The Toyota Way

The Toyota Way

The 14 Principles of the Toyota Way is a management philosophy used by the Toyota corporation that includes the Toyota Production System.

The 14 Principles

The 14 principles of The Toyota Way are organized in four sections:
1) Long-Term Philosophy,
2) The Right Process Will Produce the Right Results,
3) Add Value to the Organization by Developing Your People, and
4) Continuously Solving Root Problems Drives Organizational Learning. The principles are set out and briefly described below:

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.

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 through the process of continuous improvement — kaizen. The eight types of muda are:

Overproduction
Waiting
Unnecessary transport
Overprocessing
Excess inventory
Unnecessary movement
Defects
Unused employee creativity

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. (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.

Principle 6

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

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 engrained, 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 (TCC)) 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

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

It is really overwhelming to see how Totoya has revolutionised the way production takes place at the shop floor. Though a bit methodological, this kind of system helps in the long way in improving things. This kind of managerial systems, when placed in system, always actas a guideline for the managers and it is easy to imbed the philosphy in the new-comers. Though many of Indian firms might be following any or some of these methods, they do it in bit and pieces and that too without putting any system in place. Only Toyota has placed such an exhaustive system of managerial control in place.

This is possible only when the top mangement is committed to improving things down the line. They are focussed on the financial numbers. That's why there is the need for balanced scorecard kind of performance measurement system wherein one gets to see the impact all functions on the balance sheet.