The 14 Principles Of The Toyota Model

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OPERATIONS MANAGEMENT

Introduction

Toyota captured the world's attention for the first time in the eighties, when it was felt that there was something special about Japanese efficiency and quality. The Japanese cars lasted longer than the Americans and needed much less repairs. The way Toyota designed and manufactured the cars endowed their processes and production with incredible consistency. Toyota designed cars faster, more reliably, at a competitive cost and paying the relatively high salaries of Japanese workers. Equally impressive was that, whenever Toyota showed apparent weakness and seemed vulnerable to its competitors, it miraculously solved the problem and continued even stronger.

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The incredible consistency of Toyota's performance is the direct result of its operational excellence, which has become a strategic weapon. This operational excellence is based, in part, on tools and methods of quality improvement, made famous by Toyota in the world of manufacturing, such as just-in-time, kaizen, piece by piece, jidoka and heijunka. But tools and techniques are no secret weapon to transform a business.

In fact, many companies have tried to copy the use of these tools to emulate the success of the Japanese company and have failed. Toyota's true success comes from its philosophy, which is based on its ability to cultivate leadership, teams and organizational culture, to project a long-term strategy, build relationships with suppliers and maintain an organization based on learning.

The 14 principles of the Toyota model

Principle 1: The production system of Toyota is often explained with the simile of a house. Why a house? Because a house is a structural system.

The house is solid only if the roof, pillars and foundations are strong. Weak unions would put the entire system at risk.The plan of the "house" Toyota has this structure:

The foundations: long-term philosophy over short financial objectives.
The pillars: lean tools: continuous flow, just-in-time, Kanban, Heijunka, Jidoka, Andon, etc.
The interior: respect for workers, partners and suppliers.
The roof: continuous learning.

Principle 2: Long-term philosophyPrinciple. The case of Toyota shows that it is possible for a modern company to prosper in a capitalist world and be profitable by doing the right thing, even though this means that short-term profitability is not the first objective. Toyota employees stand out for having a great sense of mission for the company, and are able to distinguish the right from the wrong in relation to that mission. They learn the Toyota model through their Japanese senseis (mentors) with a coherent message: do the right thing for the company, its employees, the client and for society, treating it as a whole. The strong sense of mission and commitment of Toyota with its customers, employees and society is the basis for other principles, an aspect that is not considered in other companies that try to emulate Toyota. In these times of cynicism about the ethics of the control panels of companies and the position occupied by large capitalist companies in civilized society, the Toyota model provides an alternative model of what happens when 250,000 employees are aligned under a common purpose that goes beyond simply generating money. The starting point of Toyota's business is to generate value for the customer, society and the economy.

Principle 3: Contribute to the global growth of Toyota. The company must enhance the growth of the company because, if not, it can not contribute to its external and internal partners. This is the reason for making excellent products. Toyota challenges its workers to contribute to the company by making it a place in history. Toyota truly wants its associates to grow and learn, to invest in long-term technologies, generating final satisfaction in the client, with the aim of achieving a business for life. The pillars: The correct process will produce the right results Principle 2: Create processes in continuous flow to make problems come to the surface. A good way to start the journey towards lean production is to create continuous flow wherever applicable, both in manufacturing processes and in services.

The flow means that when a customer issues an order, it pulls the process of obtaining required raw material, just for its own order. The raw material flows immediately to the supplying plants, where without delay the workers assemble the order, immediately flowing the completed order to the customer. The whole process should take a few hours or days, instead of a few weeks or months. However, a very efficient department can bury the other departments with excess inventories and paperwork, causing them to lose agility and create disorder. The problem of coordination of activities may arise.Toyota has identified eight major types of waste (muda, in Japanese) that do not add value in company or production processes:

Superproduction (waste).
Waiting (time with inactivity).
Transportation or unnecessary movements.
Overprocessing or processing incorrectly.
Excess inventory.
Unnecessary movements in the production operators.
Defects: the production of defective parts or by retouching.
Creativity of employees not used.

The Toyota model is not about managing inventories, but about eliminating them. From the beginning, Toyota was thinking in terms of pulling inventory based on customer demand, rather than using a push system that anticipated customer demand. In the Toyota model, pull means the ideal state of just-in-time manufacturing: delivering the customer what he wants, when he wants it and in the amount he wants.

Principle 4: Level the workload (heijunka). The heijunka is the leveling of production both by volume and by product mix. The problem with making a real production sequence like this is that it makes us manufacture pieces irregularly. So, if on Monday we received twice as many orders as on Tuesday, we must pay the workers overtime on Monday and send them home before Tuesday. To smooth this, we must take the customer's actual demand, determine the pattern of the volume and mix, and make a programmed level every day. For example, suppose we make 5 A for every 5 B. Now we can create a ABABAB production leveling sequence. This would be a level production with mixed models, because we combine production while leveling customer demand with a predictable sequence, which separates different types of products and levels their volume.

Principle 5: Create a culture of stopping in order to solve problems, to achieve good quality at first. The jidoka is also known as 'autonomatization', a team that is endowed with human intelligence to stop when it has a problem. Quality in the workplace (preventing problems from progressing along the line) is much more effective and less expensive than inspecting and repairing quality problems after they appear, just as it is done in a traditional manufacturing process.At Toyota, quality specialists and team members have only four tools: Go and see. Analyze the situation. Use the one-piece flow and the andon for problems to surface. Ask "Why?" five times (to find the root of the problem as well as countermeasures to solve it).

Principle 6: Standardized tasks are the foundation of continuous improvement and employee autonomy. Toyota has turned the standardized work practice around. Instead of forcing rigid standards that can turn jobs into something routine and degrading, standardized work is the basis for empowering workers and allowing them to innovate in their jobs, because they know their details best.In the NUMMI plant that Toyota has in California, the jobs are highly repetitive. The operators follow very detailed standardized procedures that touch every aspect of the organization. There are many managers and team leaders and an extensive hierarchy. There is strict discipline in matters such as time, costs, quality, safety, etc. NUMMI has all the characteristics associated with bureaucracy and a very "mechanistic" organization.But, at the same time, NUMMI also has many features associated with flexible organizations: extensive employee involvement, a lot of communication, innovation, flexibility, high morale and a great customer focus. The bureaucracy that exists in NUMMI is a "facilitating" bureaucracy.

Principle 7: Use visual control so that problems are not hidden. Visual control goes beyond capturing deviations from the goal or goal in tables and graphs, and then deploying them publicly. The visual controls in Toyota are integrated into the value-added work process. The visual aspect means being able to observe the process, a piece of equipment, inventory, information or an operator doing a task and immediately see the standard used to execute the task and if there is a deviation from that standard. That's why, at Toyota, one of the things they do is create boards with the "shadows" of each of the tools. The "shadows" of each of the tools are painted on the board in the places where they should be hung: for example, the silhouette of a hammer shows where the hammer should go, so it is obvious if the hammer is missing or not. Thus, having visible indicators of the minimum and maximum levels of the inventories will help the director (and everyone) to see if the inventories are well managed.

Principle 8: Use only reliable and proven technology that serves your staff and processes. At Toyota, a new technology is introduced only after having tested it through its direct experimentation with the involvement of a broad multifunctional group. Before adopting a new technology, Toyota will make large studies to analyze the impact it will have on its current processes.

Principle 9: Grow leaders who understand work perfectly, live philosophy and teach it to others. Throughout the history of Toyota, have always been found, at the right time and within the company, the key leaders, to shape another stage in the evolution of the company. They have previously been in various parts of the company (sales, product development, manufacturing and design). Toyota leaders, given their thorough understanding of the work and the ability to develop, advise and lead people, are respected for their technological knowledge, as well as followed by their leadership skills. They rarely give instructions. In fact, they often lead and mentor asking questions. A Toyota manager will ask questions about the situation and the person's strategy to act, but will not answer those questions, even if he or she knows them.

Principle 10: Develop exceptional people and teams that follow the philosophy of your company. In Toyota they are guided by the most relevant theories about motivation: both by those who assume that motivation is fundamentally external and by those who claim that motivation has to be internal.

Principle 11: Respect your extended network of partners and suppliers, presenting challenges and helping them to improve. At Toyota they have very high standards of excellence and expect their suppliers to reach them. And, even more important, they help everyone reach them.When Toyota started to build cars, it did not have a volume to offer a quantity of business to its suppliers. Therefore, those responsible for the company understood the need to find solid partners. At that time, all that Toyota could offer was the opportunity for all partners to grow together and benefit each other in the long term. Similar to Toyota employees, suppliers became part of an extended family that grew and learned the Toyota Production System. The roof: The continuous resolution of the fundamental problems drives the organizational learning.

Principle 12: Go see it for yourself to fully understand the situation (genchi genbutsu). The most striking feature of the Toyota model compared to other management approaches is genchi genbutsu. We can not be sure that we really understand any business problem unless we go and see it for ourselves first-hand. It is unacceptable to take something for granted or rely on reports from others.The exact translation of genchi means 'the real location' and that of genbutsu, 'the actual materials or products'. Toyota promotes and expects creative thinking and innovation is an obligation, but it must be supported by a deep knowledge of all aspects of the real situation. This is one of the behaviors that really distinguish someone who has been trained in the Toyota model: do not take anything for granted and know what you are talking about, because it comes from firsthand knowledge.

Principle 13: Make decisions by consensus slowly, conscientiously considering all options; Implement them quickly (nemawashi). For Toyota, how one comes to the decision is as important as the quality of the decision. It is mandatory to dedicate time and effort to do well. In fact, management forgives a decision that does not work as planned, if the correct process has been used. A decision that by chance works well, but has been formulated without the necessary steps, is more than likely to receive a reprimand from superiors.Toyota's secret to the smooth and often flawless implementation of new initiatives is early and careful planning, with extreme attention to detail.

Principle 14: Become an organization that learns through constant reflection (hansei) and continuous improvement (kaizen). The reason why Toyota is one of the best organizations is that it considers standardization and innovation as two sides of the same coin, combining them in a way that creates great continuity. The foundation for the Toyota model of learning is the following: standardization with brushstrokes of innovation, which becomes a new standard.

At Toyota, teamwork never replaces individual responsibility. This is not about complaints or punishments, but learning and growth. A key to learning, not only in Toyota, but in Japanese culture, is hansei or "reflection".Without hansei it is impossible to have kaizen. Hansei means that when you do not do something right, at first you must feel very sad. Then, you should think about how in the future you will solve that problem and sincerely believe that you will not make the same mistake again. Hansei is a way of thinking and an attitude that is inseparable from kaizen. Toyota executives have become consummate teachers in setting demanding goals together with their collaborators and are passionate about measurement and feedback.

These are the bases of hoshin kanri. The hoshin kanri, also known as "policy deployment", is Toyota's process to set cascading objectives, from top management to the working group. Aggressive goals are initiated at the executive level and then each level, in turn, develops its measurable objectives for the year, designed to support the goal of the executive level. At Toyota, these goals must be measurable and very specific (for example, reducing packaging costs by 47% of sales, reducing inventory by 50%, etc.). Ambiguous objectives are not accepted.