The Toyota Way

The Toyota Way

by Jeffrey Liker

The Toyota Way provides an excellent introduction of the Toyota Production System and insights into the company culture.

Toyota is the leader of lean production. In contrast to batch and queue systems, lean focuses on one-piece flow. The customer is the next process and the ideal batch size is one, so the source of defects can be discovered before thousands of defective parts are made.

Counter-intuitively Toyota does not strive for zero downtime. Production should be stopped when there is a problem (jidoka). In the words of Fujio Cho, who was president of Toyota Motor Corporation in Kentucky, “If you are not shutting down the assembly plant, it means you have no problems. All manufacturing plants have problems. So you must be hiding your problems.”

Core principles are continuous improvement (kaizen) and reducing waste (muda) such as unnecessary work, uneven workflow, and excess inventory. Just-in-time inventory enables efficient production, but not without vulnerabilities. Thus Toyota has very deep relationships with suppliers.

Toyota is focused on process rather than technology. “Often the best option was a low-tech solution.” Cards (kanban) are used to signal replenishment of parts. Traffic lights (andon) are used to signal production line problems and shut downs. “Technology should be highly visual and intuitive.”

Consensus building (nemawashi) is part of Toyota’s culture. In essence, everyone affected by a decision should be consulted in advance. This reduces unanticipated obstacles impeding execution.

The book explains five-why analysis. “One technique that is part of kaizen (continuous improvement) is to ask why a problem exists five times, going to a deeper level with each ‘Why?’ to get to the root cause of the problem… Taiichi Ohno emphasized that true problem solving requires identifying ‘root cause rather than source;’ the root cause lies hidden beyond the source.”

One idea which resonates with me is genchi genbutsu: “You cannot be sure you really understand any part of any business problem unless you go and see for yourself firsthand.” Another is the one page report—the idea that less is more. “Reduce your reports to one piece of paper whenever possible, even for your most important financial decisions.”

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Liker, Jeffrey K. The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer. New York: McGraw-Hill, 2004. Buy from Amazon.com

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