Essence of TPM - KLMANAGEMENT of TPM Fostering people leads to Good Manufacturing 16 March 2007 Seiichi Nakajima ... Jishu-Hozen…Original new step deployed in Part II/III

1

Essence of TPM Fostering people leads to Good

Manufacturing

16 March 2007

Seiichi Nakajima

PM Award Assessor, Japan Institute of Plant Maintenance

Copyright 2007 JIPM-Solutions 2

1. Birth and Development of TPM

2. Status of TPM Global Development and Good Examples ① TPM of the 21st Century ② Development in Number of TPM Award winning Sites

③ WORLDWIDE TPM ④ Trends in TPM Activities in recent years ⑤ Effective Cases at

Awarded Businesses ⑥ Benefit of TPM ⑦ Why does TPM give Significant Results?

3. Behavioural Science – The Theoretical Background to TPM ① SELF-ACTUALIZING MANAGEMENT (A.H.Maslow), ② Theory X and Theory Y (Douglas

McGreger) ③ DIRECTIVE MANAGEMENT AND PARTICIPATIVE MANAGEMENT (Rensis

Likert), ④ New Management Pattern “Linking Pin Function” (Rensis Likert)

4. Essence of TPM

① The origin of TPM ② The aim of TPM ③ Definition & Basic Concepts of TPM ④ Points

in fostering autonomous staff with good morale and skills ⑤ Change Thinking and

Behaviour with TPM ⑥ Preventive Medicine in Facility＝Preventive Maintenance ⑦ The

Preventive, Zero-Focused Mindset (PM) & Zero Defect (ZD) ⑧ The Basic Approach to Zero

Failure ⑨ The Principles Behind Zero Failure ⑩ Overview of the Figure-of-Eight Method

for Quality Maintenance ⑪ Step Implementation of the Active Contrivance to Zero Industrial

Accident ⑫ Essence of TPM

5. Aim to be VISIONARY COMPANY ① What is VISIONARY COMPANY ② GE Revolution by Jack Welch Jack ③ The Role of

Management (P.F.Drucker) ④ Using TPM to Make “5S Management" a Reality! ⑤ Case of

5S management satisfaction improvement with TPM ⑥ Aim to be VISIONARY COMPANY

Contents


1． Birth and Development of TPM

1950

1960

1970

1980

1990

2000

1951- PM (Preventive Maintenance) Introduced to Japan from the USA

1958- PM (Productive Maintenance) Commenced dissemination in Japan

1962-Commenced Small-group activities in

Japan (Such as QC Circle, and etc.) 1962- ZD (Zero Defects) Mr. Philip Crosby commenced activities

1960- Behavior Science (Thesis publication)

1965- Commenced Japanese-style ZD

1

●1971- Commenced Production

Division TPM in Japan

●1982- Commenced company-wide deployment of TPM in Japan

●1985- Commenced global deployment of TPM

●1991- Commenced Global TPM Award

2001- 21st century TPM Proposal (Part II/III)

Triggered by PM Award presented to Denso with TPM

Tonen introduced US-type PM

Mr. George Smith visited Japan for PM training

NEC commenced small-group ZD activities

Aisin Seiki won TPM Award for company-wide deployment

Commenced TPM training in Korea, Taiwan, Brazil, USA, and etc.

TPM awarded to overseas companies for the first time:

Belgium Volvo, Nachi-Singapore


at Tonen Corporation 1951


DENSO (Nihon Denso) wining PM Award 1971

(middle: Mr. Katsuo Aoki)

(from Nihon Denso 25-nenshi)


(From Aisin Seiki 20-year History)

1982 Aisin Seiki was Awarded the PM Award for

Company-wide Deployment

In the afternoon of the final day of screening, comprehensive questioning and review were carried out, and the Hibi Project Manager, representing the panel of judges, stated the following:

“Aisin Seiki truly implements TPM, a company-wide PM (CWPM), including R&D and administrative divisions, that are original, rare and characteristic, and not at all a copied version of other companies.

President Nakai winning PM Award (September, 1982)


TPM Consulting in Taiwan 1986

Seminar at China Productivity Center 1986 At China Productivity Center 1988


Ground-Breaking TPM

Creative TPM

2-1 TPM of the 21st Century (Level 1,2,3)

A Conceptual View of the TPM Levels


1 4

6

17 7

5

62

4

9

1

9

7

6

10

6

15

1

20

31

7

22

8

32

1

10

25

43

15

1

45

5

6

9

1

61

13

16

62

19

4

17

3

87

22

6

16

2

56

27

8

22

3

83

33

11

22

1

95

27

51

25

2

104

28

12

1

17

6

108

42

12

16

1

88

52

17

21

22

1

87

34

15

1

3

16

4

90

47

18

11

7

2

99

40

17

22

0

20

40

60

80

100

120

140

160

180

200

1971 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2000 2001 2002 2003 2004 2005

3 2 6 3 2 7 5 2 2 1

10 8 12 8 14

22 29

41 42

185 177

2

0 1

5 6

14 9

22

83

163

83

16

177

96

51

135

152 151

172

79

62

64

91 109

2005 2000 1995 1990 1985 1980 1975

168

15

30

45

60

75

90

105

120

114

54

41

overseas

2-2 Development in Number of TPM Award winning Sites

Award for World-class TPM Achievement

Advanced Special Award for TPM Achievement

Special Award for TPM Achievement

Award for Excellence in Consistent TPM Commitment, 1st Category

Award for TPM Excellence, 1st Category

Award for Excellence in Consistent TPM Commitment, 2nd Category

Award for TPM Excellence, 2nd Category

Trend in number of Award winning sites outside Japan

(Average for 1971-1980 - 3.2) (Average for 1981-1990 – 18.6)

16

(Average for 1991-2002 - 118.4)


2.③ 2-3 Worldwide TPM


2-4 Trends in TPM Activities in Recent Years 1. General Trend

1) The number of overseas award winners have increased to double of that of Japan. 2) There is an increasing trend of companies mounting challenges for higher-level awards (Part

II/III). 3) Trend of past award winners re-implementing the project.

2. Distinctive TPM Activities 1) Cases of TPM deployment via autonomous management systems…Mini-company

management systems, store management systems 2) Cases of Innovative/Original (Part II/III) TPM activities

Development of new products and new production methods aiming for the No.1 position in industry and the No.1 position in the world, Structuring of the mother factory

3) Kobetu-Kaizen…Dissemination of “innovative COS reduction” (Koichi Nakazato), PM analysis/Analysis on why/IE method utilization

4) Jishu-Hozen…Original new step deployed in Part II/III (quality maintenance, plant maintenance, operation management, and etc.)

5) Keikau-Hozen…CBM (Predictive maintenance)/Dissemination of RCM, efficacy for shut down, zero malfunction line structure

6) Quality-Hozen…Dissemination of “8-character deployment” (Yoshifumi Kimura), partial introduction of “Double 8-character deployment,” zero defect line structure, quality engineering, utilization of Six Sigma

7) Early Management…Establish DR (Design Review), concurrent development of products and equipment, achievement of vertical start-up, in-house development of a compact injection molding machine

8) Training & Education…Introduction of the CUDBAS method (Curriculum Developing Based on Ability Structure), nurturing operation engineers, certified equipment maintenance engineers and autonomous maintenance engineers

9) TPM in Administrative and Support Dept. …Computerization of production management systems, introduction of TPS (JIT), introduction of SCM activities, reduction in purchasing, distribution and inventory loss, shorten period for monthly closing (to 1-2 days)

10) SHE…Introduction of step deployment active contrivance to zero industrial accidents, zero accident line structure, recycling of industrial waste


2-5 Effective Cases at Awarded Businesses (FY 2006/Domestic)

1. Management Index Recurring income 28.6-fold (’02: \8 million’05: \229 million): Sambo Copper Alloy (Cont. 1) Net income on sales 3-fold: Konica Minolta Supplies Manufacturing Kansai (Category 1) Factory income 2-fold: Toppan Saga Yoki (Special)

2. Productivity (P) Productivity 1.7-fold: Konica Minolta Supplies Manufacturing Kansai (Category 1) Overall equipment efficiency 93%: Toppan Saga Yoki (Special), 92%: TOTO Nakatsu (Special), 85%: JIDECO Niigata (Category 1) Malfunction case/0 per month/262 cases: Shikishima Baking Pasco, Tokyo Tama (1) 3/123 cases: Toppan Saga Yoki (Special) 15/175 cases: Sambo Copper Alloy (Cont. 1)

3. Quality (Q) Zero defect delivery: JIDECO Kikukawa (Category 1), Carry-in zero defect case: Mitsuba Akagi (Cont. 1) Zero claim cases: TOTO Nakatsu (Special)

4. Cost (C) Production cost 1/5: Hamada Kogyo Silicon Wafer Operation (1) Chip production COS approx. 1/2: Sharp LSI Operation HQ Fukuyama No.3 Factory (Category 1)

5. Delivery (D) Delivery date observance100%: Mitsuba Akagi (Cont. 1), Delivery date observance 100%: JIDECO Kikukawa (Category 1) Production Lead time 1/2: Kanbe Toppan (Cont. 1), In-process inventory 1/4.5: Toppan Saga Yoki (Special)

6. Safety/Health/Environment (S) Zero accident requiring absence continued for 8 years: Gosho Works Miharu (Category 1) Zero labor accident: Konica Minolta Supplies Manufacturing Kansai (Category 1), JIDECO Niigata (Category 1) JIDECO Fukushima (Category 1), Showa Denko Shiojiri (Category 1), Showa Denko Tokuyama (Category 1), Suntory Yamasaki (Category 1), Technohama (Cont. 2) Recycling rate100%: Calbee Hokubu Company (Special)

7. Moral (M) Improvement proposal cases 7.9/mo./person: Technohama (Cont. 2), 5.2 case/mo./person: Sanwa Aluteck (Category 2) Certified Jishu Hozen Engineer accumulated total 116 persons (Passing rate for our company 90%, National average 60%): Sendai Nikon (Special)


2-6 Benefits of TPM

Automobile

Components

Semi-

conductors

Chemicals

Plastic

Products

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140

Average Cost-Benefit of TPM by Industry

Units ¥100M

Amount saved through TPM

Amount invested in TPM


SEIICHI NAKAJIMA 2-7 Why does TPM give Significant Results?

TPM is being deployed globally, reaching beyond differences in race, manners, custom, culture, and etc.

All companies introducing TPM have achieved wonderful

results.

“The making of a product” is “the making of people” Manufacture well-selling products Innovate manufacturing facilities, technology and

systems are all achieved by “autonomous individuals with good morale and skills”

It is certain that this is based on the principle common to

human beings, in other words, on “behavioral science,” research on “why people work”

Charging self-implementation requirement/ Total-worker-participation type management (=TPM)


Human behavioural factors – A H Maslow’s

5-stage hierarchy of human needs

•Work is a type of psychological therapy

for satisfying our desire for self-

actualization.

• People and work are in a cyclic

relationship; people grow and develop

through their work, bringing prosperity

to their companies, and that prosperity

lead s to further individual development.

• When people find a purpose in life

through their work, they become ever

more passionate about it.

The Theoretical Background to Team Activities (QC

Circles, ZD Groups, Jishu Kanri, etc.)

Behavioural Science – The Theoretical Background to TPM

3-1 SELF-ACTUALIZING MANAGEMENT

Safety needs (job and income security)

Self-fulfillment needs

(using one’s talent)

Social needs (a sense of belonging)

Ego or esteem needs (self-respect)

Physiological needs (sleep, food, etc.) (Based on AH Maslow’s writings on self-actualizing

management)


① The expenditure of physical and mental effort in

work is as natural as play or rest, and the average

human being does not inherently dislike work.

② Man will exercise self-direction and self-control in

the service of objectives to which he is committed.

③ The most significant rewards, e.g. the satisfaction

of ego and self-actualization needs, can be direct

products of efforts directed toward organizational

objectives.

④ The average human being learns, under proper

conditions, not only to accept but to seek

responsibility.

⑤ The capacity to exercise a relatively high degree

of imagination, ingenuity and creativity in the

solution of organizational problems is widely, not

narrowly, distributed in the population.

⑥ Under the conditions of modern industrial life, the

intellectual potentialities of the average human being

are only partially utilized.

Theory X Theory Y (The traditional view of direction and and control) (The integration of individual and organizational goals)

① The average human being has an inherent

dislike of work and will avoid it if he can.

② Because of this human characteristic of dislike of

work, most people must be coerced, controlled,

directed, and threatened with punishment to get

them to put forth adequate effort toward the

achievement of organizational objectives.

③ The average human being prefers to be directed,

wishes to avoid responsibility, has relatively little

ambition, and wants security above all.

(from The Human Side of Enterprise, by Douglas

McGregor)

3-2 Theory X and Theory Y

(The Theory X culture must be

changed to a Theory Y culture)

Self-Actualizing Management =Theory Y


＝

(Based on Rensis Likert’s writings on behavioural science in management)

3-3 DIRECTIVE MANAGEMENT AND PARTICIPATIVE MANAGEMENT

Type of

Management Features Results

Directive

(Theory X)

Management by direction and control

(obedience based on fear)

High short-term

productivity

Lack of trust

Low long-term

productivity

Participative

(Team-Based

Activities)

Self-actualizing

management

(Theory Y)

Management by self-determination and

self-control

1 The principle of supportive relationships

2 Group decision-making and problem-solving

3 Setting stretching targets

High level of

trust

High long-term

productivity

＜Participative Management = Self-Actualizing Management = Theory Y＞


TPM

SEIICHI NAKAJIMA

(New Patterns of Management by Rensis Likert, 1964)

Linking Pin Function

3-4 New Management Pattern “Linking Pin Function”

Factory General Manger

Department Manger

Area Manger

Line Manger

Team Leaders

General Employees

Factory TPM Steering Committee

Department TPM Meetings

Area TPM Meetings

Shop-Floor Teams (PM Circles)


ＴＰＭ Behavioral Science

ＰＭＰＭ (Preventive Maintenance)

(Productive Maintenance) ・Prevention

・Zero Breakdown ・Productivity

・Cost Down

ＺＤ（Zero Defect）

Do it right the first time ・QC Circle etc.

・Eupsychian Management by A.H. Maslow

・The Human Side of Enterprise by Douglas McGregor

・New Patterns of Management by Rensis Likert

etc．

ＳＥＩＩＣＨＩＮＡＫＡＪＩＭＡ

Small Group Activity

4-1 The Origin of TPM

Copyright 2007 JIPM-Solutions

4-2 The Aim of TPM

Improve the company by improving its people and its equipment

+

Improve The Company

---- Develop people with the skills required for

today’s highly-automated factories----

1. Operators: Do Jishu-Hozen (AM)

2. Maintenance staff: Do advanced, specialised maintenance

3. Production engineers: Plan maintenance-free equipment

Improving the

People

1) Raise OEEs by improving the equipment currently in use

2) Design new equipment for minimum life-cycle cost and

vertical startup

Improving the

Equipment


SEIICHI NAKAJIMA 4-3 Definition & Basic Concepts of TPM

Definition of Company-wide TPM Basic Concepts of TPM

2. Preventive philosophy (preventive action) MP-PM-CM

3. Participation of all members (Management participation/Respecting people) Overlapping small

group, Jishu Hozen by operators

4. Principle of actual scene and actual thing “What should be” for

facilities and work, visual management, clean workplaces

5. Renewing common sense Continued evolution and

growth of views and thinking

1. Create a profit-making corporate culture Pursuit of economy,

zero accidents, zero defects, zero failures

1. Aiming to create corporate culture that optimizes

efficiency of production systems (Overall

effectiveness),

2. Structure with an actual scene/actual thing a

system that takes preventive action against loss

such as “Zero accidents, zero defects, zero

failures” targeting the overall lifecycle of the

production system,

3. In all divisions including production, development

Sales and administration divisions,

4. Participation of by all members of the company, from top management to frontline staff,

5. Achieve zero loss with overlapping small-group activities.


SEIICHI NAKAJIMA 4-4 Points in fostering autonomous staff with good morale and skills

Good morale

Good skill

Good workplace

…

Enhance problem-finding, improvement,

problem-solving capacities with training

programs and OJT experience,

Acquiring official certification

Continue TPM (self-fulfilling

management/Participating management)

TPM as a routine of corporate culture

Sense of achievement with self-direction and

self-control,

Successful experience, satisfy self-fulfillment

…

…


ＳＥＩＩＣＨＩＮＡＫＡＪＩＭＡ 4-5 Change Thinking and Behaviour with TPM

1. Policy and Target: - In line with the policies and targets of the superior, members of each corporate strata establish high targets, and self-controlled activities to achieve targets (self-directing/self-control)

2. Jishu-Hozen (Autonomous Maintenance): - Protect your own facility (self-control/participating management)

1) Voluntarily take action without being instructed by superiors such as with tag attachment and detachment at malfunction area, measures for sources of problems and hard-to handle areas, visual control, KAIZEN with Jishu-Hozen work time reduction.

2) Determine and implement standards such as tentative Jishu-Hozen standards and create autonomous inspection check sheets.

3) Attend inspection skill training and enhance equipment knowledge, and perform general inspections to extract and restore minor equipment defects.

4) Record malfunctions, minor stoppages, setup times and display target values and performances on the activities board.

5) Create ONE/POINT/LESSON and share information and improve skills. 6) Hold meetings with members of the circle and execute role sharing and measure proposals. 7) Superiors will execute step examinations for each step, and staff members will have a sense of

achievement and satisfaction from self-determination.

3. Kaizen: - Establish targets for the elimination of losses by each corporate strata, and derive a sense of achievement through improvement activities.

4. Training＆Education: - Prepare training rooms, learning and practice tools, hold lectures and drills for maintenance and operation skill enhancement. Furthermore, participate in external training programs and encourage the targeting of official certification for HR development.

5. Improvement Case Presentation Sessions: - Internal and external presentation sessions will be a place for exchange and self-fulfillment.

6. Judgment/Recognition: - The best opportunity to satisfy self-fulfillment.


F-Tagging


Initial

Cleaning

and

Inspection


TPM Award Onsite Assessement

・Kubota Corporation Okajima Plant

・ADEKA Corporation (old Asahi Denka Co., Ltd)

Akashi Factory

Copyright 2007 JIPM-Solutions 27 日本の設備管理発展史日本の設備管理発展史

予防保全時代予防保全時代

１９５０年以前１９５０年代１９６０年代１９７０年代１９８０年代１９９０年代

事後保全時代

専門保全部門による設備管理時代（ＰＭ）

総合的設備管理（ＴＰＭ）時代生産保全時代生産保全時代生産部門の生産部門のＴＰＭ時代ＴＰＭ時代全社的全社的ＴＰＭ時代ＴＰＭ時代ＴＰＭのグロＴＰＭのグローバル時代ーバル時代

日本の設備管理発展史日本の設備管理発展史

予防保全時代予防保全時代

１９５０年以前１９５０年代１９６０年代１９７０年代１９８０年代１９９０年代

事後保全時代

専門保全部門による設備管理時代（ＰＭ）

総合的設備管理（ＴＰＭ）時代

生産保全時代生産保全時代

生産部門の生産部門のＴＰＭ時代ＴＰＭ時代

全社的全社的ＴＰＭ時代ＴＰＭ時代

ＴＰＭのグロＴＰＭのグローバル時代ーバル時代

SEIICHI NAKAJIMA 4-6 Preventive Medicine in Facility＝Preventive Maintenance

Preventive Medicine

Physical

Check up

Daily maintenance Cleaning, lubrication,

Tightening, check

Inspection

(Diagnosis)

Preventive repair

Preventive maintenance

Daily

Prevention

Early

Treatment

(Early exchange) ( )

Prevent

degradation

Measure

degradation

Recover

degradation ( ) ( ) ( )


4-7 The Preventive, Zero-Focused Mindset

Deterioration

Breakdown

= result

Pro

cess

Systems that do not allow breakdowns to happen

‘Deterioration Control’ e.g. Jishu-hozen systems, keikaku-hozen systems

Variation

Quality defects

= result

Pro

cess

Systems that do not allow quality defects to happen

‘Variation Control’

e.g. Hinshitsu hozen systems

Risks

Accidents =

result

Pro

cess

Systems that do not allow accidents to happen

‘Risk Control’ e.g. Safety systems

Latent demand and

dissatisfaction

Pro

cess

Systems for profitable business

‘Management of Latent Demand’ e.g. Sales proposal systems,

developmental sales systems

Working profitably = cause control + process control

(The philosophy of prevention – stop problems happening in the first place)

Causes

Causes

Causes

Causes

Sales = result


4-8 The Basic Approach to Zero Failure

Equipment does not go wrong by itself: people make it go wrong;

By changing the way people think and act, equipment can be made completely failure-free;

People must stop thinking about equipment as something that goes wrong, and start thinking about themselves as agents who can stop it from going wrong, and eventually get rid of failure for good.


4-9 The Principles Behind Zero Failure

Bring hidden equipment defects to light and nip them in the bud!

Breakdowns are only the tip of the iceberg

Hidden equipment defects

- Dust, dirt, contamination by

product or materials

- Wear, looseness, slackness, leaks

- Rust, deformation, scratches,

cracks

- Excess heat, excess vibration,

abnormal noise and other

abnormalities

Failure

( Preventing Breakdowns )


4-10 Overview of the Figure-of-Eight Method for Quality Maintenance

Sustain (Observe rules and procedures rigorously)

Improve (Tighten up existing rules and procedures,

and replace any missing ones)

Identify Existing

Situation

1-1 Investigate quality situation

1-2 Identify rules and procedures

1-3 Assess compliance

Restore

2-1 Restore

2-2 Check results

Analyse

Causes

3-1 Analyse causes 3-2 Revise standards

Eradicate

Causes Investigate causes Restore and improve Check results

Establish

Conditions

5-1 Revise QM Matrix

5-2 Revise standards

Maintain

Conditions

• Perform checks • Monitor trends (Revise the rules to ensure

they are observable)

Improve

Conditions

• Reduce number • Extend intervals • Reduce times (Make them easier

to observe)

1 2

3 4

5

6 7

CHECK


4-11 Step Implementation of the Active Contrivance to Zero Industrial Accident

Measures to solve problems at the source of danger factor

Step 1: Current situation survey

Step 2: Overall inspection of danger factors

Step 3: Create table of danger factors

Step 4: Improvement of danger factors

Step 5: Setup requirements for zero accident

Step 6: Create inspection standards, and

training and drills

Step 7: Execute safety diagnosis

Safety maintenance


SEIICHI NAKAJIMA 4-12 Essence of TPM

Foster autonomous

individual

with good morale

and skill

Preventive action/

measures for sources

of problems

Zero Loss

Good skill

Good morale

Good workplace

Zero

defect

Zero malfunction

Zero accident

Set up Hoshin Goal/ Evaluation of result

Kobetsu-Kaizen (Focused Improvement)

Jishu-Hozen (Autonomous Maintenance)

Keikaku-Hozen (Planned Maintenance)

Training & Education

Early Management (Product & Equipment)

Quality-Hozen (Quality Maintenance)

TPM in Administrative and Support Departments

Overlapping small-group organization

SHE (Safety, Health & Environment)

Th

e 8

Pil

lar

of

TP

M


SEIICHI NAKAJIMA 5-1 What is VISIONARY COMPANY

<Aim for VISIONARY COMPANY>

James C. Collins and Jelly I. Porras, professors at Stanford University, wrote in their book that Visionary Companies are “companies with vision, future-oriented companies, prospective companies, companies excelling in the industry, and that have won broad-based respect from other companies in the same industry, and continuously making a big impact on the world.”

A questionnaire survey of the CEO’s of 700 companies was carried out, and 18 companies were selected as target visionary companies for comparative examination.

3M, American Express, Boeing , Citicorp, Ford, GE, Hewlett-Packard, IBM, Johnson & Johnson, Marriott, Merck, Motorola, Nordstrom, P&G, Philip Morris, Sony, Wal-mart, Walt Disney.

The book also states that there are other visionary companies that were not included in the comparative examination, and that the above companies had fallen into management crises in the past, but had the power to regain their footing in spite of the adversity.

An important element of visionary companies is the fundamental principle; in other words, fundamental value and goal (the reason for the company’s existence) surpassing mere profit.

It states that the essence of visionary companies is that basic principles and the ambition for advancement are disseminated to the every corner of the company. (Cited Reference: BUILT TO LAST by James C. Collins & Jelly I. Porras Japanese version, Nikkei BP, Ed. 2006)


ＳＥＩＩＣＨＩＮＡＫＡＪＩＭＡ編集

[注:中嶋]

5-2 GE Revolution by Jack Welch

When Jack Welch assumed the role of Chairman and CEO of GE in April, 1981, the company was ranked No.10 in the US, with $25 billion in annual sales, $1.5 billion in profits, and an aggregated market value of $12 billion. By 1998, Welch had increased the business to $100.4 billion in annual sales (No.5 in the US), and $9.3 billion in profits. And the aggregated market value had exceeded $400 billion by the fall of 1999. This marks a 4-fold increase in sales, a 6-fold increase in profits and a 33-fold increase in the aggregated market value from 1981.

As soon as he was appointed CEO of GE, Welch had decided to create a completely new type of management style and declared that he would put a stop to the then current management style exercised routinely by most managers; a dominating and control type military system.

Welch was confident that his job was take action that would motivate his employees. The secret was to have the staff feel that they were given authority, in other words, to help the staff members perceive themselves as the “entrepreneurs.” How could he make his staff feel that they were a part of management? Welch had come up with the answer. It was a company-program where each staff member be his or her own boss named “workout.” (Self-fulfillment/Management participation)

Workout is a wide-scope system in which the bureaucracy is reduced and staff members are encouraged to openly and honestly express thoughts and understand one another. Welch strongly believed that staff members with the imagination and innovation to dramatically improve productivity were those who were actually working on the frontline.

(Cited reference: The GE WAY FIELDBOOK by Robert Slater, Japanese version, Nikkei BP, 2000.7.)


5-3 THE ROLE OF MANAGEMENT

There are three tasks that management has to perform to enable the

institution in its charge to function and to make its contribution:

① Establish the specific purpose and mission of the institution.

Management exists to fulfill the mission, i.e. the various purposes, of

their organization. (CS: Customer Satisfaction, SHS: Shareholder

Satisfaction)

② Make work productive and the worker effective. Institutions in

today’s society are increasingly the means through which individual

human beings find their livelihood, find their access to social status, to

community and to individual achievement and satisfaction. (ES:

Employee Satisfaction)

③ Manage social impacts and social responsibilities, and help to

address social issues. (SS: Social Satisfaction, GS: Global

Satisfaction)

(from P F Drucker’s Essential Writings on Management, adapted by S

Nakajima)


• CS (Customer Satisfaction）: Satisfying QCD requirements

• ES (Employee Satisfaction): Fulfilling self-actualization needs

• SS (Social Satisfaction): Corporate social responsibility

• GS (Global Satisfaction): Conserving the global environment

• SHS (Shareholder Satisfaction): Securing profits and dividends

Maxim

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5-4 Using TPM to Make “5S Management" a Reality!


SEIICHI NAKAJIMA 5-5 Volvo Gent Factory (FY 1999 World Class Award)

By realizing an individual order production system, the company aimed for a significant reduction in lead time with 98% of deliveries with an average of 5 days. Furthermore, autonomous maintenance activities were expanded, cost control was tackled by all, including operators, and advanced simulation programs were utilized to deal with reduction in the trial production period. These measures had significantly improved the 5S’s: CS/ES/SS/GS/SHS (shareholder).

With the above measures conditions for prosperity as an car assembly factory were established.

- Five improvements in satisfaction with continued TPM -

<Case of 5S management satisfaction improvement with TPM>


ＳＥＩＩＣＨＩＮＡＫＡＪＩＭＡ 5-6 Aim to be VISIONARY COMPANY

Basis for “the making of a product” is “the making of people”

Top management itself should lead in making TPM (self-fulfillment/participating-type management) the common corporate culture, in fostering human resources and in aiming to become a VISIONARY COMPANY (No.1 in the industry, No.1 in the world)!


END

Thank you for your kind attention!!

Documents

Essence of TPM - KLMANAGEMENT of TPM Fostering people leads to Good Manufacturing 16 March 2007 Seiichi Nakajima ... Jishu-Hozen…Original new step deployed in Part II/III