The Toyota way

Liker, Jeffrey K. The Toyota way : 14 management principles from the world's greatest manufacturer. New York: McGraw-Hill, 2004. Print.
ISBN 0-07-139231-9

Author spend about 20 years of studying Toyota and formulate 14 principles described in details with history of Toyota and demonstrate how these principles was applied in different situations.



Part One - The World-Class Power of the Toyota Way
Chapter 1 - The Toyota Way: Using Operational Excellence as a Strategic Weapon

Author describe the difference between scientific management (aka Ford-style management) and lean approach used at Toyota. Also he touches current situation with implementing lean production at US and why it's misunderstand (in some degree). Finally he explains that his book s the first one which introduces Toyota thinking outside Japan and purpose of the the book to explain how to improve business processes by:

• Eliminating wasted time and resources
• Building quality into workplace systems
• Finding low-cost but reliable alternatives to expensive new technology
• Perfecting business processes
• Building a learning culture for continuous improvement 

Chapter 2 - How Toyota Became the World s Best Manufacturer: The Story of the Toyoda Family and the Toyota Production System.

History of Toyoda family and creation of Toyota production system. Mass production (used in US) was not applicable to Japan - market was small and it was not possible to use economics of scale - different customers want different types of automobiles. One piece flow principle. Pull system, JIT, built-in quality, Deming cycle (Plan-Do-Check-Act).

Chapter 3 - The Heart of the Toyota Production System: Eliminating Waste

One-piece-flow cell. TPS structure:

Chapter 4 - The 14 Principles of the Toyota Way: An Executive Summary of
the Culture Behind TPS

Chapters contains summary of 14 core principles which will be explained in details in followed chapters.

Principle 1. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.
Principle 2. Create continuous process flow to bring problems to the surface.
Principle 3. Use pull systems to avoid overproduction.
Principle 4. Level out the workload (heijunka). (Work like the tortoise, not the hare.)
Principle 5. Build a culture of stopping to fix problems, to get quality right the first time.
Principle 6. Standardized tasks are the foundation for continuous improvement and employee empowerment.
Principle 7. Use visual control so no problems are hidden.
Principle 8. Use only reliable, thoroughly tested technology that serves your people and processes.
Principle 9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.
Principle 10. Develop exceptional people and teams who follow your company s philosophy.
Principle 11. Respect your extended network of partners and suppliers by challenging them and helping them improve.
Principle 12. Go and see for yourself to thoroughly understand the situation (genchi genbutsu).
Principle 13. Make decisions slowly by consensus, thoroughly considering all options; implement
decisions rapidly (nemawashi).
Principle 14. Become a learning organization through relentless reflection (hansei) and continuous
improvement (kaizen).

Chapter 5- The Toyota Way in Action: The No Compromises Development of Lexus

Describe how Ichiro Suzuki (and team) manages to create innovative luxury vehicle while avoiding quality compromises.

Chapter 6 - The Toyota Way in Action: New Century, New Fuel, New Design Process Prius

History of Prius design lead by  Takeshi Uchiyamada.

Improvements to design process.

1. The cross-functional team and chief engineer work together almost daily in the same room (obeya).
2. Simultaneous engineering. (and manufacturing)

Explanation how base principles was applied to Lexus and Prius development.

Part Two - The Business Principles of the Toyota Way
Section I - Long-Term Philosophy
Chapter 7 - Principle 1: Base Your Management Decisions on a Long-Term Philosophy, Even at the Expense of Short-Term Financial Goals

The NUMMI Story.
Toyota s Mission Statement and Guiding Principles:

1. Contribute to the economic growth of the country in which it is located (external stakeholders).
2. Contribute to the stability and well being of team members (internal stakeholders).
3. Contribute to the overall growth of Toyota.

Section II - The Right Process Will Produce the Right Results
Chapter 8 - Principle 2: Create Continuous Process Flow to Bring Problems to the Surface

Finding waste. Batch processing vs continuous flow. Benefits one piece flow:

1. Builds in Quality.
2. Creates Real Flexibility.
3. Creates Higher Productivity.
4. Frees up Floor Space.
5. Improves Safety.
6. Improves Morale.
7. Reduces Cost of Inventory.

Chapter 9 - Principle 3: Use Pull Systems to Avoid Overproduction

Kanban - pull system, examples of usage and benefits of it. Warn. - "push" schedules still have a place.

Chapter 10 - Principle 4: Level Out the Workload (Heijunka)

Things wrong with this unleveled schedule:

1. Customers usually do not buy products predictably.
2. There is a risk of unsold goods.
3. The use of resources is unbalanced.
4. Placing an uneven demand on upstream processes.

Benefits of leveling the schedule:

1. Flexibility to make what the customer wants when they want it.
2. Reduced risk of unsold goods.
3. Balanced use of labor and machines.
4. Smoothed demand on upstream processes and the plant's suppliers.

Heijunka in Service Operations:

1. Fit customer demand into a leveled schedule.
2. Establish standard times for delivering different types of service.

Chapter 11 - Principle 5: Build a Culture of Stopping to Fix Problems, to Get Quality Right the First Time

Stopping the Process to Build in Quality (Jidoka). The quality specialists and team members have just four key tools:

1. Go and see.
2. Analyze the situation.
3. Use one-piece flow and andon to surface problems.
4. Ask Why? five times.

Set-based concurrent engineering. Building in quality is a principle, not a technology.

Chapter 12 - Principle 6: Standardized Tasks Are the Foundation for Continuous Improvement and Employee Empowerment

NOTE: This is manufacturing - software development (my point of interest) is different by nature however some routine operations has to be standardized across organization. Coercive versus enabling bureaucracies. Standardization as an enabler.

Chapter 13 - Principle 7: Use Visual Control So No Problems Are Hidden

5S's (seiri, seiton, seiso, seiketsu, and shitsuke, translated into
English):

1. Sort through items and keep only what is needed while disposing of what is not.
2. Straighten (orderliness) A place for everything and everything in its place.
3. Shine (cleanliness) The cleaning process often acts as a form of inspection that exposes abnormal and
4. pre-failure conditions that could hurt quality or cause machine failure.
5. Standardize (create rules) Develop systems and procedures to maintain and monitor the first three S's.
6. Sustain (self-discipline) Maintaining a stabilized workplace is an ongoing process of continuous improvement.

Examples of visual control in manufacturing and the office.
A3 reports: capturing all you need to know on one sheet of paper.

Chapter 14 - Principle 8: Use Only Reliable, Thoroughly Tested Technology That Serves Your People and Processes

Adoption of new technology must support people, process, and values. Role of IT in Toyota's development process.

Section III - Add Value to the Organization by Developing Your People and Partners
Chapter 15 - Principle 9: Grow Leaders Who Thoroughly Understand the Work, Live the Philosophy, and Teach It to Others

Growing leaders rather the purchasing of them. Putting customers first. The Chief Engineer: the critical link to innovation, leadership, and customer satisfaction (see Master Developer in "Lean Software Development: An Agile Toolkit"). Leader's traits in Toyota:

• Focused on a long-term purpose for Toyota as a value-added contributor to society.
• Never deviated from the precepts of the Toyota Way DNA and lived and modeled themselves around this for all to see.
• Worked their way up doing the detailed work and continued to go to the gemba the actual place where the real added-value work is done.
• Saw problems as opportunities to train and coach their people.

Chapter 16 - Principle 10: Develop Exceptional People and Teams Who Follow Your Company's Philosophy

Developing teams at Toyota. Theories of motivations: external and internal. Structure of a team at Toyota - team member, team leader, group leader.

Chapter 17 - Principle 11: Respect Your Extended Network of Partners and Suppliers by Challenging Them and Helping Them Improve

Work with suppliers, mutual learning of TPS, enabling others. Different approaches to logistics - Toyota vs Ford.

Section IV - Continuously Solving Root Problems Drives Organizational Learning
Chapter 18 - Principle 12: Go and See for Yourself to Thoroughly Understand the Situation (Genchi Genbutsu)

Ohno circel. Hourensou is a Japanese word made up of three parts: hou (hou koku to report), ren (renroku to give updates periodically), and sou (sou dan to consult or advise).

Chapter 19 - Principle 13: Make Decisions Slowly by Consensus,Thoroughly Considering All Options; Implement Rapidly (Nemawashi)

Thorough consideration in decision making. Set-based approach to making decision. Nemawashi: Make decisions slowly by consensus, thoroughly considering all options; implement rapidly.

Chapter 20 - Principle 14: Become a Learning Organization Through Relentless Reflection (Hansei) and Continuous Improvement (Kaizen)

Identify root causes and develop countermeasures. Five-why analysis. Hansei: responsibility, self-reflection, and organizational learning. Major metrics at Toyota:

• Global performance measures how is the company doing?
• Operational performance measures how is the plant or department doing?
• Stretch improvement metrics how is the business unit or work group doing?

Hoshin kanri - directing and motivating organizational learning.

Part Three - Applying the Toyota Way in Your Organization
Chapter 21 - Using the Toyota Way to Transform Technical and Service Organizations

Identifying flow in organization. Using value stream map. Possible way - kaizen workshop.

Chapter 22 - Build Your Own Lean Learning Enterprise, Borrowing from the Toyota Way

Commitment from the top, build culture from ground up. Why changing culture is hard:

• Start from the top this may require an executive leadership shakeup.
• Involve from the bottom up.
• Use middle managers as change agents.
• It takes time to develop people who really understand and live the philosophy.
• On a scale of difficulty, it is extremely difficult.

13 general tips on what works in transitioning a company into a lean enterprise:

1. Start with action in the technical system; follow quickly with cultural change.
2. Learn by doing first and training second. 
3. Start with value stream pilots to demonstrate lean as a system and provide a go see model.
4. Use value stream mapping to develop future state visions and help learn to see.
5. Use kaizen workshops to teach and make rapid changes.
6. Organize around value streams.
7. Make it mandatory.
8. A crisis may prompt a lean movement, but may not be necessary to turn a company around.
9. Be opportunistic in identifying opportunities for big financial impacts.
10. Realign metrics with a value stream perspective.
11. Build on your company s roots to develop your own way.
12. Hire or develop lean leaders and develop a succession system.
13. Use experts for teaching and getting quick results.

Read on June. 3 - Jul. 12 2019 approx 20 hours