The Toyota Way

Document Sample
The Toyota Way Powered By Docstoc
					                                 The Toyota Way
                                        by
                                  Jeffrey Liker

             14 Management Principles from the
               World’s Greatest Manufacturer

Tedd Snyder
Snyder Consulting & Associates
                                 MAQIN Lean and Six Sigma
tfsnyder@teddsnyder.com            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          Principles 12-14
            PROBLEMS
          Add value to the
           organization by        Principles 9-11
      developing your PEOPLE
          and PARTNERS
      The right PROCESS will      Principles 2-8
      produce the right results

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

 Have a sense of purpose that supercedes any short term
   decision making. Work, grow, align the organization toward a
   purpose greater than “making money.” Understand your place in
   the history of the company and work to bring the company to the
   next level.

 Generate value for the customer, society and the economy.
   Evaluate every function in the company in terms of its ability to
   achieve this.

 Be responsible. Strive to decide your own fate. Act with self
   reliance and trust in your own abilities. Accept responsibility for
   your conduct and maintain and improve the skills that enable
   you to produce added value.
Principle 2: Create continuous process flow to
            bring problems to the surface

 Redesign processes to achieve high value added, continuous
   flow.

 Create flow to move material and information fast as well as to
   link processes and people together so that problems surface
   right away.

 Make flow evident throughout your organizational culture.

 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%
Principle 3: Use “pull” systems to avoid
            overproduction
 Provide your downstream customers in the process with what
   they want, when they want it, and in the amount that they want.
     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.
       Just-in Time - an organized system of inventory buffers.
       Examples- filling your gas tank, office supplies.
       Kanban - sign, signboard, doorplate, poster, billboard,
        card…signal

 “Flow (one piece) where you can and pull where you must.”
    -   Rother and Shook in “Learning to See”

 Scheduling still happens, but keep it short (days vs months)
Principle 4: Level out workload (heijunka)

 Eliminating Muda is just one third of the equation for making
    lean successful. Eliminating Muri and eliminating Mura in
    production are just as important.
   Muda (waste)
      Transportation, Inventory,Movement Waiting,
        Overproduction, Overprocessing, Defects + Unused
        employee abilities
   Muri (overwork), Mura (inconsistency),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%
Principle 5: Build a culture of stopping to fix
      problems, to get quality right the first time
        Quality at the source
           Jidoka – autonomation
           Andon – signal for help
               Yellow, then red
               Team leader fix, figure, pull
               Segmented assembly line with buffer inventory
               “Freshman job” Takt = 57 Touch = 44.7
           Poke yoke – “get 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
    2.      Understand the situation
    3.      One piece flow or andon
    4.      Ask why 5 times
Principle 6: Standardized tasks are the
     foundation for continuous improvement
     and employee empowerment
 Standardized work is not the end result, the “one best way,” it is the
   beginning of improvement.

 Use stable, repeatable methods everywhere to maintain the
   predictability, timing, and regular output of your processes. (This also
   helps to manage them). It is the foundation of flow and pull.

 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. Allow creative and individual expression to
   improve upon the standard; then incorporate it into the new standard.
Principle 7: Use visual control so no problems
            are hidden
 Visual Control – The ability to see abnormalities at a glance.
       Example - Ask a coworker to see a specific document, item, or
        something on their computer or the company’s intranet.
 5S
       Sort
       Straighten
       Shine
       Standardize
       Sustain
       Example – email audits

 Process Control Boards (daily goals, takt rate, manpower, current
   status throughout the day)

 Reduce your reports to one piece of paper whenever possible.
       E.g. A3 (11x17) Reports (Storyboards) A4 (8 ½ x 11)next!
Principle 8: Use only reliable thoroughly
            tested technology that serves your
            people and processes
 Use technology to support people, not to replace people.

 Conduct actual tests before adopting new technology in
   business processes, manufacturing systems, or products.

 Reject technologies that conflict with your culture or that might
   disrupt stability, reliability, and predictability.

 Encourage your people to consider new technologies when
   looking into new approaches to work. Quickly implement a
   thoroughly considered technology if it has been proven in trials
   and it can improve the flow of your processes.
Principle 9: Grow leaders who thoroughly
             understand the work, live the
             philosophy, and teach it to others

 Grow leaders from within rather than buying them from outside.
  (This is an example of applying Heijunka)…or constancy of
  purpose.

 Leaders must be role models of the company’s philosophy and
  way of doing business.

 A good leader must understand the daily work in great detail so
  they can be the best teacher of your company’s philosophy.

 “Before we make cars (monozukuri), we make people (hito-
  zukuri).”
Principle 10: Develop exceptional people and teams
             who follow your company’s philosophy
 Create a strong, stable culture in which company values and
   beliefs are widely shared and lived out over a period of many
   years.
     Respect for Humanity system
     Uses both intrinsic and extrinsic approaches to motivation


 Train exceptional individuals and teams to work within the
   corporate philosophy to achieve exceptional results.
     Balance between teamwork and excellent individual work


 Use cross functional teams to improve quality and productivity
   and enhance flow by solving problems.

 Make an ongoing effort to teach individuals how to work
   together as team toward common goals. Teamwork is
   something that has to be learned.
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. It
  shows that you value them. Set challenging targets
  and assist your partners in achieving them. (e.g. John
  Deere, Harley Davidson)
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.

   Example-Siena chief engineer drives in 50 states, 13 provinces and territories
    and Mexico
        Improvements include turning radius, wind stability, drift, cup holders and trays

   “Common sense will tell you the answer, but collecting data (and then
    understanding the facts) will tell you whether your common sense was correct.”

   The Ohno circle – He asked an engineer to stand and observe an operation…for
    8 hours!

   “The Geography of Thought: How Asians and Westerners Think Differently and
    Why” by Richard Nisbett
        Westerners see things
        Easterners see things and relationships
        Language?

   Hourensou- to report, to update periodically, to consult or advise
        Genchi genbutsu for executives (coordinated reporting)
Principle 13: Make decisions slowly by
             consensus, thoroughly considering
             all options; implement decisions rapidly
        Given a year to implement a project…
               Western – typically 3 months planning, 9 months implementing and correcting
               (Tedd’s example-in a class exercise, I assign 15 min. to “plan” and 45 minutes
                to “do.” Participants never use the full 15 minutes, even since I’ve reinforced
                the importance of this time.)
               Toyota – typically 10 months planning, pilot, implement flawlessly

        Toyota decision making
    1.          Find out what is really going on, including genchi genbutsu
    2.          Understanding underlying causes that explain surface appearances – asking
                “Why?” five times
    3.          Broadly considering alternative solutions and developing a detailed rationale
                for the preferred solution.
            –       What alternatives have you considered?
            –       How does this solution compare with those alternatives?
    4.          Building consensus within the team, including employees and outside
                partners.
            –       Nemawashi –the process of discussing problems and potential solutions with
                    all those affected, to collect their ideas and get agreement on a path forward.
                    e.g. tollgate review
    5.          Using very efficient communication vehicles to do 1-4, preferably one side of
                one page (e.g. one page 7 step storyboards)
Principle 14: Become a learning organization
             through relentless reflection (hansei)
             and continuous improvement (kaizen)

  “Many people are surprised when I give talks and tell them that Toyota
  doesn’t have a Six Sigma program. Six Sigma is based on complex
  statistical analysis tools. People want to know how Toyota achieves
  such high levels of quality without the quality tools of Six Sigma. You
  can find an example of every Six Sigma tool in use somewhere in
  Toyota at some time. Yet most problems do not call for complex
  statistical analysis, but instead require painstaking, detailed problem
  solving. This requires a level of detailed thinking and analysis that is all
  too absent from most companies in day-to-day activity. It is a matter of
  discipline, attitude, and culture.”
                                                                 Jeffrey Liker
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.
   Hansei – loosely “reflection” or lessons learned
       “Please do the Hansei.”
        1. Feel sorry.
        2. Create a plan to solve the problem.
        3. Sincerely believe you will not make this mistake
           again.
       Without Hansei, it is impossible to have kaizen.
   Hansei kai – reflection meetings
       e.g. DMAIC tollgates
   No magic metrics
   Policy Deployment
In Closing…

 “We place the highest value on actual
 implementation and taking action.”
                                    Fujio Cho
                                    President,
                                 Toyota Motor
                                   Corporation
                                         2002

				
DOCUMENT INFO