As always, Chihiro Nakao’s initial foray into Porsche was a theatrical tour de force. When he arrived for his first visit in the fall of 1992, he insisted that Wiedeking immediately accompany him to the assembly plant. After walking through the door and looking at the stacks of inventory, he asked in a loud voice: “Where’s the factory? This is the warehouse.” Upon being assured that he was indeed looking at the engine assembly shop, he declared that if this was a factory Porsche obviously could not be making any money. And upon being told that Porsche was, in fact, losing more money every day, Nakao announced that a drastic improvement activity must be conducted in engine assembly along with many other places and that these must start immediately, indeed that day.
This, of course, was not the normal practice at Porsche, where all changes were carefully planned months in advance and negotiated with the Works Council. Any change in job content and the movement of any machine needed to be negotiated in advance, making kaikaku and kaizen in the normal “just do it” manner illegal in Germany.
Nor was it the normal practice for a stranger—a Japanese, no less, who spoke no German and communicated through an interpreter—to speak this way to a Dr. Ing. head of production (Ph.D. engineer) in a loud voice in front of the workforce. Finally, it was not normal practice to announce that the participants in the initial improvement projects must include all of the senior managers as well as the primary workforce.
The initial reaction on the shop floor was shock followed by considerable resentment, and the Works Council only very reluctantly consented to the initial improvement exercise. Most Porsche workers still found it difficult or impossible to believe that the problem was inside Porsche rather than outside in the marketplace. In addition, it was hard to believe that Japanese production engineers who knew nothing about the sports car industry could actually be helpful.
When the Works Council agreed to the experiment with the Japanese consultants, it stipulated that Porsche workers would conduct their own parallel workshop to show- if change was really needed it could perfectly well be achieved by long-term employees rather than outsiders.
The objective of the first kaikaku in the engine assembly area was very simple: Get rid of the mountains of inventory and the treasure hunting for parts which occupied a substantial fraction of each assembler’s daily effort. Then make the parts flow from receiving to engine assembly to the final assembly plant very rapidly with no stopping, no scrap, and no backflows to fix defects.
A start must be made somewhere, so the objective of the first weeklong improvement activity was to cut shelf height in half from 2.5 to 1.3 meters in order to cut the inventory of parts on hand in engine assembly from an average of twenty-eight days to seven and to make it possible for everyone to see everyone else in the shop. (The underlying idea, of course, was to “lower the water level” so the snags in the prompt resupply of parts would be brought to the surface and the next step could be taken toward eliminating inventory and speeding flow.)
As the team formed its plan, a crucial moment arrived. Nakao handed a circular saw to Wiedeking, now dressed in the blue Porsche jumper worn by all production workers, and told him to go down the aisle sawing off every rack of shelving at the 1.3-meter level. As Manfred Kessler, then the head of the Methods and Planning Department and now the head of the Supplier Development Group, remembers, “It was the defining moment. Historically, senior management never touched anything in the plant and no one ever took such drastic actions so directly and quickly.”
At the end of the week, the initial rundown in inventory was complete (there was no longer anyplace to store twenty-eight days’ worth of parts) and the effects were both dramatic and completely visible. The Porsche internal teams, meanwhile, had made hardly any progress on their parallel tasks and concluded that they should simply join the next consultant-led kaizen. Excerpted from page numbers 201-203 of ‘Lean Thinking’ by Womack and Jones