Toyota first came to the world’s attention in the 1980s when it became clear that there was something special about Japanese quality and efficiency. By the 1990s, it seemed that there was something more unique about Toyota than the rest of the automakers in Japan, namely the way it engineered and built cars that led to this massive market penetration.
Toyota made cars faster, more reliably, and more competitively, even though it had to pay relatively high wages to Japanese workers. Today, Toyota ranks second after General Motors, the world’s largest automaker, with annual global sales of more than six million vehicles in 170 countries. Analysts in the auto sector estimate that if Toyota continues in this way, it will overtake General Motors to become the largest automaker in the world. The author of the Toyota System provides tools and methods that can help companies in any sector become the best in their field in terms of cost, quality and service. To understand Toyota’s dramatic success, we must begin with the founders, the Toyoda family. They were innovative, idealistic, realistic, and determined to achieve their goals. The most important thing is that they relied on setting a good example in their leadership.
The story began with Sakichi Toyoda, who invented the automatic loom and founded in 1926 “Toyoda Automatic Loom Works”, which is the parent company of the Toyota Group. As for his great invention, the “flaw-detecting loom,” which consisted of a distinctive mechanism that automatically stops the loom when the thread breaks, it made this machine the most popular Sakichi model. He was later called the “King of Inventors”. When Sakichi Toyoda commissioned his son Kiichiro to establish the car company, it was not with the aim of increasing the family’s wealth, but rather he wanted his son to have the opportunity to make a contribution to the world. He explained to him the following: “Everyone should start a great project, even once in his life. I have devoted most of my life to inventing new types of looms, and now it is your turn, so you must make an effort to complete what will benefit society. Kiichiro established the “Toyota Automotive Company” according to his father’s philosophy and approach to management, but he added his own innovations to it. Unfortunately, World War II occurred, Japan lost, and companies went out of business. Kiichiro had to ask his 1,600 employees to retire voluntarily. However, this has led to the suspension of work and popular demonstrations. It was not from Kishiro, who wanted to be an example of the leader, but to resign from the presidency. Then Eiji Toyoda, Kiichiro’s cousin, became the new leader and presided over the company during its most dynamic years of post-war growth. Egy has played an instrumental role in selecting and supporting leaders who have made their mark in sales, manufacturing, product development, and most of all, the TPS system that has developed globally as a new example of manufacturing excellence.
The most obvious product of Toyota’s pursuit of excellence is the manufacturing philosophy that has been called the “Toyota Production System” (TPS), often known as the “Lean Principle”. It is an advanced production system in which all departments contribute to accomplishing a common work. Toyota Production. Why home? Because the house constitutes a strong structural system, provided that the roof, columns, and foundations are strong. Drawing (No. 1) begins with the ceiling that constitutes the overall goals, which are the best quality, the lowest cost, and the shortest work period. Then there are two main external columns “just in time” which means removing used inventory to put a barrier to problems that may arise in front of production and “jidoka” which means automation with a human touch. At the center of this system are human resources. The analysis using five questions that begin with “what” is a method for in-depth and spontaneous pursuit of the causes of the problem. Then we find the foundations that include several elements:
Stable and standardized operations, and HEIJUNKA which stands for measuring the production program in terms of scale and diversity, visual management and long-term philosophy.
It takes a high degree of stability for this system to not stop working frequently. As for the people, they are in the middle, because only through continuous improvement can the process reach the required stability.
Toyota Production System TPS
A production system based on the philosophy of achieving complete elimination of waste or defects in pursuit of the most efficient method.
Toyota Motor Corporation’s Automotive Production System is a method of making things that is sometimes referred to as the “Lean Manufacturing System” or “Just-in-Time (JIT) System”, and has become known and studied around the world.
This production control system is established on the basis of many years of continuous improvements, with the aim of making vehicles ordered by customers in the fastest and most efficient way, in order to deliver vehicles as quickly as possible. The Toyota Production System (TPS) was built on the basis of two concepts: “jidoka” (which can be loosely translated as “automation with a human touch”), where when a problem occurs, the equipment stops immediately, preventing the production of defective products; and the “Just-in-Time” concept, whereby each process produces only what is needed for the next process in a continuous stream.
Based on the core philosophies of jidoka and Just-in-Time, TPS can produce sound-quality cars efficiently and quickly, one by one, perfectly meeting customers’ requirements. TPS and its cost-cutting approach are Toyota’s unique competitive strengths and advantages. Honing these strengths is essential to Toyota’s survival into the future. We will use these initiatives and develop our human resources to create ever better cars that customers will love.
How did you become the best maker in the world?
The secret of Toyota’s success is that it is a school of knowledge and a house of morals and ideals. Toyota has 14 “administrative” principles, which are:
1 Make your management decisions based on a long-term philosophy
If only at the expense of short-term financial goals. Have a philosophical sense of purpose that transcends any short-term decision-making. Work, grow the whole institution and direct it towards a common goal that is greater than making money. Your philosophical task is to establish all other principles.
2- Create a continuous flow of operations in order to bring problems to the fore: Re-design work procedures with the aim of achieving high added value and continuous flow, and fight to eliminate the time during which a project remains unimplemented or waiting for someone to work on it. Create flow to move materials and information quickly and to connect processes to staff so problems can be identified immediately. Make the flow visible in your organizational culture. It is the secret to true continuous improvement and employee development.
3- Resort to the “withdrawal” system to avoid surpluses in production: Provide the needs of your customers during the production process, upon their request and in the quantity they want. The supply process triggered by consumption is the basic principle of the “just-in-time” theory.
Reduce operational work and inventory packing in warehouses, by stocking smaller quantities of each product and frequent restocking based only on what the customer actually takes.
Be responsive to daily changes in the level of customer requests instead of relying on computer programs and systems to monitor inventory that leads to waste.
4 Elimination of wastage
Eliminate waste, which is generally divided into seven categories: overproduction, waste of time, unhelpful shipping and unloading, redundant tasks, storage, useless movements, and defective products.
5 Building a culture of quality and achieving it from the first time. Use all available modern methods to ensure quality.
Build into your equipment the ability to detect and stop problems and develop a visual system for alerting project leaders or teams that a machine or process needs their help. The jidoka, that is, machines with human intelligence, form the basis of building in the field of quality.
Build support systems within your company to quickly solve problems and adopt countermeasures.
Build within your culture the philosophy of stopping or slowing down to achieve quality the first time to enhance productivity in the long term.
6 Standardization of tasks is the basis for continuous improvement. : Use stable and repeatable methods everywhere in order to maintain the predictability, timing and regular return of your operations. This is the basis of the “flow and draw” principle.
Gather accumulated knowledge about a process up to a point in time by standardizing current best practices. Allow creative and individual expression to make things better than standardized standards, and then embed those contributions into the new standardized standards, allowing you to transfer learning from the person leaving your organization to the person who will succeed them.
7- Using visual monitoring so that a problem does not remain hidden:
Use simple visual indicators to help employees immediately determine if they are working within the terms of standardized standards or if they are deviating from them. Limit your reports to one page when possible, even when it comes to the most important financial decisions.
8- Using reliable and thoroughly tested technology that serves employees and processes.
Use technology to support employees, not to replace them. In most cases, we see that it is better to do a process manually before adding the technology that will support this process. Conduct actual testing before adopting new technology in company processes, manufacturing systems, or products.
Reject or modify technologies that conflict with your culture or that may disrupt stability, trust, and predictability. However, you have to encourage people to think about new technologies when they are considering new approaches to work. Add value to your organization by developing your employees and partners.
9 Develop leaders who deeply understand the work, live the philosophy, and teach it to others.
Develop leaders from within your organization rather than hiring people from outside.
Don’t think of a leader’s work as completing a set of tasks and having good people skills. Leaders play the role of role models who embody the company’s philosophy and way of doing business. A good leader must understand the day-to-day work in its smallest detail, which enables him to be the teacher of your company’s philosophy.
10- Create a strong and stable corporate culture: Create in the company shared values and beliefs that will live on for a period of many years.
Use cross-functional work teams to improve quality and productivity and enhance flow by solving difficult technical problems.
Make an ongoing effort to teach individuals how to work together as a team for common goals. Working in a group or team is an issue that is necessary to learn.
11 Respect your extended partners and suppliers by helping them improve
Respect your partners and suppliers and treat them as an extension of your organization.
Encourage your external partners to grow and develop, as this shows how much you value them. Set exciting goals that challenge them and help your partners achieve them.
12 Move and investigate for yourself to deeply understand the status of your operations. GENCHI GENBUTSU
Dealing with problems and doing good deeds by going to the source and by observing the data and verifying it personally instead of theorizing on the basis of what others transmit to you or the computer screen.
13 Make your decision deliberately and in agreement with others, but work to implement it quickly: Do not choose one direction and do not walk in that path before you have taken all options into account. Use the NEMAWASHI principle, which is the process of discussing problems and potential solutions with everyone affected by them, in order to gather their ideas and obtain their approval to move forward. This consensus process, even if it is time-consuming, helps broaden the scope of the search for solutions.
Kit for quick implementation.
14- Become a learning organization through persistent thinking (HANSEI) and continuous improvement (KAIZEN).
Use «Hansy» means thinking about the main pillars and after the completion of a project to identify all the weaknesses in it. Put in place countermeasures to avoid getting into the same problems again.
Design processes that hardly require inventory. This will make wasted time and resources visible to all. Once the waste issue is exposed, ask users to use a continuous improvement process that leads to its elimination.
Protect the organizational knowledge base by developing a stable human resource system, slow promotions, and careful succession.
Toyota power through numbers
Toyota’s market capitalization (meaning the total value of the company’s shares) was about $105 billion in 2003, higher than the combined capitalization of Ford, General Motors and Chrysler.
Its asset returns are 8 times more than the average in the automotive sector
Toyota has achieved annual profits over the past twenty-five years and has between $20 and $30 billion in cash in its treasury on an ongoing basis.
Toyota is the number one automaker in Japan and Russia and the third in North America.
1.2 million of the 1.8 million Toyota/Lexus cars sold in North America are manufactured in North America, at a time when American manufacturers are closing their factories, reducing their production capabilities, and moving their factories abroad.
Lexus was introduced to the market in 1989 and its sales in 2002 exceeded those of BMW, Cadillac and Mercedes-Benz in the United States for the third year in a row.
Toyota has the fastest production development process in the world. New cars and trucks need twelve months or less to design, while competitors need a period ranging between two and three years.
Toyota is considered a benchmark for its peers and competitors in the world in terms of quality, high productivity, rapid manufacturing and flexibility.
According to Consumer Reports, a leading magazine for car buyers, 15 out of the 38 vehicles that have won the trust of consumers have been made by Toyota/Lexus over the past seven years.
Apply the Toyota System in your company The “Toyota System” is a lesson and vision that any organization that wants to be successful in the long run can adopt. This requires thinking and continuity in leadership and laying the foundations that will radically transform the culture of the organization. What do you need to know about changing your company culture?
1- Start from the top, as it may require a shake-up at the level of the executive leadership.
2 Make everyone, from the lowest to the highest, participate in the process.
3 Use middle managers as change agents.
4 It takes time to develop people who really understand and live the company’s philosophy.
All industrial and commercial companies that want to succeed in the long term must become institutions of learning. Toyota is one of the best models in the world and is able to provide inspiration and suggestions on how philosophy, business, people and problem-solving can be properly combined to create an organization for learning.
Fastest production development process in the world: 12 months vs. 24 and 36 for competitors
the main points
Toyota is the most profitable car manufacturer in the world and its secret weapon is the Toyota Production System (TPS), also known as the Lean Principle. Today, companies around the world are trying to emulate Toyota’s remarkable success by implementing the company’s root system to speed up operations, reduce waste and improve quality.
Jeffrey Laker has spent 20 years studying Toyota and giving unprecedented access to Toyota executives, users and factories. As he details the company’s culture, operations, and people, Liker provides readers with a management model, based on the 14 founding principles behind the automaker’s sustained greatness. It also reveals how Toyota creates the ideal environment for applying lean technologies and tools through:
> Nurturing an atmosphere of continuous improvement and learning.
> Removing the huge costs incurred by wasting time and resources.
> Improving the quality of work systems.
> Preparing leaders from within the company instead of using them from outside.
> Educate employees to become problem solvers.
> Increase the speed of any process within the company.
Myth vs. Reality of the Toyota TPS Production System
What the Toyota Production System (TPS) is not
A concrete recipe for success
An administrative project or programme
A set of ready-to-implement tools
A special group for production departments only
Implementable in the short or medium term.
What is the Toyota Production System (TPS)?
A coherent way of thinking
A complete management philosophy
Focus on fully satisfying the customer
An environment of teamwork and improvement
Constant search for a better method
Inherent quality of operations
An organized and tidy work center
TPS house diagram (No. 1)
Best Quality – Lowest Cost – Best Safety – High Ethics
By shortening production time by eliminating waste
Just in time
The right portion, the right amount, the right time
«Tact» (scale) planning time
employees and joint work
Make decisions by consensus
Go see for yourself
Analysis by five questions
start with why
Make problems visible
Differentiate between man and machine
Quality control inside the plant
Addressing problems from their roots
Settle operations (hijunka)
Stable and standardized operationss