Genchi Genbutsu is a core principle of the Toyota Production System that
translates to "go and see for yourself."
It
emphasizes firsthand observation to understand situations deeply, solve
problems accurately, and make informed decisions.
Instead of
relying on second hand reports or data alone, leaders and team members are
encouraged to go to the actual place where value is created, such as the
factory floor, the customer site, or the development environment.
The Genchi Genbutsu approach involves:
Visiting the gemba: Physically
going to the site of the issue or process.
Observing without assumptions:
Understanding the facts directly through observation.
Engaging with people: Talking
to employees, operators, or customers involved.
Asking “Why?” and using the “5
Whys” technique to get to the root cause.
Genchi
Genbutsu promotes situational awareness, empathy, and fact-based leadership. It
bridges the gap between strategy and execution, ensuring leaders stay grounded
in operational realities.
Finally, a
word to clarify the difference between Genchi Genbutsu and Gemba; Gemba means "the real
place" where work happens and value is created (like a factory floor)
Genchi Genbutsu means "go and see for yourself" and emphasizes
firsthand observation to understand problems deeply.
Gemba is
the location, Genchi Genbutsu is the mindset and method of investigation.
In supply
chain operations, we pride ourselves on precision, efficiency, and continuous
improvement.
But what if
I told you there’s an entire shadow process operating inside your workflows
quietly consuming time, resources, and money and it’s not even on your radar?
Welcome to
the world of the Hidden Factory.
What is a
Hidden Factory?
A Hidden
Factory is the collection of all the rework, corrections, and unofficial fixes
that happen behind the scenes to make a process appear like it's working
smoothly. These aren’t logged as defects. They don’t show up in your
dashboards. But they exist.
These might
look like:
Warehouse staff quietly
relabeling mis-picked items before shipping.
Customer service reps manually
adjusting inventory levels in the system to correct errors.
Planners double-checking
forecasts with spreadsheets because they don’t trust the MRP output.
Individually,
these “workarounds” seem harmless even helpful. But collectively, they signal
process gaps that are eating into your margins and scalability.
Hidden
factories are dangerous because they create the illusion of control. Everything
looks good on paper, but under the surface, people are compensating for broken
processes.
The good
news is, Hidden factories can be found and fixed. Here are some ways to shine a
light on them:
1. Listen
to the “Off-the-Record” Conversations; pay attention when someone says:
“Oh, I
always fix that before it causes a problem.” “It’s faster if I just do it this
way.”
2. Map the
Actual Process (Not the SOP)
Use value
stream mapping to compare how the process is supposed to work versus how it actually
works. You'll often find extra steps that aren't documented anywhere, that's
your hidden factory.
3. Look at
Cycle Time Variance
If your
standard cycle time says an order takes 3 hours, but in practice it’s closer to
5, that discrepancy is usually where the rework is hiding.
4. Involve
the Front Lines
Your team
knows. Engage operators, planners, and support staff early and often, they live
the day-to-day realities that KPIs can’t always capture.
Before we dive into the eight types
of wastes, it is important to understand what waste is.
Waste is any action or step in a
process that does not add value to the customer.
Originally seven wastes (Muda) were identified,
and a methodology was developed by Toyota, as part of the Toyota Production System (TPS).
The seven wastes were; Transportation,
Inventory, Motion, Waiting, Overproduction, Overprocessing and Defects. They
are often referred to by the acronym ‘TIMWOOD’.
The 8th waste of non-utilized talent
or ‘Skills’ of workers was later introduced in the 1990s when the Toyota
Production System was adopted in the Western world. As a result, the 8 wastes
are commonly referred to as ‘TIMWOODS’.
We can now deep dive into each of
these eight wastes and understand how we can reduce or eliminate them as part
of a leaner and more efficient operations.
Kaizen is a
business philosophy that focuses on continuous improvement across the entire
organization. The pursue of the kaizen model is to help companies
focus on gradually and consistently increasing efficiency and reducing waste
within processes. That doesn't mean alterations happen slowly. The kaizen
process simply recognizes that small changes now can have huge impacts in the
future.
To achieve all this, kaizen encourages
input from any employee, from the factory floor to the most senior management.
The kaizen method became popular in Japan,
at manufacturers like Toyota. Kaizen can broadly be translated as means continuous
improvement in Japanese.
There are five fundamental Kaizen
principles that are embedded in every tool and behaviour:
1. Know your customer
2. Let it Flow
3. Go to Gemba
4. Empower People
5. Be Transparent
Traditionally, kaizen has been known
for its events, usually a three- to five-day team workshop
in which employees, managers, and sometimes C-suite executives make an
actionable plan to improve an existing process. Kaizen
events often follow Gemba Walks or the discovery of an inefficiency. We
have spoken about Gemba Walks in the past, these are visits to workplaces where
management teams can witness processes, talk to employees, gather insights, and
identify any issues. You can read more about Gemba Walks in here.
After you’ve identified problems or bottlenecks in a process,
start making small, continuous improvements. During the kaizen event, team
members collaborate and think of solutions. The ideal outcome of these events
is an actionable plan that is ready for implementation.
Kaizen events can take many forms to best serve their business
application.
1. Focused-improvement
kaizen. A
focused-improvement event is a kaizen event centred on a single, known
issue. Prioritize your most important losses and develop solutions to
eliminate them.
2. Waste
kaizen. This
type of event focuses on eliminating waste in your processes, as opposed
to improving systems that are currently working.
3. Error-proofing
kaizen. Use
this type of event to reduce human error by improving processes. This
could be as simple as standardizing checklists, automating parts of a
system or using Poka Yoke which we talked about here.
4. Lead-time
kaizen. This
kind of event is suitable when you realize one of your processes is taking
too long. The event aims to reduce the amount of time it takes to complete
a process, like the time from processing an order to the customer
receiving their goods.
How to run a Kaizen event:
There is not a unique way
to conduct a kaizen event but the plan-do-check-act (PDCA) framework is
common and often recommended method.
1.
Plan
The Gemba Walk, mapping your value stream, and identifying the
problems in your processes are part of the planning stage in a PDCA cycle.
Follow these steps to get started.
Speak to employees. They’re
the people who know the daily process better than anyone, so find out what
problems or issues they're aware of.
Define and analyse the
problem. When you’ve decided which issue to
tackle, break it down and find the bottleneck in the process.
Establish the metrics
you’ll use to measure success. Without this data it’s
impossible to analyse the results after you’ve tested the solution.
Decide on a goal. You
should have one goal that is achievable within the event time frame.
Work as a team to find solutions to the problem. There should
be no limits on the kind of solutions encouraged. Allow employees to use
their creativity. Choose one with potential to start with.
2. Do
Run a small-scale test of your chosen solution. Make sure every team member
involved is aware of the change and let it run long enough to gather meaningful
data and feedback.
3. Check
Collect data from your test and assess its success.
4. Act or adjust
If the test was a success, scale, implement your improved process company-wide
or as a permanent update. However, if you found issues, or if the solution
didn’t work, refine the process, and run further tests or choose a different
solution and try again.
This should be a cyclical process. The kaizen event might be a one-time event
but the process of improving never stops. To keep the continuous loop going,
repeat the cycle. Find more processes to improve or try out other solutions.
Many companies struggle with
translating strategic plans into actionable items on a daily process, luckily, among the most powerful tools in the Lean arsenal for
effective strategic management we can find Hoshin Kanri.
Similar Jidoka
or Just in Time, Hoshin Kanri has its roots in the Toyota Production System and
as a tool, it can be very helpful, when implemented properly, in bridging the
gap between strategy and execution.
Hoshin Kanri has a Matrix shape with
four quadrants each devoted to a specific task.
1-Set the strategic vision & goals (3-5 year breakthrough
objectives):
The long-term goals is the
starting point In Hoshin Kanri, normally in the frame between 3 and 5 years.
List them at the bottom quadrant of the matrix
template and have in mind that every initiative will have many smaller tasks
that will need to process before achieving the goal.
After your long-term goals are
all set, prepare the most important objectives that you aim to achieve in a
shorter time frame and put them in the left quadrant of the Hoshin matrix.
3-Set short-term actions and metrics (improvement
priorities)
You will need to fill the top
quadrant with the most important activities that need to be completed to
achieve the short-term goals, this is basically the to-do list for the upcoming
months.
4-Agree on key performance indicators (targets to improve)
Agree on the most crucial metrics
that need to be improved and list them on the diagram.
Following this line of thought, right next to
the key metrics, you need to list the key stakeholders responsible for leading
the completion of the activities in the matrix's top quadrant.
Finally, you should complete the picture by
specifying the dependencies between every listing in your matrix.
Kaizen
is a Japanese word that means “change ofr better” but it´s also
a philosophy that refere to continuously improve; instead
of encouraging large, radical changes to achieve desired goals,
Kaizen
philosophy recommends
that organizations introduce small improvements, preferably ones that
could be implemented on the same day.
In
Supply Chain Kaizen
is an
on going
process and
its
purpose goes beyond simple productivity improvement. It is also a
process that, when done correctly, humanizes the workplace and
teaches people how to eliminate waste.
While
Kaizen
usually delivers small improvements, the culture of continual small
improvements and standardization yields large results in terms of
overall improvement in productivity.
The
following video, although in Spanish compliments the abobe information
in an easier and approachable way!
Waste minimization is the process of reducing the amount of waste produced
with the aim to eliminate the generation of harmful and persistent
wasters. Waste minimization involves efforts to minimize resources
and energy use during manufacture.
Waste
management on the other hand, focuses on processing waste after it´s
created, concentrating on reducing, reusing and recycling products
and components. Waste minimization should be seen as a primary focus
for most waste management strategies.
Zero
waste is a philosophy that encourages the redesign of resource life
cycles so that all products are reused and no waste is generated, it
encompasses more than eliminatig waste through recycling and reuse,
it focuses on restructuring the production and distribution systems
to reduce waste.
Many
companies have set ambitious targets waste reduction, and factories
have been targeted as the primarily function to trial waste reduction
principles.
One
prime example of this journey to zero waste is Uniliver; the giant FMCG started his journey back in 2009 with the aim to achieve zero
waste across their global factory network by 2020. They achieved
this target in 2014, 6 years ahead of plan. Here is how they did it:
The
challenge is now to roll out these best practices from factories to
distribution centres, head offices and customers. Hopefully one day,
the zero waste philosophy will be part of everybody´s life, in the
meantime, a few pioneers are showing us the way. Only a few changes
in our day to day life will mean a start to a journey to reduce our
impact in our planet.
