The Toyota Way

The Toyota Way is a set of principles and behaviors that underlie the Toyota Motor Corporation's managerial approach and production system. Toyota first summed up its philosophy, values and manufacturing ideals in 2001, calling it “The Toyota Way 2001.” It consists of principles in two key areas: continuous improvement, and respect for people.^[1][2][3][4]

Contents 1 Overview of the principles 1.1 Continuous Improvement 1.2 Respect for People 2 Researcher's Findings - 14 Principles 2.1 Section I — Long-Term Philosophy 2.2 Section II — The Right Process Will Produce the Right Results 2.3 Section III — Add Value to the Organization by Developing Your People 2.4 Section IV — Continuously Solving Root Problems Drives Organizational Learning 3 Translating the principles 4 See also 5 References 6 Further reading

[edit] Overview of the principles

[edit] Continuous Improvement

The principles for continuous improvement include establishing a long-term vision, working on challenges, continual innovation, and going to the source of the issue or problem:

• Challenges

Form a LT vision and meet challenges with courage and creativity.

• Kaizen (continuous improvement)

Improve business operations continuously, always driving for innovation and evolution.

• Genchi Genbutsu (go and see)

Go to the source to find the facts to make correct decisions, build consensus and achieve goals at best speed.

[edit] Respect for People

The principles relating to respect for people include ways of building respect and teamwork:

• Respect

Respect others. Make every effort to understand each other, take responsibility and do your best to build mutual trust.

• Teamwork

Stimulate personal and professional growth, share the opportunities of development and maximize individual and team performance.

[edit] Researcher's Findings - 14 Principles

In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published "The Toyota Way." In his book Liker calls the Toyota Way, "a system designed to provide the tools for people to continually improve their work."^[5] The system can be summarized in 14 principles.^[6]

According to Liker, the 14 principles of The Toyota Way are organized in four sections: I) Long-Term Philosophy, II) The Right Process Will Produce the Right Results, III) Add Value to the Organization by Developing Your People, and IV) Continuously Solving Root Problems Drives Organizational Learning. The principles are set out and briefly described below:

[edit] Section I — Long-Term Philosophy

Principle 1

• Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.

People need purpose to find motivation and establish goals.

[edit] Section II — The Right Process Will Produce the Right Results

Principle 2

• Create a continuous process flow to bring problems to the surface.

Work processes are redesigned to eliminate waste (muda) through the process of continuous improvement — kaizen. The seven types of muda are:

1. Overproduction
2. Waiting (time on hand)
3. Unnecessary transport or conveyance
4. Overprocessing or incorrect processing
5. Excess inventory
6. Motion
7. Defects

Principle 3

• Use "pull" systems to avoid overproduction.

A method where a process signals its predecessor that more material is needed. The pull system produces only the required material after the subsequent operation signals a need for it. This process is necessary to reduce overproduction.

Principle 4

• Level out the workload (heijunka). (Work like the tortoise, not the hare).

This helps achieve the goal of minimizing waste (muda), not overburdening people or the equipment (muri), and not creating uneven production levels (mura).

Principle 5

• Build a culture of stopping the production line to fix problems, to get quality right the first time.

Quality takes precedence (Jidoka). Any employee in the Toyota Production System has the authority to stop the process to signal a quality issue.

Principle 6

• Standardized tasks and processes are the foundation for continuous improvement and employee empowerment.

Although Toyota has a bureaucratic system, the way that it is implemented allows for continuous improvement (kaizen) from the people affected by that system. It empowers the employee to aid in the growth and improvement of the company.

Principle 7

• Use visual control so no problems are hidden.

Included in this principle is the 5S Program - steps that are used to make all work spaces efficient and productive, help people share work stations, reduce time looking for needed tools and improve the work environment.

• Sort: Sort out unneeded items
• Straighten: Have a place for everything
• Shine: Keep the area clean
• Standardize: Create rules and standard operating procedures
• Sustain: Maintain the system and continue to improve it

Principle 8

• Use only reliable, thoroughly tested technology that serves your people and processes.

Technology is pulled by manufacturing, not pushed to manufacturing.

[edit] Section III — Add Value to the Organization by Developing Your People

Principle 9

• Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.

Without constant attention, the principles will fade. The principles have to be ingrained, it must be the way one thinks. Employees must be educated and trained: they have to maintain a learning organization.

Principle 10

• Develop exceptional people and teams who follow your company's philosophy.

Teams should consist of 4-5 people and numerous management tiers. Success is based on the team, not the individual.

Principle 11

• Respect your extended network of partners and suppliers by challenging them and helping them improve.

Toyota treats suppliers much like they treat their employees, challenging them to do better and helping them to achieve it. Toyota provides cross functional teams to help suppliers discover and fix problems so that they can become a stronger, better supplier.

[edit] Section IV — Continuously Solving Root Problems Drives Organizational Learning

Principle 12

• Go and see for yourself to thoroughly understand the situation (Genchi Genbutsu).

Toyota managers are expected to "go-and-see" operations. Without experiencing the situation firsthand, managers will not have an understanding of how it can be improved. Furthermore, managers use Tadashi Yamashima's (President, Toyota Technical Center (TTC)) ten management principles as a guideline:

1. Always keep the final target in mind.
2. Clearly assign tasks to yourself and others.
3. Think and speak on verified, proven information and data.
4. Take full advantage of the wisdom and experiences of others to send, gather or discuss information.
5. Share information with others in a timely fashion.
6. Always report, inform and consult in a timely manner.
7. Analyze and understand shortcomings in your capabilities in a measurable way.
8. Relentlessly strive to conduct kaizen activities.
9. Think "outside the box," or beyond common sense and standard rules.
10. Always be mindful of protecting your safety and health.

Principle 13

• Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly (nemawashi).

The following are decision parameters:

1. Find what is really going on (go-and-see) to test
2. Determine the underlying cause
3. Consider a broad range of alternatives
4. Build consensus on the resolution
5. Use efficient communication tools

Principle 14

• Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen).

The process of becoming a learning organization involves criticizing every aspect of what one does. The general problem solving technique to determine the root cause of a problem includes:

1. Initial problem perception
2. Clarify the problem
3. Locate area/point of cause
4. Investigate root cause (5 whys)
5. Countermeasure
6. Evaluate
7. Standardize

[edit] Translating the principles

There is a question of uptake of the principles now that Toyota has production operations in many different countries around the world. As a New York Times article notes, while the corporate culture may have been easily disseminated by word of mouth when Toyota manufacturing was only in Japan, with worldwide production, many different cultures must be taken into account. Concepts such as “mutual ownership of problems,” or “genchi genbutsu,” (solving problems at the source instead of behind desks), and the “kaizen mind,” (an unending sense of crisis behind the company’s constant drive to improve), may be unfamiliar to North Americans and people of other cultures. A recent increase in vehicle recalls may be due, in part, to "a failure by Toyota to spread its obsession for craftsmanship among its growing ranks of overseas factory workers and managers." Toyota is attempting to address these needs by establishing training institutes in the United States and in Thailand.^[7]

[edit] See also

• The India Way - the modern management book, after the Toyota Way^[8]
• Karoshi
• 2010 Toyota Recall

There is one Global Production Training Center (GPC) in Japan, and three Regional Training Centers. The three regional training centers are located in: North America (Georgetown, KY), Thailand, and Great Britain. The GPC is responsible for training and certifying the Regional Trainers. In turn, the Regional trainers are responsible for training and certifying the local Trainers. The local trainers are located in each manufacturing facility and are responsible for training the team members before they start working on the product. Certification on a job is required before a team member can do that job. Recertification is planned for every three years. In the Lexus plants recertification is every six months.^{[citation needed]}

Every team member who does a particular job has the same fundamental training components regardless of their country or plant of origin. Toyota drives standardized work through this methodical training process. Understand that the standardized work as it is performed in different countries will be different, but the fundamental components of that standardized work will all be identical.^{[citation needed]}

It is through this training system Toyota can once again begin to show its abilities to meet the ever increasing expectations of the customer and develop the team members who do the job every day.^{[citation needed]}

[edit] References

[edit] Further reading

• Hino, Satoshi (2005). Inside the Mind of Toyota: Management Principles for Enduring Growth. University Park, IL: Productivity Press. ISBN 978-1-56327-300-1. http://www.productivitypress.com/productdetails.cfm?SKU=3004. 
• Liker, J; Meier, D. (2005). The Toyota Way Fieldbook: A Practical Guide for Implementing Toyota's 4Ps. McGraw-Hill. ISBN 0071448934.