Tuesday, July 21, 2009

Lean, Elegant and Excellent

I just experienced the most impressive company visit during my career. I have visited quite a few companies in several industries during the past 15 years, but none of them compares to NBK in Gifu, Japan. NBK originally started 450 years ago as a pot maker and has during the years evolved to a maker of metal parts such as pulleys, couplings and screws, with 410 employees generating US$ 80 million of revenue.

What made this visit so impressive is that they seem to fullfil all
I'm not going to list all those principles here, I have explained most of them earlier and will be blogging about Toyota Way later.

NBK has managed to create a true learning organization which operates according to lean principles producing high quality products with high customer and employee satisfaction and good profitability.

And they do this with
  • no sales budget

  • no cost budget

  • no profitability target

  • no HR department

  • no Quality assurance department

  • no maintenance department

  • no bureacracy

  • ...
Instead they had had culture where they put high emphasis on employee learning, job rotation, continuous improvement and meeting each customer's needs. Their Sushi Bar Concept describes how committed they are to meet their customers needs - to understand the rest you need to go and visit the factory.


NBK's craftsmanship meets each customer's needs.

As our customer, we would deliver what you need, right when you need it, in just the amount you require. We at NBK have been polishing our skills in an effort to craft each individual product with precision and mastery, as embodied in the work of sushi bar chefs. We continually strive to respond to all customer needs. We do so by engaging in "one-by-one production," and inspecting every single product that we produce in order to ensure the highest quality possible, and by responding to customer orders anywhere, anytime, and for any quantity, even for an order of one.


Waugust said...

There is a lot here Samuli and it will take some time to digest but in these challenging times, the better ideas are often those that appear very different than how we've done things in the past, which is certainly true in this case.

Oh yeah, and then there is the fact that NBK has been in business almost a half a millennium.

They must be doing something right.

Samuli said...

Hi Bill,

yes, there was a lot there.

They have no sales or cost budget, yet they are highly profitable. They have no HR department, yet everybody is committed to personal development and they have an excellent trainee-to-meister career path and smooth job rotation.

In fact, when you have no department budgets, you do not use the resources where their costs are allocated, but where they are most needed at a given time - which is just what NBK was doing.

They have no Quality department yet they produce high quality, because everybody is committed and responsiblle for the quality.

In a way they operated like a small craft man's shop - like they would have operated 400 years ago. What made it amazing is that they were able to do that with over 400 people today.

If you think of in the terms of Lean, they had eliminated a lot of "management waste" most of us think is necessary to run a business.

Matthew E. May said...

Love the example. Wish I'd known about it in writing my book! I've "tweeted" your post.

Anonymous said...

I agree with you - lean, elegant and excellent sounds good from a profitable business point of view - at least today. However, I would like to both challenge and introduce all writers and visitors of this excellent blog to further develop a meaning of sustainability together with the lean, elegant and excellent. Referring to MIT Sloans article of Mr. John R. Ehrenfeld on 14th July, former director of MIT program on Technology, Business and Environment:

"I define sustainability as the possibility that human and other life will flourish on the planet forever. It’s a definition about as far from the central notion of sustainable development as night is from day. But, to me, it represents a truer idea about what sustainability is all about. Flourishing, like many other desirable qualities, is an emergent property. It has no thing-like character. It’s like health, or liberty, or freedom: It appears only when the whole system is functioning properly. And just like you can’t produce a Rembrandt from a paint-by-numbers kit, you can’t build a machine to produce flourishing, and you can’t measure it.

Now, many people belittle this kind of notion, because in the world of business and management you find the mantra, “if you can’t measure it, you can’t manage it.” But sustainability is not about managing and measuring. It’s about getting there, and staying there."

I have heard quite many times during the last 3-6 months that we have only appr. 10 years time to change our "consumption" oriented culture to a more environmentally friendly and sustainable culture. What should be changed first? Maybe we could could brainstorm some ideas in this bloq and maybe we could "spread the word" and ideas based on our conclusions. What do you think?


Anonymous said...

Please find attached a link to an interesting article.



Samuli said...

Hi Daddy,

Thank you for the comments. I have been on holiday without any connection to the internet - relaxing! I will check your links later in August.