The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer

by Jeffrey K. Liker

As The Toyota Way 2001 puts it, “We accept challenges with a creative spirit and the courage to realize our own dreams without losing drive or energy.”

the philosophy of deeply understanding the current condition before making a decision or trying to change something that you think will be an improvement.

There are two main aspects of genchi genbutsu. First, decisions are made based on observed facts about the issue, rather than on hunches, assumptions, or perceptions. Second, decisions should be put into the hands of those closest to the problem and those who have gone to see it and have a deep understanding of its causes and the possible impact of proposed solutions.

Critical to Toyota’s success is single-point accountability. One person’s name goes up next to each item in an action plan. But in order to succeed, the individual responsible must work with the team, draw on its collective talents, listen closely to all team members’ opinions, work to build consensus, and ultimately give credit for success to the team.

Respect and Develop People In many ways, this is the most fundamental of the core values. Respect for people starts with the desire to contribute to society through producing the best possible products and services. This extends to respect for the community, customers, employees, and all business partners.

The Toyota Production System, with its just-in-time system and andon to surface problems immediately, creates constant challenges on the shop floor.

Toyota needs every employee to always be thinking about how to improve processes—continuous improvement—just to keep up with the demands of the highly competitive automobile business. That requires Toyota to invest in team members so that they can be problem solvers. It is these skills in deeply understanding the gemba, solving problems as they occur, and systematically improving through PDCA that make Toyota team members the company’s most valuable asset.

it cannot operate in a vacuum. Toyota must also contribute to society through new technologies and “enrich the lives of communities” where it does business.

One thing that stands out to class members is the remarkable consistency of philosophy and thinking of leaders at all levels. In one class, the first observations that class members made were (1) “Consistency of the principles and values across all levels and time,” (2) “They repeat historical Toyota stories so often,” and (3) “There is a strong culture that is evident everyplace.” Even in a one-day visit, it is evident that Toyota leaders walk the talk. And the people in the class would have come to the same conclusions if they had visited any other Toyota manufacturing plant in the world. Toyota’s culture is deliberate and consistent, and the company’s words correspond well to actions.

Deliberate practice is goal oriented, focused on determining, for example, “What is my next step to get to a higher skill level? What is the gap between my current way and the desired way? And what exercises can I do to close the gap?”

What drives Toyota forward is people who believe there is always a better way

five foundational elements of The Toyota Way 2001 drive continuous improvement in pursuing challenging goals through kaizen and a daily focus on developing people and teams.

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, former President, Toyota Motor Manufacturing, North America

In Toyota, the ideal of continuous flow has become a core belief. Flow is at the heart of the lean message that shortening the elapsed time from raw materials to finished goods (or services) will lead to the best quality, lowest cost, and shortest delivery time.

Connected processes force all team members to strive for perfection. Ohno taught that lowering the “water level” of inventory exposes problems (like rocks in the water), and you are forced to deal with the problems. Coupling steps in the process so that there is little material or time buffer lowers the water level and exposes inefficiencies that demand immediate solutions. Everyone concerned is motivated to fix the problems and inefficiencies because the process will shut down if they aren’t fixed. As Ohno disciple Mr. Minoura explained: When they run one-piece production, they can’t have the quantity that they want so everybody gets frustrated and doesn’t know what to do. But then, within that, they have to find ways to think: what is the way to get the quantity? That is the true essence of TPS and, in that sense, we create confusion so we have to do something different in approaching this problem.

In order to increase throughput, the analysts had to work on fewer projects at a time.

I have heard this repeated from other Toyota leaders: “We would rather be slow and steady like the tortoise than fast and jerky like the rabbit.”

At Toyota, muda is viewed as something that can be worked on by the frontline work group, but overburden and unevenness are the responsibility of management.

To get to lean flow requires seeking to eliminate the three Ms: muda (waste), mura (unevenness), and muri (overburden).

Today’s standardization . . . is the necessary foundation on which tomorrow’s improvement will be based. If you think of “standardization” as the best you know today, but which is to be improved tomorrow—you get somewhere. But if you think of standards as confining, then progress stops.

By “standardized work,” we are referring to the most efficient and effective combination of people, material, and equipment to perform the work that is presently possible. “Presently possible” means it is today’s best-known way, which can be improved.

Managers have a misconception that standardization is all about finding the scientifically one best way to do a task and freezing it. As Imai explained so well in Kaizen,4 it is impossible to improve any process until it is standardized. If the process is shifting from here to there, then any improvement will just be one more variation that will be altered by the next variation. One must standardize, and thus stabilize, the process before continuous improvements can be made.

Whenever a defect is discovered, the first question asked is, “Was standardized work followed?” As part of the problem-solving process, the leader will watch the worker and go through the standardized worksheet step-by-step to look for deviations. If the worker is following the standardized work and the defects still occur, then the standardized work may need to be modified.

To turn the desired behavior into actual behavior requires training through enough repetitions that the new way becomes a habit.

In a Toyota plant with one-minute-cycle jobs, it can take two weeks of this repeated teaching before the worker is left alone, more training than many people get in some professional roles.

most modern organizations need to be flexible, to focus on effectiveness, to be adaptable to change, and to do this by empowering their employees.

The critical task for standardized work is to find that balance between providing employees with rigid procedures to follow and providing the freedom to innovate and to be creative in consistently meeting challenging targets for cost, quality, and delivery. The key to achieving this balance lies in the way people write standards, as well as who contributes to them.

standardized work must be specific enough to be a useful guide, yet general enough to allow for some flexibility.

the people doing the work are in the best position to improve the standardized work.

But here is the truly important discovery from our observations: when task standardization is adopted and steady work cadences are achieved, people are freer to do the satisfying work of making human connections. When work tasks are both repeatable and rote, managers, executives, and frontline baristas all have more space in their lives to chat a little, to ask questions, and to listen to others.

When the organization is viewed as a machine, then standardized work is a tool that is intended to make it a better machine. Figure 5.6 presents a common graphic in lean training that shows standards as backstops. You figure out the best known way to do the job, write out the worksheet, teach it, and then shove the standardized work in place to prevent the process from slipping back. This ignores the fact that it is the person who can slip back, not the process. People have a way of doing the work that they are comfortable with, and developing any new habit takes repetition—practice.

The ideal state is to have standardized work that is practiced consistently by people coupled with step-by-step improvement through rapid PDCA cycles. The next level of performance can be thought of as a “target condition” that people need to strive for. You do this by experimenting with different methods for doing the work, and then when a performance threshold is achieved, you document the process and teach it as the best known way at that time.

If you are not shutting down the assembly plant, it means that you have no problems. All manufac130turing plants have problems. So you must be hiding your problems. Please take out some inventory so the problems surface. You will shut down the assembly plant, but you will also continue to solve your problems and make even better-quality engines more efficiently.

Cho explained that it took several months to “re-educate” them that it was a necessity to stop the line if they wanted to continually improve the process. He had to go down to the shop floor every day, meet with his managers, and, when he noticed a reason to stop the line, encourage the team leaders to stop it.

In-station quality (preventing problems from being passed down the line) is much more effective and less costly than inspecting and repairing quality problems after the fact.

team members are instructed to pull the cord when they identify any out-of-standard conditions, which enables continuous improvement.

The customer is the final arbiter of how good a job the company is doing.

The voice of the customer must be driven through every process from design to manufacturing.

Here are the five Ss (seiri, seiton, seiso, seiketsu, and shitsuke) translated into English:* 1. Sort. 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 prefailure conditions that could hurt quality or cause machine failure. 4. Standardize (create rules). Develop systems and procedures to maintain and monitor the first three Ss. 5. Sustain (self-discipline). Maintaining a stabilized workplace is an ongoing process of continuous improvement as conditions change. In

Lean systems use 5S to support a smooth flow to takt. 5S is also a tool to help make problems visible and, if used in a sophisticated way, can be part of the process of continuous improvement.

“Visual control” is any communication device used in the work environment that tells us at a glance how work should be done and whether it is deviating from the standard.

Visual controls at Toyota are integrated into the process of the value-added work. The “visual” aspect means being able to look at a process, a piece of equipment, inventory, information, or a worker performing a job and immediately see the standard being used to perform the task and if there is a deviation from the standard.

Can your manager walk through the shop floor, office, or any type of facility where work is being performed and recognize if standardized work or procedures are being followed?

If there is no kanban card requesting that you refill a bin, then the bin should not be there. The filled bin without a kanban is a visual signal of overproduction.

the best visual indicators are right at the worksite, where they can jump out at you and clearly indicate by sound, sight, and feel the standard and any deviation from the standard. A well-developed visual control system increases productivity, reduces defects and mistakes, helps meet deadlines, facilitates communication, improves safety, lowers costs, and generally gives the workers more control over their environment.

Humans are naturally visual creatures and are more likely to recall and use information if it is in a visual format, preferably pictures.

Visual control at the worksite should make it clear at a glance what the standard is and if anything is out of standard.

Bill Gates wisely observed: The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.

Managers, engineers, and production team members needed to develop the following four skills: Visualize production. Develop explicit knowledge of the process. Standardize the knowledge. Develop intelligent automation through kaizen.

had to have specific skills I was working toward, a standard for what I wanted my swing to be like, and for each swing of the club I needed to note deviations from the standard and then think of and practice a countermeasure to those deviations.