Introduction
The success of many organizations depends on how well their managers address the challenges that affect them. Problem-solving is a skill that many managers acquire, based on their experiences on the job and, most importantly, their choice and adoption of problem-solving techniques (Hill, 2012). Depending on the type of problem affecting an organization and the resources available to solve them, managers have a selection of tools to address their corporate challenges. The Fishbone diagram, Duncker diagram, Kepner Tregoe diagram, and TRIZ are some problem-solving techniques available to managers. Researchers, observers, and commentators alike have often debated their efficacies and use in different management contexts.
In this paper, we focus on the Kepner Tregoe technique as an effective problem-solving tool for manufacturing companies. To do so, we use a case study of its application in Toyota Motor Corporation (Japan). This case study highlights how the managers of the automobile giant continue to rely on the Kepner Tregoe technique to solve some of the problems associated with the implementation of the just-in-time (JIT) technique in its manufacturing and assembly processes. We have divided this paper into six key sections that include an introduction, problem identification, problem analysis, an analysis of the significance of the problem for local and international organizations, and an overview of the application of the technique selected for the problem. In the last section of this paper, we evaluate the solutions to the problem and review the underlying justifications for developing them.
Identification of the Problem
In the early 1970s, Toyota used the Kepner Tregoe technique to improve its manufacturing and vehicle assembly processes during the evolution of its manufacturing processes that hinged on the adoption of the JIT production process (Kaynak, 2013). The adoption of the JIT process was known as the “Toyota Production Process” and was intended to improve the corporation’s manufacturing efficiency (Kaynak, 2013). Outside of the automobile industry, other companies have also used the same technique to reduce waste and improve the quality of their production processes.
Before the use of the Kepner Tregoe technique, Toyota often relied on a standard troubleshooting process that did not yield much success in identifying the main problems associated with its manufacturing and assembly process (Institute for Manufacturing, 2016). Consequently, the problems associated with the technique would reoccur because the company was not effectively minimizing them. More importantly, Toyota did not understand these problems in the first place. This challenge came at a huge cost to the company because it lost a lot of money through excess inventory and through reworking most of its products (Institute for Manufacturing, 2016). After suffering these production inefficiencies, the company chose to adopt a new technique – the Five Whys technique, which it merged with the Kepner Tregoe model to improve its operational efficiency.
Indeed, experts who have investigated the company’s problems say the use of this problem-solving technique birthed the concept of the five why techniques to improve its manufacturing competencies (Institute for Manufacturing, 2016). To explain its application, Vilet (2014) says, “The premise of the five whys technique is to find the root cause of a problem or defect by carefully asking and repetitively asking why” (p. 6). By doing so, it is easy to understand the cause of a problem. Consequently, managers could effectively develop a countermeasure for solving it. The use of this technique was part of Toyota’s proposal to induct new processes into its production system.
Originally adopted by Sakichi Toyoda, Toyota’s managers used the tool as a critical component of its problem solving and training methods (Kaynak, 2013). Taiichi Ohno headed the company’s production system and approved its use in the department (Kaynak, 2013). Its application involved the repetition of “why” five times to identify the company’s manufacturing and production problems (Institute for Manufacturing, 2016). According to Vilet (2014), Toyota adopted this technique to understand the nature of its problems as well as the possible solutions to them. By repetitively asking “why,” the company was able to peel off different layers of symptoms for the company’s production problems to identify the main issues affecting each department. Practically, asking this question repetitively led to a situation where the symptom of the problem was followed by another “why.” Although the standard criterion used to probe a company’s problems, asking five “whys” the Institute for Manufacturing (2016) says the probing may stretch beyond this limit of questioning to identify more symptoms of a problem.
Toyota asked five key fundamental questions about its just-in-time production process that was designed to improve the delivery of its production goals. The questions appear below:
- Why is production running slowly?
- Why did the new widgets fit wrongly?
- Why is the hole too small?
- Why is that measurement specified in the drawings?
- What data is in the computer-aided design system?
The use of the Kepner Tregoe technique to solve some of the implementation challenges of the JIT production technique is a current problem for Toyota Corporation because the organization’s culture mirrors that of the Japanese, which always strives for constant improvement (Institute for Manufacturing, 2016). In other words, employees are always willing to achieve higher levels of efficiency despite realizing some substantial levels of success with the JIT approach over the years. Therefore, although the company already meets high standards of production in the global automobile sector, Toyota still believes that it could achieve higher standards of the same. Since Toyota’s employees have worked with the company for most of their careers, they are constantly striving to hone their skills in the implementation of the JIT approach (Kaynak, 2013). These cultural dynamics of the organization show that Toyota still has room to improve the implementation of its JIT approach even today. Therefore, the Kepner Tregoe technique stands out as a valuable tool to guide the organization through its path to self-improvement.
Analysis of the Problem
According to proponents of the Kepner Tregoe model, the best recourse, or action, that managers could take in problem-solving is preempting a problem and solving it before it happens (Hill, 2012). However, this was not the case for Toyota because the company’s management started reporting significant challenges with its JIT model before it could preempt them. A significant challenge that they reported on the adoption of the technique centered on errors in multi-skilling (Institute for Manufacturing, 2016). This problem mostly involved a management challenge of allocating employees different types of jobs, based on existing workflow patterns. Another challenge reported by the management team centered on redesigning the vehicles to eliminate or widen, their tolerance (Institute for Manufacturing, 2016). This problem emerged from the fact that assembly line managers did not know which parts to use in the production process. At the same time, they had to minimize waste by using all of them. In line with the principles of the JIT approach, the employees also had to make sure that all parts fit perfectly. Lastly, Toyota had a problem of training its suppliers to adhere to the principles of the JIT approach by requiring them to make timely supplies and in good quality (Institute for Manufacturing, 2016). Collectively, these issues outlined the main challenges associated with its JIT approach.
Significance of the Problem for Local and International Organizations
The JIT production process is not exclusive to Toyota; different companies have always relied on the management philosophy to deliver their products to their customers on time and in the right quality and quantity (Lai & Cheng, 2009). Different corporations have chosen to use the technique as a preferable choice for their manufacturing and production activities because of its efficiencies. For example, some observers hail it for reducing waste and setting up timely production processes (Lai & Cheng, 2009). This technique is also popularly used in Japan and other manufacturing companies around the world since the 1970s (Institute for Manufacturing, 2016). As mentioned in this paper, the technique was introduced in Toyota by Taiichi Ohno who wanted to eliminate delays in delivery of products to customers and increase the timeliness of undertaking different production processes across the manufacturing and assembly chain. Experts attribute the company’s success to the proper understanding and implementation of this system (Institute for Manufacturing, 2016).
For Toyota, the focus was mostly on improving the company’s efficiencies by focusing on three core functional areas of production – people, systems, and plants (Kaynak, 2013). The focus on people was important because the company’s managers, at the time, understood that the success of the JIT production process would depend on the involvement of all employees in the organization. Similarly, they realized that this technique would be successful only if the organization’s plant and processes were organized for maximum organizational output (Kaynak, 2013). The organization’s quality and production programs also had to be arranged in a manner that easily met the production and demand expectations of the organization.
Based on the key competencies of the JIT approach, the management challenges experienced by Toyota, when implementing the strategy, are equally useful to other companies that want to implement it. Although the technique originated from Japan, its use has transcended this geographic location and permeates through different organizational management paradigms today. For example, Hewlett Packard, Dell, McDonald’s owe part of their success in the implementation of the JIT approach (Institute for Manufacturing, 2016). In other words, different companies recognize its advantages and work towards benefitting from its efficiencies.
Relative to this advantage, the Institute for Manufacturing (2016) says, “JIT manufacturing has the capacity, when properly adapted to the organization, to strengthen the organization’s competitiveness in the marketplace substantially by reducing wastes and improving product quality and efficiency of production” (p. 5). Consequently, the problems experienced by Toyota and the use of problem-solving techniques have a larger and significant implication for local and international organizations that use the JIT approach or are planning to do so. Therefore, Toyota’s experience in using this technique will offer valuable lessons to such corporations regarding the implementation of the technique and its possible adoption in different aspects of the manufacturing sector.
Application of the Technique Selected for the Problem
The Kepner Tregoe technique is a systematic problem-solving tool that seeks to rule out possible solutions to a problem and identify its real causes. Abstractly, researchers have said that it adds rational thought to managers who are involved in problem-solving actions (Hill, 2012). Founded in 1958 by Charles Kepner and Dr. Benjamin Tregoe, the theory posits that some people are better decision-makers than others are. Proponents of the theory have been committed to the model because they believe it is the best way for companies to improve their problem-solving skills (Hill, 2012). The Kepner Tregoe model premises on four basic pillars.
The first one is the situation appraisal process, which identifies the main concerns plaguing an organization and strives to highlight the main priorities that managers should consider in their primary working environments (Hill, 2012). The second tenet is the problem analysis stage, which strives to identify the main problems facing a company and its possible causes. The third basic step of the Kepner Tregoe model is the decision analysis stage, which strives to identify and analyze the main alternatives for solving the main problem by evaluating the pros and cons of each (Hill, 2012). Managers make a final decision after this review. The last tenet of the Kepner-Tregoe technique is the problem analysis stage, which strives to evaluate the chosen solutions by reviewing how it compares to others and how people could take corrective actions to minimize its possible risks.
Toyota’s decision-making process involved an analysis of several key issues such as establishing the objectives of the decision, classifying the objectives according to the importance of each, developing alternative actions, evaluating the possible alternatives against the established objectives and identifying the best alternative that would help to achieve all the laid out objectives (Lai & Cheng, 2009). These considerations led it to develop its tentative decision. After this process, the company’s managers evaluated the tentative decision for possible future risks and controlled the effects of the final decision by taking proactive measures to prevent possible adverse outcomes. The last stage also involved making sure that the selected alternatives were undertaken or completed (Lai & Cheng, 2009).
After completing these stages, the managers of Toyota evaluated the procedures for scoring alternatives. The possible alternatives for solving the JIT challenges meet the “must” and “want” criteria (Kaynak, 2013). For example, to identify the performance of each identified objective, the managers evaluated the possible objectives according to how the proposed alternatives met the “want” objective. To do so, it was important to rank each alternative using a number. The number could range from one to ten. The best alternative would have a score of one, while the least desirable alternative would have a score of 10 (Kaynak, 2013). If there were no significant differences between the scores evaluated, the managers could give them the same score. The scores would simply outline how every alternative would rank with the emphasis placed on each objective.
Understanding the worth of every alternative chosen would involve a process of multiplying the score of each objective with the weight assigned to each. Understanding the weight of each alternative would go a long way in indicating how the alternative would influence the company’s performance. Similarly, it would help in understanding the importance of that performance. By doing so, the managers would also have a better understanding of how each score would affect the company’s objective. Nonetheless, using these numbers did not help to make a decision for the managers; instead, their experiences and available facts were some of the main contributors to the process of evaluating the best alternative (Kaynak, 2013). In other words, the numbers used by the managers only helped to record the decision-making process of the manager and provide a basis for dealing systematically with the problem-solving process. Problem analysis is often the last and most important part of the problem-solving process (Hill, 2012). Comprehensively, the best alternative that had the highest score on the performance measure emerged as the best alternative in the problem-solving process. Based on a review of these processes, Toyota achieved the following goals.
Waste reduction
According to Lai and Cheng (2009), Toyota’s mantra of continuous improvement has permeated throughout the company’s departments and operational years. The successful implementation of the JIT approach created a disdain for inefficiencies in the organization’s operational plans. The reduction of inefficiencies in the company’s plans has emerged in several ways, including a reduction of wasted time and excess materials. For most companies, once they find a system that works and makes a company profitable, it would take a long while for managers to change anything (Lai and Cheng, 2009). However, for Toyota’s managers, even when a system is successful, they find a way to improve it. For example, if it were able to install a hood in 10 minutes, it would look for better ways to install it in half that time, or even quarter the time. Such is the progress that Toyota has made in improving its operational efficiencies. Waste reduction is a key outcome in the implementation of the Kepner Tregoe technique (Lai and Cheng, 2009).
Development of the Kanban System
The production challenges that led to the inefficient application of the JIT system and the use of the Kepner Tregoe technique to solve them led to the development of the Kanban system as a useful production technique for Toyota. Some people termed this method as the supermarket system because it was borrowed from the merchandising process used in different chain stores (Toyota Global, 2016). The Kanban system works as the supermarket model where products have control cards that contain details about each item on display. At Toyota, the company introduced Kanban signs to improve synergy in production processes because whenever a process is dependent on preceding parts, the Kanban system outlines the details of the preceding process so that there are harmony and synchrony throughout the production process. The diagram below provides a graphical representation of the Kanban system.
The Kepner Tregoe technique is largely responsible for the establishment of the continuous improvement model, which is a critical component of the company’s operational process. The same technique has elevated the JIT approach as the company’s most successful operational technique (Institute for Manufacturing, 2016). The Kanban system, which contains information about manufacturing specifications, eliminated inconsistencies in production processes. The system helped to answer important questions regarding the company’s JIT system, such as why did the new widgets fit right? Why is the hole too small? What measurement is specified in the drawings? And What data is in the computer-aided design system? These kinds of questions posed a problem in the implementation of the JIT plan but were solved by the implementation of the Kanban system, which is a product of the use of the Kepner Tregoe technique.
Evidence of the successful implementation of the JIT method exists in different research studies, such as those highlighted by the Institute for Manufacturing (2016), which showed that Toyota adopted the technique successfully. Generally, the company improved its product quality and increased its market share, using this method, because many people became aware of its key competencies and were willing to buy their cars at the expense of others (customer satisfaction led to customer loyalty) (Institute for Manufacturing, 2016). In terms of its service delivery, Toyota was able to reduce its response time to about a day and minimized the probability that its vehicles would not be sold. Through the improvement of the company’s return on equity, Toyota has grown to be the envy of many local and international companies in the global manufacturing and automobile sector. Comprehensively, the use of the Kepner Tregoe technique in the implementation of the JIT production model helped to improve the organization’s production process and bring a new level of operational efficiency that has seen Toyota build some of the most reliable and efficient cars in the automobile industry.
References
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Kaynak, H. (2013). Total quality management and just-in-time purchasing: their effects on performance of firms operating in the U.S. London, UK: Routledge.
Lai, K., & Cheng, E. (2009). Just-in-time logistics. London, UK: Gower Publishing, Ltd.
Toyota Global. (2016). Just-in-time — philosophy of complete elimination of waste. Web.
Vilet, V. (2014). The five whys. Web.