AFSO21 Reading list THE TOYOTA WAY

RAF MILDENHALL, England -- THE TOYOTA WAY by Jeffrey K. Liker

Overview: The Toyota Production System (TPS) is often referred to as "lean" or "lean production" and focuses on defining customer demands, identifying value-added steps, and eliminating waste. TPS is based on 14 management principles which are all tied together by the Kaizen principle of continuous improvement.

Personal Evaluation: The book provides a thorough description of the origins of Toyota and the evolution of TPS. The 14 principles are clearly defined with useful examples of how each one can affect a manufacturing or service process. The book provided a strong conclusion by focusing on the importance of becoming a learning organization, a concept that has recently gained attention in western organizations.

The 14 Business Principles of Toyota:
- Principle 1: Long Term Philosophy: Focus on a mission greater than earning a paycheck, do the right thing for the customer, and build trust with employees.
- Principle 2: Create Continuous Process Flow: Allows for efficient movement of people and materials and good communication because equipment is arranged so that there is very little movement of material from one stop to the next.
- Principle 3: Use Pull Systems to Avoid Overproduction: Involves just-in-time manufacturing so that you only make what the customer wants, when they want it. Ideal process for eliminating inventory.
- Principle 4: Level Out the Workload: Adjusting inventory, post-poning of shipments, and perhaps even asking some customers to wait for a short period so that your production level is the same, or constant for a given period of time. Avoid the "hurry up and wait" situation.
- Principle 5: Build a Culture of Stopping to Fix Problems, to Get Quality Right the First Time: Detect defects when they occur and stop production so an employee can fix the problem before the defect continues downstream.
- Principle 6: Standardize Tasks Are the Foundation for Continuous Improvement and Employee Empowerment: It is impossible to improve a process until it is standardized. "One must standardize, and thus stabilize the process, before continuous improvements can be made."
- Principle 7: Use Visual Control So No Problems Are Hidden: Visual controls are tools that tell us in a glance how work should be done and whether it is deviating from the standard. Keep your area neat and clean so that you can easily access the tools you need for the job at hand.
- Principle 8: Use Only Reliable, Thoroughly Tested Technology That Serves Your People and Processes: Ensure the technology has value added and that it is used to support the people and the process. "People do the work, computers move the information."
- Principle 9: Grow Leaders Who Thoroughly Understand the Work, Live the Philosophy, and Teach it to Others: Leaders who are brought in from outside to turn around ailing companies are often hired to take the company in a radical new direction. At Toyota, key leaders are found within the company, at the right time, to shape the next step in Toyota's evolution without any sudden change in direction.
- Principle 10: Develop Exceptional People and Teams Who Follow Your Company's Philosophy. "Teams do not do value-added work. Individuals do. Teams coordinate work, motivate, and learn from each other." Excellent individual performers are required to make up teams that excel. Ensure proper training and mentorship to develop individuals.
- Principle 11: Respect Your Extended Network of Partners and Suppliers by Challenging Them and Helping Them to Improve: Find solid partners and grow together for mutual benefit in the long term.
- Principle 12: Go and See for Yourself to Thoroughly Understand the Situation: A key factor in TPS is that leaders understand and participate in the process. Having data is good, but it is one step from the process while facts are verified from being on-the-scene.
- Principle 13: Make Decisions Slowly by Consensus, Thoroughly Considering All Options; Implement Rapidly: Toyota's decision making involves finding out what is really going on, understanding the underlying causes, considering alternative solutions, building a team consensus, and using communication vehicles to do one through four.
- Principle 14: Become a Learning Organization Through Relentless Reflection and Continuous Improvement: Mass production is no longer the key to competitive advantage. Instead, adaptation, innovation, and flexibility have become the necessary ingredients for a successful business. In order to adapt and create new ideas, employees must continuously learn, hansei (Japanese word for reflect) about how current processes work, and tap their creative thinking to continuously improve the process.

Highlights:

Pg 9:
Value Defined: "The physical or information transformation of a product, service, or activity into something the customer wants."

Pg 13:
The "4 P" model describes the steps required to obtain a "lean culture."
1. Philosophy: Management decisions should be made on a long-term philosophy, even at the expense of short-term financial goals.
2. Process: Eliminate waste, create process flow, use pull systems, standardize tasks and use visual controls to expose problems. Most lean companies achieve and remain at this stage.
3. People and Partners: Grow leaders who live the philosophy. Respect, develop and challenge your people and teams. Respect and help your suppliers.
4. Problem Solving: Continuous improvement and learning. Make decisions slowly by consensus and implement rapidly.

Pg 46 - 47:
The 5 Whys: One technique that is part of Kaizen is to ask why a problem exists five times, going to a deeper level with each "why?" to get to the root cause of the problem.

Pg 51:
Kaizen: "(Booming business) leads companies into complacency. The biggest crisis from the perspective of Toyota leaders, is when associates do not feel there is a crisis or do not feel the urgency to continuously improve the way they work."
The Lexus and Prius were built during times when Toyota was enjoying high sales; however, the leaders remained in crisis mode and developed the concept cars based on long-term future considerations. They continued to anticipate change and never settled for complacency.

Pg 251:
Toyota uses stability and standardization to transfer individual and team innovation into organization-wide learning. When an individual comes up with innovative ways to do things, the new way must be standardized and practiced across the organization until a better way is discovered.

Pg 258:
Hansei is about identifying your weaknesses and finding ways to overcome them. Hansei is at the root of Kaizen because you must realize the area of weakness before you can improve it.