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Source: Business-improvement.eu
Lean: Value adding organization
Kaizen 2.0 at Yusen LogisticsKaizen 2.0: improving the supply chain with all partners
The chain-wide view of Yusen Logistics
Dr Jaap van Ede, editor-in-chief business-improvement.eu, 17-04-2019

Kaizen 2.0, that’s what Yusen Logistics calls continuous improvement with a supply chain-wide view!

Logistics Control Towers are not new to the transportation industry. Many logistics service providers already manage and control the movements of their customers’ goods and the related administration through Control Tower solutions. What is new though, is that Yusen Logistics complements this with continuous improvement and that they invite their customers to join, in multidisciplinary Kaizen teams!

The wider your view, the greater the potential for improvement. One of the most important tools for Kaizen 2.0 is a simple Makigami-board. It displays all process steps with post-its. This keeps the focus on attaining insight and it helps to connect all supply chain partners with each other. Complex improvement tools are not needed.

Yusen Logistics is a large and internationally operating logistics service provider. They arrange the complete journey for the goods of their customers. Available services include air freight forwarding, ocean freight forwarding, cross-docking, storage, reverse logistics, customs clearance, global tracking, climate cargo, supply chain planning, and even consultancy.

Insight into action
Yusen offers these services under the tagline insight into action. This is more than just a marketing slogan. With a Japanese heritage and global headquarters in Tokyo, Lean and continuous improvement is a part of the company’s DNA.

With insight, Yusen Logistics means that all activities in a logistics chain are made visible, to improve the "value flow". That is the action.

As a logistics service provider, Yusen provides freight forwarding and everything relating to it
As a logistics service provider, Yusen provides freight forwarding and everything relating to it.

Control towers
A Yusen customer can for example be an automotive or pharmaceutical company, for which they arrange the supply of materials.

Control towers are often talked about in logistics. These ‘towers’ provide live tracking and tracing of goods, they help to identify opportunities for consolidation and optimization, and they handle the related administration.

What is new, is that Yusen Logistics goes one step further. They invite their customers - and the suppliers of those customers - to analyze the effectiveness of the Control Tower. Ways to improve are identified, by working together in ‘kaizen’ improvement teams. The overall aim is to make the logistics increasingly smarter.

A Kaizen improvement team does not deal with daily logistics; Yusen’s ‘traffic controllers’ take care of that on the basis of real-time data. Instead, a Kaizen team looks at the blueprint behind the logistics: the ins and outs of the supply chain.

By studying this blueprint, insight and understanding of each other’s contribution to the chain increase. This is the basis for Kaizen (Japanese for ‘Change for the Better’) in the supply chain!

Logistics control towers thus become kaizen control towers. The latter term is mine, not Yusen Logistics. The metaphor of a multidisciplinary improvement team that overlooks the entire value chain from a tower, was too good to pass up.

In a kaizen control tower, Yusen Logistics can not only connect companies physically but also bring people together. Being a Japanese company, they understand the principle of ‘listening to the Gemba’. The person doing the work at a certain spot knows most about possible improvement opportunities there. Other parts of the supply chain are often unaware of these local problems and possible solutions. That’s why it’s important to bring all partners of a supply chain together in one improvement team.

A multidisciplinary team improves a process throughout the value chain on the basis of a Makigami board
A multidisciplinary team improves a process chain-wide on the basis of a Makigami board. Yusen wants to do this with all supply chain partners, and calls this Kaizen 2.0.

Outsourcing logistics is often a large step for an organization. At Yusen Logistics, the first step of onboarding a new customer therefore is stabilization. It is not compulsory to participate in Kaizen 2.0 teams. You can choose to outsource ‘just’ your logistics to Yusen and decide not to interfere further with it.

‘In all cases, the first thing we do is unburden a new customer,’ says Kiron Zaal, kaizen manager at Yusen Logistics Europe. ‘We start by stabilizing the logistics process that is outsourced to us. The second step is to improve our share of it, the part between the supplier and our customer. First we put our own house in order. However, we also start thinking about what could be improved if you could also change things at the beginning and end of the chain. Those are the spots we have no control over.’

‘Then, we ask the customer and their supplier(s) if they want to improve the supply chain further, together with us, based on our preliminary work and the ideas that this yielded. This approach fits well with our pursuit of long-term relationships. We do not aim for rapid cost reduction, at the expense of quality. Our priority is an increasingly better value chain. As a result, the costs fall naturally.’

Kiron Zaal: If you give your value chain partners insight into the chain-wide process, then the process improvement is almost automaticKiron Zaal: ‘If you give your value chain partners insight into the chain-wide process, then process improvement follows almost automatically. Providing insight is much more important than doing an in-depth analyzes that only you, as a Black Belt, understand.’

Kiron Zaal became part of the Yusen Logistics team in November 2017. Before that, he worked at Heineken for nine years, the last two of which as a senior process improvement specialist. ‘I was asked by Yusen to improve their way of continuous improvement, so doing a kind of Kaizen on the Kaizen.’

Kaizen 1.0
That raises questions. You would expect that a Japanese company is already good at doing Kaizen! ‘That’s right. Yusen Logistics has been applying what we now call Kaizen 1.0 for a significant time and on a large scale. Across every site in the world, Yusen Logistics’ employees are constantly looking what can be changed in order to improve their own work. Think of the Ohno circles. They observe from a certain place what happens and how that could be improved.’

That raises more questions, since what Zaal calls ‘Kaizen 1.0’ is not enough if you want to become and stay Lean. This is evident from the case-studies on this website. If you encourage everyone to improve their own work, you often see enthusiasm in the beginning. However, a few years later a relapse follows because there is no direction for improvement.

‘First of all, I want to emphasize that there is nothing wrong with this way of doing Kaizen,’ Kiron responds. ‘It invites people to think about their activities and how to improve them. This creates an open culture. The biggest benefit is a kaizen mindset. But I agree with you: in the end you also need to improve in a structured and targeted way.’

Hoshin Kanri
Tho this end, Yusen implemented their own form of Hoshin Kanri, Japanese for ‘compass for improvement’. Hoshin Kanri links strategic goals to local goals at the department level.

‘To speed up this process we use a kind of Hoshin Kanri light, without complex X-matrices that link goals to sub goals. As a logistics service provider, we have to deal with rapidly changing situations in supply chains. We must be able to respond faster than a company that manages its own supply chain. The introduction of a new car model is an example of a major disrupting event.’

The healthcare distribution center of Yusen in Antwerp
The healthcare distribution center of Yusen in Antwerp

Kaizen 2.0
Hoshin provides direction. However, it is less suitable to provide chain-wide insight for chain partners who work together on process improvement. The use of value stream mapping is better suited for this. You can map supply chains from start to finish, in order to uncover weak links and improvement opportunities.

‘This is the way we give direction to Kaizen, with the aim to improve cross-departmental and cross-company. As I already told you, we do this with multidisciplinary teams that improve chain-wide. We call this Kaizen 2.0.’

A step back
In his time as a process improver at Heineken, Zaal learned two things. ‘First, process improvement must be something of the people themselves, otherwise they will not support the changes it entails. At The Lean Six Sigma Company I was trained as a Lean Six Sigma Black Belt, and in 2018 as a Master Black Belt. However, as a facilitator of an improvement team, you should take a step back. A team will always work harder towards something they believe in, than towards a solution imposed upon them by an outsider.’

The second thing that Zaal learned in his Heineken time is that everything stands or falls with insight. ‘Insight into how processes are executed at the moment, and what effect local activities have on other activities. Once a Kaizen team has that insight, process improvement follows almost automatically. Providing insight is therefore much more important than doing an in-depth statistical analysis that only you, as a Black Belt, understands.’

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In the past year, Zaal trained more than 200 people across Yusen Logistics to become a kaizen practitioner. These people become the facilitators of the (future) Kaizen 2.0 improvement teams. This could be ‘internal’ improvement teams, but also the chain-wide improvement teams already mentioned.

‘People at various management levels follow my training courses. We want at least one kaizen officer per country. He or she will coordinate all kaizen activities there, led by the kaizen practitioners.’

Future kaizen practitioners learn how to make processes visual and transparent throughout the chain, and they learn how a Kaizen team can define and implement improvements. ‘We also teach them something else. People who are involved in problems have the most knowledge about the root cause of those problems. You must therefore ensure that they are not designated as guilty. Then they slam shut, after which you lose your most important source of information. A problem almost never is caused by people alone. The root cause often is the way a process or system is designed or organized.’

Future kaizen practitioners make their first makigami on day one of the training. A makigami is a variant of a Value Stream Map (VSM). With a makigami, the emphasis is less on physical parameters such as cycle times and inventory levels, and more on information transfer within the process chain.

Makigami is Japanese for ‘roll of paper’ or ‘script’. The goal is to reveil all actions that are necessary to complete a process with a row of ‘post-its’. ‘There are many administrative operations in logistics services, and the start and end of a chain typically is in an office. Therefore, makigami is very suitable for our industry. ’

After an introduction about makigami, the participants play an interactive supply chain game, with each person representing a link in the chain.

Kiron prefers the word ‘simulation’, because it is a serious training. ‘It is built into the simulation that people sometimes seem to be guilty of disruptions. However, these disruptions are the result of the rules that are imposed on them. This is a first learning moment. People are not to blame, but the way the process is organized.’

After the first round, the trainees map the process chain with the help of makigami. ‘Next, the game is played again. The people will now experience how valuable insight is. Because the understanding of each other’s role in the process has increased, the game goes much better in the second round. If you work on a real supply chain, this is also true. Everything stands or falls with insight. If there is also good teamwork, openness and communication, then complicated improvement tools are often unnecessary. ’

As a logistics service provider, Yusen Logistics  has to deal with rapidly changing situations in supply chains. Yusen Logistics has to deal with rapidly changing situations in supply chains.

Down to earth
The final step of the improvement game is to identify improvement options based on the makigami. ‘Which steps are of value and which are not. We do not use labels such as overproduction or overprocessing but remain down to earth. It is much better to determine in concrete terms which activities could be executed easier, more efficiently or more safely. If someone sees the makigami after a week, it’s important that the improvement suggestions and the reasons behind them are still understandable. This way, continuous improvement becomes more accessible. The easier people can think along, the more support you get for improvements.’

During the second training day, the group works on a real process. Preferably something that the participants themselves want to improve. ‘Again it is emphasized that it is not important who caused an error, but what caused it. Besides this, the group is encouraged to focus on quality. People may only suggest to do activities with fewer people if the quality is at 100%.’ ​​Finally, the suggestions for improvement are implemented immediately. If that is not possible, at least an action list must be delivered.

After the training, it is the intention that the kaizen practitioners start new improvement teams. This is the most difficult step: finding a suitable follow-up project. ‘This is preferably a process that is strategically important for Yusen, or that we carry out for our customers.’

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Chain-wide view
The question arises whether there is sufficient enthusiasm among customers of Yusen to participate in Kaizen 2.0 teams. This is necessary for the highest goal: chain-wide improvement.

All partners must be willing to share information that is potentially competitive. This is a point of attention. ‘Our customers are of course free to participate. There are already some of them who decided to do this.’

High five
Zaal has suggested to invite customers and suppliers to the training game. That would show them how much fun and easy it is to improve together, and how you can find and implement improvements that way. ‘I see people, who entered my training as individuals, leaving the room with a high five. Then the training was successful, people became connected to each other.’

It is not easy to improve a supply chain with multiple parties, but it is possible. And, the wider your view, the greater the potential for improvement!

‘We show that this is possible in a supply chain with at least three links, the customer, one or more suppliers, and us as a logistics service provider. I think there are many more situations where you can improve together. For example, this same methodology could be applied in situations with only two parties, such as the cooperation between hospitals and nursing homes. ’

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Arnout Orelio