14 Toyota Way Principles

• Long – Term Philosophy
 Base your Management Decisions on a Long-Term Philosophy, even at the Expense of Short-Term Financial Goals

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14 Toyota Way Principles
• The Right Process Will Produce the Right Results
 Create Continuous Process Flow to Bring Problems to the Surface  Use “Pull” Systems to avoid Over Production  Level out the Work Load (Heijunka)  Build a Culture of Stopping to Fix Problems, to get Quality Right the First Time  Standardised Tasks are the foundation Improvement and Employee Empowerment  Use Visual Control so no Problems are Hidden  Use Only Reliable, Thoroughly Tested Technology that Serves your People and Processes
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Continuous

14 Toyota Way Principles
• Add Value to the Organisation by Developing Your People and Partners
 Grow Leaders who thoroughly understand the Work, Live the Philosophy and Teach it to Others  Develop Exceptional People and Teams who follow your Company’s Philosophy  Respect your Extended Network of Partners and Suppliers by Challenging them and Helping them Improve

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14 Toyota Way Principles
• Continuously Solving Organisational Learning Root Problems Drives

 Go and See for Yourself to thoroughly Understand the Situation  Make Decisions Slowly by Consensus, thoroughly Considering all Options, Implement Decisions Rapidly  Become a Learning Organisation through Relentless Reflection (Hansei) and Continuous Improvement (Kaizen)

“4 P” Model of The Toyota Way
Problem Solving (Continuous Improvement & Learning)
•Continual organizational learning through Kaizen •Go see for yourself to thoroughly understand the situation (Genchi Genbutsu) •Make decisions slowly by consensus, thoroughly considering all options; implement rapidly

People and Partners (Respect, Challenge and Grow Them)

•Grow leaders who live the philosophy •Respect, develop, and challenge your people and teams •Respect, challenge, and help your suppliers

Process (Eliminate Waste)

•Create process “flow” to surface problems •Use pull systems to avoid overproduction •Level out the workload (Heijunka) •Stop when there is a quality problem (Jidoka) •Standardize tasks for continuous improvement •Use visual control so no problems are hidden •Use only reliable, thoroughly tested technology

Philosophy (Long-term Thinking)

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

“4 P” Model – Most Companies
Ge Ge nch i nb uts u

Problem Solving (Continuous Improvement & Learning)

•Continual organizational learning through Kaizen •Go see for yourself to thoroughly understand the situation (Genchi Genbutsu) •Make decisions slowly by consensus, thoroughly considering all options; implement rapidly

Ka ize n

Re Te spec am t & wo rk

Where Most “Lean” Companies are

People and Partners (Respect, Challenge and Grow Them)

•Grow leaders who live the philosophy •Respect, develop, and challenge your people and teams •Respect, challenge, and help your suppliers

Process (Eliminate Waste)

•Create process “flow” to surface problems •Use pull systems to avoid overproduction •Level out the workload (Heijunka) •Stop when there is a quality problem (Jidoka) •Standardize tasks for continuous improvement •Use visual control so no problems are hidden •Use only reliable, thoroughly tested technology

ge

Ch all en

Philosophy (Long-term Thinking)

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

“4 P” Model of The Toyota Way
Ge Ge nch i nb uts u

Toyota’s Terms

Problem Solving (Continuous Improvement & Learning)

•Continual organizational learning through Kaizen •Go see for yourself to thoroughly understand the situation (Genchi Genbutsu) •Make decisions slowly by consensus, thoroughly considering all options; implement rapidly

Re Te spec am t & wo rk

People and Partners (Respect, Challenge and Grow Them)

Ka ize

•Grow leaders who live the philosophy •Respect, develop, and challenge your people and teams •Respect, challenge, and help your suppliers

n

Process (Eliminate Waste)

•Create process “flow” to surface problems •Use pull systems to avoid overproduction •Level out the workload (Heijunka) •Stop when there is a quality problem (Jidoka) •Standardize tasks for continuous improvement •Use visual control so no problems are hidden •Use only reliable, thoroughly tested technology

ge

Ch all en

Philosophy (Long-term Thinking)

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

Toyota Production System House
Best Quality – Lowest Cost – Shortest Lead Time – Best Safety – High Morale Through shortening the production flow by eliminating waste

Just-in-Time
Right Part, Right Amount, Right Time Take Time Planning Continuous Flow Pull System Quick Changeover Integrated Logistics • • • • •

People & Teamwork
Selection Common Goals Ringi Decision Making Cross – Trained • • • • • • •

Jidoka
(In-station Quality) Make Problems Visible Automatic Stops Andon Person – Machine Separation Error Proofing In-station Quality Control Solve Root Cause of Problems (5 Why’s)

Continuous Improvement Waste Reduction
Genchi Genbutsu 5 Why’s Eyes for Waste Problem Solving • • • •

Leveled Production (Heijunka) Stable and Standardized Processes Visual Management Toyota Way Philosophy

• •

Deming Cycle
Plan

Across Companies
Plan

Company
Plan

Group
Plan

Act

Act

Act

Act

Project

Do

Do

Do

Do

Check

Check Check

Check

Creating Flow and PDCA
Create Flow (Act)

Evaluate Results (Check)

Eliminate Waste

Surface Problems (Plan)

Counter Measures (Do)

Three M’s

Muda Waste

Mura Unevenness

Muri Overburden

Toyota Leader’s View
Management

AN M

• • • •

JIT Jidoke Kaizen Heijunka

NI

Technical • Stability

L

PEOPLE

Long – term Asset –> Learned Skills Machinery Depreciates -> Loses Value People Appreciates -> Continue to Grow

• True North • Tools to Focus Management Attention • Go and See • Problem – Solving • Presentation Skills • Project Management • Supportive Culture

CA

AG EN EM

TE

CH

T

PHILOSOPHICAL
Philosophy / Basic Thinking
• • • • Customer First People are most Important Asset Kaizen Go and See -> Focus on Floor • Give feedback to Team Members and Earn Respect • Efficiency Thinking • True (vs. apparent) Condition • Total (vs. Individual) Team Involvement

Supply Chain Need Hierarchy

Learning Enterprise
Re

io n

Next Level of Improvement

gr es

ct

si ng

tis fa

Enabling Systems

Ne

Sa

ed

ed

Sa

Ne

ti s

g

c fa

in

re ss

Clear Expectations

t io n

Pr og

Stability

Stable, Reliable Processes

Fair and Honorable Business Relations

Alternative Toyota Decision Making Methods

Level of Involvement

Seek Individual Input, then Decide and Announce Decide and Announce

Seek Group Input, then Decide and Announce

Group Consensus, Management Approval

Group Consensus, With Full Authority

Time

• Decision Making is Highly Situational • Philosophy is to seek Maximum Involvement for Each Situation

Myth Vs. Reality
Myth What TPS is Not
• A Tangible recipe for Success • A Management Project or Program • A set of Tools for Implementation • A system for Production Floor only • Implementable in a Short or Mid-term Period

Reality What TPS Is
• A Consistent way of Thinking • A Total Management Philosophy • Focus on Total Customer Satisfaction • An Environment of Teamwork and Improvement • A Never-ending Search for a Better Way • Quality Built in Process • Organised, Disciplined Workplace • Evolutionary

Motivation Theories & The Toyota Way
Internal Motivation Theories
Maslow’s Need Hierarchy

Concept
Satisfy Lower Level Needs and Move Employees up the Hierarchy toward Self Actualization. Eliminate “Dissatisfiers” (Hygiene Factor) and Design Work to Create Positive Satisfiers (Motivators)

Toyota Approach
Job Security, Good Pay, Safe Working Conditions satisfy Lower Level Needs Culture of Continuous Improvement supports Growth towards Self Actualization 5S, Ergonomics Programs, Visual Management, HR Policies address Hygiene Factors. Continuous Improvement, Job Rotation and Build -in Feedback Support Motivators.

Herzberg’s Job Enrichment Theory

External Motivation Theories
Taylor’s Scientific Management Scientifically Select, Design Standardized Jobs, Train & Reward with Money Performance relative to Standards. Reinforce Behaviour on the spot when the Behaviour Naturally Occurs Set Specific, Measurable, Achieveable Challenging Goals and Measure Progress. All Scientific Management Principles followed but at the Group Level rather than Individual Level and based on Employee Involvement Continuous flow & andon creates short-lead times for Rapid Feedback. Leaders constantly on the floor and Providing Reinforcement. Sets Goals that meet these Criteria Through Hoshin Kanri (Policy Deployment). Continuous Measurements relative to Targets.

Behaviour Modifications

Goal Setting

Coercive Vs. Enabling Bureaucracy
SOCIAL STRUCTURE
Coercive Bureaucracy
• Rigid Rule Enforcement • Extensive Written Rules and Procedures • Hierarchy Controls

TECHNICAL STRUCTURE

High Bureaucracy

Enabling Bureaucracy
• Empowered Employees • Rules and Procedures as Enabling Tools • Hierarchy Supports Organisational Learning

Autocratic Low Bureaucracy
• Top Down Control • Minimum Written Rules and Procedures • Hierarchy Controls

Organic
• Empowered Employees • Minimum Rules and Procedures • Little Hierarchy

Coercive

Enabling

5 S’s
Sort
Clear out rarely used Items by Red Tagging

Sustain Use Regular Management Audits to Stay Disciplined

Eliminate Waste

Straighten Organise and Label a Place for Everything

Standardise Create Rules to Sustain the first 3 5’S

Shine Clean It

Waste in a Value System
Casting Time Transportation Staging Machining Setup Inspection Staging Assembly

Raw Material
Value – Added Time Non-Value-Added Time (Waste)

Time

Finished Parts

• Value-added Time is only a Small Percentage of the Total Time • Traditional Cost Savings focuses only on Value-adding Items • Lean Thinking Focuses on the Value Stream to Eliminate Non-Value-Adding Items

Practical Problem-Solving Process
1. Initial Problem Perception
(Large, Vague, Complicated Problem)

2. Clarify the Problem
The “Real Problem Grasp the Situation

3. Locate Area / Point of Cause POC
Why? Why? Why? Why? Why?

Cause Investigation

Direct Cause
Cause Cause Cause Cause

Basic Cause and Effect Investigation

4. 5 – Why? Investigation of Root Cause

Root Cause

5. Countermeasure 6. Evaluate 7. Standardise

The Andon System

Waste in a Truck Chassis Assembly Line

TPS Flow Environment

Product Development Matrix

Team & Batch Production Vs. On-Piece Flow

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