How Does Toyota Do It? (A Layman's Look At Valuing an Asset) - Part 1 By Mike Brown  For some reason lately, I have found myself reading several books at one time.  This probably has a lot to do with the location of the book at the time I choose to read rather than some intellectual plan for optimizing knowledge and wisdom.  However, I have found that this does work as some sort of literary brainstorming technique to enlighten and hopefully spawn new ideas and opportunities. This has happened to me recently when information from three books and articles made me even more aware of the dynamic business conditions, and perhaps a problem or two, that we are facing in this country today.  The books and articles, which I highly recommend, are: The World Is Flat by Thomas Friedman; The Toyota Way by Jeffrey Liker; and an article Maintenance Goes A Lot Further Than Equipment by Robert Apelgren. Three Issues The issues at the convergence of this information are: Why is Toyota still the benchmark for efficiency / quality / profit / growth in the manufacturing and business world (after being studied for 20+ years)? Does the "off-shoring" of so many jobs and companies have to have such a huge impact on our manufacturing segment? How can a business address this issue and come out ahead in a world market place? The Key    The one item that appears to be a key to this whole situation for me after melding the information in these three pieces is ‘the requirement for the vertical movement of knowledge, skills, and capabilities of the total manufacturing workforce'.  Now you are probably going to say "Boy that is brilliant", or something much more stingingly cynical.  But give the following seven statements some thought: If the average worker could regularly and continually improve his skills and capabilities (i.e., performance and reliability) he would be able to regularly move out of the low skill job (that does not demand his growing wage rate and is easily transferred to a low skill / low wage rate region) and into a job that is increasingly value-added and deserving of his increasing wage rate. (Increased ROI?)   Wages have increased almost automatically for decades. Has there been any requirement for a similar increase in ‘human performance and capability'? I'm not talking about Process Improvements - they need to always be demanded. I'm talking about Personal Improvements - that improve performance and reliability (capability). Our culture has precipitated the idea for decades of "go to school, get your diploma, and then go to work for thirty years". We have never really connected learning / knowledge with ongoing work performance / reliability and the requirement thereof. For years, we asked people to ‘check their brain at the door and get to work'. I believe there is a need to recognize the relationship between knowledge and labor at the working level (especially in a time of accelerating change). We have treated our workforce just like some of our machinery and equipment: "run it till it breaks - then, we will just fix it/replace it" (or better - just outsource it). Unfortunately, that sub-optimizes a sometimes huge investment in an asset. Our machines and equipment have a huge asset/dollar value. However, I've always heard "our people are our greatest asset". But places that act like that about their people are the exception instead of the rule. We have a hard time putting an asset value on our workers, but it must be extremely high since we let them run but not take care of all those high-dollar machines. Next Time In the next issue I'll cover statements 5-7 and share some thoughts about how to get started with making an investment in 'your most valuable asset'.

In addition to  Lean Consulting Services, TAG provides Project Management, Engineering & Technical Support, Training Services, Facility and Maintenance Services, and Architectural & Design Services.  Call us toll free at 877-824-3647 or visit  www.tag.bz for more information. About the Author: Mike Brown is a Principal with The ACCESS Group, LLC (TAG)  headquartered in the Nashville, TN area.  Mike is also a partner with Healthcare Performance Partners (HPP). Mike has had a dual background in both the manufacturing industry and the military.  Mike has led various business process and Lean Enterprise related improvement projects for companies, including those in the manufacturing, healthcare and administrative sectors of industry. Mike has over 30 years experience in significant areas of growth and leadership during his career. He has also managed numerous planning and industrial projects in the automotive, consumer goods, defense, boat, aircraft, and truck industries.