The Toyota Way

BY: V E E R E S H G O U D A S N

THE TOYOTA WAY

KLE’S COLLEGE OF ENGENEERING &TECHNOLOGY,

BELGAUM

GUIDE: Prof. S A JANAWADE

CONTENTS

• INTRODUCTION• THE 14 TOYOTA WAY PRINCIPLES• CONCLUSION• REFERENCES

THE COMPANY: CONTRIBUTIONS BY 3 GENERATIONS

Sakichi Toyoda(1867-1930 ) Automatic loom

Kiichiro Toyoda(1894-1952) Used chain conveyor into the Assembly line. 1930-Creation of Toyota Motor Corp.

Eiji Toyoda(1913) Implementation of Jidoka and JIT.

Type-G Automatic Loom assembly line

Toyota Standard Sedan Model AA

announced in 1936

14 TOYOTA-WAY PRINCIPLES

Section I – Long-term philosophyPrinciple 1: Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.

Section II – The Right processes will produce the right resultsPrinciple 2: Create continuous process flow to bring problem to the surface.Principle 3: Use “pull” system to avoid overproduction.Principle 4: Level out the workload (heijunka). (work like a tortoise not the hare.)Principle 5: Build the culture of stopping to fix problems to get quality right the first time.Principle 6: Standardize tasks are the foundation for continuous improvement and employee empowerment.Principle 7: Use visual control so no problems are hidden.Principle 8: Use only reliable, thoroughly tested technology that serves your people and processes.

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14 TOYOTA-WAY PRINCIPLES

Section III – Add value to the organization by developing your people and partnersPrinciple 9: Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.Principle 10: Develop exceptional people and teams who follow your company’s philosophy.Principle 11: Respect your extended network of partners and suppliers by challenging them and helping them improve.

Section IV – Continuously solving root problem drives organizational learningPrinciple 12: Go and see for yourself to thoroughly understand the situation (genchi genbutsu).Principle 13: Make decisions slowly by consensus, thoroughly considering all options, implement decisions rapidly.Principle 14: Become a learning organization through relentless reflection (hensei) and continuous improvement (kaizen).

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Philosophy(Long-Term Thinking)

Process(Eliminate Waste)

People & Partners(Respect, Challenge

& Grow Them))

Problem Solving(Continuous Improvement

& Learning)

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izen

Res

pect

& T

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Toyota’sTerms

•Continual organizational Learning through Kaizen• Go see for yourself to thoroughly Understand the Situation (Genchi Genbutsu ) • Make decisions slowly by Consensus, thoroughly considering all options; Implement Rapidly

•Grow Leaders who live the Philosophy• Respect, develop, and challenge your People and Teams• Respect, challenge and help your Suppliers

•Create process “flow” to surface problems• Use pull systems to avoid over production• Level out the workload (Heijunka)• Stop when there is a quality problem (Jidoka)• Standardize tasks for continuous improvement• Use Visual Control so no problems are hidden• Use only reliable, thoroughly tested technology.

•Base management decisions on a Long-term philosophy, even at the expense of short-term financial goals

“4P” model of the Toyota Way …….

“A journey of one thousand miles begins with a single

step…”Confucius

“…Followed by about 2 Million difficult, challenging, continuous

steps.”Veereshgouda

SECTION I:PRINCIPLE 1: CREATE A LONG–TERM PHILOSOPHY

PRINCIPLE 1: CREATE A LONG–TERM PHILOSOPHY

• SHORT TERM GOALS?1. QUARTERLY PROFIT AND THE BALANCE SHEET2. TARGETS AND ASSOCIATED COSTSRESULT ORIENTED LEADERSHIP

• LONG TERM GOALS?1. PRODUCTS2. PEOPLEPROCESS ORIENTED LEADERSHIP

• 2 THEMES1. ENVIRONMENTALLY FRIENDY2. CONSERVING NATURAL RESOURCES

PRINCIPLE 1: CREATE A LONG–TERM PHILOSOPHY

• LONG TERM GOALS: EXAMPLES AT TOYOTA1. BUILDING AUTOMOBILES IN JAPAN AFTER WWII2. BUILDING ELECTRIC HYBRID PRIUS3. CREATING SPORTS CAR DIVISION LEXUS

• LONG TERM GOALS AT THE EXPENSE OF SHORT TERM GOALS: EXAMPLES AT TOYOTA1. CUSTOMER FIRST: PAID $500 FOR OWNERS OF LEXUS2. EMPLOYEE FIRST:TRAINING, GOOD SALARY3. SOCIETY FIRST: TEACH LEAN PRODUCTION (TPS) TO

SUPPLIERS

SECTION II

•The Right Processes Will Produce The Right Results

PRINCIPLE 2: CREATE ONE PIECE FLOW

• STEP 1: ELIMINATING WASTE(MUDA)1. KNOW THE PROCESS2. MAP VALUE STREAM3. IDENTIFY WASTE(FIG)

HOW? Reduce Setup Times Small-Lot Production Employee Involvement and Empowerment  Quality at the Source Equipment Maintenance  Pull Production  Supplier Involvement

• STEP 2: CALCULATE TAKT TIME( RATE AT WHICH CUSTOMER WANTS PRODUCT)

DEMAND PER DAY

TAKT TIME (PC/HR) = ------------------------------------------------------- NO OF WORKING HOURS PER DAY

Overproduction

waiting

conveyancedefect

processinginventory

motion

MUDA

PRINCIPLE 2: CREATE ONE PIECE FLOW

• STEP 3: REARRANGE PRODUCTION SYSTEM TO CELL PRODUCTION

PRINCIPLE 3: USE “PULL”SYSTEM

• WHAT IS PULL? PRODUCTION INITIATED BY CUSTOMER

ORDER (JIT)

• EXAMPLE: SUPERMARKETS• ACHIEVING PULL: KANBAN• Kanban is a simple but effective

production control tool that helps JIT work.

• The word is JapaneseKAN= card

BAN=signals

• USED TO AVOID OVERPRODUCTION

PRINCIPLE 3: USE “PULL”SYSTEM

1

2 3

PRINCIPLE 4: LEVEL OUT THE WORKLOAD (HEIJUNKA) FOR BUILT TO ORDER

• WHY?1. Customers usually do not buy products predictably(schedule).2. There is a risk of unsold goods.3. The use of resources is unbalanced.4. Placing an uneven demand on upstream processes.

ADVANTAGES:5. Flexibility to make what the customer wants when they want

it, and how many they want…..JIT6. Reduced risk of unsold goods.7. Balanced use of labor and machines. 8. Smoothed demand on upstream processes and the plant s

suppliers.

PRINCIPLE 4: LEVEL OUT THE WORKLOAD (HEIJUNKA) FOR BUILT TO ORDER

HOW ITS ACHIEVED? USE OF FLEXIBLE PALLET THAT COULD HOLD ANY

SIZE JOB.

PRINCIPLE 5: STOPPING THE PROCESS TO BUILD IN QUALITY (JIDOKA)

• THE EVOLUTION: AUTOMATIC STOP IN MANUAL LOOMS WHENEVER A THREAD BROKE BY SAKOCHI TOYODA

• JAPANESE WORD: JIDOKA MEAN AUTOMATION WITH HUMAN TOUCH OR INTELLIGENCE

• IT IS A QUALITY CONTROL PROCESS THAT APPLIES THE FOLLOWING FOUR PRINCIPLES:

1. Detect the abnormality.

2. Stop.

3. Fix or correct the immediate condition.

4. Investigate the root cause and install a countermeasure.

PRINCIPLE 5: STOPPING THE PROCESS TO BUILD IN QUALITY (JIDOKA)

ERROR-PROOFING (POKA-YOKE)

• Error-proofing makes it difficult or impossible to do the job the wrong way. • Slots and keys, for example, prevent parts from

being assembled the wrong way.• Process recipes and data entry also can be error-

proofed.

PRINCIPLE 6: STANDARDIZED TASKS FOR CONTINUOUS IMPROVEMENT

• STANDARDIZATION IMPROVE QUALITY AND EMPOWER EMPLOYEE• TOYOTA’S STD WORK IS POSTED OUTWARD• IT CONTAIN 3 ELEMENTS:

1. TAKT TIME (TIME REQD TO COMPLETE 1 JOB AT CUSTOMER DEMAND)

2. SEQUENCE OF PROCESS OR SOP’S3. STANDARDIZED STOCK

• STANDARDS HAVE TO BE SPECIFIC ENOUGH TO BE USEFUL GUIDE LINE, YET GENERAL ENOUGH TO ALLOW FOR SOME FLEXIBILITY

PRINCIPLE 7: USE VISUAL CONTROLS SO NO PROBLEMS ARE HIDDEN

• CLEAN IT UP, MAKE IT VISUAL- 5S PROGRAM

PRINCIPLE 7: USE VISUAL CONTROLS SO NO PROBLEMS ARE HIDDEN

• TO CREATE TRANSPARENT WASTE FREE ENVIRONMENT• WHATS VISUAL CONTROL??• Visual control is any communication device used in the

work environment that tells us at a glance how work should be done and whether it is deviating from the standard.

• It shows where?, how many? Items belong what SOP for doing something, status of work in progress

• EXAMPLES: 1. SHADOW TOOL2. BIN WITHOUT KANBAN- OVERPRODUCTION3. ANDON SIGNAL- DEVIATION FROM SOPs4. PROCESS CONTROL BOARDS

PRINCIPLE 7: USE VISUAL CONTROLS SO NO PROBLEMS ARE HIDDEN

Andon Display Board

- Green: normal operations- Yellow: changeover or planned maintenance- Red: abnormal, machine down

PRINCIPLE 8: USE RELIABLE TECHNOLOGY THAT SUPPORT PEOPLE AND PROCESS

• DEVELOPED WITHIN TOYOTA- SIMPLE AND LOW COST

KANBAN- INVENTORY MGMT ANDON- PROBLEM DETECTION AND SOLVING

• ADOPTED- MAKE CHANGES TO ADJUST TO YOUR PEOPLE AND PROCESS.• AT TOYOTA - TECHNOLOGY IS SECONDARY• PEOPLE DO WORK, COMPUTERS MOVE INFO

HUMANS ARE MOST FLEXIBLE, ADOPTABLE

ADOPT TECH. PROPERLY- TRAIN YOUR EMPLOYEES

PRINCIPLE 8: USE RELIABLE TECHNOLOGY THAT SUPPORT PEOPLE AND PROCESS

• 2 Yrs. OF THINKING AND DEBATING – CATIA (COMPUTER

AIDED THREE-D INTERACTIVE APP) ADOPTED WITH LOTS CUSTOMIZATION TO FIT THEIR DEVELOPMENT PROCESS• CATIA – PROOVEN WITH BOING AND CHRYSLER• COLLABORATIVE VEHICLE DEVELOPMENT USING

DIGITAL ENGG.• THE CROSS-FUNCTIONAL TEAM and CE works together

almost daily in the same room (OBEYA-big war room)• SIMULTANEOUS ENGG.- MFG. AND PRODN. ENGG. Give

input to design and R&D at development stage

SECTION III: PEOPLE AND PARTNER

ADD VALUE TO YOUR

ORGANISATION BY DEVELOPING YOUR PEOPLE

AND PARTNERS

• RESPECT, CHALLENGE AND GROW THEM

PEOPLE

“If it weren’t for the people this would be

easy.”

“But, if it weren’t for the people this would be

impossible.”

IMPORTANCE OF PEOPLE AT TOYOTA:A GRAB FROM THE TOYOTA WAY DOCUMENT

PRINCIPLE 9: GROW LEADERS- UNDERSTAND WORK, LIVE TEACH PHILOSOPHY TO OTHERS

• TOYOTA DON’T GO FOR HEAD HUNTING• COZ THEY DON’T KNOW THE

TOYOTA WAY

• LEADERS LIVE THE PHELOSOPHY• TEACH IT TO OTHERS,

LEARNS FROM SENSEI- JAPANESE MENTOR

PRINCIPLE 9: GROW LEADERS- UNDERSTAND WORK, LIVE TEACH PHILOSOPHY TO OTHERS

TOYOTA DON’T GO FOR HEAD HUNTING

BECAUSE THEY DON’T KNOW THE TOYOTA WAY

• LEADERS LIVE THE PHELOSOPHY• TEACH IT TO OTHERS,

LEARNS FROM SENSEI- JAPANESE MENTOR

MATRIX ORGANISATION AT TOYOTA PRODUCT

DEVELOPMENT

PRINCIPLE 10: DEVELOP EXCEPTIONAL PEOPLE AND TEAMS WHO FOLLOW YOUR COMPANY’S PHILOSOPHT

• “We build people, not just cars.”-TOYOTA• KEY- Developing Excellent Individual Work While

Promoting Effective Team Work.• DEVELOPING TEAM

1. ORIENTATION- MISSION AND MINGLE2. DISSATISFACTION- WORK IS HARDER THAN IT LOOKS3. INTEGRATION- MOTIVATION BY LEADERS, WORK4. PRODUCTION- INCREASED PRODUCTIVITY AND TEAM IS

READY FOR NEXT MISSION

• USE TPS TOOLS WHILE WORKING!!

PRINCIPLE 10: DEVELOPING EXCELLENT INDIVIDUAL WORK WHILE PROMOTING EFFECTIVE TEAM WORK

• Typical Toyota organization assembly operation AND Toyota roles and responsibilities

(AT SHOP LEVEL)

PRINCIPLE 11: RESPECT YOUR EXTENDED NETWORK OF PARTNERS

“TOYOTA IS OUR BEST CUSTOMER, ALSO OUR TOUGHEST !! ”

- AN AUTOMOTIVE SUPPLIER

• TOYOTA VIEWS SUPPLIERS AS ITS PARTNERS. HOW??ENGAGES IN DESIGN, TEACHES THEM TPS, AND

CHALLENGES THEM WITH TOUGH TASKS. SAVES SICK SUPPLIERS BY SENDING THEIR MANAGERS TO

IT.

• TOYOTA DEMANDS JIT SUPPLY OF PARTS TO ITS ASSEMBLY PLANTS AND THEREFORE LEAD TIMES ARE SHORT- TOUGH JOB

• TODAY MOST COMPANIES HAVE JIT AND IT GIVES TOYOTA SUPPLIERS A COMPETATIVE ADVANTAGE

PRINCIPLE 12: GO AND SEE FOR YOURSELF (GENCHI GENBUTSU)

• GEMBA- JAPANESE WORKPLACE• HOW ITS DONE?• DEEPLY UNDERSTAND AND REPORT WHAT YOU SEE!!

• THE OHNO CIRCLE- TERUYUKI MINOURA, PRESIDENT, TMM, NORTH AMERICA.

• TAIICHI OHNO- CHRISTENED FIRST TPS IN TOYOTA CITY

PRINCIPLE 13: MAKE DECISIONS SLOWLY.

• DECIDE BY CONSENSUS, THOROUGHLY CONSIDERING ALL OPTIONS.• USE OF BIG ROOM• EXAMPLE: DEVELOPMENT OF PRIUS

1. SISPENSION- 20 TESTED2. HYBRID ENGINES- 80 REDUCED 10, 10 TO 4 THROUGH

MERITS, 4 EVALUATED IN COMPUTER SIMULATION3. STYLING-20 DESIGNS BY 5 STYLING STUDIO

• INVOLVED CAL,EUR,TOK, AND TOYOTA CITY

PRINCIPLE 14: BECOME LEARNING ORGANISATION

• HOW??HANSEI- RELENTLESS REFLECTION- ACCEPT FAILURES

AND APOLOGIZE PUBLICALLYKAIZEN- CONTINUOUS IMPROVEMENT – GO TO ROOT

CAUSE TO ELIMINATE MISTAKES, IMPROVE THE STANDARDS BY INCORPORATING LEARNINGS

GETTING TO ROOT CAUSE- 5 WHY?’S

PRINCIPLE 14: BECOME LEARNING ORGANISATION

5 WHY?’S TOOL

PRINCIPLE 14: BECOME LEARNING ORGANISATIONTOYOTA PROBLEM SOLVING

CONCLUSION

• MOST TOYOTA WAY IS COMMONSENSE!!

• IT’S THE FUNDAMENTAL WAY THAT TOYOTA VIEWS ITS WORLD AND DOES BUSINESS

• THE TOYOTA WAY ALONG WITH THE TOYOTA PRODUCTION SYSTEM (TPS), MAKES UP THE TOYOTA’S DNA

• THIS DNA WAS BORN WITH FOUNDERS AND CONTINUES TO BE DEVELOPED AND NURTURED IN ITS CURRENT AND FUTURE LEADERS. THEY DEFINE ITS MGMT. AND WHATS UNIQUE ABOUT THE COMPANY.

REFERENCES:

1. Liker, Jeffrey K. The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer, McGraw-Hill, 2004

2. Liker, Jeffrey K. Becoming Lean: Inside Stories of U.S. Manufacturers. Portland, OR: Productivity Press, 1997.

THANK YOU.. ANY QUSTIONS??