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 main ideas are to base management decisions on a "philosophical sense of purpose", to think long term, to have a process for solving problems, to add value to the organization by developing its people, and to recognize that continuously solving root problems drives organizational learning.
Since the 1980s, Toyota and Lexus vehicles have been recognized for their quality and are consistently ranked higher than other car makes in owner satisfaction surveys, due in large part (according to Jeffrey Liker, a University of Michigan professor of industrial engineering) to the business philosophy that underlies its system of production.
- 1 The 14 Principles
- 1.1 Section I — Long-Term Philosophy
- 1.2 Section II — The Right Process Will Produce the Right Results
- 1.3 Section III — Add Value to the Organization by Developing Your People
- 1.4 Section IV: Continuously Solving Root Problems Drives Organizational Learning
- 2 Translating the principles
- 3 Notes
- 4 References
- 5 External Resources
The 14 Principles
The Toyota Way has been called "a system designed to provide the tools for people to continually improve their work" 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
- 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
- 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 eight types of muda are:
- Waiting (time on hand)
- Unnecessary transport or conveyance
- Overprocessing or incorrect processing
- Excess inventory
- Unnecessary movement
- Unused employee creativity
- 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.
- Level out the workload (heijunka). (Work like the tortoise, not the hare).
- Build a culture of stopping to fix problems, to get quality right the first time.
- 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.
- 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
- 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
- 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.
- 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.
- 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
- 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.
- 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
- 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)
Translating the principles
There is a question of uptake of the principles now that Toyota has production operations in many different countries around the world. As a New York Times article notes, while the corporate culture may have been easily disseminated by word of mouth when Toyota manufacturing was only in Japan, with worldwide production, many different cultures must be taken into account. Concepts such as “mutual ownership of problems,” or “genchi genbutsu,” (solving problems at the source instead of behind desks), and the “kaizen mind,” (an unending sense of crisis behind the company’s constant drive to improve), may be unfamiliar to North Americans and people of other cultures. A recent increase in vehicle recalls may be due, in part, to "a failure by Toyota to spread its obsession for craftsmanship among its growing ranks of overseas factory workers and managers." Toyota is attempting to address these needs by establishing training institutes in the United States and in Thailand.
- Liker, J. 2004. "The 14 Principles of the Toyota Way: An Executive Summary of the Culture Behind TPS", p. 37. Ann Arbor, Michigan: University of Michigan. Retrieved: 2007-04-24
- Liker, J. 2004. The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer.
- Fackler, Martin. The ‘Toyota Way’ Is Translated for a New Generation of Foreign Managers. New York Times. February 15, 2007. Retrieved on: July 2, 2007.
- Hino, Satoshi (2005). Inside the Mind of Toyota: Management Principles for Enduring Growth. University Park, IL: Productivity Press. ISBN 978-1-56327-300-1. http://www.productivitypress.com/productdetails.cfm?SKU=3004.
- Liker, Jeffrey (2004). The 14 Principles Of The Toyota Way: An Executive Summary of the Culture Behind TPS. http://www.si.umich.edu/ICOS/Liker04.pdf.
- Liker, J (2004). The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. McGraw-Hill. ISBN 0071392319. http://books.google.ca/books?id=9v_sxqERqvMC&dq=The+Toyota+Way&psp=1.
- Liker, J; Meier, D. (2005). The Toyota Way Fieldbook: A Practical Guide for Implementing Toyota's 4Ps. McGraw-Hill. ISBN 0071448934.