Overall Thoughts

Even if you have no interest in manufacturing operations, this was a fantastic book for learning to run any type of organization. The principles are applicable to all industries and even your own personal life. There’s a lot of misconceptions of how Toyota rose to prominence and this book clarifies exactly what drove its success. Highly recommend if you want to rethink how your organization does work.  

The Big Ideas

1.     Constancy of Purpose

2.     Continuous Improvement

3.     Systems Approach

4.     Bias Towards Action

5.     Sometimes the best things to do is stop

6.     Does this activity produce something that the customer wants?

7.     Quality over Cost

8.     Standardized Process

9.     Simplify Reporting

10.   Go to the source

11.   Decide slowly, implement rapidly

12.   Lower the Water Level

13.   Problems of Batch Activity

14.   Muda, Muri, Mura

15.   Find problems and solve them immediately

16.   Technology doesn’t solve people problems

17.   Give workers autonomy to improve their own standards

18.   Are you organized?

19.   Differentiate between motivators and hygiene factors

20.   Feedback

21.   People need to understand why we do certain things

22.   Efficient Meetings

23.   Forget programs of the month

24.   After Action Review

 

Constancy of Purpose

When I think about Toyota and how it operates, I keep on coming back to quality guru W. Edwards Deming's famous edict: " Constancy of purpose. " Constancy of purpose explains why, in any given year, if you bet Toyota will make a profit, you will probably win. If you bet that its sales will grow over the year before, you will probably win. You will not see huge growth spurts from one year to the next or major shifts in strategy. You will not see boardroom coups where a new regime takes over and remakes the company. Rather, you will see a slow and steady movement forward year in and year out. This is " constancy of purpose, " as I believe Deming envisioned it, that goes beyond short - term profits and enriching a few executives.

The Toyota Way can be briefly summarized through the two pillars that support it: " Continuous Improvement " and " Respect for People. "

Continuous Improvement

Continuous improvement, often called kaizen, defines Toyota's basic approach to doing business. Challenge everything. More important than the actual improvements that individuals contribute, the true value of continuous improvement is in creating an atmosphere of continuous learning and an environment that not only accepts, but actually embraces change.

Systems Approach

The key to the Toyota Way and what makes Toyota stand out is not any of the individual elements…But what is important is having all the elements together as a system. It must be practiced every day in a very consistent manner — not in spurts.

Bias Towards Action

We place the highest value on actual implementation and taking action. There are many things one doesn't understand and therefore, we ask them why don't you just go ahead and take action; try to do something? You realize how little you know and you face your own failures and you simply can correct those failures and redo it again and at the second trial you realize another mistake or another thing you didn't like so you can redo it once again. So by constant improvement, or, should I say, the improvement based upon action, one can rise to the higher level of practice and knowledge. — Fujio Cho, President, Toyota Motor Corporation

Sometimes the best thing to do is stop

Often the best thing you can do is to idle a machine and stop producing parts. You do this to avoid over production, the fundamental waste in TPS.

It may not be a top priority to keep your workers busy making parts as fast as possible. You should produce parts at the rate of customer demand. Working faster just for the sake of getting the most out of your workers is another form of over production and actually leads to employing more labor overall.

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

Does this activity produce something that the customer wants?

This is why TPS starts with the customer, by asking, " What value are we adding from the customer's perspective? " Because the only thing that adds value in any type of process — be it in manufacturing, marketing, or a development process — is the physical or information transformation of that product, service, or activity into something the customer wants.

Quality over Cost

Then the business world got the quality religion from Deming, Joseph Juan, Kaoru Ishikawa, and other quality gurus. It learned that focusing on quality actually reduced cost more than focusing only on cost.

Standardized Process

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

Capture the accumulated learning about a process up to a point in time by standardizing today's best practices. Allow creative and individual expression to improve upon the standard; then incorporate it into the new standard so that when a person moves on you can hand off the learning to the next person.

Simplify Reporting

Reduce your reports to one piece of paper whenever possible, even for your most important financial decisions.

The whole time he talked about the report, I was envisioning a large book - like document. Suddenly it dawned on me that he was talking about an 11 ″ × 17 ″ (A3) sheet of paper and how he was going to put the entire budget and its justification on that one sheet of paper. Toyota is very strict about having managers and associates go to great lengths to put key information on one side of an A3 - sized piece of paper. Why A3? Because this is the largest paper that can fit through a fax machine. A typical A3 report is not a memo — it is a full report documenting a process. For example, a problem - solving A3 would succinctly state the problem, document the current situation, determine the root cause, suggest alternative solutions, suggest the recommended solution, and have a cost - benefit analysis.

Go to the source

Solve problems and improve processes by going to the source and personally observing and verifying data rather than theorizing on the basis of what other people or the computer screen tell you.

Decide slowly, implement rapidly

Nemawashi is the process of discussing problems and potential solutions with all of those affected, to collect their ideas and get agreement on a path forward. This consensus process, though time - consuming, helps broaden the search for solutions, and once a decision is made, the stage is set for rapid implementation.

Lower the Water Level

A lean expression is that lowering the " water level " of inventory exposes problems (like rocks in the water) and you have to deal with the problems or sink. Creating flow, whether of materials or of information, lowers the water level and exposes inefficiencies that demand immediate solutions.

Traditional business processes, in contrast, have the capacity to hide vast inefficiencies without anyone noticing — people just assume that a typical process takes days or weeks to complete. They don't realize that a lean process might accomplish the same thing in a matter of hours or even minutes.

Problems of Batch Activity

The same logic applies to a business or engineering process. Let individual departments do the work in batches and pass the batches to other departments and you guarantee major delays in getting work done. Lots of excessive bureaucracy will creep up, governing the standards for each department, and lots of non - value - adding positions will be created to monitor the flow. Most of the time will be spent with projects waiting for decisions or action. The result will be chaos and poor quality.

Muda, Muri, Mura

The Toyota Way document refers to the "elimination of Muda, Muri, Mura"

Muda — Non - value - added. The most familiar M includes the eight wastes

mentioned in earlier chapters. These are wasteful activities that lengthen lead times, cause extra movement to get parts or tools, create excess inventory, or result in any type of waiting.

Muri — Overburdening people or equipment. This is in some respects on the opposite end of the spectrum from Muda. Muri is pushing a machine or person beyond natural limits. Overburdening people results in safety and quality problems. Overburdening equipment causes breakdowns and defects.

Mura — Unevenness. You can view this as the resolution of the other two M’s. In normal production systems, at times there is more work than the people or machines can handle and at other times there is a lack of work. Unevenness results from an irregular production schedule or fluctuating production volumes due to internal problems, like downtime or missing parts or defects. Muda will be a result of mura. Unevenness in production levels means it will be necessary to have on hand the equipment, materials, and people for the highest level of production — even if the average requirements are much lower than that.

Find problems and solve them immediately

Jidoka is also referred to as autonomation — equipment endowed with human intelligence to stop itself when it has a problem. In - station quality (preventing problems from being passed down the line) is much more effective and less costly than inspecting and repairing quality problems after the fact.

(Asking " why " five times whenever you uncover a problem will provide root cause analysis of the problem as well as countermeasures to solve it. As discussed in Chapter 20, it's an excellent team tool for keeping the focus on solving problems rather than blaming someone for them, which is just another form of Muda.)

Taiichi Ohno emphasized that true problem solving requires identifying " … ' root cause ' rather than ' source; ' the root cause lies hidden beyond the source. " For example, you might find that the source of a problem is a supplier or a particular machining center — the problem occurs there. But what is the root cause of the problem? The answer lies in digging deeper by asking why the problem occurred. Asking " Why? " five times requires taking the answer to the first why and then asking why that occurs. Typically, the process of asking " Why? "

Technology doesn’t solve people problems

Americans tend to think that buying expensive new technology is a good way to solve problems. Toyota prefers to first use people and processes to solve problems, then supplement and support its people with technology.

Give workers autonomy to improve their own standards

Second, the people doing the work have to improve the standards. There is simply not enough time in a workweek for industrial engineers to be everywhere writing and rewriting standards. Nobody likes following someone's detailed rules and procedures when they are imposed on them. Imposed rules that are strictly policed become coercive and a source of friction and resistance between management and workers.

Are you organized?

Try this little exercise at your own place of work. Go up to a co - worker and ask to see a specific document, tool, or something on his or her computer or the company's intranet. Watch to see if the person can go immediately to one place and pull out the document, locate the tool, or find the information on the computer on the first try. The amount of time it takes, and perhaps the person's frustration level, will most likely tell you at a glance whether your co - worker's way of visually organizing his or her workplace is in control or out of control.

Differentiate between motivators and hygiene factors

Herzberg's Job Enrichment. Frederick Herzberg's theories are similar to Maslow’s, but they focus on characteristics of work that are " motivators. " He said that what Maslow called lower - level needs are really " hygiene " factors. Their absence will cause dissatisfaction, but providing a person more and more of them will not positively motivate. For example, a clean and bright work environment, nice eating facilities, and good pay and benefits can help keep people in the job, but more hygiene factors do not make people work harder. If you really want to motivate people, you have to go beyond the hygiene factors and enrich jobs so they are " intrinsically " motivating. People performing the work need feedback on how they are doing. They need to perform a whole piece of work, one in which they can identify with the product of their work. They also need a degree of autonomy.

Internal Motivation Theories Maslow's Hierarchy of Needs. Abraham Maslow's need hierarchy looks at motivating people as equivalent to satisfying their internal needs. Your highest level of motivation will be to do the things that better you as a person — called " self - actualization. " But there are a few steps you have to take before you can get there. Humans can work on higher - level needs like self - actualization only if lower - level needs are satisfied — physiological (e.g.. , having enough food to eat ) , safety and security ( e.g. . , feeling safe from harm ) , and social approval ( having others you care about think well of you ) . These factors are all external to you. There are then two higher - level needs — self - esteem (you feel good about yourself) and the ultimate self - actualization — striving to develop yourself.

External Motivation Theories Taylor's Scientific Management. Taylorism is the ultimate in external motivation. People come to work to make money — end of story. You motivate workers by giving them clear standards, teaching them the most efficient way to reach the standard, and then giving them bonuses when they exceed the standard. The standards are for quantity, not quality. In Chapter 12, we discussed how Toyota's system is also based on standardization, but workers have responsibility for improving standardized work. Basically, Toyota turned scientific management on its head and turned over control of standardization to work teams.

Feedback

Toyota's system based on continuous flow and the andon system is ideal for powerful behavior modification. Feedback is very rapid. The best kind of negative feedback is impersonal and people find out how they are doing without a supervisor even telling them — by uncovering quality problems immediately. As for praise or reprimands from supervisors, the group leaders are right there on the floor in a perfect position to give immediate feedback to associates. In addition, they are trained to do it.

People need to understand why we do certain things

I am more inclined to ask the penetrating question: why do you do it that way? Do not just tell me what you do — the standard operating procedures. I want to know why. I also challenge conventional assumptions. I learned more about due diligence and strategic planning as legal counsel for Toyota than with any other client I have had in 40 years of practice.

Efficient Meetings

One of the benefits of the A3 communication format and a disciplined approach to problem solving is that Toyota runs its meetings very efficiently. The discipline of the A3 process helps to accomplish effective meetings. There are several prerequisites to an efficient meeting:

 ·         Clear objectives prior to the meeting. These are sometimes reflected in an agenda, but the agenda needs to be very focused on clear tasks and deliverables.

·         The right people at the meeting. People expected to show up need to show up.

·         Prepared participants. All participants know what they should prepare for the meeting and have done it.

·         Effective use of visual aids. The A3 format is extremely effective.

·         Separate information sharing from problem solving. Share information as much as possible prior to the meeting so that the focus of the meeting can be on problem solving.

·         The meeting starts and ends on time.

 Forget programs of the month

 Unlike most companies, Toyota does not adopt " programs of the month " nor does it focus on programs that can deliver only short-term financial results. Toyota is process oriented and consciously and deliberately invests long term in systems of people, technology, and processes that work together to achieve high customer value.

 After Action Review

 At Toyota, even if you do a good job successfully, there is a hansei - kai (reflection meeting). Bruce Brownlee, General Manager at the Toyota Technical Center, helped clarify this, drawing on his experience as an American who grew up in Japan: Hansei is really much deeper than reflection. It is really being honest about your own weaknesses. If you are talking about only your strengths, you are bragging. If you are recognizing your weaknesses with sincerity, it is a high level of strength. But it does not end there. How do you change to overcome those weaknesses? That is at the root of the very notion of kaizen. If you do not understand sansei, then kaizen is just continuous improvement. Hansei is the incubator for change — that whole process. We want to overcome areas of weakness. It also explains why we (Toyota) spend little time talking about successes. We spend more time talking about our weaknesses. If anything, perhaps a weakness for Toyota is that we do not celebrate our successes enough.