The Toyota Way - 14 Management Principles

The Toyota Way

14 Management Principles
Author: Jeffrey K.Liker

ANUJ NIJHON

The Toyota Way - 14 Management Principles

About The Author

Dr. Jeffrey K.Liker is Professor of Industrial and operations Engineering at the University of Michigan. He is the director of the Japan Technology Management Program (JTMP) and co-director of lean manufacturing program at university of Michigan that offers a ten day lean manufacturing certificate and five day lean development certificate. Dr Liker has authored over 65 articles and five books.

The Toyota Way - 14 Management Principles

14 13 2 11 10 9 8 7 6 5 4 3 2 1

Principle 1
Base your management decisions on a longterm philosophy, even at the expense of short-term financial goals.
1. Align the organization toward a purpose greater than making money. 2. Generate value for the customer, society and the economy. 3. Be responsible. Accept responsibility for your conduct and maintain and improve the skills that enable you to produce added value.

The Toyota Way - 14 Management Principles

14 Principle 2 13 12 Create a continuous process flow to bring 11 problems to the surface. 10 9 1.Redesign processes to achieve 8 continuous flow. 7 2.Create flow to move material 6 and information fast. 5 3.Link processes and people so 4 that problems surface right away. 3 4.Make flow obvious throughout 2 your organizational culture. 1

The Toyota Way - 14 Management Principles

14 Principle 3 13 12 Use pull systems to avoid overproduction. 11 10 9 1.Provide downstream customers in the process with what they want, 8 when they want it, and in the amount that they want. 7 6 2. Pull vs Push Material replenishment initiated by 5 consumption is the basis for just-in-time. 4 Just-in Time - an organized 3 system of inventory buffers. 2 1

The Toyota Way - 14 Management Principles

14 Principle 4 13 12 Level out the workload 11 10 Benefits of leveling schedule 9 1- Flexibility to make what the customer wants 8 when they want it. 7 2- Reduced risk of unsold goods. 6 3- Balanced used of labor and goods. 5 4 3 2 1

The Toyota Way - 14 Management Principles

14 Principle 5 13 12 Build a culture of stopping to fix problems, to 11 get quality right the first time. 10 9 8 7 6 5 4 3 2 1

The Toyota Way - 14 Management Principles

14 Principle 6 13 12 Standardized tasks and processes are the 11 foundation for continuous improvement and 10 employee empowerment. 9 8 7 6 5 4 3 2 1

The Toyota Way - 14 Management Principles

14 Principle 7 13 12 Use visual control so no problems are hidden. 11 10 Sort Simple visuals to support What to work flow 9 keep and dispose 8 Determine deviation Sustain Straighten 7 from standard maintain (orderliness) stabilized place for Eliminate workplace everything 6 Reduce report size Waste 5 4 Standardize Shine 3 procedure inspection maintain 1 affect quality 3 2 1
st

The Toyota Way - 14 Management Principles

14 Principle 8 13 12 Use only reliable, thoroughly tested 11 technology that serves your people and 10 processes. 9 Support people not replace them 8 Analyze impact of new technologies on existing 7 processes 6 Conflict company philosophy or 5 principle? 4 Involve stake holders 3 Encourage to consider new 2 technologies while seeking for new 1
approach

The Toyota Way - 14 Management Principles

14 Principle 9 13 12 Grow leaders who thoroughly understand the 11 work, live the philosophy, and teach it to 10 others. Dont buy leaders from outside 9 Leaders job: not only 8 Accomplishing task Having good people skills 7 Role models of companys philosophy 6 Must understand daily work in great details 5 4 3 2 1

The Toyota Way - 14 Management Principles

14 Principle 10 13 12 Develop exceptional people and teams who 11 follow your companys philosophy. 10 Create Strong stable culture. 9 Train Exceptional Individual & Teams to work with corporate philosophy. 8 Use Cross Functional Team 7 Make a Continuous effort towards Teamwork. 6 Understand & Use Motivation theory. Maslows Need Hierarchy theory. 5 Herzbergs Job Enrichment theory . Taylors Scientific Management theory. 4 Behavior Modification theory. 3 Goal Setting theory 2 1

The Toyota Way - 14 Management Principles

14 Principle 11 13 12 Respect your extended network of partners 11 and suppliers by challenging them and 10 helping them improve. 9 Maintain Principle of partnership 8 Acquire new suppliers. 7 Enhance relations with existing suppliers. 6 Teach The Toyota Way . 5 4 3 2 1

The Toyota Way - 14 Management Principles

14 Principle 12 13 12 Go and see for yourself to thoroughly 11 understand the situation. 10 9 Think and speak based on personally verified information and data. 8 Confirm the fact yourself. 7 Solve problem by going to root causes. 6 The Geography of thought. Think & speak based on personally verified data. 5 Common sense will tell you the answer, but collecting data and then understanding the facts will tell you 4 whether your common sense was correct. 3 2 1

The Toyota Way - 14 Management Principles

14 Principle 13 13 12 Make decisions slowly by consensus, thoroughly 11 considering all options; implement decisions rapidly 10 Five major elements in decision making process 9 1- Finding out what is really going on. 8 2- Understanding the causes of problems asking 7 why five times. 6 3- Broadly considering alternative solutions and 5 developing a detailed rationale for preferred or 4 selected solution. 3 4- Building consensus with team employee and 2 suppliers. 1 5- Using effective and efficient communication to convey steps 1 to 4.

The Toyota Way - 14 Management Principles

14 Principle 14 13 12 Become a learning organization through 11 relentless reflection and continuous 10 improvement . 9 8 7 6 5 4 3 2 1

The Toyota Way - 14 Management Principles

Lessons of organizational behavior of the book

The Toyota Way - 14 Management Principles

Difficult Times Require Special Actions

Leadership must consider future needs Intensify focus on people development and improvement activities Involve people in pursuit of cost reductions

The Toyota Way - 14 Management Principles

People are the Most Important Part of Toyota

Only people can think and solve problems Only people can understand the needs of customers Only people can support the process

The Toyota Way - 14 Management Principles

There is no Short Cut to Talent Development

Talent is developed through effort and hard work Learning occurs best in small increments spread over time Many non-job specific skills to learn
Leadership Problem Solving Developing others

The Toyota Way - 14 Management Principles

Most Desired Traits at Toyota

Job Fit Motivation Problem identification and solving Adaptability Team Leadership and Team Membership Initiative

The Toyota Way - 14 Management Principles

The 4 Steps of Talent Development

1. Prepare the organization to develop exceptional people 2. Identify critical knowledge 3. Effectively transfer knowledge 4. Verify learning and success

The Toyota Way - 14 Management Principles

Step 1: Prepare the Organization

The Toyota Way - 14 Management Principles

Begin by understanding the needs of your organization What is the purpose of developing people? It should be more than a project Interest in mutual prosperity

Define the Need

The Toyota Way - 14 Management Principles

Step 2: Identify Critical Knowledge

The Toyota Way - 14 Management Principles

Identify Major Steps and Key Points

Major Steps define WHAT to do Key Points explain HOW to do the Major Step Key Points are important items necessary explain the proper way to complete the task Each Key Point should have a valid reason why it is important

The Toyota Way - 14 Management Principles

Importance of Key Points Key Points are related to the most critical and important methods of doing the work Critical items must be very detailed and specific Items of low importance do not need key points

The Toyota Way - 14 Management Principles

Step 3: Transfer Knowledge to Others

The Toyota Way - 14 Management Principles

Step 1. Prepare the Student

Put the student at ease

State the Job Name

Find out what the student already knows about the job Get the student interested in learning the job Place the student in the correct position to learn

The Toyota Way - 14 Management Principles

Step 2. Present the Operation

Teacher demonstrates 1 Major Step at a time as student observes

Teacher demonstrates again as student observes each Major Step & Key Point
Teacher demonstrates again as student observes each Major Step, Key Point, & Reasons

Explain Clearly, Completely, and Patiently

Present no more than worker can do.

The Toyota Way - 14 Management Principles

Step 3. Try out Performance

Have the student try the job while you correct mistakes

Student explains the Major Step as the job is done again

Student explains the Key Points as the job is done again Student explains the Reasons as the job is done again

The Toyota Way - 14 Management Principles

Step 4: Verify learning and Success

The Toyota Way - 14 Management Principles

Step 4. Follow-up
Assign the person a task Tell the student where to go for help

Check their progress frequently

Encourage them to ask questions

Gradually reduce coaching followup

The Toyota Way - 14 Management Principles

Job Instruction Motto

If the student hasnt learned, The instructor hasnt taught

The Toyota Way - 14 Management Principles

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