The Toyota Way by Jeffrey Liker

14 Management Principles from the World¶s Greatest Manufacturer
Tedd Snyder Snyder Consulting & Associates tfsnyder@teddsnyder.com

MAQIN Lean and Six Sigma Special Interest Group May 19, 2004

Toyota History 
1894 - Sakichi Toyoda, a tinkerer and inventor, begins making  

  

manual looms. 1926 ± Toyoda opens Toyoda Automatic Loom Works. He later invents looms that stop automatically when thread breaks (jidoka). 1937 - Kiichiro Toyoda, an engineer, opens Toyota Motor Company. Visits Ford and GM during the 30s. 1945 - Toyoda challenges company to catch up to US in 3 years. 1948 - Toyota¶s debt is 8 times its capital value. 1950s ±Toyota studies US plants, including Ford, and supermarkets during a 12 week study visit. They see little improvement since his trip in the 30s but use supermarkets as a model for just-in-time production.

The Toyota Approach : 4Ps Continuously solving root PROBLEMS Add value to the organization by developing your PEOPLE and PARTNERS The right PROCESS will produce the right results Long Term PHILOSOPHY Principles 12-14 Principles 9-11 Principles 2-8 Principle 1 .

even at the expense of short term financial goals. Level out workload (heijunka). thoroughly considering all options. Use only reliable thoroughly tested technology that serves your people and processes. 12. 9. 2. 11. 14. 4. 3. Standardized tasks are the foundation for continuous improvement and employee empowerment Use visual control so no problems are hidden. Use ³pull´ systems to avoid overproduction. Go and see for yourself to thoroughly understand the situation. implement decisions rapidly Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen) . 10. 7. Create continuous process flow to bring problems to the surface. and teach it to others Develop exceptional people and teams who follow your company¶s philosophy Respect you extended network of partners and suppliers by challenging them improve. to get quality right the first time. 6. Grow leaders who thoroughly understand the work. Make decisions slowly by consensus. live the philosophy. Base your management decisions on a long term philosophy. 5. 13. 8.Toyota¶s 14 Management Principles 1. Build a culture of stopping to fix problems.

Evaluate every function in the company in terms of its ability to achieve this. Accept responsibility for your conduct and maintain and improve the skills that enable you to produce added value.´ Understand your place in the history of the company and work to bring the company to the next level. even at the expense of short term financial goals  Have a sense of purpose that supercedes any short term decision making. grow. Strive to decide your own fate. Act with self reliance and trust in your own abilities. .  Be responsible. Work. society and the economy. align the organization toward a purpose greater than ³making money.Principle 1: Base your management decisions on a long term philosophy.  Generate value for the customer.

 Make flow evident throughout your organizational culture. continuous flow.Principle 2: Create continuous process flow to bring problems to the surface  Redesign processes to achieve high value added.  Create flow to move material and information fast as well as to link processes and people together so that problems surface right away.  Case Study ± Navy yard job summaries     Lead time reduced 63% Distance paperwork traveled reduced 55-92% Number of steps reduced by 67% Handoffs reduced by 80% .

poster. doorplate.  Toyota studied US supermarkets in the 50¶s  Pull vs Push (Production Schedule)     Material replenishment initiated by consumption is the basis for just-in-time. and in the amount that they want. but keep it short (days vs months) . signboard.an organized system of inventory buffers. Just-in Time . card«signal  ³Flow (one piece) where you can and pull where you must. Kanban .Principle 3: Use ³pull´ systems to avoid overproduction  Provide your downstream customers in the process with what they want.´ - Rother and Shook in ³Learning to See´  Scheduling still happens. billboard.sign. office supplies. Examples. when they want it.filling your gas tank.

Defects + Unused employee abilities Muri (overwork). Muda (waste)  Transportation. Overproduction.Heijunka (evenness) AAABBBCCC to ABCABCABC Case study.Gutter manufacturer  Lead time reduced by 40%  Changeover time reduced by 70%  WIP reduced by 40%  Inventory obsolescence reduced by 60% . Eliminating Muri and eliminating Mura in production are just as important. Overprocessing.Movement Waiting.Principle 4: Level out workload (heijunka)  Eliminating Muda is just one third of the equation for making     lean successful. Inventory. Mura (inconsistency).

4. 2.7  Poke yoke ± ³get rid of mistakes´ mistake avoidance (example-cotter pin/light curtain) (avoid easy mistakes)  Administrative approaches ±standardized work and checklists (pilots) (engineering forced to consider alternatives) Toyota¶s quality process 1.  Go and see Understand the situation One piece flow or andon Ask why 5 times .Principle 5: Build a culture of stopping to fix problems. then red Team leader fix. 3. figure. pull Segmented assembly line with buffer inventory ³Freshman job´ Takt = 57 Touch = 44. to get quality right the first time    Quality at the source Jidoka ± autonomation Andon ± signal for help     Yellow.

the ³one best way.  Use stable. .  Standardized work consists of three elements Takt time  Sequence of the process  Amount of stock on hand  Capture the accumulated learning about a process by standardizing the current best practices. timing. (This also helps to manage them).´ it is the beginning of improvement. and regular output of your processes. then incorporate it into the new standard.Principle 6: Standardized tasks are the foundation for continuous improvement and employee empowerment  Standardized work is not the end result. It is the foundation of flow and pull. repeatable methods everywhere to maintain the predictability. Allow creative and individual expression to improve upon the standard.

Principle 7: Use visual control so no problems are hidden  Visual Control ± The ability to see abnormalities at a glance.g. takt rate. item.  5S  Sort  Straighten  Shine  Standardize  Sustain  Example ± email audits  Process Control Boards (daily goals. or something on their computer or the company¶s intranet.Ask a coworker to see a specific document. A3 (11x17) Reports (Storyboards) A4 (8 ½ x 11)next! . current status throughout the day)  Reduce your reports to one piece of paper whenever possible. manpower.  Example .  E.

reliability. Quickly implement a thoroughly considered technology if it has been proven in trials and it can improve the flow of your processes.  Encourage your people to consider new technologies when looking into new approaches to work. . and predictability. manufacturing systems.Principle 8: Use only reliable thoroughly tested technology that serves your people and processes  Use technology to support people. not to replace people. or products.  Reject technologies that conflict with your culture or that might disrupt stability.  Conduct actual tests before adopting new technology in business processes.

 Leaders must be role models of the company¶s philosophy and way of doing business.  ³Before we make cars (monozukuri).´ . we make people (hito- zukuri). live the philosophy.Principle 9: Grow leaders who thoroughly understand the work. and teach it to others  Grow leaders from within rather than buying them from outside.  A good leader must understand the daily work in great detail so they can be the best teacher of your company¶s philosophy. (This is an example of applying Heijunka)«or constancy of purpose.

Teamwork is something that has to be learned. stable culture in which company values and beliefs are widely shared and lived out over a period of many years.  Balance between teamwork and excellent individual work and enhance flow by solving problems. .Principle 10: Develop exceptional people and teams who follow your company¶s philosophy  Create a strong.  Respect for Humanity system  Uses both intrinsic and extrinsic approaches to motivation corporate philosophy to achieve exceptional results.  Train exceptional individuals and teams to work within the  Use cross functional teams to improve quality and productivity  Make an ongoing effort to teach individuals how to work together as team toward common goals.

Set challenging targets and assist your partners in achieving them. John Deere.Principle 11: Respect you extended network of partners and suppliers by challenging them improve  Have respect for your partners and suppliers and treat them as an extension of your company.  Challenge your partners to grow and develop. (e. Harley Davidson) .g. It shows that you value them.

13 provinces and territories and Mexico   Improvements include turning radius. cup holders and trays  ³Common sense will tell you the answer. to update periodically.´ The Ohno circle ± He asked an engineer to stand and observe an operation«for 8 hours! ³The Geography of Thought: How Asians and Westerners Think Differently and Why´ by Richard Nisbett      Westerners see things Easterners see things and relationships Language?  Hourensou. but collecting data (and then understanding the facts) will tell you whether your common sense was correct. drift. to consult or advise  Genchi genbutsu for executives (coordinated reporting) .to report.Principle 12: Go and see for yourself to thoroughly understand the situation  Genchi (actual location) genbutsu (actual material or product)«also known as going to the gemba. wind stability. Example-Siena chief engineer drives in 50 states.

2. thoroughly considering all options. implement decisions rapidly    Given a year to implement a project« Western ± typically 3 months planning. tollgate review 5. 3. Using very efficient communication vehicles to do 1-4. including genchi genbutsu Understanding underlying causes that explain surface appearances ± asking ³Why?´ five times Broadly considering alternative solutions and developing a detailed rationale for the preferred solution. to ³plan´ and 45 minutes to ³do. Nemawashi ±the process of discussing problems and potential solutions with all those affected. preferably one side of one page (e. implement flawlessly   1.g. pilot. e. 9 months implementing and correcting (Tedd¶s example-in a class exercise. Toyota decision making Find out what is really going on. ± ± What alternatives have you considered? How does this solution compare with those alternatives? 4. ± Building consensus within the team.) Toyota ± typically 10 months planning.Principle 13: Make decisions slowly by consensus. to collect their ideas and get agreement on a path forward.´ Participants never use the full 15 minutes. I assign 15 min. even since I¶ve reinforced the importance of this time.g. one page 7 step storyboards) . including employees and outside partners.

People want to know how Toyota achieves such high levels of quality without the quality tools of Six Sigma. Yet most problems do not call for complex statistical analysis. attitude. Six Sigma is based on complex statistical analysis tools. This requires a level of detailed thinking and analysis that is all too absent from most companies in day-to-day activity. and culture.Principle 14: Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen) ³Many people are surprised when I give talks and tell them that Toyota doesn¶t have a Six Sigma program. but instead require painstaking. It is a matter of discipline. detailed problem solving. You can find an example of every Six Sigma tool in use somewhere in Toyota at some time.´ Jeffrey Liker .

Create a plan to solve the problem. e. Sincerely believe you will not make this mistake again. DMAIC tollgates    Hansei kai ± reflection meetings  No magic metrics Policy Deployment . Feel sorry.´ 1.Principle 14: Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen)    7 step problem solving method Problem solving is 20% tools and 80% thinking.g. Without Hansei. 2. 3. Hansei ± loosely ³reflection´ or lessons learned   ³Please do the Hansei. it is impossible to have kaizen.

Toyota Motor Corporation 2002 .´ Fujio Cho President.In Closing« ³We place the highest value on actual implementation and taking action.