Losing the Toyota Way?

February 12, 2010 ~ LINUS FERNANDES

The way Toyota and Honda have been receiving bad press about the way they have been handling the recalls of their vehicles, the casual observer would seem to wonder what’s all the fuss about? Don’t car recalls happen all the time? Haven’t the Big 3 in Detroit been doing it all the time? Or rather it seems they do it all the time? I guess, bad press magnifies faults. It’s said that bad word of mouth can lose you 10 customers , maybe even more, but good WOM could gain you just 3!

Anyway , I would just like to post the Toyota way for my readers, so that we all remember why Japanese (and German) cars were synonymous with quality for a long,long time and hopefully for a long,long time to come!

The Toyota Way

Section I — Long-Term Philosophy

Principle 1

Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.

People need purpose to find motivation and establish goals.

Section II — The Right Process Will Produce the Right Results

Principle 2

Create a continuous process flow to bring problems to the surface.

Work processes are redesigned to eliminate waste (muda) through the process of continuous improvement — kaizen. The seven types of muda are:

Overproduction

Waiting (time on hand)

Unnecessary transport or conveyance

Overprocessing or incorrect processing

Excess inventory

Motion

Defects

Principle 3

Use "pull" systems to avoid overproduction.

A method where a process signals its predecessor that more material is needed. The pull system produces only the required material after the subsequent operation signals a need for it. This process is necessary to reduce overproduction.

Principle 4

Level out the workload (heijunka). (Work like the tortoise, not the hare).

This helps achieve the goal of minimizing waste (muda), not overburdening people or the equipment (muri), and not creating uneven production levels (mura).

Principle 5

Build a culture of stopping to fix problems, to get quality right the first time.

Quality takes precedence (Jidoka). Any employee in the Toyota Production System has the authority to stop the process to signal a quality issue.

Principle 6

Standardized tasks and processes are the foundation for continuous improvement and employee empowerment.

Although Toyota has a bureaucratic system, the way that it is implemented allows for continuous improvement (kaizen) from the people affected by that system. It empowers the employee to aid in the growth and improvement of the company.

Principle 7

Use visual control so no problems are hidden.

Included in this principle is the 5S Program – steps that are used to make all work spaces efficient and productive, help people share work stations, reduce time looking for needed tools and improve the work environment.

Sort: Sort out unneeded items

Straighten: Have a place for everything

Shine: Keep the area clean

Standardize: Create rules and standard operating procedures

Sustain: Maintain the system and continue to improve it

Principle 8

Use only reliable, thoroughly tested technology that serves your people and processes.

Technology is pulled by manufacturing, not pushed to manufacturing.

Section III — Add Value to the Organization by Developing Your People

Principle 9

Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.

Without constant attention, the principles will fade. The principles have to be ingrained, it must be the way one thinks. Employees must be educated and trained: they have to maintain a learning organization.

Principle 10

Develop exceptional people and teams who follow your company’s philosophy.

Teams should consist of 4-5 people and numerous management tiers. Success is based on the team, not the individual.

Principle 11

Respect your extended network of partners and suppliers by challenging them and helping them improve.

Toyota treats suppliers much like they treat their employees, challenging them to do better and helping them to achieve it. Toyota provides cross functional teams to help suppliers discover and fix problems so that they can become a stronger, better supplier.

Section IV: Continuously Solving Root Problems Drives Organizational Learning

Principle 12

Go and see for yourself to thoroughly understand the situation (Genchi Genbutsu).

Toyota managers are expected to "go-and-see" operations. Without experiencing the situation firsthand, managers will not have an understanding of how it can be improved. Furthermore, managers use Tadashi Yamashima’s (President, Toyota Technical Center (TTC)) ten management principles as a guideline:

Always keep the final target in mind.

Clearly assign tasks to yourself and others.

Think and speak on verified, proven information and data.

Take full advantage of the wisdom and experiences of others to send, gather or discuss information.

Share information with others in a timely fashion.

Always report, inform and consult in a timely manner.

Analyze and understand shortcomings in your capabilities in a measurable way.

Relentlessly strive to conduct kaizen activities.

Think "outside the box," or beyond common sense and standard rules.

Always be mindful of protecting your safety and health.

Principle 13

Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly (nemawashi).

The following are decision parameters:

Find what is really going on (go-and-see) to test

Determine the underlying cause

Consider a broad range of alternatives

Build consensus on the resolution

Use efficient communication tools

Principle 14

Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen).

The process of becoming a learning organization involves criticizing every aspect of what one does. The general problem solving technique to determine the root cause of a problem includes:

Initial problem perception

Clarify the problem

Locate area/point of cause

Investigate root cause (5 whys)

Countermeasure

Evaluate

Standardize