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Swati SharmaPGDM- Busines DesignRoll No.- 52 
THE TOYOTA WAY
14 MANAGEMENT PRINCIPLES FROM THE WORLD’S GREATEST MANUFACTURERAUTHOR- JEFFERY K. LIKERThe Toyota Way is the first book for a general audience that explains the managementprinciples and business philosophy behind Toyota's worldwide reputation for qualityand reliability. Complete with profiles of organizations that have successfully adoptedToyota's principles, this book shows managers in every industry how to improvebusiness processes.World Class Power of the Toyota Way first caught the worlds attention in the 1980swhen consumers started noticing that Toyota cars lasted longer and required fewer repairs than American cars. Today, not only is Asia leading the way incar productionbut the company has the biggest market value consistently producing high-quality carsusing fewer man hours and less on-hand inventories. To this day, Toyota continues toraise the bar for manufacturing, production development and process excellence. TheToyota Way explains the management principle and business philosophy behindToyotas success. It narrates Toyotas approach to Lean Production (known as theToyota Production System) and the 14 principles that drive Toyota towards quality andexcellence. The book also explains how you can adopt the same principles to improveyour current manufacturing process.Professor Jeffrey Liker 
,
Ph.D., is cofounder and director of the Japan Technology ManagementProgram at the University of Michigan, where he is also a professor of industrial and operationsengineering. He has won four Shingo Prizes for excellence, and has written extensively on Toyota invarious management journals. Dr. Liker is also a principal of Optiprise, a lean enterprise/supply chainmanagement consulting firm.
 
He
 
has been studying Toyota for twenty years, and was givenunprecedented access to Toyota executives, employees and factories, both in Japan and the UnitedStates, for this landmark book. The Toyota Way reveals how Toyota creates an ideal environment for implementing Lean techniques and tools by:Ø Fostering an atmosphere of continuous improvement and learningØ Satisfying customers (and eliminating waste at the same time)Ø Getting quality right the first timeØ Grooming leaders from within rather than recruiting them from the outsideØ Teaching all employees to become problem solversØ Growing together with suppliers and partners for mutual benefitToyota developed the lean production after World War II. While Ford and GM used mass productionand economies of scale, Toyota faced very different business conditions. Toyota's market was verysmall but it had to produce a variety of vehicles on the same assembly line to satisfy customers. Thesolution:making the operations flexible. This resulted in the birth of TPS- Toyota production system.TPSborrowed some of its ideas from the United States. The core idea came from the concept of the “pull-system”, which was inspired by the American supermarkets. In the pull system, individual items arereplenished as each item begins to run low on the shelf. Applied to Toyota, it means that the first stepin the process is not completed until the second step uses the materials or supplies from Step 1. AtToyota, every step of the manufacturing process uses to signal to the previous step when its partneeds to be replenished.
 The book is divided into three parts. Part one introduces us to the presentsuccess and history of Toyota. It describes how TPS evolved as a new paradigmof manufacturing, transforming businesses across industries. Part two covers the
 
14 principles of Toyota as identified by Liker. The 14 principles of The ToyotaWay are organized in four sections: I) Long-Term Philosophy, II) The RightProcess Will Produce the Right Results, III) Add Value to the Organization byDeveloping Your People, and IV) Continuously Solving Root Problems DrivesOrganizational Learning. Part three of the book discusses how organizations canapply the Toyota way and what actions they can take to become a lean,learningorganization.
Toyota’s lean production system started a global revolution in manufacturing and service businessthat many consider the next phase beyond mass production. The Toyota Way Explains how Toyota’sproduction system evolved as a new paradigm of manufacturing excellence, and describescompanies in industries as diverse as healthcare, engineering, pharmaceuticals and construction, thatare using Toyota’s methods to dramatically improve their performance.Not too many companies believe their competitive advantage is their process. But the title of the firstchapter says it all, “Using Operational Excellence as a Strategic Weapon”. Many people think theToyota Way is lean process development, but after reading The Toyota Way I understand that lean is just a part of their “operational excellence”. Their real excellence can be summed up as “culture anddiscipline”.The Toyota Way isn’t a process, it’s the name for Toyota’s culture involving: problem solving (see for yourself, consensus decision making, and ask why? five times), people and partners (grow leadersand your business partners), process (eliminate waste, lean flow to view the problems, level theworkload, stop as soon as there is a quality problem, pull systems, visibility, and standardized tasks),and philosophy (long term thinking). This culture influences every level of Toyota.Many people confuse the Toyota Production System (TPS) with the Toyota Way. TPS is themanufacturing process; the Toyota Way is the culture. Most companies try to implement lean (just intime) production systems and fail because they don’t have the culture and discipline to do it. Simpleexample: western plants try to minimize downtime; at Toyota downtime is considered good becauseproblems are getting fixed. Without the discipline to run so lean that problems pop up, western plantshave a hard time finding and fixing the problems."Minimize costs by maximizing quality at every level of the organization"Toyota’s methods are surprisingly low-tech. Every employee is a problem solver and taught theToyota Way. Culture is ingrained. Reports are given on one sheet of paper. There is no Six Sigma,only simple statistics. Processes are standardized and visible systems (andons) are created to showdeviation from the process. Pretend for a minute that every employee at your company had a trafficlight on their head and every day you could see if they were behind schedule, on time, or runningahead. Again this isn’t just for manufacturing but for all parts of Toyota.But many companies who think they are Lean – aren’t. The book explains how to get beyond a focuson the surface tools and techniques of Lean by creating a Toyota-style culture of quality-a Lean,learning enterprise. It tells how to improve the speed of a business processes, improve product andservice quality, and cut costs, no matter what is the industry. The Toyota Way is an inspiring guide totaking the steps necessary to emulate Toyota’s remarkable success.This book is like a Toyota vehicle: not necessarily fancy, but extraordinarily capable of getting youfrom point "A" to point "B." Author Jeffrey K. Liker’s thorough insight into the continual improvementmethod known as "The Toyota Way" reflects his experience with the Toyota Production System(TPS) and his knowledge of its guiding philosophies and its technical applications. He explainswhy Toyota has become a global symbol of passionate commitment to continual improvementand efficiency. Toyota’s success as the world’s most profitable automaker is no accident and now,thanks to this book, it’s no mystery, either. Liker drills down to the underlying principles andbehaviours that will set your company on the Toyota Way. The book reflects years of studying
 
Toyota’s philosophy: it is well mapped out, straightforward and exceedingly although not daringlyinnovative . this book is a must for anyone striving to improve their organization’s operationalefficiency.INSPIRING STORY-After World War 2 and Japan’s loss to America, inflation in Japan became very rampant ,which further made money worthless and getting paid by customers very difficult. Cash flow became so horrendousthat at one point in 1948 Toyota’s debt was eight times in total capital value. To avoid bankruptcy,Toyota adopted strict cost-cutting policies,including voluntary pay cuts by managers .Finally, even thepay cuts were not enough. This forced Kiichiro Toyoda, CEO of Toyota, to ask 1600 workers to retirevoluntarily. This led to work stoppages and public demonstrations by workers, which at the time werebecoming commonplace across Japan.Companies go out of business every day. For the CEO’s it is always some other person’s fault thatthe company has failed. Kiichiro Toyoda took a different approach. He accepted responsibility for thefailing of the automobile company and resigned as president, even though in reality the problemswere well beyond his or anyone else’s control. His personal sacrifice helped to quell worker dissatisfaction. More workers voluntarily left the company and labor peace was restored. However, histremendous personal sacrifice had a more profound impact on the history of Toyota. Everyone inToyota knew what he did and why. The philosophy of Toyota to this day is to think beyond individualconcerns to the long term good of the company, as well as to take responsibility for problems. KiichiroToyoda was leading by example in a way that is unfathomable to most of us.
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