BOOK REVIEW: THE TOYOTA WAY

LEAN IS
A LONG JOURNEY THAT NEEDS COMMITMENT, PATIENCE, LONG-TERM THINKING,
POSITIVE MINDSET AND ATTITUDE, AND CONTINUOUS IMPROVEMENT WHICH ARE
MERGED TOGETHER AS OPERATIONAL EXCELLENCE AND AS A STRATEGIC WEAPON.
- DAVI D MEI ER & J EFFREY LI KER

SUBMITTED AS PARTIAL REQUIREMENT IN THE SUBJECT
ME 613 ENGINEERING PRODUCTION MANAGEMENT


TO:

DR. MICHAEL A. ALORIA
PROFESSOR BATANGAS STATE UNIVERSITY

BY:

VIRNE B. DALISAY
G2006-00130





OCTOBER 2014
THE TOYOTA WAY: Toyota Production System (TPS)
The TPS involved a flexible batch process, with multipurpose capital equipment and cross trained
workers supplied by JIT inventory. It aimed at eliminating wastage and lowering capital expenses
to increase productivity through a process of continuous improvement or kaigen. It focused on
empowerment of workers and on developing strong relations with suppliers. This whole case is
about Toyotas efficient production system how Toyota gains comparative advantage over other
car manufacturers. TPS consisted of two aspects- the Hard or the technical part and the Soft
or people related part. The hard aspect focused on the manufacturing systems like JIT and
Kanban and soft part related to respect for humans, which included workers and suppliers. TPS
tried to increase the efficiency of production by eliminating waste and lowering costs. JIT was the
foundation of TPS. Its aim was to eliminate waste of all kinds by producing or supplying
materials only when they were needed and not earlier. The principle behind JIT was to produce
only necessary products, at the necessary time and in necessary quantity, to keep the stock at
minimum. Adopting JIT allowed Toyota to do away with inventory and stores, thereby cutting
out the corresponding costs. JIT was based on reverse reasoning, and the working of the
production line started at the point of customer demand. Kanban was the cornerstone of JIT and
helped Toyota achieve a high level of outsourcing. In this system process needing components
wrote the details about the kind of units needed and the quantity on a card called the KANBAN. A
worker then took this card to the preceding process and withdrew the amount required. Kanban
had evolved into sophisticated inventory management tool that ensured production in the required
quantities at the right time in all manufacturing processes within a factory. Kaizen meant
continuous improvement and was another element of TPS. Kaizen required all employees to
participate in eliminating all activities that were classified as waste from the production system.
Kaizen involved a great of observations of workers and their work processes. The focus of Kaizen
was not just to identify a problem and develop a solution, but to understand the problem and all
its alternatives thoroughly. Considering the persuasive nature of Kaizen activities, the support and
commitment of the management was an important prerequisite for their successful
implementation. An important element in Kaizen was Poka-yoke involved the creation of
processes that moved smoothly from step to step, without giving room for errors to creep in. The
human element played an important role in the TPS. Analysts said that the organizations and
structure of the human resource function, in addition to the corporate culture, played a very
important role in Toyota's success. The main considerations in TPS were:
Elimination of wasteful movement by the workers
Consideration for workers safety; and
Self-display of workers capabilities by entrusting them with greater responsibility and
authority
The TPS emphasized flexibility and team work. Most of the workers were cross trained and could
be shifted between different production lines. Jidoka was manifestation of Toyotas commitment
towards empowerment. This philosophy empowered workers to stop the equipment or operations
in a line whenever an abnormal or defective condition arose in the line. This displayed the trust
that Toyota placed in the capability of its workers and was also meant to promote worker
participation. The Jidoka system helped direct attention to the problem as soon as it occurred,
thus preventing further complications. This helped Toyota achieve a high level of quality. John
Krafcik a researcher first coined the term Lean Manufacturing in the late 1980. The concept
was based on the Toyotas Production System, which manufactured better quality products with a
lower defect rate and at a great speed than its competitors. Lean manufacturing is lean because
it uses less of everything- half the manufacturing space, half the investment in tools, half the
engineering hours, and half the time to produce goods that have fewer defects. It combines teams
of multi skilled workers at all levels of the organization and uses highly flexible and increasingly
automated machines to produce volumes of product of enormous variety (Abhishekh Kumar).
Jeffrey K. Liker, the author of The Toyota Way, believes that an ultimate success can be achieved
by using tools such as Just-In-Time (JIT), one piece flow, jidoka and heidunka, and the
philosophy of the Toyota Way. Most of the tools in Toyota Production System (TPS) are focused
on the behavior of eliminating non-value added waste (muda) in business and manufacturing
processes. These mudas can be derived as below:
Overproduction;
Waiting time (for next steps, tools, parts etc);
Unnecessary transport of work in progress;
Over processing / incorrect processing;
Excess inventory;
Unnecessary movement;
Defects in products or machines;
Unused employee creativity.
TPS is all about applying the principles of The Toyota Way in order to encourage, support and
give workers the opportunity to contribute in the improvement of the systems and to themselves.
It is a culture more than efficiency and improvement techniques.
Liker divided Toyota Way 14 principles into four categories, the Philosophy, Process,
People/partners and Problem Solving:
No. Explanation
Philosophy
Principle
1
Base all management decisions on a long term philosophy even at the
expense of short term financial goals.
Process
Principle
2
Create continuous process flow to bring problems to the surface.
Principle
3
Use pulls 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 (such as 5S program).
People/partners
Principle
8
Use only reliable, thoroughly tested technology that serves your people
and processes. Add value to the organization by developing your
people and partners.
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 the companys
philosophy.
Principle
11
Respect your extended network of partners and suppliers by challenging
them and helping them to improve.
Problem Solving
Principle
12
Go and see for you to thoroughly understand the situation (genchi
genbutsu).
Principle
13
Make decisions slowly by consensus, thoroughly considering all
options, and implement decisions rapidly.
Principle
14
Become a learning organization through relentless reflection (hansei)
and continuous improvement (kaizen).

Everyone in Toyota holds to the same philosophy, to generate value for the customer, society and
the economy. Thus, they strive to be responsible, to act with self-reliance and improve skills that
enable them to produce added value. Toyota also implemented a kind of one-piece flow to the
production line or information management which is able to expose any inefficiencies or defects
that demand immediate attention that motivates everyone to fix the problems. This is an approach
that builds up quality, creates flexibility and results in optimum productivity. Toyota always
replenishes their stock based on usage rate. This is the basic principle of JIT that minimizes work
in progress and avoiding keeping a large inventory by stocking small amounts on short time
interval. This habit also contributes to heijunka. Toyota levels out both volume and product mix
of all manufacturing and processes. Instead of building products based on customers demand,
they take the total amount of orders in a specified period and level them so the same amount and
design are made each day in a predictable sequence, spreading out different product types and
leveling volume. Toyota believes that quality should be built in, thus devices are built into
machines to detect any abnormalities and automatically stop an operation. Meanwhile, in the case
of human, every team member has the responsibility to stop the line every time something is out
of standard. As the foundation for flow and pull, the company uses stable, repeatable methods
everywhere to maintain the predictability, regular timing and regular output of its process. By
using these standardized practices, it can capture the accumulated learning about a process up to a
point and allows individuals to emerge from those executing the process and improve upon the
standard. Visual control refers to the design of JIT information of all kinds, integrated into the
process of value-added work in order to ensure fast execution of operations and processes.
Included in this is the 5S program (sort, straighten, shine, standardize and sustain) which support
a smooth flow and help make problems visible. At Toyota, new technology is introduced only
after it has been thoroughly examined and tested to ensure it adds value to the process and does
not conflict with the principles of valuing people over system and eliminating waste. If only it
meets all these criteria, it will be used to support continuous flow in the production process and
help employees perform better. Every leader in the company has to deeply understand and live
the philosophy by demonstrating and understanding how work gets done so that it can create the
environment for a learning organization and lay the foundation for genuine long term success.
Toyota from time to time encourages its employee to work right and to strive for daily
improvement by building a system that conforms to the principle of developing exceptional
people and teams who respect the companys philosophy. Its about making the training of a
bunch of exceptional people and work groups that integrates the social system with the technical
system. In choosing partners and suppliers, Toyota tends to choose those who are solid enough
and grow together with them for long term benefit. New suppliers have to prove their sincerity
and commitment to Toyotas high performance standards in quality, cost and delivery before it
can be adopted into the Toyota family. Genshi genbutsu means involvement in every aspect to
thoroughly understand the situation. People in Toyota go down to the ground and see for
themselves. Its the factor that distinguishes the Toyota Way from other management approaches.
Toyota is a true learning organization. It tends to push everyone to think and grow together
through a process in which mistakes are considered a medium for learning. This involves
perceiving the problem, clarifying it, determining the root cause, providing effective
countermeasures, evaluating the results and standardizing the approach. Only then the new
knowledge is transferred to the right people at the right time to ensure the companys continuous
learning culture.
Transitioning into The Toyota Way can be achieved by doing changes in the technical system,
followed quickly by cultural change. Learn by doing first and training second. Use kaizen
workshops to teach and make rapid changes. Be opportunistic in identifying opportunities for
making big financial impacts. Hire and develop lean leaders and create a succession system, and
use experts for getting quick results.
The 4P model of Toyota Way (Liker & Meler):
1. Philosophy (Long term Thinking): Adding Value to Customers and Society
Base management decisions on a long term philosophy, even at the expense of short-term
financial goals
Toyota mission:
Contribute to the economic growth of the country in which it is located (external
stakeholders)
Contribute to the stability and well-being of team members and partners (internal
stakeholders)
Contribute to the overall growth of Toyota

2. Process (Eliminate Waste): Eliminate waste through flow and Standardization
Lean Manufacturing is a manufacturing philosophy which shortens the time between the
customer order and the product build / shipment by eliminating sources of waste.
Why Focus on Flow? If some problem occurs in one-piece-flow manufacturing, then the whole
production line stops. In this sense it is a very bad system of manufacturing. But when production
stops everyone is forced to solve the problem immediately. So team members have to think, and
through thinking team members grow and become better team members and people (Teruyuki
Minoura).
Lean Tools to Support Flow
5S-Visual Workplace
When anyone can walk into a workplace and visually understand the current situation.
Total Productive Maintenance
Total Productive Maintenance (TPM) - it is a Productive Maintenance with
EVERYONEs participation.
Quick Changeover
The more quickly we change over, the more our inventory levels decrease. This helps
accomplish our goal of waste elimination.
Standardized Work
Standardized tasks are the foundation for continuous improvement and employee
empowerment
Quality Methods

3. People and Partners (Respect, Challenge and Grow Them): The heart and soul of
Toyota Way
Grow leaders, who thoroughly understand the work, live the philosophy, and teach it to
others. Develop exceptional people and teams who follow your companys philosophy.
Respect your extended network of partners and suppliers by challenging them and
helping them improve.
4. Problem Solving (Continuous Improvement and Learning): The dynamic of The
Toyota Way
Typical Improvement Opportunities Available
Improvement Approaches of Typical Companies
Toyota Leverages Opportunities at all Levels
Most common mistake - Jumping from problem to solution without clear
understanding and analysis. Problems are opportunities to learn. Hiding problems
undermines the system
Characteristics of Effective Lean Transformation
Top Down Directive that this is the new way.
Bottom-up involvement in concrete projects with clear results.
Develop internal experts through learning by doing.
Expert sensei to guide the process and teach.
Learning philosophy: every project, activity, is a chance to learn.
Start with value stream transformation projects.
Build on successes to transform broader organization and culture over time even years.





Bibliography
1. Abhishekh Kumar, e. (n.d.). Taiichi Ohno and Toyota Production System.
2. Liker, J. K., & Meler, D. (n.d.). Lessons Learned from The Toyota Way. Western
Massachusetts APICS Keynote. University of Michigan.
3. Teruyuki Minoura. (n.d.). Toyota Motor Manufacturing, North America.