The Toyota Way in Information Technology by Pierre Masai, VP & CIO of Toyota Europe at the European Lean IT Summit 2012


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In his presentation "The Toyota Way in Information Technology – Lean IT and IT for the Lean Company" at the European lean IT Summit 2012, Pierre Masai explained how the Toyota Production System is applied to the IS function of Toyota Motor Europe, showing with a number of concrete examples how the principles of Just In Time and Jidoka are applied in an IS context, then more generally, how they are progressing on their journey to move from ‘lean IS’ to ‘IS enabled lean enterprise’.
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  • This was the best presentation of the European Lean IT Summit in Paris! So little has been know about Toyota's use of IT. It makes sense that this CIO would be fully versed in the Toyota Production System and concepts of Lean IT.
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The Toyota Way in Information Technology by Pierre Masai, VP & CIO of Toyota Europe at the European Lean IT Summit 2012

  1. 1. Towards an IS Enabled Lean EnterprisePierre MasaiVP of Information Systems & Telematics
  2. 2. Agenda Introduction Toyota Way & Business Practice Manufacturing TPS and IS The IS Enabled Lean Enterprise
  3. 3. Agenda Introduction Toyota Way & Business Practice Manufacturing TPS and IS The IS Enabled Lean Enterprise
  4. 4. Toyota – in the World Established in 1937 77 manufacturing companies in 27 countries Vehicles sold in more than 170 countries worldwide 7.95 million vehicles sold worldwide in 2011 Market share • (2011): 44% in Japan, 12.6% in US • (2011): 4.2% in Europe Net revenue: • €170 billion in FY 2011-12 • €217 billion forecast for FY 2012-13 Approx. 318,000 employees worldwide
  5. 5. Regional Headquarters Toyota Motor Europe NV/SA (TME) Toyota Motor Corporation Toyota Motor North America, Inc. (TMC) (TMA) Toyota Motor Asia Pacific Pte Ltd. (TMAP-MS)
  6. 6. Manufacturing Facilities TMMR - Camry TMIP – Diesel engines TMUK - Engines TMUK – Auris, Auris Hybrid & Avensis TMMP - Engines & Transmissions TMMF – Yaris & Yaris Hybrid TPCA - AYGO Toyota Caetano Portugal Commercial Vehicles TMMT - Auris & Verso
  7. 7. Manufactured VehiclesApprox. 2/3 of our vehicles sold in Europeare made in Europe:• Toyota AYGO• Toyota Yaris• Toyota Yaris Hybrid• Toyota Auris• Toyota Auris Hybrid• Toyota Verso• Toyota Avensis• Toyota Camry• Toyota Dyna
  8. 8. National Marketing & Sales Companies  30 NMSCs  56 Countries  275 Lexus retailers  2,835 Toyota retailersNot shown: Toyota Caucasus LLP, Union Motors Ltd (Israel), Toyota Motor Kazakhstan LLP
  9. 9. Agenda Introduction Toyota Way & Business Practice Manufacturing TPS and IS The IS Enabled Lean Enterprise
  10. 10. The Toyota Way Values Continuous Improvement Respect for People Challenge Respect Kaizen Teamwork Genchi genbutsu
  11. 11. The Toyota Way Values Continuous Improvement Respect for People Without ever being satisfied with the current situation, We respect people, and always pursuing the most practical and believe the success of our business is and effective solutions, created by individuals we strive to continually increase our and good teamwork. knowledge
  12. 12. Toyota Way Values – Respect for People Respect for People Benefits Respect the ability of Provide opportunities for people to solve problems personal developmentPeople’s ability to think is Sense of achievement, boundless self-realization, self- improvement
  13. 13. The Toyota Way Values and Toyota Business Practices Toyota Business Practices Continuous Improvement Respect for People Challenge Respect Kaizen Teamwork Genchi genbutsu
  14. 14. Toyota Business Practices Clarify the Problem Customer First Always Confirm the Purpose of Your Break Down the Problem Work Take Ownership and ResponsibilityPlan Target Setting Visualization (MIERUKA) Toyota Root Cause Analysis Judgment Based on Facts Business Develop Countermeasures Practices Think and Act Persistently Speedy Action in a Timely Manner See Countermeasures ThroughDo Follow Each Process with Sincerity and CommitmentCheck Monitor both Results and Processes Thorough Communication Standardize Successful ProcessesAct and Start next iteration Involve all Stakeholders
  15. 15. Why is Process Important ?“We get brilliant results fromaverage people managing brilliantprocesses. We observe that ourcompetitors often get average (orworse) results from brilliant peoplemanaging broken processes.“Source: “Decoding the DNA of the Toyota Production System“ Steven Spear and Kent Bowen,Havard Business Review, September October 1999
  16. 16. TBP Training within TMEMandatory training for all employees Multi-day formal training in Toyota Way and Toyota Business Practices Multi-month ‘training’ project With an assigned coach Ends with a formal presentation of a Toyota Business Practices “A3” If required, a ‘second chance’ presentation can be scheduled several months after the firstFollow-up “on-the-job” training: In daily work: Identifying Problems, taking Decisions In all management processes: reporting, KPIs, etc.
  17. 17. Types of Problems in Toyota Future Possible Level of Performance ‘Setting’ or ‘Stretch’ type of problem Standard Exception or Gap type of problem Current Situation
  18. 18. Problems – Some advice from Ohno San “No one has more trouble, than the person who claims to have no trouble.” (Having no problems is the biggest problem of all.) Taiichi Ohno
  19. 19. Agenda Introduction Toyota Business Practice Manufacturing TPS and IS The IS Enabled Lean Enterprise
  20. 20. Linking TPS and IS Implement  Design software deliverables with small lot sizes, with a short PDCA cycle to highlight issues very quickly after they occur. continuous flow to highlight problems  Encourages Heijunka and allows Jidoka  In requirements gathering – ensure that the IS member spends Go and see (Genchi- time with the business, engaged in their proces. Genbutsu).  In Software development and Project management create Virtual Gemba and deliver meaningful KPIs to clarify the facts.  By using continuus flow and Heijunka encourage frequent lines Stop to fix problems stops early in the project to fix problems. & Jidoka  Maximise value of human checking by automating where possible
  21. 21. Linking TPS and IS  Encourage team members to understand the entire process, by Develop the team job rotation and special assignments. (including Suppliers)  Involve suppliers fully, being open about process and measures.  Once basic principle and operation are clear, use technology to Use technology to support it. help the process  Don’t follow a product’s operation without thought.  In Software development visualise defects and causes. Visualise your process and Results  Visualise entire project using one document Plan, Issues/Risks, Costs and Quality.
  22. 22. Visualisation 1
  23. 23. Visualisation 2
  24. 24. Agenda Introduction Toyota Way & Business Practice Manufacturing TPS and IS The IS Enabled Lean Enterprise
  25. 25. Lean IS or Lean Enterprise• How does TME create IS Systems that embody lean business processes ? • If we only make the IS process lean – this benefits IS and has some benefits for the business. • .. but if we can implement systems that make us lean as an Enterprise - this benefits the whole company.
  26. 26. Lean IS or Lean Enterprise• Lean IS can deliver big impact in the scope of the IS department.…like high revs in first gear.• If we can engage the higher gears, through operating at an Enterprise scope, larger opportunities become available to us.
  27. 27. Objective Benefits of a Lean EnterpriseIDC Survey of 800 manufacturers showed an average 40% increase in profitability between Lean and non Lean companies. WorldwideLean Companies Median Quarterly Net Profit Margin Trends,1Q02–4Q11 Source: IDC Manufacturing Insights Q1 2012
  28. 28. Elements Required for Lean Systems• Clear Direction; • Consistent from Global to Company to individual Level. • Consistent between each Division & Department.• Complementary approach to Strategic and Practical objectives.• Management of Process and Results.• IS Management has objective to deliver Business Improvement not simply deliver Software.
  29. 29. Direction = HoshinHoshin Kanri; Management of Direction• Mid to Long Term Viewpoint.• Vertical Alignment• Horizontal Coordination• Process and Results Management.• Human Resource Development
  30. 30. Hoshin Kanri
  31. 31. “Stop and Solve problems” vs Hoshin Problem Solving Steps Annual Hoshin Kanri Cycle 1. Clarify the Problem Develop an Image of the Desired Future Situation P Grasp the Current Situation A D Identify C Gaps Draft the Annual Determine Daily Management Items 2. Breakdown the Problem 3. Set the Targets Hoshin Plan Engage in 4. Root Cause Analysis Nemawashi 5. Develop Counter-measures Create a Deployment Plan Implement the Countermeasure 6. See the Countermeasures through P Plan or A D 7. Monitor both Process and Results Standardize C Kaizen the 8. Standardize Check Progress Hoshin Management Process
  32. 32. Hoshin Kanri - Recap• Forget about IS and Enterprise alignment. • … this concept is based upon IS and the company business being separate.• We are one team, with one aim.• Hoshin Kanri allows us to clarify the aims and each give maximum contribution.• If an “excellent” IS system does not give business value – it isn’t an excellent system.
  33. 33. PDCA and Continuous improvement
  34. 34. Plan
  35. 35. Do
  36. 36. Check
  37. 37. Act
  38. 38. PDCA Recap• Clarifying the direction and the essential logic of business value is a one team activity – all parties must contribute.• Checking the benefits is the same.• Honest and measurable evaluation of benefits result in wisdom that can be carried forward.• .. “When we blame we lose the power to change”.
  39. 39. Example – Pan E Telematics• Ambition to take an early step into Telematics for mass produced vehicles.• Our Pan E organisation structure was optimised for country by country support.• Toyota needed to introduce a new business flow and we did this by introducing a Telematics system that could implement that.
  40. 40. Pan E Telematics – What we delivered Search Engine Providers
  41. 41. Pan E TelematicsCentralised management of our customer and vehicle data
  42. 42. Pan E Telematics TME Vendors•TME IS is responsible for functions in the vehicle for the first time
  43. 43. Agenda Introduction Toyota Way & Business Practice Manufacturing TPS and IS The IS Enabled Lean Enterprise In Summary
  44. 44. Summary•TME believe that the Toyota Way principles strengthen our work and our organisation.•Through a sincere implementation of Lean thinking the Enterprise can move forward, with Kaizen and Innovation.•Our customers cannot do this without an IS team fully committed to business benefit.•The IS team cannot do it without their customers.
  45. 45. Thank you Thank you for your attention today at the #Lean #IT Summit @PierreMasai