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TOCICO 2009 Conference

Two sides of the


same coin
Presented By: Guilherme Almeida – Vectis Solutions
Date:
© 2009 TOCICO. All rights reserved. 1
Which company is that?
TOCICO 2009 Conference

• Excessive administrative • One of the most admired


headcount companies in the world
• Avoid reducing Labor • Its products are always
Force among the best in
consumers rankings
• Low speed of promotion
• Founded in 1937 in Japan
• H
Homogeneous corporate t
management • Serves 170 different
markets
• Accumulation of
significant amount of • Number 1 in the
cash automotive business
• No clear strategic focus
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© 2009 TOCICO. All rights reserved.
Key questions
TOCICO 2009 Conference

• Why it’s so difficult to emulate Toyota?

• What is Toyota’s
y DNA made of?

• Are the Toyota and TOC way really different?

• In which way Toyota and TOC can benefit


from each other?

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© 2009 TOCICO. All rights reserved.
What is the secret of Toyota?
TOCICO 2009 Conference

• They are from another planet!!!!

• The Toyota Production System

• Lack of discipline, rigor and


persistance

• It is Toyota unique culture

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© 2009 TOCICO. All rights reserved.
What is culture?
TOCICO 2009 Conference

Schein Model

What we can see


FACTS from direct
BEHAVIOURS observation

POLICIES RULES What are


identified
id tifi d
AND patterns
VALUES

What are the


PARADIGMS basic
BELIEFS assumptions

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© 2009 TOCICO. All rights reserved.
The Six paradoxes in Toyota
TOCICO 2009 Conference

On one hand On other hand


Move gradually Take big leaps

Cultivate frugality Spending huge sums

Operate efficiently Operate redundantly

Cultivate stability Paranoid mindset


Respect bureaucratic Allow freedom to dissent
hierarchy
Mantain simplified Mantain complex
communication
i ti communication
i ti
network
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© 2009 TOCICO. All rights reserved.
Key conclusion
TOCICO 2009 Conference


Contradictions, opposites, and paradoxes
within
ithin To
Toyota
ota are self
self-generated
generated and ”
deliberately imposed.
Toyota strives to remain "extreme," a state of
disequilibrium where radical contradictions coexist,
pushing
p g it awayy from the comfort zone to create healthy
y
tension and instability within the organization. This
tension becomes the catalyst for movement forward. The
organization finds new solutions beyond opposing traits,
sending it off on a new trajectory. This trajectory moves
upward in an expanding spiral as the firm continuously
pursues innovation and self-renewal in the resolution of
opposites.
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© 2009 TOCICO. All rights reserved.
The effect of compromising
TOCICO 2009 Conference

OBJECTIVE IMPROVE
PROFITS / ROI
now andd in
i the
th future
f t

Protect & Increase


Control & Reduce Costs
Sales

ACTIONS
Focus on WIN for
Focus on WIN for
sharehoulders
customers (Effective)
(Efficiency)

EFFECTS
FOCUS

Compromise

Undesirable Effects Undesirable Effects


- Higher level of Costs/ Investments - More complaints from customers
- Lower level of Profits/ ROI - Lower Sales (Qty/Price)
- More complaints from - Higher rework costs
sharehoulders - Lowel levels of Profits / ROI
- Lower level of Investiments / Cash

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© 2009 TOCICO. All rights reserved.
The opposing forces
TOCICO 2009 Conference

Impossible
Goals
Founder’s
Founder s
Up or In Philosophies

Mutual trust and


Respect respect between
Team Work Labor and
Management and
long term
Continuous employment
Improvement stability
R
Respect
t for
f
People
Communication
Challenge
Kaizen
Genchi Genbutsu

Local Eagerness to
Customization Experiment
Nerve
System
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© 2009 TOCICO. All rights reserved.
About TOC
TOCICO 2009 Conference

TOC Beliefs
– The Choice
over lastt 30 years
s

TOC Business Strategy


- Viable Vision/ S&T
TOC & Technology
– Necessary but not Sufficient
The TOC Holistic Approach
– 8 Video Sessions
volution o

Project Management
– Critical Chain
Distribution, Marketing, Management Skills
– It’s Not Luck
TOC Ev

The Thinking Processes


– Jonah Program
TOC for Production, Throughput Accounting
– OPT,
OPT The Goal
Goal, The Race
Race, The Haystack Syndrome

1975 1985 1990 1995 2000 2007


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© 2009 TOCICO. All rights reserved.
The improvement challenge
TOCICO 2009 Conference

Growth
FORMANCE
E

Constraint Stability/
Survival
PERF

What Next?

Past Now Future


TIME

Pressure to Growth /
Change Satisfaction
Stakeholder’s Be
Successful/
Conflict: Happy
Pressure to Stability /
Not Change Security GOAL
DECISION NEED
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© 2009 TOCICO. All rights reserved.
TOC Overview
TOCICO 2009 Conference

Distribution
Finance and
Operations and Supply
Measurements
Chain

Applications Project
Management
Sales Marketing

People
Strategy Education
Management

CRT
S//T
CLR FRT

Tools Thinking
Processes S//T S//T
NBR PRT

Cloud TT S//T S//T S//T

P
6 Questions
of
Buy In

Processes Technology (-- & +)

3
Stability
5 Focusing
Strategical
Steps
Questions

Principles Inherent
Simplicity
Harmony Respect
Inherent
Potential

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© 2009 TOCICO. All rights reserved.
Living TOC
TOCICO 2009 Conference

Full Life P
Stability

Meaningful successes

Stamina to overcome Have many Collaborate with


f il
failures opportunities people

Think clearly

Overcome 4
obstacles

Overcome Don’t accept Avoid blaming Don’t think that


perception of conflicts as given you know
reality as complex
Inherent Inherent
Harmony Respect
Simplicity Potential
Every situation is Every conflict can People are good Every situation
simple be removed can be
substantially
Win-Win is always improved
possible
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© 2009 TOCICO. All rights reserved.
TOC Principles
TOCICO 2009 Conference

Inherent Inherent
Harmony Respect
Simplicity Potential

50
40 A Undesirable
Undesirable
B Effect Within our Influence
30 Effect under new Paradigm
20 Potential
C Potential Out of our Control 10%
10 D Bad
BadBehaviour
Behaviour Goal
0 THEN
THEN by
byPerson
Person There
FEW arereal
MANY
A B C D Constraints and
Constraints and
MOST are are 90%
100
D Out of our
Within 90%
80 G
IFIF BECAUSE ControlControlor
60 H Goal Influence
People
(Some) are
People PersonBad
with Current Within our Control 10%
B E
40 areGood
Bad Bad
Person Current
C Assumption
F Belief “Cause” Current
Current // Past
Past
20
Performance
Performance
A windmill
i d ill Belief “C
“Cause”

0 A
A B C D E F G H can have 2
heights?
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© 2009 TOCICO. All rights reserved.
Two sides of the same coin
TOCICO 2009 Conference

EVER FLOURISHING COMPANY


Impossible Goals
Founder’s
Philosophies
U or In
Up I

Stability

t
Local Eagerness to
Customization Nerve experiment
S t
System

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© 2009 TOCICO. All rights reserved.
Two sides of the same coin
TOCICO 2009 Conference

PRINCIPLES

Inherent Inherent
Harmony Respect
Simplicity Potential

M t l trust
Mutual t t and
d
Respect respect between
Team Work Labour and
Management and
long term
Continuous employment
Improvement stability
Respect
p for
People
Communication
Challenge
Kaizen
Genchi Genbutsu

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© 2009 TOCICO. All rights reserved.
Two sides of the same coin
TOCICO 2009 Conference

VISION
Pi k a ffriendly
Pick i dl fifight!!!
ht!!!
“Combining the words "friendly" and "fight" may seem like
a contradiction, but we make it work because both sides
share the same goal—to produce cars that make
customers happy.
happy The first item on my list of my priorities
is to make this an organization where nobody hides
concerns or problems and where constructive discussion
Katsuaki Watanabe takes place routinely. Without such discussion people will
Toyota Motor Company
Former CEO tend to let problems slide with slapdash solutions that
barely scratch the surface”

What is needed is just the courage to face


inconsistencies and avoid running away from them
just because “that’s the way it was always done”
The Goal
Reality doesn’t contain contradictions
The Choice
Eli Goldratt 17
© 2009 TOCICO. All rights reserved.
How can Toyota and TOC benefit
from each other?
TOCICO 2009 Conference

What is the decisive How to consistently


competitive edge? deploy TOC principles,
tools and processes in
a massive scale?

How to boost continuous improvement?

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© 2009 TOCICO. All rights reserved.
About Guilherme Almeida
TOCICO 2009 Conference

Married with Carolina,


f
father off Marcelo and
Marina
Things I like to do:
learning, working, racing
and running
More than 20 years
working in the e-mail: guilherme@vectis-solutions.com

automotive industry
y Site: www.vectis-solutions.com

Strong belief in the


tremendous potential of
every human being
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© 2009 TOCICO. All rights reserved.