Heijyun-ka. Levelization. One of the core concepts of TPS. The objective of this concept is to even the workload. Something bothers me every time I hear this explanation. I don’t think it is wrong. I think it is not enough.
Here’s an episode I heard from my father. When he arrived in North America, the factory always had overtime on Friday. The demand is high on Friday. That’s was the story. But the management did not accept the report, and the TPS team started the investigation. The finding. One regional sales person was batching orders instead of processing them one by one, resulting in upheaval demand. So they re-trained the sales team and worked on poka-yoke inside the system.
When I heard this story, I had some questions. Why did the management choose to problem solve? If this was just about the even workload, shouldn’t the most significant beneficiary keep the buffer stock? Here is my hypothesis. Heijyun-ka is not the ego of the supply side. It is the search for the truth of the demand side.
The market is a complicated thing. The whole subject of the economy is about the market. The classic theory talks about “Homo economicus” who makes perfectly rational decisions inside the market. Is this statement right or wrong is what the economist is studying. But I asked the following question, “How will demand look like if we had such a market?” The answer is simple. It will be levelized. No up and down in volume. No radical shift in the mix of products. Heijyun-ka defines such market. However, Toyota is not a market theorist. To meet the up and down of the market, they have Just In Time production system. But before tackling the up & down of the market, they make sure they meet the levelized demand. If a process is incapable of meeting the levelized demand, that is a big problem.
Ever since I heard the story, I investigate the ups and downs of the market of each factory. There is always a story about why it is high or low on Monday to Friday. More myths about why it fluctuates at the beginning and end of the month. But once we started doing problem-solving and visiting those sales sites, we find random behaviors by sales personal, strange promotions, process audits, etc. We always find something "funny", but it is fatal if we make business decisions by chasing such fake demand. This sudden up in the market does justify many over-investment in factories.
Viewing the market in a leveled way is not Toyota’s unique characteristic. In the world of finance, there is this thinking called “dollar-cost averaging.” It might not be a perfect strategy, but it provides foundations. I like to think Heijyun-ka as “par” in golf. If we only follow the scores, we get confused about the assessment. But if I compare the score against par, I know if I did well or not regardless of the difficulty of the course. I think this is a better way to manage not just the operations but also the sales. If I only compare against the scores, the explanation will always be that it is the market. But the Toyota trusted the leveled market and questioned the internal system. This lead to the finding in the episode.
So when you are trying to implement Heijyun-ka, and obviously it is a necessity to even the workload, don’t rush to implement the buffer stock. Do not hesitate to involve sales. Go to the shop floor of sales. Follow the information flow. The same approach that we take in factories applies to sales. That will save both sales and operations.