12/8/2015 Dr. Jeffrey Liker http://webcache.googleusercontent.com/search?q=cache:http://www.leanthinking.info/TheToyotaWay.pdf&gws_rd=cr&ei=dopmVu3bJdCauQSx4Rw 1/75 This is the html version of the file http://www.leanthinking.info/TheToyotaWay.pdf. Google automatically generates html versions of documents as we crawl the web. Page 1 Dr. Jeffrey Liker • Professor of Industrial & Operations Engineering at the University of Michigan • President of the Toyota Way Academy – an organization that teaches and certifies Toyota Way practitioners. • He is a frequent keynote speaker and consultant. • Authored 75+ articles and 9 books. • His articles and books have won 7 Shingo Prizes for Research Excellence. 1 Prizes for Research Excellence. – “The Toyota Way” 2004 – “The Toyota Way Fieldbook” 2005 (with David Meier) – “Toyota’s Product Development System: Integrating People, Process and Technology” – 2006 (with Jim Morgan) – “Toyota Talent” 2007 (with David Meier) – “Toyota Culture” 2008 (with Michael Hoseus) Page 2
This is the html version of the file http://www.leanthinking.info/TheToyotaWay.pdf.Google automatically generates html versions of documents as we crawl the web.
Page 1
Dr. Jeffrey Liker• Professor of Industrial & OperationsEngineering at the University of Michigan
• President of the Toyota Way Academy – anorganization that teaches and certifiesToyota Way practitioners.
• He is a frequent keynote speaker andconsultant.
• Authored 75+ articles and 9 books.• His articles and books have won 7 ShingoPrizes for Research Excellence.
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Prizes for Research Excellence.
– “The Toyota Way” 2004– “The Toyota Way Fieldbook” 2005 (with David Meier)– “Toyota’s Product Development System: Integrating People,
Process and Technology” – 2006 (with Jim Morgan)– “Toyota Talent” 2007 (with David Meier)– “Toyota Culture” 2008 (with Michael Hoseus)
The World Class Power ofThe World Class Power ofThe Toyota Way
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The Toyota Production System
“All we are doing is looking at the“All we are doing is looking at thetime line from the moment thecustomer gives us an order to thepoint when we collect the cash. Andwe are reducing that time line byremoving the nonvalueaddedwastes.”
The 14 Principles of the Toyota Way:An Executive Summary of the Culture Behind TPS
“Since Toyota’s founding we have adhered to thecore principle of contributing to society through thepractice of manufacturing highquality productsand services. Our business practices and activitiesbased on this core principle created value, beliefsand business methods that over the years havebecome a source of competitive advantage. Theseare the managerial values and business methodsthat are known collectively as the Toyota Way.”
Fujio Cho, President Toyota,2001
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It’s about People
In the Toyota Way, it’s the people whobring the system to life: working,communicating, resolving issues, andgrowing together.The Toyota Way goes well beyondthis; it encourages, supports, and in
It’s a culture, more than a set of efficiency andimprovement techniques.The workers will reduce inventory, identify hiddenproblems, and fix them.The workers have a sense of urgency, purpose,and teamwork because if they don’t fix it therewill be an inventory outage.This effort requires a combination of committedThis effort requires a combination of committedmanagement, proper training, and a culture thatmakes sustaining improvement a habitualbehavior from the shop floor to management.
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“We place the highest value on actual implementation andtaking action. There are many things one doesn’tunderstand and therefore, we ask them why don’t you just
The WorldClass Power of the Toyota Way
understand and therefore, we ask them why don’t you justgo ahead and take action; try to do something? You realizehow little you know and you face your own failures and
you simply can correct those failures and redo it again andat the second trial, you’ll realize another mistake or anotherthing you didn’t like so you can redo it once again. So byconstant improvement, or, should I say, the improvementconstant improvement, or, should I say, the improvementbased upon action, one can rise to the higher level ofpractice and knowledge.“
Fujio Cho, President, Toyota Motor Corporation, 2002
Page 10 How Toyota Became the World’sBest Manufacturer
The Story of Toyoda Family andthe Toyota Production System
“I plan to cut down on the slack time withinprocesses and in the shipping of parts andmaterial as much as possible. As the basicprinciple in realizing this plan, I will uphold the“just in time” approach. The guiding rule is notto have goods shipped too early or too late.”
Kiichiro Toyoda, founder of Toyota Motor Company, 1938
“We accept challenges with a creative spiritand the courage to realize our own dreamswithout losing drive or energy. Weapproach our work vigorously, withoptimism and a sincere belief in the value ofour contribution. We strive to decide ourown fate. We act with selfreliance, trustingin our own abilities. We acceptresponsibility for our conduct and formaintaining and improving the skills thatenable us to produce added value.”
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The Heart of the Toyota ProductionSystem: Eliminating Waste
“Many good American companies haverespect for individuals, and practice kaizenand other TPS tools. But what is importantis having all the elements together as asystem. It must be practiced every day in avery consistent mannernot in spursbut in aconcrete way on the shop floor.”
Stable and Standardized ProcessesLeveled Production (Heijunka)
Why’s)solving
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How Managers Can Dramatically Improve TheirBusiness Process
• Eliminating wasted time and process• Building quality into workplace systems• Finding lowcost but reliable alternatives toexpensive new technology
• Perfecting business processes• Building a learning culture for continuousimprovement
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Safety is First
“Every method available for manhourreduction to reduce cost must, of course, bepursued vigorously; but we must neverforget that safety is the foundation of all
our activities. There are times whenimprovement activities do not proceed inthe name of safety. In such instances, returnto the starting point and take another look atthe purpose of that operation. Never besatisfied with inaction. Question andredefine your purpose to attain progress.”
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The Business Principles of
Part Two II
The Business Principles ofthe Toyota Way
14 Management Principles14 Management Principles
Page 18 The Toyota Way: Using OperationalExcellence as a Strategic Weapon
contribute to economic and social development throughcorporate activities in the communities.
• Dedicate ourselves to providing clean and safe products and toenhancing the quality life everywhere through all ouractivities.
• Create and develop advanced technologies and provideoutstanding products and services that fulfill the needs ofcustomer worldwide.
Page 24 Base management decisions on a long termphilosophy, even at the expense of shorttermfinancial goals
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Toyota Mutual Respect and Trust Principles (cont’d):5. Foster a corporate culture that enhances individual creativity
and team work value, while honoring mutual respect and trustbetween labor and management.
6. Pursue growth in harmony with the global community throughinnovative management.
7. Work with business partners in research and creation toachieve stable, longterm growth and mutual benefits, whilekeeping ourselves open to new partnership.
Page 25 Base management decisions on a long termphilosophy, even at the expense of shorttermfinancial goals
1. Have a philosophical sense of purpose that supersedes anyshortterm decision making. Work, grow and align the wholeshortterm decision making. Work, grow and align the wholeorganization toward a common purpose that is bigger thanmaking money. Understand your place in history of thecompany and work to bring the company to the next level.Your philosophical mission is the foundation for all the otherprinciples.
2. Generate value for the customer, society, and the economyitis your starting point. Evaluate every function in the companyin terms of its ability to achieve this.
3. Be responsible. Strive to decide your own fate. Act with selfreliance and trust in your own abilities. Accept responsibilityfor your conduct and maintain and improve the skills thatenable you to produce added value.
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Process
Eliminate Waste:2. Create process “flow” to surface problems
3. Use pull system to avoid overproduction
4. Level out the workload (heijunka)
5. Stop when there is a quality problem (jidoka)
Eliminate Waste:
5. Stop when there is a quality problem (jidoka)
6. Standardize tasks for continuous improvement
7. Use visual control so no problems are hidden
8. Use only reliable, thoroughly tested technology
“If some problem occurs in onepieceflowmanufacturing then the whole production line
Principle Two 2
manufacturing then the whole production linestops. In this sense it is a very bad system ofmanufacturing. But when production stopseveryone is forced to solve the problemimmediately. So team members have to think, andthrough thinking team members grow and becomebetter team members and people.”
Teruyuki Minoura, former President,Toyota Motor Manufacturing, North America
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Create continuous process flow to bring problemsto the surface 2
Create continuous process flow to bring problemsto the surface 2
Traditional Mass Production Thinking:
• Economics of scale. First and foremost,mass production thinking was aboutsqueezing the most production possible atthe lowest cost per unit out of every piece ofequipment or every worker in a manualoperation.
• Apparent flexibility in scheduling.
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Create continuous process flow to bring problemsto the surface 2
Create continuous process flow to bring problemsto the surface 2
Why creating flow is difficult:
In 1947, we arranged machines in parallel lines or in an Lshape and tried having one worker operate three or fourmachines along the processing route. We encountered strongresistance among the production workers, however, eventhough there was no increase in work or hours. Our craftsmendid not like the new arrangement requiring them to function asmulti skilled operators. They did not like changing from oneoperator, one machine to a system of one operator, manymachines in different process. Their resistance wasunderstandable. Furthermore, our efforts revealed variousproblems. As these problems became clearer, they showed methe direction to continue moving in. Although young andeager to push, I decided not to press for quick, drasticchanges, but to be patient. (Ohno, 1988)
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Create continuous process flow to bring problemsto the surface 2
1. Redesign work processes to achieve high valueadded,
continuous flow. Strive to cut back to zero the amount of timecontinuous flow. Strive to cut back to zero the amount of timethat any work project is sitting idle or waiting for someone towork on it.
2. Create flow to move material and information fast as well asto link processes and people together so that problems surfaceright away.
3. Make flow evident throughout your organizational culture. Itis the key to a true continuous improvement process and todeveloping people.
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Principle Three
“The more inventory a company has,…the lesslikely they will have what they need.”
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likely they will have what they need.”Taichi Ohno
1. Provide your down line customers in the production processwith what they want, when they want it, and in the amount
Basic Thoughts
with what they want, when they want it, and in the amountthey want. Material replenishment initiated by consumption isthe basic principle of justintime.
2. Minimize your work in process and warehousing of inventoryby stocking small amounts of each product and frequentlyrestocking based on what the customer actually takes away.
3. Be responsive to the daybyday shifts in customer demandrather than relying on computer schedules and systems totrack wasteful inventory.
“In general, when you try to apply the TPS, the first thingyou have to do is to even out or level the production. Andthat is the responsibility primarily of production control orproduction management people. Leveling the productionschedule may require some frontloading of shipments orpostponing the shipments and you may have to ask somecustomers to wait for a short period of time. Once theproduction level is more or less the same or constant for amonth, you will be able to apply pull systems and balancethe assembly line. But if production levelsthe outputvariesfrom day to day, there is no sense in trying to apply othersystems, because you simply cannot establish standardizedwork under such circumstances.”
Focusing on muda is the most commonapproach to “implement lean tools,”
4Level Out the Workload (Heijunka)
approach to “implement lean tools,”because it is easy to identify and eliminatewaste. But what many companies fail to dois the more difficult process of stabilizingthe system and creating “evenness”a truebalanced lean flow of work. This is theToyota concept of heijunka, leveling out theToyota concept of heijunka, leveling out thework schedule. Achieving heijunka isfundamental to eliminating mura, which isfundamental to eliminating muri and muda.
causes less waste and is much moredesirable than the speedy hare thatraces ahead and then stopsoccasionally to doze. The ToyotaProduction System can be realizedonly when all the workers becometortoises.” (Ohno, 1988)
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Heijunka is the leveling of production
4Level Out the Workload (Heijunka)
Heijunka is the leveling of productionby both volume and product mix.There are four benefits of heijunka:
1. Flexibility to make what the customer wants when theywant it.2. Reduced risk of unsold goods.3. Balanced use of labor and machines.4. Smoothed demand on upstream processes and the plant’ssuppliers.
Heijunka in service operations:1. Fit customer demand into a leveledschedule.2. Establish standard times fordelivering different types of service.
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1. Eliminating waste is just onethird of the equation formaking lean successful. Eliminating overburden to people
4Level Out the Workload (Heijunka)
Basic Thoughts
making lean successful. Eliminating overburden to peopleand equipment and eliminating unevenness in the productionschedule are just as importantyet generally not understoodat companies attempting to implement lean principles.
2. Work to level out the workload of all manufacturing andservice processes as an alternative to the stop/start approachof working on projects in batches that is typical at mostcompanies.
“Mr. Ohno used to say that no problemdiscovered when stopping the line shouldwait longer than tomorrow morning to befixed. Because when making a car everyminute we know we will have the sameproblem again tomorrow.”
Fujio Cho, President, Toyota Motor Corporation
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5Build a culture of stopping to fix problems, to getquality right the first time
The Principlestopping the process to build inThe Principlestopping the process to build inquality (jidoka)
“A method to detect defects when they occur andautomatically stop production so an employee can fix theproblem before the defect continues downstream.”
Jidoka is also referred to as autonomationequipmentJidoka is also referred to as autonomationequipmentendowed with human intelligence to stop itself when it has aproblem. In stationquality (preventing problems from beingpaased down the line) is much more effective and less costlythan inspecting and repairing quality problems after the fact.Use andon cord if problems occur. Andon refers to the lightsignal for help.
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5Build a culture of stopping to fix problems, to getquality right the first time
The key concept:1. Building in quality is a principle, not a technology2. Using countermeasures and errorproofing to fix
problems.3. Keep quality control simple and involve team
members.a. Go and seeb. Analyze the situationc. Use onepieceflow and andon to surface
problemsd. Ask “Why?” five times
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5Build a culture of stopping to fix problems, to getquality right the first time
1. Quality for the customer drives your value proposition.2. Use all the modern quality assurance methods available.
Basic Thoughts
2. Use all the modern quality assurance methods available.
3. Build into your equipment the capability of detectingproblems and stopping itself. Develop a visual system toalert team or project leaders that a machine or process needsassistance. Jidoka (machines with human intelligence) is thefoundation for “building in” quality.
4. Build into your organization support systems to quicklysolve the problems and put in place countermeasures.
5. Build into your culture the philosophy of stopping orslowing down to get quality right the first time to enhanceproductivity in the long run.
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“Standard work sheets and the information
Principle Six 6
“Standard work sheets and the informationcontained in them are important elements of theToyota Production System. For a production personto be able to write a standard work sheet that othersworkers can understand, he or she must beconvinced of its importance…High productionefficiency has been maintained by preventing therecurrence of defective products, operationalmistakes, and accidents, and by incorporatingworkers’ ideas. All of this is possible because of theinconspicuous standard work sheet.”
Taiichi Ohno
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6Standardized tasks are the foundation forcontinuous improvement and employee
“Today’s standardization…is the necessary foundation onwhich tomorrow’s improvement will be based. If you thinkof “standardization” as the best you know today, but whichis to be improved tomorrowyou get somewhere. But if youthink of standards as confining, then progress stops.”
Toyota President Cho describes:“Our standardized work consists of three elementstakt time(time required to complete one job at the pace of customerdemand), the sequence of doing things or sequence ofprocesses, and how much inventory or stock on hand theindividual worker needs to have in order to accomplish thestandardized work. Based upon these three elements, takttime, sequence, and standardized stock on hand, the standardwork is set.”
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6Standardized tasks are the foundation forcontinuous improvement and employeeempowerment
The Principle:The Principle:“Standardization is the basis forcontinuous improvement andquality.”
Systems should be designed so as to Systems should help people control theirSystems should be designed so as tokeep employees out of control loop.
Systems should help people control theirown work: help them form mentalmodels of the system by “glass box”design.
Systems are instructions to be followed,not challenged.
Systems are best practice templates to beimproved.
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6Standardized tasks are the foundation forcontinuous improvement and employeeempowerment
1. Use stable, repeatable methods everywhere to maintain thepredictability, regular timing, and regular output of your
Basic Thoughts
predictability, regular timing, and regular output of yourprocesses. It is the foundation for flow and pull.
2. Capture the accumulated learning about a process up to apoint in time by standardizing today’s best practices. Allowcreative and individual expression to improve upon thestandard; then incorporate it into the new standard so thatwhen a person moves on you can hand off the learning to thenext person.
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“Mr. Ohno was passionate about TPS. He said you
Principle Seven 7
“Mr. Ohno was passionate about TPS. He said youmust clean up everything so you can see problems.
Visual control systems are about improving valueadded flow
Visual control is any communications device used inthe work environment that tells us at a glance howwork should be done and whether it is deviating fromthe standard.
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7Use visual control so no problems are hidden
1. Use simple visual indicators to help people determineimmediately whether they are in standard condition or
Basic Thoughts
immediately whether they are in standard condition ordeviating from it.
2. Avoid using a computer screen when it moves the worker’sfocus away from the workplace.
3. Design simple visual systems at the place where the work isdone, to support flow and pull.
4. Reduce your reports to one piece of paper wheneverpossible, even for your most important financial decision.
“Society has reached the point where onecan push a button and be immediatelydeluged with technical and managerialinformation. This is all very convenient, ofcourse, but if one is not careful there is adanger of losing the ability to think. Wemust remember that in the end it is theindividual human being who must solve theproblems.”
Eiji Toyoda, Creativity, Challenge and Courage,Toyota Motor Corporation,1983
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8Use only reliable, thoroughly tested technologythat serves your people and processes
The PrincipleAdoption of newtechnology must support your people,process, and values.At Toyota, new technology is introduced only afterit is proven out trough direct experimentation withthe involvement of a broad crosssection of people.
The technology has been thoroughly evaluated andtested to ensure it provides added value.
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8Use only reliable, thoroughly tested technologythat serves your people and processes
Toyota steps to analyze new technology:
1. Go and see first hand the nature of the valueadded workbeing performed by the workers for the particular process.
2. Look for new opportunities to eliminate waste and evenout the flow.
3. Use a pilot area to improve the process with existingequipment, technology, and people.
4. When it has accomplished as much improvement aspossible with the present process, ask again if it can makeany additional improvement by adding the newtechnology.
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8Use only reliable, thoroughly tested technologythat serves your people and processes
Toyota steps to analyze new technology (cont’d):
5. If it determines that the new technology can add value tothe process, the technology is then carefully analyzed to
see if it conflicts with Toyota’s philosophies andoperating principles.
6. If the technology violates these principles or if there isany change it may adversely disrupt stability, reliability,and flexibility, Toyota will reject the technology or atleast delay adopting it until the problems can be resolved.
7. If the new technology is acceptable, the guiding principleis to design and use it to support continuous flow in theproduction process and help employees perform betterwithin the Toyota Way standards.
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8Use only reliable, thoroughly tested technologythat serves your people and processes
1. Use technology to support people, not to replace people. Often itis best to work out a process manually before adding technology
Basic Thoughts
is best to work out a process manually before adding technologyto support the process.
2. New technology is often unreliable and difficult to standardizeand therefore endangers “flow.” A proven process that worksgenerally takes precedence over new and untested technology.
3. Conduct actual tests before adopting new technology in businessprocesses, manufacturing systems or products.
4. Reject or modify technologies that conflict with your culture orthat might disrupt stability, reliability and predictability.
5. Nevertheless, encourage your people to consider newtechnologies when looking into new approaches to work. Quicklyimplement a thoroughly considered technology if it has beenproven in trials and can improve flow in your processes.
Respect, Challenge, and Grow Them:9. Grow leaders who thoroughly understand the work,live the philosophy, and teach it to others
10. Develop exceptional people and teams who followyour company’s philosophy
11. Respect your extended network of partners and
Respect, Challenge, and Grow Them:
11. Respect your extended network of partners andsuppliers by challenging them and helping themimprove
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Principle Nine 9
“Until senior management gets their egos out of theway and goes to the whole team and leads them alltogether…senior management will continue to missout on the brain power and extraordinarycapabilities of all their employees. At Toyota, wesimply place the highest value on our teammembers and do the best we can to listen to themand incorporate their ideas into our planningprocess.”
Alex Warren, former Senior VPToyota Motor Manufacturing, Kentucky
having good people skills. Leaders must be role models of thecompany’s philosophy and way of doing business.3. A good leader must understand the daily work in great detail so
he or she can be the best teacher of your company’s philosophy.
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Principle Ten 10
“Respect for people and constant challenging to dobetter—are these contradictory? Respect for peoplemeans respect for the mind and capability. You donot expect them to waste their time. You respect thecapability of the people. Americans think teamworkis about you liking me and I liking you. Mutualrespect and trust means I trust and respect that youwill do your job so that we are successful ascompany. It does not mean we just love eachother.”
Sam Heltman, Senior VP of AdministrationToyota Motor Manufacturing, North America
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10Develop exceptional people and team who followyour company’s philosophy
The PrincipleDeveloping excellentindividual work while promoting effectiveteam work.The Toyota Way is not about lavishing goodies onpeople whether they have earned them or not; it isabout challenging and respecting employees at thesame time.
If you make teamwork the foundation of thecompany, individual performers will give theirhearts and souls to make the company successful.
At TPS, we called this the “respect for humanitysystem.”
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10Develop exceptional people and team who followyour company’s philosophy
Toyota roles and responsibilities:Team Member (TM)
1. Create a strong, stable culture in which company values andbelief are widely shared and lived out over a period of manybelief are widely shared and lived out over a period of manyyears.
2. Train exceptional individuals and teams to work within thecorporate philosophy to achieve exceptional results. Work veryhard to reinforce the culture continually.
3. Use crossfunctional teams to improve quality and productivityand enhance flow by solving difficult technical problems.Empowerment occurs when people use the company’s tools toimprove the company.
4. Make an ongoing effort to teach individuals how to worktogether as teams toward common goals. Teamwork is somethingthat has to be learned.
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Principle Eleven 11
“Toyota is more handson and more driven to improving theirown systems and then showing how that improvesyou…Toyota will do things like level their productionsystems to make it easier on you. Toyota picks up our product12 times per day. They helped move presses, moved wherewe get the water from, trained our employees. On thecommercial side they are very handson also—they come inand measure and work to get cost out of the system. There ismore opportunity to make profit with Toyota. We started withToyota when we opened a Canadian plant with onecomponent and, as performance improved, we were rewarded,so now we have almost the entire cockpit. Relative to all carcompanies we deal with, Toyota is the best.”
11Respect your extended network of partners andsuppliers by challenging them and helping themimprove
The PrincipleFind solid partners andgrow together to mutual benefit in thelong term.Toyota perspective: having high expectations fortheir supplier and then treating them fairly andteaching them is the definition of respect.
Achievement of business performance by the parentcompany through bullying suppliers is totally aliento the spirit of the Toyota Production System.
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11Respect your extended network of partners andsuppliers by challenging them and helping themimprove
13. Make decisions slowly by consensus, thoroughlyconsidering all options; implement rapidly (nemawashi)
14. Become a learning organization through relentless14. Become a learning organization through relentlessreflection (hansei) and continuous improvement(kaizen)
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Principle Twelve 12
“Observe the production floor withoutpreconceptions and with a blank mind. Repeat“why” five times to every matter.”
Taiichi Ohno (as quoted in The Toyota Way document)
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12Go and see for yourself to thoroughly understandthe situation (genchi genbutsu)
The PrincipleDeeply understandingand reporting what you see.Genchi means the actual location and genbutsumeans the actual materials or products.
Genchi genbutsu is interpreted within Toyota tomean going to the place to see the actual situationfor understanding.for understanding.
Gemba is a term that has become popular, it refersto “the actual place.”
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12Go and see for yourself to thoroughly understandthe situation (genchi genbutsu)
Employees and managers must “deeply” understandthe processes as well as have the ability to criticallyevaluate and analyze what is going on, this mayinclude some analysis of data.
In addition, they must know how to get to the rootcause of any problems they observe andcommunicate it effectively to others.
12Go and see for yourself to thoroughly understandthe situation (genchi genbutsu)
HourensouRapid genchi genbutsufor executives
Hourensou is a japanese word made upof three parts: hou (hou kokuto report),ren (ren rakuto give updatesperiodically), and sou (sou dantoperiodically), and sou (sou dantoconsult or advise).
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12Go and see for yourself to thoroughly understandthe situation (genchi genbutsu)
1. Solve problems and improve processes by going to the sourceand personally observing and verifying data rather than
Basic Thoughts
and personally observing and verifying data rather thantheorizing on the basis what other people or the computer screentell you.
2. Think and speak based on personally verified data.
3. Even highlevel managers and executives should go and seethings for themselves, so they will have more than a superficialunderstanding of the situation.
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Principle Thirteen 13
“If you’ve got a project that is supposed to be fully“If you’ve got a project that is supposed to be fullyimplemented in a year, it seems to me that the typicalAmerican company will spend about three months ofplanning, then they’ll begin to implement. But they’llencounter all sorts of problems after implementation, andthey’ll spend the rest of the year correcting them. However,given the same yearlong project, Toyota will spend nine toten months planning, then implement in a small waysuch aswith pilot productionand be fully implemented at the end ofthe year, with virtually no remaining problems.”
Alex Warren, former senior vice president,Toyota Motor Manufacturing, Kentucky
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13Make decisions slowly by consensus, thoroughlyconsidering all options; implement rapidly(nemawashi)
2. It gets all the parties on board and supporting the decisionso any resistance is worked out before implementinganything. The cost of addressing this resistance whenimplementation begins is likely to be many times the costof addressing it in the planning stage.
3. It achieves a great deal of learning up front beforeanything is even planned or implemented.
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13Make decisions slowly by consensus, thoroughlyconsidering all options; implement rapidly(nemawashi)
1. Do not pick a single direction and go down that one path untilyou have thoroughly considered alternatives. When you have
Basic Thoughts
you have thoroughly considered alternatives. When you havepicked, move quickly but cautiously down the path.
2. Nemawashi is the process of discussing problems and potentialsolutions with all of those affected, to collect their ideas and getagreement on a path forward. This consensus process, thoughtimeconsuming, helps broaden the search for solutions, and oncea decision is made, the stage is set for rapid implementation.
“We view errors as opportunity for learning. Ratherthan blaming individuals, the organization takescorrective actions and distributes knowledge abouteach experience broadly. Learning is a continuouscompanywide process as superiors motivate andtrain subordinates; as predecessors do the same forsuccessors; and as team members at all levels shareknowledge with one another.”The Toyota Way document 2001, Toyota Motor Corporation
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14Become a learning organization through relentlessreflection (hansei) and continuous improvement(kaizen)
A learning organization is where people continuallyexpand their capacity to create the results they trulydesire, where new and expansive patterns ofthinking are nurtured, where collective aspiration isset free, and where people are continually learninghow to learn together.
Page 99 Become a learning organization through relentless
14reflection (hansei) and continuous improvement(kaizen)
The PrincipleIdentify root causesand develop countermeasures.Toyota is process oriented and consciously and deliberatelyinvests long term in systems of people, technology, andprocesses that work together to achieve high customer value.
“Systems” are not information systems but work processesand appropriate procedures to accomplish a task with theminimum amount of time and effort.
The philosophy of Toyota and its experience support the beliefthat if it focuses on the process itself and continualimprovement, it will achieve the financial results it desires.
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14Become a learning organization through relentlessreflection (hansei) and continuous improvement(kaizen)
When you make processes stable and have aprocess to make waste and inefficiencies publiclyvisible, you have an opportunity to learncontinually from your improvements.
To be a learning organization, it is necessary tohave stability of personnel, slow promotion, andvery careful succession system to protect theorganizational knowledge base.
To “learn” means having the capacity to build onyour past and move forward incrementally, rather
than starting over and reinventing the wheel withnew personnel with each new project.
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14Become a learning organization through relentlessreflection (hansei) and continuous improvement(kaizen)
Ultimately, the core of kaizen and learning is anattitude and way of thinking by all leaders andassociates—an attitude of selfreflection and evenselfcriticism, a burning desire to improve.
The greatest sign of strength is when an individualcan openly address things that did not go right, takeresponsibility, and propose countermeasures toprevent these things from happening again.
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14Become a learning organization through relentlessreflection (hansei) and continuous improvement(kaizen)
Getting to the root cause by asking “Why?” fivetimes.
Most problems do not call for complex statisticalanalysis, but instead require painstaking, detailedproblem solving. This requires a level of detailedthinking and analysis that is all too absent from
most companies in daytoday activity. It is a matterof discipline, attitude, and culture.
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14Become a learning organization through relentlessreflection (hansei) and continuous improvement(kaizen)
Taiichi Ohno emphasized that true problem solvingrequires identifying “root cause” rather than“source;” the root cause lies hidden beyond thesource.
Keep asking why until the root cause(s) aredetermined. Take countermeasures at the deepestlevel of cause that is feasible and at the level thatwill prevent reoccurrence of the problem.
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14Become a learning organization through relentlessreflection (hansei) and continuous improvement(kaizen)
Practical problem solving requires you to clarify the problemor, in Toyota terminology “grasp the situation”. Grasping the
situation starts with observing the situation with an open mindsituation starts with observing the situation with an open mindand comparing the actual situation to standard.
To clarify the problem, we must start by going to where theproblem is (genchi genbutsu). This may include prioritizing anumber of different problems in Pareto analysis. At this pointwe also set targets for improvement.
The we make first attempt at identifying the point of cause(POC). The purpose is to generate and implement acountermeasure and evaluate the results. If thecountermeasure is effective, it will become part of a newstandardized approach.
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14Become a learning organization through relentlessreflection (hansei) and continuous improvement(kaizen)
“Practical Problem Solving” in Seven Steps (cont’d)
The seventh stepstandardizing the new processis veryimportant at Toyota. Standardization and learning go hand inhand and are the basis for continuous improvement. If we donot standardize the improved process, the learning up to thatpoint falls into a black hole, lost, forgotten, and unavailablefor further improvements.
Tools, techniques, and metrics aside, Toyota’s greatestemphasis is on thinking through problems and solutions.
At Toyota, problem solving is 20% tools and 80% thinking.
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14Become a learning organization through relentlessreflection (hansei) and continuous improvement(kaizen)
Organization Learning.Without hansei it is impossible to have kaizen. In Japanese hansei,when you do something wrong, at first you must feel really, reallysad. Then you must create a future plan to solve that problem andyou must sincerely believe you will never make this type of mistakeagain. Hansei is a mindset, an attitude. Hansei and kaizen go hand inhand.
Hansei is really much deeper than reflection. It is really being honestabout our own weakness. If we are talking about only our strengths,we are bragging. If we are recognizing our weakness with sincerity, itis a high level of strength. But it doesn’t end there. How do wechange to overcome those weakness? That is at the root of every
notion of kaizen. If we do not understand hansei, than kaizen is justcontinuous improvement. Hansei is the incubator for changethewhole process.
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Hoshin KanriDirecting and MotivatingOrganizational Learning
Targets for Organization
14Become a learning organization through relentlessreflection (hansei) and continuous improvement(kaizen)
Targets for Organization
Time
Quality
Cost
Innovation
Executive Staff
HighLevel Plan
Improvement?
Who?
Method?
Target & Time?
Manager/Supervisor
PlanDo
Work Plan by Item
ActionManager/Supervisor Action
Measurement
Countermeasure
Work Team
PlanDo
Work Plan by Item
Action
Measurement
Countermeasure
Work Team
Policy Deployment Process (hoshin kanri)
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14Become a learning organization through relentlessreflection (hansei) and continuous improvement(kaizen)
1. Once you have established a stable process, use continuousimprovement tools to determine the root cause of inefficiencies
Basic Thoughts
improvement tools to determine the root cause of inefficienciesand apply effective countermeasures.
2. Design processes that require almost no inventory. This willmake wasted time and resources visible for all to see. Once wasteis exposed, have employees use a continuous improvementprocess (kaizen) to eliminate it.
3. Protect the organizational knowledge base by developing stablepersonnel, slow promotion, and very careful succession systems.
4. Use hansei (reflection) at key milestones and after you finish aproject to openly identify all the shortcomings of the project.Develop countermeasures to avoid the same mistakes again.
5. Learn by standardizing the best practices, rather than reinventingthe wheel with each new project and each new manager.
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Applying the Toyota Way in
Part Three III
Applying the Toyota Way inYour Organization
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Using the Toyota Way to TransformTechnical and Service Organizations
“Applying the Toyota Production System outside the shop
A
“Applying the Toyota Production System outside the shop
floor can be done, but this takes some creativity. Certainly, thebasic principles can be applied to administrative processes.We sent some associates from our kaizen promotion office todealers to help them. They have been able to reduce the timeit takes to inspect the vehicle and do routine repairs, likechanging parts or changing oil, in some cases from 60minutes to 10 minutes. This is very good for us and makes ourcustomers very happy. There are many more opportunitiesthat we need to work on using our creativity.”
Fujio Cho, president of Toyota Motor Corporation
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Five steps to creating flow in technical andservice organizations:
1. Identify who the customer is for the processes and the addedvalue they want delivered.
A
value they want delivered.2. Separate out the repetitive processes from the unique, one
ofakind processes and learn how you can apply TPS to therepetitive processes.
3. Map the flow to determine value added and nonvalueadded.
4. Think creatively about applying the broad principles of theToyota Way to these processes using a future state valuestream map.
5. Start doing it and learn by doing using a PDCA cycle andthen expand it to the less repetitive processes.
atoms Alvin had imagined in his mind. He never realized it before,but people could be like those atoms, too. Most of the time peoplewere all disorganized, nobody knowing who anybody else was,nobody holding still long enough to trust or to be trusted, just likeAlvin imagined atoms might have been before God taught them whothey were and gave them work to do…It was a miracle seeing howsmooth they knew each other’s next move before the move was evenbegun. Alvin most laughed out loud in the joy of seeing such a thing,knowing it was possible, dreaming of what it might mean—thousands of people knowing each other that well, moving to fit eachother just right, working together. Who could stand in the way ofsuch people.”
Orson Scott Card,
Prentice Alvin: The Tales of Alvin Maker, Book Three
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BA Commitment from the Top to Build a TotalCulture from the Ground Up
What do we know about changing a culture?1. Start from the topthis may require an executive
leadership shakeup.2. Involve from the bottom up.3. Use middle managers as change agents.4. It takes time to develop people who really
understand and live the philosophy.5. On a scale of difficulty, it is ‘extremely” difficult.
Committed toDeveloping andInvolving teamAssociates and
Partners?
Theory of Constraints
Cost Containment
Supply Chain Software
No
No
Yes
Will there beContinuity in topLeadership’sPhilosophy?
BeginLean
Journey
YesYes•Leadership Background•Ownership Structure•Promote from Within•Environmental Pressures•Experience with Lean
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BMyth versus Reality of TPS
Myth What TPS Is Not Reality What TPS Is• A tangible recipe for success • A consistent way of thinking• A tangible recipe for success• A management project orprogram• A set of tools forimplementation• A system for production flooronly• Implementable in a shortor
• A consistent way of thinking• A total management philosophy• Focus on total customersatisfaction• An environment of teamworkand improvement• A neverending search for abetter way• Implementable in a shortor
mid term periodbetter way• Quality built in process• Organized, disciplinedworkplace• Evolutionary
Improvement to eliminate wasteThrough the Toyota Way
Cells, andonCharts, teams
SloganValue stream maps
The Essence ofTPS
(what we miss)
Through the Toyota Way
Iceberg Model of TPS
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BDescription of The Toyota Way Culture
1. The Toyota Way has a depth that goes to the level of basicassumptions of the most effective way to “perceive, think,and feel” in relation to problems. Things like genchigenbutsu, recognizing waste, thorough consideration ingenbutsu, recognizing waste, thorough consideration indecision making, and the focus of Toyota on longtermsurvival are the DNA of Toyota.
2. The Toyota Way was “invented, discovered, and developed”over decades as talented Toyota managers and engineers,like Ohno, “learned to cope with its (Toyota’s) problems ofexternal adaptation and internal integration.”
3. The Toyota Way is explicitly “taught to new members.” TheToyota Way is explicitly taught the way we should transmitculturethrough action in daytoday work where leadersmodel the way.
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B13 Tips to Transitioning a Company to a LeanEnterprise
1. Start with action in the technical system; follow quickly withcultural change. Mostly a lean transformation focus on the“process layer” of the 4P model, as the technical systems oflean drive the Toyota Way behaviors. Even though, the socialand technical systems of TPS are intertwined; if thecompany wants to change the culture, it must also developtrue lean leaders who can reinforce and lead the culturalchange. The best way a company can develop this is throughaction to improve the company’s core value streams,supported by committed leaders who reinforce culturechange. Leaders must be involved in the value streammapping and shop floor transformation so they can learn tosee waste.
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B13 Tips to Transitioning a Company to a LeanEnterprise
2. Learn by doing first and training second. The Toyota Way isabout learning by doing. At the early stages of leantransformation there should be at least 80% doing and 20%training and informing. The best training is training followed
by immediately doing or doing followed by immediatelytraining. The Toyota approach to training is to put people indifficult situations and let them solve their way out of theproblems.
3. Start with value stream pilots to demonstrate lean as asystem and provide a “go see” model. The goandsee modelline should become a singularly focused project with a greatdeal of management attention and resources to make it asuccess and an object lesson in management commitment.
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B13 Tips to Transitioning a Company to a LeanEnterprise
4. Use value stream mapping to develop future state visionsand help “learn to see.” Value stream mapping should beapplied only to specific product families that will beimmediately transformed.
5. Use kaizen workshop to teach and make rapid changes. Thekaizen workshop is a remarkable social invention that freesup a cross functional team to make changes in a week thatotherwise can drag on for months. Selecting the right peoplefor the team is critical, as is setting aside the time for thoseindividuals and giving them a lot of management support.
6. Organize around value streams. Choose someone with realleadership skills and a deep understanding of the product andprocess must be responsible for the process of creating valuefor customers and must be accountable to the customer.
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13 Tips to Transitioning a Company to a LeanEnterprise
B 7. Make it mandatory. If a company looks at leantransformation as a nice thing to do in any spare time or asvoluntary, it will simply not happen.
8. A crisis may prompt a lean movement, but may not benecessary to turn the company around. A sinking shipcertainly mobilizes management and the workforce intoserious about lean. What is important is that leadership isfocused on longterm learning.
9. Be opportunistic in identifying opportunities for big financialimpacts. By picking the right product family and withexperienced lean expertise, a serious effort has about a 100%chance of making huge and visible improvements that willimpress any executive.
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B13 Tips to Transitioning a Company to a LeanEnterprise
10. Realign metrics with a value stream perspective. “You getwhat you measure” has become a truism in most companies.Metrics are key tools for continuous improvement. First stepis eliminate nonlean metrics that are wreaking havoc withthose seriously invested in improving operational excellence.The next step is to measure a variety of value stream metricsfrom lead time to inventory levels to firstpass quality andtreat these metrics as seriously as labor productivity andother shortterm cost metrics.
11. Build on your company’s roots to develop your own way.When Toyota works with companies to teach TPS, theyinsist that the companies develop their own system. Put theminto our own language in a way that fits their business andtechnical context.
B13 Tips to Transitioning a Company to a LeanEnterprise
12. Hire or develop lean leaders and develop a successionsystem. Leaders must thoroughly understand, believe in, andlive the company’s “way.” All leaders must understand thework in detail and know how to involve people. If the top isnot driving the transformation, it will not happen.
13. Use experts for teaching and getting quick results. Acompany needs a sensei to provide technical assistance andchange management advice when it is trying something forthe first time. This “teacher” will help facilitate thetransformation, get quick results, and keep the momentumbuilding. But a good teacher will not do it all for you. Todevelop a lean learning enterprise we need to build internalexpertisesenior executives , improvement experts, andgroup leaders who believe in the philosophy and will spreadlean throughout the organization over time.
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“The Toyota Way matches everythingthat they (team members) do every
Closing
that they (team members) do everyhour of the day. So they areswimming in this culture and thisphilosophy. We’re always doingkaizen projects. It’s a part of who wekaizen projects. It’s a part of who we
are.”Jane Baseda, GM and VP North American Parts Operations
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“A long journey that needs commitment,patience, longpatience, longterm thinking, positiveterm thinking, positive
Lean is…
patience, longpatience, longterm thinking, positiveterm thinking, positivemindset and attitude, and continuousimprovement which are merged togetheras operational excellence and as astrategic weapon.”
