The Toyota Way

 The Toyota Way

◦ 2 Pillars:
 Continuous Improvement
 Respect for People

 The Toyota Way in Sales and Marketing

5 Connections:
 Purpose

 Principles

 People

 Practices

 Process
Toyota Way

TWSM

Customer
Section One:
The Toyota Way
“Open the Window – It’s a Big World Out There!”
- Sakichi Toyoda
Toyota Today

No. 1 in Sales Globally

9.98M Units Sold in 2013

Toyota Today

12 Largest Company in
th

the World (2013)

Toyota Today
No. 8 Most Valuable Brand (2104)

No. 1 Most Valuable Auto Brand (2104)

Toyota Today
Toyota Today
64 plants, 7,000++ dealerships, 338,875 team members (3/2014)
The Toyota Way
Objective
The objective of this presentation is to explain “The
Toyota Way,” Toyota’s fundamental DNA which forms
unique managerial values and business methods.

Definition
“The Toyota Way is a standard, ideal, or guiding
beacon for the global network of manufacturers,
distributors and dealers.”
The Toyota Way
Kaizen Spirit

Developing People & Reducing Muda

 Kiichiro Toyoda often encouraged staff to
make suggestions.
 “Let’s give it a try” and “Don’t be afraid to

make mistakes”
 Striving for continuous improvement
(Kaizen) and reduction of waste (Muda)
remains as core ethos of the company today

Kaizen: continuous Improvement


Knowledge Work
Waiting for meetings to
start. Information,
paperwork and approvals
Walking to deliver
paperwork, poor
ergonomics, chasing
information.
Work not meeting
requirements. Missing
information. Rework
Paper based data vs.
electronic transfers. Routing
of unnecessary approvals /
processing.
Unnecessary steps. Too
many handoffs, lack of
SOPs.
Excessive backlog of work
to be processed. Too much
paper to be handled,
processed or filed.
Too many reports, reviews,
approvals. Batching
paperwork.
Manufacturing
Waiting for machines,
people or process to cycle,
waiting for materials and
tools.
Repetitive/unnecessary
movement caused by poor
ergonomic design.
Scrap, rework, lost capacity
due to mistakes, inaccurate
SOPs.
Forklifts, conveyors, long
travel distances, unplanned
premium freight, large
batch containers.
Incapable machines and
processes. Equipment with
unbalanced flow.
Making what we can
instead of what customers
need. High obsolesence
and write-offs.
Running machines and
making parts to keep
machines and people busy.
The Toyota Way
The Toyota Way

The Toyota Way

Continuous Respect for

Improvement People

Challenge Kaizen Genchi Genbutsu Respect Teamwork

The Toyota Way
Key Factors of the Toyota Way
1.
Challenge
Realize our dreams, use long-term vision to meet challenges
with courage & creativity

◦ Create value through manufacturing & delivery of products

and service

◦ Maintain a challenging spirit with team members

◦ Have long-range perspective

◦ Make good decisions through consideration & discussion.

How do you apply Challenge?
 Produce output with higher productivity & efficiency

 Maintains and improves skill

 Positively accommodate changing situations with

flexibility

 Focus on long term results

 Takes action after study and testing

 Makes decisions with awareness of risks &

contingencies

 Establishes priorities for optimum results

Historical Reference

The Three C’s:

Creativity
Challenge
Courage

Shoichiro Toyoda
The Toyota Way
Key Factors of the Toyota Way
2.
Kaizen

We continuously improve our business operations

always driving for innovation.

◦ Adopt a Kaizen mindset & innovative thinking

◦ Build lean systems & structures

◦ Promote organizational learning

* Kaizen means continuous improvement

How do you apply Kaizen?
 Actively and continuously engage in creative thinking

 Shares common understanding by using visual

controls

 Eliminates all kind of wastes

 Implements cost controls and cost reduction efforts

 Adopts successful processes as standard

Historical Reference

“I have experienced many twists and

turns in my life; many battles hard
fought and skirmishes half won. For
the most part I have seen more
failures than successes!”

Sakichi Toyoda
The Toyota Way
Key Factors of the Toyota Way
3. Genchi
Genbutsu
Go to the source to find facts to make correct
decisions, build consensus to achieve goals.
Gather facts (data) then through problem
solving & consensus achieve timely
improvements:
◦ Genchi Genbutsu ( go to the place & see)
◦ Effective consensus building
◦ Commitment to achievement
How do you apply Genchi Genbutsu?
 Establish goals through consensus building

 Finds root causes by means of first hand investigation

 Takes action decisively to produce results and meet

deadlines

 Works persistently to eliminate obstacles

 Follows up progress with the PDCA method

Historical Reference

“There is no fixed mold for making

decisions, the key is to study the
problem thoroughly and decide in
what is believed is best.”

Eiji Toyoda
The Toyota Way
Key Factors of the Toyota Way
4.
Respect
We respect others. By understanding & respecting
each other we take responsibility to build mutual
trust:

◦ Respect for all shareholders & colleagues

◦ Mutual Trust and Mutual Responsibility

◦ Sincere, Effective, Communication.

How do you apply Respect?
 Fulfills one’s duties faithfully

 Takes responsibility for improving the company and

contributes to its results and growth

 Provides ever greater satisfaction of Customers

 Accepts responsibility for one’s action

 Demonstrate respect for other cultures and for people

with diverse customs and background

 Uses positive and non-offensive language

Historical Reference
The Toyota Way
Key Factors of the Toyota Way
5.
Teamwork
We stimulate personal & professional growth,
share development opportunities to maximize
individual and team performance:

◦ Commitment to Education & Personal Development

◦ Respect for the individual, realizing consolidated

power as a team.
How do you apply Teamwork?
 Trusts each individual’s creative power

 Has motivation to learn for own development

 Provides opportunities for personal growth and

creates work that leads to a sense of fulfillment

 Incorporates ideas of others into the planning process

 Shares knowledge with one another

 Monitors individual and team performance

 Brings TMs together through coordination and

collaboration
Historical Reference

“People are the most important asset

of Toyota and the determinant of the
rise and fall of Toyota”

“Because people make

our automobiles, nothing
gets started until we
train and educate our
people”
Eiji Toyoda
The Toyota Way
Results of Applying Toyota Way
The Toyota Way has been successfully applied in
many dealerships. The Benefits are:
1) For Customer
◦ Cost reduction through reducing waste and
providing better vehicle quality and competitive
pricing for customers.
2) For Dealer
◦ Improved production & efficiency through kaizen
applied to daily operations
◦ Empowered employees who can identify problems
and apply kaizen actions immediately.

30
Toyota Way Today
• Crisis response must start by
building a strong culture long
before the crisis hits.
• Culture matters far more than
decisions made by top executives.
• Investing in people, even in the
depths of a recession, is the
surest path to long-term
profitability.
 Toyota Culture in Response to
the Crisis
Challenge “It was the culture that allowed the entire
company, from the shop floor to the purchasing
offices to the customer service center, to focus
immediately and actively on cutting costs while
protecting capability.”
“… projects were launched simultaneously,
almost instantaneously that made the
difference. That’s the spirit of challenge in
action.”
 Toyota Culture in Response to
the Crisis
Respect for People

“It is respect for people that drives Toyota’s

commitment to exhaust every possibility before
laying off team members. It’s respect for people
that drives Toyota’s willingness to put
extraordinary trust in hourly employees to find
and solve problems.”
 Toyota Culture in Response to
the Crisis
Respect for People “At the time I was very severely
criticized . People suggested
that I was trying to escape from
the problems in the U.S. or that
I was lying, which was
absolutely appalling. It was
very difficult for me to face.
But one thing that I decided
was I would never point fingers
at somebody else. I decided I
would never blame others.”
Akio Toyoda
 Toyota Culture in Response to
the Crisis
Genchi Genbutsu

“We managed to create a culture … where those who learned

the truth of the GEMBA were the most respected. In this
culture there is no such thing as manager or subordinate. Job
titles are unimportant. In the end, who sees wins; and winning
means being close to the objects, close to the GEMBA.”
 Toyota Culture in Response to
the Crisis
Kaizen

“At no point did the company panic and start making changes
without a thorough analysis of the problem and a search for
solutions that would improve the company’s operations. The
application of Kaizen mind is what led to the actions that
Toyota took.”
 Toyota Culture in Response to
the Crisis
Teamwork

“I want you to think for the entire company rather than

yourself alone. Coordinate with other divisions, and lead on,
no matter what, to concrete results.”

Eiji Toyoda
 Section Two:
The Toyota Way in
Sales and Marketing
 Respect for
People

Purpose
Continuous
Improvement

Practice Principles
Sales &
Marketing

Process People
Purpose
“Why should we know the Toyota Way?”
 Constant sales growth over the years by
matching sales operations to market needs.

 The Toyota Way as our common asset and

inheritance.
 Purpose

• Through cooperation, all

of us – the dealers, the Distributor
Dealer
(TMP)
distributors (TMP), and
TMC – practice the Toyota
Way in Sales and Toyota Way in
Marketing to continuously Sales and Marketing

improve and pursue “the

best method” in sales and
marketing. TMC
Principles
What are we aiming for?

Vision
We seek to become the most successful and respected
car company in each market around the world.

Mission
◦ Customer first / Lifetime customer
◦ Radar for all of Toyota
Principles
People
“Who needs to know the Toyota Way?”
All of us.
“People are the most
important asset of
Toyota and the
determinant of the rise
and fall of Toyota” – Eiji
Toyoda
People

 3C’s for Harmonious Growth: Communication,

Consideration, Cooperation

 3C’s for Innovation:

Creativity, Challenge, Courage

 Just-in-time
◦ Being fast and flexible in responding to customer requirements.
◦ Avoiding inefficiency of excess inventory.
 JIT Jumble
As a team, work together to unscramble the
JIT definitions on the worksheets.
Customers’ orders pull the products through the dealership The system pushes the products through the dealership

Small batches are made with reduced setup time Large batches are made due to high setup time

Emphasis is on small but continuous improvements “If it ain’t broke, don’t fix it” attitude

High turnover with minimum inventory level Low turnover due to high inventory level

Fewer number and they are integrated into the system Supplier’s are kept at arms length

Multi-skilled, flexible and work well in teams Specialized and with strict work rules

Empowerment of workers enables quick response Centralized at management level

Everyone’s responsibility Q.C. Inspector’s Job

Satisfied, loyal customers = Repeat purchasers Sporadic customers = One-time buyers

Process

“Where can we apply the Toyota Way

with regard to the customer?”
 Visit

Search Purchase
Customer
Expectations

Own Obtain
Practices

“How do we take advantage of our knowledge of the

customer’s buying process?”
 Practices
 Our sales operation is broken down into the five “targeted
processes” that match the steps of customers in
purchasing and owning.

 Action guidelines
 Concrete actions necessary for meeting customer
expectations.

 Measures and Tools

 Key performance Indicators; Operating guides,
manuals, supporting systems.
 Visit

Search Purchase
Customer
Expectations

Own Obtain
 Section Three:
Customer Satisfaction & Loyalty
and Creating Engaged Customers
and Engaged Team Members
How Competitive Environment Affect
Satisfaction-Loyalty Relationship
  Satisfaction
≠
Loyalty

 Toyota customers
=
Toyota advocates?
The Service-Profit Chain
(Taco Bell Story)
 Taco Bell Case Study
◦ Role of the customer
◦ Key factors for Taco Bell
◦ Parallels between The Toyota Way and Taco Bell
policies
◦ Challenges facing Toyota
The Service-Profit Chain

Profit
and
Growth

Customer
Satisfaction
and Loyalty
The Service-Profit Chain

Profit
Service
and
Value
Growth

Employee Customer
Satisfaction Satisfaction
and Loyalty and Loyalty
 Section Four:
The “Fish Principle”
“Fish Tales”
“Catch the energy – release the potential”

“We’re not dealing in fish. We’re dealing in service, in

people we want to serve to the best of our ability.”
“Be there, moment to moment, you have to work at it.”
“I realized I was serving people and making people happy –
I love serving people now…they leave in a better mood.”

“Acknowledge everyone. They are future shoppers. If they

aren’t buying now, they will later.”

“Choose where you are going to be when you get out of

bed”

“It’s a simple choice - be happy or don’t be happy.”

Our Challenge

 Make our customers advocates – put the customer

first through engagement

 Employee engagement is the foundation

 Bring the Toyota Way to life in your dealerships

 The continuous practice of “Kaizen”

Summary
Today we have looked at and gained an understanding of:

 The origins of Toyota and the TPS

 The pillars and principles of the Toyota Way, where they came from
and why they work

 The Toyota Way in Sales and Marketing and how you can benefit

 The importance of Employee Engagement

 How we can all benefit from the Toyota Way

Survey:
What is your current level of understanding of the
Toyota Way 2001 and Toyota Way in Sales and Marketing?
1) I fully understand the TW and TWSM and utilize them in my work

2) I somewhat understand the TW and TWSM and utilize some of the

concepts in my work

3) I have heard of the TW and TWSM, but am not sure if I utilize the
concepts in my work

4) I have heard of the TW and TWSM, but have no idea what they mean

5) I have never heard of the TW and TWSM

“Before you say you can’t do something, try it!”
– Sakichi Toyoda
Thank You!