because when the patients were given treatment, their symptoms worsened. 

Things get worse before they become better. The medical industry calls this healing crisis the “Herxheimer reaction” after the good doctor. Things get worse before they become better – but not everyone waits and persists to see the payoff.

All change brings a dip along with it. 

When you try to improve something, productivity first goes down before it goes up. It’s always darkest before dawn. 

Taichi Ohno knew this. He knew that people would resist the change. Because change means: something that worked in the past goes away. And things go worse in the near future. 

But just like how doctors ask you to stick with the antibiotics treatment to the end no matter what, Ohno pushed his employees to use the andon cord no matter what. And the payoff was worth it!

Because after a few months, the number of defects had gone down drastically! The quality of the Toyota cars improved a lot! And the assembly line started moving faster than ever before! Toyota started beating other car manufacturers when it came to quality as well as productivity.

How to survive the change curve

Most people don’t stick with the change after making it. Because things become worse in the short term. So how do you make sure that the change sticks?

  1. Awareness. You need to be aware of the change curve. That you will see a drop in productivity and quality before a dramatic improvement.
  2. Patience. You need to be patient during the drop.
  3. Persistence. You need to persist with the change and go beyond the drop. 

What if the change backfires?

But sometimes the change can actually be bad. What do you do in those instances?

You have to stop measuring the end output and start measuring the process. Because the output is a lagging indicator. If the process is improving things, the output will soon follow too.

So what you measure has to change and become granular. You have to start measuring the immediate effects of the process and if that’s going well, you have to trust that the end output will improve too! If the immediate effects are disastrous themselves, then you need to reverse course and try other remedies.

Action Summary:

  • With any change, things become worse before they become better. You have to be aware of this universal principle. And push through the other side.
  • Patience and persistence is the key to see things through. Stick to succeed.