THE TOYOTA WAY

THE TOYOTA WAY14 MANAGEMENT PRINCIPLESFROM THE WORLDS GREATEST MANUFACTURERJEFFREY K. LIKER1CHALLENGE EVERYTHING.All elements to be practiced everyday in a very consistent manner, not in spurts2The Business of Principles- The TOYATA WAY 3Organizational learningPhilosophyProcess rightPeople and partners buildingProblem solving

operational excellence as strategic weapon45 step Lean ManufacturingDefining customer valueDefining value streamMaking it flowPulling from the customer backStriving for excellence

Cost, quality and service to be the BEST

5Founders thoughtsKing of inventors of Japan- Sakichi ToyodaToyota way- genchi genbutsu (1926)Toyota conglomerate- KeiretsuAutomation with a human touch and mistake proofing- Jidoka/ autonomationHard work, perseverance, discipline- James WattManagement by Facts

6Kiichiro Toyodaeveryone should tackle some great project at least once in their lifeEducation from Tokyo Imperial UniversityLearning by DoingPillars of the Toyota Production System- jidoka, just-in-timeCreativity, challenge, courage, commitment and patience7Taichi OhnoOne piece flowPull systemKanban Shortening lead time by eliminating waste in each step of a process leads to best quality and lowest cost, while improving safety and moraleSpirit of challenge- the acceptance of responsibility to meet the challenge8we accept challenges with a creative spirit and the courage to realize our own dreams without losing drive or energy. We approach our work vigorously, with optimism and a sincere belief in the value of our contributionwe strive to decide our own fate. We act with self reliance, trusting on our own abilities. We accept responsibility for our conduct and for maintaining and improving the skills that enable us to produce added value9Kaizen- change for the better

Kaikaiku- major revolutionary change

Walk the actual path- to construct the value stream

Takt- German word for meter

Total Productive Maintenance- always a sense of urgency

10Framework QualityCostDeliverySafetyMorale

11JIT(JUST IN TIME)PEOPLE & TEAMWORKJIDOKA(IN STATION QUALITY)CONTINUOUS IMPROVEMENT GENCHI GENBUTSU 5 WHYSEYES FOR WASTEPROBLEM SOLVINGTOYOTA WAY PHILOSOPHYLEVELED PRODUCTION (HEIJUNKA)-STABLE-STANDARDIZE PROCESS- VISUAL MANAGEMENTBEST QUALITY- LOWEST COST- SHORTEST LEADTIME12Never be satisfied with inaction

Question and redefine your purpose to attain progress

5S facilitates teamwork

Sensei- mentors

Total Budget Control System13Muri- no value added beyond capability

Mura- unevenness

most businesses are 90% waste (muda) and 10% value added work14Benefits of one piece flowBuilds in qualityCreates real flexibilityCreates higher productivityFrees up floor spaceImproves safetyImproves moraleReduces cost of inventory15TPS- Thinking Production SystemPull systemFlow where you can pull, where you mustLearning to seeHeijunka- level out the workloadAndon- light signaling systemJidoka- autonomation Standard work chartFit customer demand into leveled schedule and establish standard times for delivering different types of service

164 tools Go and seeAnalyze situationUse one piece flow and AndonAsk why? 5 times

Kentou- study drawingKentouzu- plural of drawing

Genchi genbutsu (refered as Management by Walking Around first by Hewlett Packard)17Standardized workTakt timeSequence of processInventory required18Visual control (Management by Sight)AUTOCRATICTECHNICAL STRUCTUREBUREACRACYCOERCIVEENABLINGORGANICSOCIAL STRUCTURE19A3 reportsState problemDocument current situationDetermine the root causeSuggest alternate solutionSuggest recommended solutionCost-benefit analysis20TPS- Respect for Humanity SystemRecruiting is 96% employees, 92% employers, 84% yellow pages, 47% personal contactTeam development process (Blanchard)OrientationDissatisfactionIntegrationProduction 21Jishuken- voluntary study groups

Hoshin kanri- policy deployment

Horensu- to report, give updates periodically (a form of micro management)

Thorough consideration in decision making22Nemawashi- decision making to all options and rapid implementation

Integrity and excellence

Kozokeikaku- structure plan (K4)

a picture is worth a thousand words23Meeting Clear objectives prior to the meetingThe right people at the meetingPrepared participantsEffective use of visual aidsSeparate information sharing from problem solving The meeting starts and ends on time24Hansei (relentless reflection) + kaizen (continuous improvement)= learning organization

Pareto- the only statistical tool used in toyota technical center

Point of cause (POC)

Toyota Practical Problem Solving Process (20% tools, 80% thinking)253 types of measures at TOYOTAGlobal performanceOperational performanceStretch improvement metrics

process orientation

Hoshin kanri (policy deployment process) for stretching the improvement goals26Adapt-Develop-SustainValue Stream Mapping- Material and Information Flow Diagram (Mike Rother and John Shook, 1999)

Project review events (Hansei)

Box- process, triangle- inventory

Task time- TT, Time in System- TIS, Value Ratio- VR

Core Value Stream27A Toyota leaders view of the Toyota Production SystemPEOPLETECHNICALMANAGEMENTPHILOSOPHICAL28TOYOTA LEADERSHIP MODELGroup Facilitator

Youre empowered!

Builder of Learning OrganizationsHere is our purpose and direction- I will guide and coachBureaucratic Managers

Follow the rules!

Task Master

Here is what to do and How- do it!Toyota LeadersBottom-Up(Development)Top-Down(Directives)General Management ExpertiseIn-Depth understanding of Work29Supply chain need hierarchyProgressing Need SatisfactionRegressing Need SatisfactionNext Level of ImprovementStability 30Alternative Toyota Decision making methods Time Level of InvolvementDecide and AnnounceSeek Individual Input, then decide and announceSeek group Input, then decide and announceGroup Consensus, Management ApprovalGroup Consensus with Full AuthorityFallback (if consensus not achieved )PreferredFallback (if consensus not achieved )31Initial Problem Perception(Large, Vague, complicated problem2. Clarify the ProblemThe Real Problem3. Locate Cause/ Point of CausePOC4. 5- Whys? Investigation of Root CauseBasic Cause and Effect Investigation 5. Countermeasure6. Evaluate 7. Standardize Toyotas practical problem-solving processRoot Cause------------------------------------------------------------------Grasp the Situation Cause Investigation 32Policy deployment process (hoshin kanri)Targets for OrganizationTimeQualityCostInnovation Executive StaffHigh-Level PlanImprovement?Who?Method?Target?Time? Manager/ SupervisorPlan- DoWork Plan by itemActionMeasurement Countermeasure Work TeamCheckImprovement?Method?Result?Countermeasure?Target & Time?All 3 Levels 33Creating flow and PDCACreate Flow(Act)Counter Measures(Do)Surface Problems(Plan)Evaluate Results (Check)Eliminate Waste 34Kaizen workshops Phase IPhase IIPhase III35Phase I- Preparation for the workshopClearly define the scopeSet objectivesCreate preliminary current state mapCollect all relevant documentsPost a preliminary current state map in the team room36Phase II- The Kaizen WorkshopWho is the customer?Analyze the current stateValued addedNon-Value added. What is pure waste?Non-Value added, but Required (incidental work)3. Develop future state vision4. Implementation 5. Evaluate: measuring performance

37Phase III- After the workshop- Sustaining and Continuous ImprovementReview the status of action itemsReview process metricsDiscuss additional opportunities for improvementsContinue to improve the process38Factors influencing Top Leaders in Lean visionOwnership structurePromote from withinEnvironmental pressuresExperience with lean39Myth versus reality of TPSWhat TPS is notA tangible recipe for successA management project or programA set of tools for implementationA system for production floor onlyImplementable in a short or mid-term periodWhat TPS isA consistent way of thinkingA total management philosophyFocus on total customer satisfactionAn environment of teamwork and improvementA never ending search for a better wayQuality built in processOrganized, disciplined workplace evolutionary

40Why Changing Culture is so Difficult? Tip of the iceberg- Kanban, 5S, Charts, Teams, Andon, Slogans, Value Stream Maps

Immersed iceberg- Culture Change (Involve people in continuous improvement to eliminate waste through the Toyota Way)4113 Tips for Transitioning Your Company to a Lean EnterpriseStart with action in the technical system; follow quickly with cultural changeLearn by doing first and training secondStart with value stream pilots to demonstrate lean as a system and provide a go see modelUse value stream mapping to develop future state visions and help learn to see42Use kaizen workshops to teach and make rapid changesOrganize around value streamsMake it mandatoryA crisis may prompt a lean movement, but may not be necessary to turn a company aroundBe opportunistic in identifying opportunities for big financial impacts43Realign metrics with a value stream perspectiveBuild on your companys roots to develop your own wayHire or develop lean leaders and develop a succession systemUse experts for teaching and getting quick results44Thank you..!45