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14 Toyota Way Principles Long – Term Philosophy Base your Management Decisions on a Long-Term Philosophy, even at the Expense of Short-Term Financial Goals Continue …….
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Page 1: Toyota Way

14 Toyota Way Principles• Long – Term Philosophy

Base your Management Decisions on a Long-Term Philosophy, even at the Expense of Short-Term Financial Goals

Continue …….

Page 2: Toyota Way

14 Toyota Way Principles• The Right Process Will Produce the Right Results

Create Continuous Process Flow to Bring Problems to the Surface

Use “Pull” Systems to avoid Over Production

Level out the Work Load (Heijunka)

Build a Culture of Stopping to Fix Problems, to get Quality Right the First Time

Standardised Tasks are the foundation for Continuous Improvement and Employee Empowerment

Use Visual Control so no Problems are Hidden

Use Only Reliable, Thoroughly Tested Technology that Serves your People and Processes Continue …….

Page 3: Toyota Way

14 Toyota Way Principles

• Add Value to the Organisation by Developing Your People and Partners

Grow Leaders who thoroughly understand the Work, Live the Philosophy and Teach it to Others

Develop Exceptional People and Teams who follow your Company’s Philosophy

Respect your Extended Network of Partners and Suppliers by Challenging them and Helping them Improve

Continue …….

Page 4: Toyota Way

14 Toyota Way Principles

• Continuously Solving Root Problems Drives Organisational Learning

Go and See for Yourself to thoroughly Understand the Situation

Make Decisions Slowly by Consensus, thoroughly Considering all Options, Implement Decisions Rapidly

Become a Learning Organisation through Relentless Reflection (Hansei) and Continuous Improvement (Kaizen)

Page 5: Toyota Way

Philosophy(Long-term Thinking)

People and Partners

(Respect, Challenge and Grow Them)

Process(Eliminate Waste)

ProblemSolving

(Continuous Improvement & Learning)

•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 overproduction•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

“4 P” Model of The Toyota Way

Page 6: Toyota Way

Philosophy(Long-term Thinking)

People and Partners

(Respect, Challenge and Grow Them)

Process(Eliminate Waste)

ProblemSolving

(Continuous Improvement & Learning)

•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 overproduction•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

Gench

i G

enbuts

u

Resp

ect

&Team

work

Kaiz

en

Challenge“4 P” Model – Most Companies

Where Most“Lean”

Companiesare

Page 7: Toyota Way

Philosophy(Long-term Thinking)

People and Partners

(Respect, Challenge and Grow Them)

Process(Eliminate Waste)

ProblemSolving

(Continuous Improvement & Learning)

•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 overproduction•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

Gench

i G

enbuts

u

Resp

ect

&Team

work

Kaiz

en

Challenge

Toyota’sTerms

“4 P” Model of The Toyota Way

Page 8: Toyota Way

Leveled Production (Heijunka)

Stable and Standardized Processes

Visual Management

Toyota Way Philosophy

Just-in-TimeRight Part, Right

Amount, Right Time

• Take Time Planning• Continuous Flow • Pull System • Quick Changeover • Integrated Logistics

Jidoka(In-station Quality)

Make ProblemsVisible

• Automatic Stops • Andon • Person – Machine

Separation • Error Proofing • In-station Quality

Control • Solve Root Cause of Problems (5 Why’s)

Best Quality – Lowest Cost – Shortest Lead Time – Best Safety – High Morale

Through shortening the production flow by eliminating waste

People & Teamwork• Selection • Common Goals • Ringi Decision Making• Cross – Trained

Waste Reduction• Genchi Genbutsu • 5 Why’s • Eyes for Waste • Problem Solving

Toyota Production System House

Continuous Improvement

Page 9: Toyota Way

Check

Check

Check

Check

Plan

Plan

Plan

Plan

Act Act Act Act Do Do Do Do

Across Companies

Company

Group

Project

Deming Cycle

Page 10: Toyota Way

Creating Flow and PDCA

Evaluate Results(Check)

SurfaceProblems

(Plan)

Counter Measures

(Do)

EliminateWaste

CreateFlow(Act)

Page 11: Toyota Way

MudaWaste

Muri Overburden

MuraUnevenness

Three M’s

Page 12: Toyota Way

Toyota Leader’s View

PEOPLE

Long – term Asset –> Learned Skills

Machinery Depreciates -> Loses Value

People Appreciates -> Continue to Grow

PHILOSOPHICAL

MANAGEM

ENTTE

CHNIC

ALTechnical

• Stability• JIT• Jidoke• Kaizen• Heijunka

Management• True North• Tools to Focus Management Attention• Go and See• Problem – Solving• Presentation Skills• Project Management• Supportive Culture

Philosophy / Basic Thinking• Customer First• People are most Important Asset• Kaizen • Go and See -> Focus on Floor

• Give feedback to Team Members and Earn Respect• Efficiency Thinking

• True (vs. apparent) Condition• Total (vs. Individual) Team Involvement

Page 13: Toyota Way

Supply Chain Need Hierarchy

LearningEnterprise

Enabling Systems

Clear Expectations

Stable, Reliable Processes

Fair and Honorable Business Relations

Pro

gre

ssin

g N

eed S

atis

fact

ion

Reg

ressing N

eed S

atisfaction

Next Level ofImprovement

Stability

Page 14: Toyota Way

Decide andAnnounce

Seek IndividualInput, thenDecide andAnnounce

Seek GroupInput, thenDecide andAnnounce

GroupConsensus,

ManagementApproval

GroupConsensus,With FullAuthority

Level of

Involv

em

en

t

Time

Alternative Toyota Decision Making Methods

• Decision Making is Highly Situational• Philosophy is to seek Maximum Involvement for Each Situation

Page 15: Toyota Way

MythWhat TPS is Not

Myth Vs. Reality

RealityWhat TPS Is

• A Tangible recipe for Success

• A Management Project or Program

• A set of Tools for Implementation

• A system for Production Floor only

• Implementable in a Short or Mid-term Period

• A Consistent way of Thinking

• A Total Management Philosophy

• Focus on Total Customer Satisfaction

• An Environment of Teamwork and Improvement

• A Never-ending Search for a Better Way

• Quality Built in Process

• Organised, Disciplined Workplace

• Evolutionary

Page 16: Toyota Way

Motivation Theories & The Toyota WayInternal MotivationTheories

Concept

Maslow’s NeedHierarchy

Satisfy Lower LevelNeeds and MoveEmployees up the Hierarchy toward SelfActualization.

Toyota Approach

Job Security, Good Pay, Safe WorkingConditions satisfy Lower Level NeedsCulture of Continuous Improvementsupports Growth towards SelfActualization

Herzberg’s JobEnrichment Theory

Eliminate “Dissatisfiers”(Hygiene Factor) andDesign Work to CreatePositive Satisfiers(Motivators)

5S, Ergonomics Programs, VisualManagement, HR Policies addressHygiene Factors. ContinuousImprovement, Job Rotation and Build-in Feedback Support Motivators.

External MotivationTheoriesTaylor’s ScientificManagement

Scientifically Select, Design StandardizedJobs, Train & Rewardwith Money Performancerelative to Standards.

All Scientific Management Principles followed but at the Group Level rather than Individual Level and based on Employee Involvement

Behaviour Modifications Reinforce Behaviour onthe spot when the Behaviour NaturallyOccurs

Continuous flow & andon createsshort-lead times for Rapid Feedback.Leaders constantly on the floor andProviding Reinforcement.

Goal Setting Set Specific, Measur-able, AchieveableChallenging Goals andMeasure Progress.

Sets Goals that meet these CriteriaThrough Hoshin Kanri (PolicyDeployment). ContinuousMeasurements relative to Targets.

Page 17: Toyota Way

Coercive Vs. Enabling Bureaucracy

Coercive Bureaucracy

• Rigid Rule Enforcement• Extensive Written Rules and Procedures• Hierarchy Controls

Enabling Bureaucracy

• Empowered Employees• Rules and Procedures as Enabling Tools• Hierarchy Supports Organisational Learning

Autocratic

• Top Down Control• Minimum Written Rules and Procedures• Hierarchy Controls

Organic

• Empowered Employees• Minimum Rules and Procedures• Little Hierarchy

SOCIAL STRUCTURE

TEC

HN

ICA

L S

TR

UC

TU

RE

Coercive Enabling

Low

Bu

reau

cra

cy

Hig

hB

ure

au

cra

cy

Page 18: Toyota Way

5 S’s

SortClear out rarely usedItems by Red Tagging

StraightenOrganise and Label aPlace for Everything

ShineClean ItStandardise

Create Rules to Sustainthe first 3 5’S

SustainUse Regular ManagementAudits to Stay Disciplined Eliminate

Waste

Page 19: Toyota Way

Waste in a Value System

Time

Casting

Transportation

StagingSetup

Machining

Inspection

Assembly

Staging

RawMaterial

Time FinishedParts

Value – Added Time

Non-Value-Added Time (Waste)

• Value-added Time is only a Small Percentage of the Total Time• Traditional Cost Savings focuses only on Value-adding Items• Lean Thinking Focuses on the Value Stream to Eliminate Non-Value-Adding Items

Page 20: Toyota Way

Practical Problem-Solving Process1. Initial Problem Perception

(Large, Vague, Complicated Problem)

POC

The “Real Problem

2. Clarify the Problem

3. Locate Area / Point of Cause

5. Countermeasure

6. Evaluate

7. Standardise

Basic Cause and EffectInvestigation

4. 5 – Why? Investigationof Root Cause

DirectCause

Cause

Cause

Cause

Cause

Root Cause

Grasp theSituation

CauseInvestigation

Why?

Why?

Why?

Why?

Why?

Page 21: Toyota Way

The Andon System

Page 22: Toyota Way

Waste in a Truck Chassis Assembly Line

Page 23: Toyota Way

TPS Flow Environment

Page 24: Toyota Way

Product Development Matrix

Page 25: Toyota Way

Team & Batch Production Vs. On-Piece Flow