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Volume 21, Number 12 • Copyright ©2004 Business Book Review, LLC • All Rights Reserved
The Toyota Way
14 Management Principles from the World’s Greatest Manufacturer
Jeffrey K. Liker
©2004 McGraw-Hill Adapted by permission of McGraw-Hill ISBN: 0-07-139231-9
Reviewed by Lydia Morris Brown
When Gary Convis, managing officer and president of Toyota Motor Manufacturing in Kentucky, joined Toyota after working in the U.S. auto industry for 18 years, he witnessed how one of the worst workforces in General Motors was transformed into one of the best in any U.S. manufacturing facility. This transformation, which occurred at NUMMI (the Toyota/GM joint venture plant in Fremont, California), was a direct result of the “Toyota Way,” the fundamental method by which Toyota does business. This approach, when coupled with the Toyota Production System—the basis for much of the worldwide “lean production” movement—makes up Toyota’s “DNA.” The Toyota Way describes the 14 principles that form the foundation of this uniquely successful management style. Using profiles of a diverse group of organizations, from a variety of industries, it demonstrates how this model of success can be applied in any organization, to improve the quality, efficiency, and speed of any business process, including sales, product development, marketing, logistics, and management. This blueprint of Toyota’s management philosophy offers
Business Book Review™ Vol. 21, No. 12 • Copyright © 2004 Business Book Review, LLC • All Rights Reserved
or … development … is the physical or information transformation of that product. LLC • All Rights Reserved . then. After World War II.optiprise. For more information.” The roots of these TPS and Toyota Way principles can be traced back to the history and personalities of the company’s founders. at the highest quality unique about the company. who left their indelible marks on Toyota’s culture. teamwork. This need to be flexible led to the critical continued success at implementing these tools comes discovery that when lead times are short. and production from its philosophy (the Toyota Way). cessful in the long term must become learning enterprises. and culture.“All manufacturing and service companies that want to be sucin-time (JIT). No. But its its operations. from raw material to finished maintain a learning organization.The Toyota Way Jeffrey K. “lean possible and everything to do with the manner in which manufacturing [is] a five-step process: defining customer raw material is transformed into a saleable commodity. However. and heijunka (that make up the Toyota Toyota is one of the best models in the world. This drive (in the 1940s and ability to cultivate leadership.” for they define its management style and what is what they want. Manufacturers (which won the 1998 Shingo Prize for excellence in manufacturing research). better productivity. value. one-piece flow. white-collar. and striving for excellence. which is based on lines are kept flexible. little to do with running labor and equipment as hard as According to Womack and Jones (Lean Thinking). marketing. Sakichi Toyoda used trial-and-error tinkering and getting his hands dirty (genchi genbutsu— an approach that would become part of the foundation of the Toyota Way). Ford and General Motors used economies of scale and big equipment to produce as many parts as possible. Toyota’s distinctive approach to manufacturing. manufacturing. when they want it. is Toyota has discovered that non-value-added waste has the basis of the “lean production” revolution it helped spawn. higher quality. addresses the same need companies face today— Way and the TPS form the “double helix” of the company’s “the need for fast flexible processes that give customers “DNA. where he is also cofounder and director of the Japan Technology Management Program Lean Product Development Certificate programs. service. using such tools and quality improvement methods as just. the end result of applying TPS to all these aspects of a business. flexibility was key to About the Author Jeffrey K. forcing it to make a variety of vehicles on the same assembly line. and better utilization of the company’s achievement ultimately emerges from its equipment and space ensue. PhD. and to step of the production process. through generations of consistent leadership. or activity into something the customer wants.S. 21. In this manner. is professor of Industrial and Operations Engineering at the University of Michigan. or service environments specific tools and methods for becoming the best in their industries on cost. a lean enterprise/supply chain management consulting firm. the Toyota goods. which contained a special mechanism for automatically stopping the loom whenever a thread broke. jidoka. to build supplier relationships. please visit: www. “because the only thing that adds value in any type of process—be it manufacturing. to 1950s) to eliminate wasted time and material from every devise strategy. PART I: USING OPERATIONAL EXCELLENCE AS A STRATEGIC WEAPON Liker believes that Toyota’s consistent success is a direct result of its turning operational excellence into a strategic weapon. to invent a sophisticated and highly successful automated wooden loom. It was a capability that evolved Page 2 Business Book Review™ Vol. and other leading publications. Liker.” Production System [TPS]). In the 1890s. 12 • Copyright © 2004 Business Book Review. and affordable cost. defining the value stream. Sloan Management Review.’ ‘pulling’ from the customer back. has written on Toyota for The Harvard Business Review.com This is why TPS begins with the customer. because Toyota’s market was small. and service. response. better customer an understanding of people and what motivates them. quality. who was the editor of Becoming Lean: Experiences of U.” TPS.” A lean enterprise is. Liker managers in blue-collar. Liker. a principal of Optiprise. as cheaply as possible. Thus. Dr. making it ‘flow.
This creates backwards pull concerns to the long-term good of the company and taking to the beginning of the manufacturing cycle. Today and Tomorrow. 21. which in a pull system. Sakichi sent son Kiichiro to England to sell the patent rights for the popular “mistake-proof” loom. was that the company did not always practice what it preached. In 1950. helping to a business system.” product onto the next stage of production. manufacturing. flexible enough to change. Business Book Review™ Vol. the assignment of improving Toyota’s manufacturing process so that it equaled Ford’s productivity. in the organization. Liker into the broader system. Edwards Deming. when rampant inflation threatened the this means that the first step in a process does not replenish company. like this kind of waste. jidoka means “mistake proofing. then. who taught that. World War II. Eiji gave plant manager. that the crisis was beyond anyone’s control. this personal sacrifice help quell worker dissatisfaction.” In this manner. Nonetheless. learned by doing and added his own innovations to material flow to develop an efficient system of one-piece his father’s philosophy and management approach. while Sakichi contributed the jidoka pillar to application of the principles of jidoka and one-piece flow. He also played a the subsequent process says” (atokotei wa o-kyakusama). JIT is responsibility for any problems. TPS. Taiichi Ohno. most importantly. he gave Kiichiro the task of building the Toyota Motor Corporation. understood the value of process is the customer” principle.” or building in quality as material is produced.The Toyota Way Jeffrey K. In 1929. It also refers to designing operations and equipment so that workers are not tied to machines and are free to perform value-added work. chairman. in became Toyota’s president and. JIT does not work. Kiichiro. Not only did down to a small amount of “safety stock. On the shop floor.” a leader that left the greatest imprint on Toyota. product development and. For after inspired by American supermarkets. [pushing] that will benefit society. Thus. it was his actions as which he combined with the concept of the “pull system. leaders who shaped sales. but it could use Ford’s idea of continuous Sakichi. according to customer especially influenced by the U. So Ohno began by benchmarking the competition and studying Henry Ford’s book. he originated the “the next learned the spirit of innovation. Essentially. one of the two pillars of TPS. Like Sakichi and internal customer requirements is the task of everyone and Kiichiro before him. 12 • Copyright © 2004 Business Book Review. this did not mean competing head-on with Ford. however. who eventually quality pioneer. dependent upon kanban. The objective was not to increase the family fortune. supermarket system of demand. signaling the previous step when extant in the company today) of thinking beyond individual parts need to be replenished. which preached the importance of creating continuous material flow throughout the manufacturing process.S. but to move the company into a future technology (automobiles) and to give his son his opportunity to contribute to the world. standardizing processes. jidoka (automation with a human touch).” --Sachichi Toyoda Toyota did not have the luxury of creating Despite his formal engineering education. With the 100. for it used “wasteful batch production methods that built up “Everyone should tackle some great project at least once in huge banks of work-in-process inventory their life. and eliminating waste. TPS. and had the vision of creating a translates into “the preceding process must always do what special company with a long-term future. LLC • All Rights Reserved Page 3 . it every step of every process has the equivalent of a built in also laid the foundation for Toyota’s philosophy (one still “gas gauge” (kanban). replacing products on the shelves as customers purchased Ohno turned to Toyota’s shop floor for a “hands-on” them. meeting and exceeding both external build the company into a global powerhouse. W. key role in selecting and empowering Toyota’s subsequent otherwise. Kiichiro resigned as president—despite the fact parts until the second step uses up its supply from step one. … should make an effort to complete something throughout the value chain. He was flow. Kiichiro contributed JIT. What Ohno saw.000 English pounds received from the sale. contributing to society. No. One of the family leaders who shaped the company Toyota also assimilated the teachings of American after Kiichiro was cousin Eiji Toyoda. it meant improving Toyota’s manufacturing within the protected confines of the Japanese market. he learned to get his hands dirty. Still. Thus. Thus.
though there might be a significant contributing to the improvement of the system and of improvement for an individual process. which Ohno and (WIP). causing longer lead times. Liker Deming also advocated the systematic Plan-Doopportunities for reducing waste by getting rid of. The traditional the culture behind TPS. non-value-added steps. and Roos (The Machine That 6. transportation and storage costs. No. but was a new paradigm in and product design. unused employee creativity (i. or Check-Act (PDCA) Cycle approach to problem solving reducing. many of the tools of TPS and PART II: FOURTEEN PRINCIPLES—THE CULTURE principles of the Toyota Way derive from the focused BEHIND TPS behavior of eliminating non-value-added waste. or muda. such as improving uptime. tool. costs are reduced even more. the real work of implementing local efficiencies. Without a lean improvement demands employee involvement. open discussion and a group consensus before any decision 2. Still. propelling a company beyond the mass production system. and interpreting what tion system. leads to overstaffing and increased storage and/or proposal making down to the workers and requires and transportation costs. overproduction. skills. TPS on a daily basis. losing time. and on the overall value stream. scrap.” improvements. his team created. … This same process has been played out time is happening in a production process and again throughout the history of Toyota. etc. resolving Business Book Review™ Vol. late that when companies focus on quality rather than solely supplier deliveries. even though it has all the tools and approach to process improvement focuses on identifying techniques of TPS in place. in turn.e. manufacturing worldwide discovered for. while improving safety and morale. can be implemented. and long on cost. to which Liker adds an eighth (all can be no matter how small. overprocessing or incorrect processing due to poor tool in one market and culture. WIP. the power of TPS 5. Moreover. communicating. such as walking and/or looking Changed the World). or using automated equipment to replace the the principles of the Toyota Way so that workers are human being. 21. supports. making a lean has just begun. Toyota identifies seven major types of non-valueThis is the process of making incremental improvements. defects.The Toyota Way Jeffrey K. which generates excess inventory. Liker contends that if a company does not understand in business or manufacturing processes. adding muda. information or eliminating all waste that adds cost without adding value. waiting for the next step. defects that result in repair. and step of a process [so as to get the] best quality and lowest 8. [Ohno] solved problem after problem and evolved a new producunderstanding. replacement way of “shortening lead time by eliminating waste in each production. Jones. and lean manufacturing remained mostly unknown outside or finished goods.” and. unnecessary transport or conveyance of work in progress This new manufacturing system. equipment downtime. It service): is a total philosophy that strives for perfection and sustains 1. for it is people who bring initiative. or stacking parts or tools. The Toyota Way encourages. the first question in TPS is always or listening to employees). 3. through setup times). and delay world was overtaken by the quality movement and learned (excess inventory also hides production imbalances. as a result. “lean production”—what the authors identified as Toyota’s 7. part. “Out of the rubble of WWII … ‘with a creative spirit and courage’ It was a new way of seeing. rework. the work of Womack.. manufacturing or service delivery. TPS is about applying cycle faster. cost. reaching for. “What does the internal and external customer want from this process?” Thus. unnecessary movement. there is little impact themselves. in that it pushes the decision making which. and learning opportunities by not engaging As Liker notes. and inspection. did not just pertain to one company 4. that is a cornerstone of continuous improvement (kaizen). ideas. LLC • All Rights Reserved Page 4 . most companies are unable to see the huge the system to life by working. Essentially. excess inventory in the form of excess raw material. and achieving the lean goal of applied to any process in manufacturing. of Toyota and its affiliated suppliers until the business damaged goods. obsolescence. And. 12 • Copyright © 2004 Business Book Review.
12 • Copyright © 2004 Business Book Review. and in the amount they want. Principle 14: Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen). it is a culture even more than a set of efficiency and improvement techniques. improves morale. Principle 6: Standardized tasks are the foundation for continuous improvement and employee empowerment. LLC • All Rights Reserved Page 5 issues. Liker Continuously Solving Root Problems Drives Organizational Learning Principle 12: Go and see for yourself to thoroughly understand the situation (genchi genbutsu). Throughout the company. Principle 4: Level out the workload (heijunka)—work like the tortoise. Generating value for the customer. Principle 7: Use visual control so no problems are hidden. every person has a philosophical sense of purpose that supersedes any shortterm decision making. whether of materials that serves your people and processes. … When looked at more broadly. when they want it. 21. the parts contribute to the whole. respect. live the philosophy. to trust in their own abilities. … It immediately fill the order with components that is a sophisticated system of production in which all of flow immediately to a plant and are assembled. society. It is an approach that builds in quality. or of information. and every function is evaluated in terms of its ability to achieve this objective. exposes any inefficiencies or defects that demand and Partners immediate attention. creates work. this triggers the process of obtaining the raw materials needed for that specific order. When a customer places an order. and align the entire organization toward a common purpose that is bigger than making money. Thus. motivating everyone concerned to fix Principle 9: Grow leaders who thoroughly understand the the problem. and the economy is the starting point. Long-Term Philosophy Principle 1: Base management decisions on a long-term philosophy. thoroughly considering all options: implement decisions rapidly (nemawashi). It is not just a set of lean tools. he offers 14 principles that constitute the Toyota Way and form the basis of the culture behind TPS. not the hare. frees up floor Principle 10: Develop exceptional people and teams who space. and reduces cost follow the company’s philosophy. Toyota strives to cut back to zero the amount of time that any work project is sitting idle. results in higher productivity. improves safety. No. grow. to act with self-reliance. Based on the author’s 20 years of studying Toyota. For ease of understanding. individuals strive to be responsible. real flexibility. Principle 5: Build a culture of stopping to fix problems. which minimizes Business Book Review™ Vol. and to maintain and improve the skills that enable them to produce added value. and teamwork) explained in Toyota’s own internal Toyota Way training document. TPS is about applying the principles of the The completed order then flows immediately to the customer (the entire process is designed to Toyota Way. he divides these principles into the four categories—Philosophy. Process. These materials then flow immediately to supplier plants that “TPS is not a toolkit. rather than a few weeks). improve. and all work. . This practice of letting consumption initiate material replenishment is the basic principle of JIT. and growing together. Principle 8: Use only reliable. Principle 3: Use “pull” systems to avoid overproduction. of inventory. The Right Process Will Produce the Right Results Principle 2: Create continuous process flow to bring problems to the surface. People/Partners. thoroughly tested technology Creating this kind of one-piece flow. and Problem Solving—that correlate to the four high-level principles (genchi genbutsu. Principle 13: Make decisions slowly by consensus.The Toyota Way Jeffrey K. Principle 11: Respect your extended network of partners Toyota provides its downline customers with what they and suppliers by challenging them and helping them want. Each person understands his or her place in the history of the company and works to bring the organization to the next level. and teach it to others. Thus. to get quality right the first time. even at the expense of short-term financial goals. and using small lots and closely situated Add Value to the Organization by Developing Your People processes. kaizen.” take a few hours or days.
countermeasures. In this way (by standardizing today’s best of working on batches that is typical at most companies. As the equation for making lean successful. Nonetheless. but Every team member has the responsibility to stop the line to support a smooth flow and to help make problems every time something is out of standard. for cleaning it up. quality is visible. to get a root-cause analysis and to discover the proper based on what the customer actually takes away. No. clean up. because to the actual flow of customer orders. a form of inspection.e. there are some basic of what is not needed). processes and the plant’s suppliers. Thus. visual control refers to the design of JIT is empowered to make it happen. the flexibility to make what customers want when they In Japan there are “5S programs” for eliminating want it. and (5) sustain—impose self-discipline to maintain a Moreover. devices are built into machines to to maintain and monitor sort. helps meet deadlines. defects. It control system (which includes such lean production tools entails: going and seeing. reduces the risk of unsold goods. using 5S to maintain a clean and shiny environment. to ensure fast and proper execution technology. practices). analyzing the situation. information of all kinds. the company gives them stabilized workplace as an ongoing process of continuous the power to push buttons. Its well-developed visual members. or pull cords—called andon improvement.” takes the total volume of orders in a period and levels them out so the same amount and mix are made individual expression to emerge from those actually doing each day in a predictable sequence. not a value-added work. in the case of humans. (3) shine—as be garnered. the organization uses to eliminate any overburden to people and equipment stable. and asking defects and mistakes. Not only must the first three principles. it can capture the accumulated learning about Toyota levels out both volume and product mix of all a process up to a point in time. and regular output of its (mura). you simply cannot establish standardized work under such cirwhich can swing up and down wildly. and every individual At Toyota. straighten.The Toyota Way Jeffrey K. (2) straighten—make a place for requirements to meet before any of these benefits can everything and put everything in its place. the responsibility of every individual. “If production levels—the output—varies from day to day. using as kanban and andon) increases productivity. as an alternative to the stop/start approach processes. in order small amounts of each product and frequently restocking. and injuries in labor and machines. This allows creative and manufacturing and service processes. Thus. the Toyota Way is not about cords—which can bring an entire assembly line to a halt. It is also necessary a foundation for flow and pull. there Instead of building products according is no sense in trying to apply those other systems. spreading out different the work so that they can improve upon the standard and product types and leveling volume. quite the contrary. quality control is simple and involves team of operations and processes. Toyota is responsive to day-by-day shifts in customer At Toyota. standardized work hand with heijunka. detect abnormalities and automatically stop an operation. Eliminating waste is just one-third of is the basis for empowering workers and innovation. balances use of wastes that contribute to errors. warns Liker.. Liker work in process and warehousing of inventory by stocking “Why?” five times when a problem is uncovered. systems to track wasteful inventory. LLC • All Rights Reserved Page 6 . Because Toyota believes that quality failure. 21. Rather than enforcing rigid standards Pulling a system to avoid overproduction goes hand in that make jobs routine and degrading. facilitates Business Book Review™ Vol. Thus. and smoothes demand on upstream the workplace (i. principles five. (4) standardize—develop systems and procedures should be built in. so as to expose abnormal be in place. and shine. 12 • Copyright © 2004 Business Book Review. integrated into the process of Because building in quality is a principle. six. standardized work is not intended to be a demand and does not rely on computer schedules and coercive management tool imposed on a hapless workforce. reduces one-piece flow and andon to surface problems. rather than a lot of complex statistical tools. repeatable methods everywhere to maintain the (muri) that comes as a result of uneven production schedules predictability. it cumstances. These five S’s are: (1) sort—separate items and dispose Nonetheless. and eight must conditions that could hurt quality or cause machine also be adhered to. This provides Toyota hand this learning off to the next person. making it visual). regular timing. seven.
Toyota encourages its employees to work diligently. If they And always supplement the system information with ‘genchi gendemonstrate this.’ ” orders. and then automate it. it challenges its suppliers to develop by setting a leaders have been found within the company. Leaders must demonstrate this ability and understand manufacturing. Once inside. Try to high performance standards for build into the system as much flexibility as you possibly can. product development. with a broad cross-section and adopted into the Toyota family. Then developing exceptional people and teams who follow the it will implement in a small way with a pilot project and Business Book Review™ Vol. Ohno has stated. must support the culture continuously so that it can create employees and managers must also “deeply” understand the the environment for a learning organization and lay the processes of flow and be able to provide critical evaluations foundation for genuine long-term success. 21. As conflict with the principles of valuing people over systems. Just as it challenges its employees to behind the scenes. Leaders must or public affairs. New suppliers must prove their sincerity and commitment to Toyota’s “First work out the manual process. at the right series of aggressive targets and challenges.S.The Toyota Way Jeffrey K. nor do they rely on reports. go most distinguishes the Toyota Way from other management “shopping” for new CEOs and presidents to take them approaches. Liker notes that it is a global benchmark on how to use value-added technology that supports the appropriate processes and people. Although Toyota does not lead the industry in acquiring technology. is not an easy mark. they get larger butsu. which means nothing for granted. tactile. go see. and auditory orientations of humans. and eliminating waste. This is not a matter of adopting simple solutions or applying motivational theories as an afterthought. Toyota will by building a system that conforms to the principle of spend nine to ten months planning a yearlong project. cost. At Toyota. time. it seeks a balance and takes a conservative approach to using information technology to maintain its values. and the building of individual work groups. it is used to support continuous alien to the spirit of the Toyota Production System. they and see for themselves. according to Toyota Way standards. Toyota also follows a principle of finding solid partners and growing together with them so both can benefit in the long term. it is about making the training of exceptional people. how work gets done at the shop-floor level. whether they are in day. new technology is introduced only after it has been . Toyota Throughout Toyota’s history (with the Toyoda family. Toyota’s “respect-for-humanity” social framework and its culture of continuous improvement fully support the system in which one-piece flow drives positive problem-solving behaviors and motivates people to improve. “Achievement of business performance using consensus decision making. improves safety. companies that at every crisis. Tables and numbers may measure results. but go they must understand and live the philosophy. sales. by the parent company through bullying suppliers is totally If it meets these criteria. Rather. to shape the next step in the company’s evolution. observing is not enough. No. 12 • Copyright © 2004 Business Book Review. because the Toyota Way recognizes that visual management complements the visual. thoroughly evaluated and tested. Liker has found that genchi genbutsu is the factor that Unlike typical U. former senior vice president do their jobs perfectly. people trained in the Toyota Way take teach their subordinates the Toyota Way. to According to Alex Warren. the backbone of the company’s management approach—one that integrates the social system with the technical system. lowers costs. And. save a few percentage points in cost. key improve.’ or ‘go look. and analyses. … quality. they are of people. Liker company’s philosophy. LLC • All Rights Reserved Page 7 communication. but creatively uses the best available means to create true visual control. in new directions. and delivery. Nonetheless. to ensure it adds value to the process and does not not kicked out except for the most egregious behavior. Toyota develops its leaders to live and but they do not reveal the details of the actual process thoroughly understand its genchi genbutsu culture day by being followed every day. and generally gives workers more control over their environment. Thus. It does not avoid information technology.” It is flow in the production process and help employees perform unthinkable for the company to switch suppliers simply to better. are taught the Toyota Way. carefully selecting and grooming). And. Moreover. distribution. and to strive for daily improvement of Toyota’s manufacturing plant in Kentucky.
“A prerequisite for change is for top management to have an predecessors do the same for understanding and commitment to leveraging the Toyota Way to successors. cultural change. the Toyota Way is far more than tools and the executive team must be committed to a long-term and techniques—it is designed to push everyone to think vision of adding value to customers and society in general. using a PDCA cycle. Moreover. The company is a true learning sticking with it. starting with a relentless companywide process in which superiors a philosophy that starts with the CEO. procedure: (1) Identify who the customer is for the each For Toyota. Then. Learn by doing first and training second. and grow through a process in which mistakes are used as and they must be committed to developing and involving opportunities for learning. and learns—that is the most difficult for one sheet of paper. and then spend the rest of be made more manageable via the following five-step the year correcting all the problems they encounter. Then. however. making lies careful attention to every detail including: (1) (3) Map the flow to determine value added and non-value finding out what is really going on (genchi genbutsu is added. (5) Start implementation and alternative solutions and developing a detailed rationale learn by implementing.” Thus. and improving it. The top executive motivate and train subordinates. Use value Business Book Review™ Vol. Although Liker acknowledges the lean as a system and providing a “go see” model. (3) broadly considering future-state value stream map. The Toyota Way model organization. greatest accomplishment. and The author notes. Liker be fully implemented by the end of the year. with virtually difficulty of understanding the workflow in technical and no remaining problems. the team. preferably using one side of solves problems. before implementation. Underlying the (2) Separate the repetitive processes from those that are entire process of planning. that it is the broader (5) employing very efficient communication vehicles to philosophy—the way Toyota leads people and partners. Liker offers the some general tactical PART III: APPLYING TPS AND THE TOYOTA WAY tips for transitioning into this kind of lean enterprise: Start As manufacturing companies worldwide apply TPS on with changes in the technical system.’ ” all levels share knowledge. how a decision is arrived at is just as process as well as the added value the customer wants. This does not mean that the problem. is Toyota’s Toyota’s example is the importance of developing a system. (2) understanding underlying principles of the Toyota Way to these processes. it can indeed planning. the new must develop successors with the company’s DNA (as knowledge is transferred to the right people so as to make opposed to installing a new cast of characters with each it part of the company’s repertoire of behavior. The toughest facts that could lead to many problems down the road. expand for preferred solutions. (4) building consensus within implementation to the less repetitive processes. and standardizing the approach. This involves: perceiving the employees and partners. providing effective countermeasures. evaluating same people should run a company forever. many ask how the process can be applied to their technical Start with value stream pilots as a means of demonstrating and service operations. As he has emphasized. follow quickly with the shop floor and experience extraordinary improvements. intentionally. No. 21. clarifying it. it and most basic challenge is “how to create an aligned gets support from all parties before implementation begins. and decision one-of-a-kind and apply TPS to the repetitive processes. LLC • All Rights Reserved Page 8 . the essential thing to take from Liker believes that this last point. crisis and/or frequent buyout). organization of individuals who each have the DNA of the and a great deal of learning is achieved up front before organization and are continually learning together to add anything is planned or implemented. only that they the results. using a causes (asking “Why?” five times). This five-step approach helps to uncover organizations to adapt. important as the quality of the decision. learning. This is in direct contrast to most service organizations in the same way it is possible to map American companies that tend to spend about three months the transformation of a physical product. 12 • Copyright © 2004 Business Book Review.The Toyota Way Jeffrey K. In the meantime. there must be continuity problem. value to the customer. determining the root cause of the in top leadership philosophy. complete the first four items. including employees and outside partners. and team members at become a ‘lean learning organization. problem solving. for it views continuous improvement as was built from the ground up. (4) Think creatively about applying the broad an important part of this). and sustain. develop.
recommendations for further reading. the contributions of The Machine That Changed the World (Womack. 21. not in parts. And. Thus. fits and starts. as Liker points out. Even if your company has already “dabbled” in TPS (especially. 352 Pages in Book Liker notes that if you follow only a select few of the Toyota principles.” And. Suffice it to say. 1991) and Lean Thinking (Womack and Jones. of course. consistent profitability. most attempts to emulate and implement lean production have been fairly superficial. a chapter-by-chapter bibliography. the second explained how “to make value flow smoothly at the pull of the customer in pursuit of perfection. many consider the company to be “boring. the first business book in English to provide a blueprint of Toyota’s management philosophy for general business readers. thus. Liker’s keen sense of the subtleties of TPS intrepidly challenges conventional understanding and transforms it with eloquent simplicity.” U. steadily growing sales. president of Toyota Motor Company. Organize around value streams. are not the stuff of breaking news. 12 • Copyright © 2004 Business Book Review. says that what is unique about Toyota’s remarkable success is putting all the elements of the Toyota Way together as a system and practicing this system daily and consistently. there are hundreds of books out there explaining. Remarks Everyone in the auto industry is familiar with Toyota’s dramatic business success and. LLC • All Rights Reserved . explaining how to create a Toyota-style culture of quality.” giving businesses in diverse industries some very practical and effective ideas that they can use to develop their own unique approach to TPS. dispelling the misconceptions that TPS is merely a collection of tools that lead to more efficient operations. Fujio Cho. and despite the huge influence of the lean movement. after all. the subject has not yet been fully exhausted. without an extensive and time consuming exploration of the literature. The two most noted among this treasure trove are. there is no way of ascertaining the validity of this claim. year after year. Make the shift to lean mandatory. your greatest value lies in practicing a little genchi genbutsu from the beginning and discovering and understanding as much as possible about Page 9 Business Book Review™ Vol. The Toyota Way is an approach of such breadth.” Use kaizen workshops to teach and make rapid changes.” The Toyota Way is. Jones. but do not understand what makes them work together in a system.S. Reading Suggestions Reading Time: 28-30 Hours.” For. with less than stellar results over the long term. and learning that takes quantum leaps beyond any superficial focus on tools and techniques. The first introduced the world to the tools and techniques of lean manufacturing by extracting its principles from their initial Japanese application and examining them in detail. lean. Realign metrics with a value stream perspective. consumers are demonstrably aware of the company’s world-renowned quality. Roos. Build on your company’s own roots to develop its own “Toyota Way. fits and starts. the “result will be short-term jumps on performance measures that are not sustainable. Of course. however (according to Liker). and both stand as excellent resources on the subject. analyzing. huge cash reserves. 1996). but that truly doesn’t matter. and advocating lean—providing details and insight into the tools and methods of TPS. use experts for teaching and getting quick results. Be opportunistic in identifying opportunities for making big financial impacts. and a subject index are provided. And. there’s no point in reading this book in bits and pieces. In fact. depth. of course. Toyota has done so well that. if you’ve merely dabbled).The Toyota Way Jeffrey K. But. This integration is precisely what The Toyota Way examines. as far as we’re concerned. despite this reputation as the best manufacturer in the world. Liker stream mapping to develop future state visions and to help “learn to see. * * * End notes by chapter. No. and top quality. “Dabbling at one level—the ‘Process’ level. companies have embraced lean tools. operational efficiency (combined with constant innovation—not an easy complement to pull off). and significance to the world of business that it has yet to be fully understood. He takes the reader deeply and comprehensively into the “heart and intelligence” of Toyota’s “way.” Hire or develop lean leaders and create a succession system. if implementation doesn’t work in bits and pieces.
Liker is a longtime fan of the Toyota Way and brings the incisive energy of a perennial admirer to his vigorous. 21. Thoroughly Tested Technology That Serves Your People and Processes Section 3: The Right Process Will Produce the Right Results Chapter 15: Principle 9—Grow Leaders Who Thoroughly Understand the Work. New Fuel. Borrowing from the Toyota Way Business Book Review™ Vol. Implement Decisions Rapidly Chapter 20: Principle 14—Become a Learning Organization Through Relentless Reflection (Hansei) and Continuous Improvement (Kaizen) PART 3: APPLYING THE TOYOTA WAY IN YOUR ORGANIZATION Chapter 21: Using the Toyota Way to Transform Technical and Service Organizations Chapter 22: Build Your Own Lean Learning Enterprise. Live the Philosophy. Even at the Expense of Short-Term Financial Goals Section 2: The Right Process Will Produce the Right Results Chapter 8: Principle 2—Create Continuous Process Flow to Bring Problems to the Surface Chapter 9: Principle 3—Use “Pull” Systems to Avoid Overproduction Chapter 10: Principle 4—Level Out the Workload (Heijunka) Chapter 11: Principle 5—Build a Culture of Stopping to Fix Problems. take time to reflect. The book is an easy read. Our estimated reading time of 28 to 30 hours might be an overestimate. and accessible discussion. but you should not expect to just zip through. We suspect that you will want to take notes. and appropriately applying that understanding to your particular situation. Liker the purpose of The Toyota Way. CONTENTS PART 1: THE WORLD-CLASS POWER OF THE TOYOTA WAY Chapter 1: The Toyota Way—Using Operational Excellence as a Strategic Weapon Chapter 2: How Toyota Became the World’s Best Manufacturer— the Story of the Toyoda Family and the Toyota Production System Chapter 3: The Heart of the Toyota Production System— Eliminating Waste Chapter 4: The 14 Principles of the Toyota Way—an Executive Summary of the Culture Behind TPS Chapter 5: The Toyota Way in Action—the “No Compromises” Development of Lexus Chapter 6: The Toyota Way in Action—New Century. 12 • Copyright © 2004 Business Book Review. In any event. Thoroughly Considering All Options. the centrality of people in that purpose. you should perhaps plan ahead. and Teach It to Others Chapter 16: Principle 10—Develop Exceptional People and Teams Who Follow Your Company’s Philosophy Chapter 17: Principle 11—Respect Your Extended Network of Partners and Suppliers by Challenging Them and Helping Them Improve Section 4: Continuously Solving Root Problems Drives Organizational Learning Chapter 18: Principle 12—Go and See for Yourself to Thoroughly Understand the Situation (Genchi Genbutsu) Chapter 19: Principle 13—Make Decisions Slowly by Consensus. and perhaps even reread much of the material. LLC • All Rights Reserved Page 10 . No. but we want to impress upon you the importance of taking your time. and each chapter is mercifully short and to the point. and prepare to read no more than two or three chapters each sitting. New Design Process—Prius PART 2: THE BUSINESS PRINCIPLES OF THE TOYOTA WAY Section 1: Long-Term Philosophy Chapter 7: Principle 1—Base Your Management Decisions on a Long-Term Philosophy. schedule a block of time each day. articulate. to Get Quality Right the First Time Chapter 12: Principle 6—Standardized Tasks Are the Foundation for Continuous Improvement and Employee Empowerment Chapter 13: Principle 7—Use Visual Control So No Problems Are Hidden Chapter 14: Principle 8—Use Only Reliable.The Toyota Way Jeffrey K.
and in that selection process. No. Liker A Note to Our Readers We at BBR encourage our readers to purchase the business books we review. LLC • All Rights Reserved Page 11 . strive to help you make informed book-purchasing decisions.com Business Book Review. 21.businessbookreview. This book is available at bookstores and online booksellers. visit our Web site. ISSN 0741-8132 Business Book Review™ Vol. to subscribe to BBR. LLC 1549 Clairmont Road. or to provide us feedback. GA 30033 Copyright © 2004 Business Book Review.The Toyota Way Jeffrey K. LLC For more information about BBR. LLC • All Rights Reserved No copies may be made of this review unless appropriate license has been granted. 12 • Copyright © 2004 Business Book Review. as we recommend only those books that are worth your time to read in their entirety. www. We apply stringent criteria in selecting only the best business books. Suite 203 Decatur. Business Book Review™ is a service of Business Book Review. BBR Reviews are intended as a service to busy professionals.
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