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14 Management Principles : Toyota Way


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Awareness cum Training Program held at Kutch Saurashtra Productivity Council, Rajkot, India

Published in: Leadership & Management

14 Management Principles : Toyota Way

  1. 1. Excellence unLimited, Rajkot 1 14 Management Principles for Quality and Excellence The Toyota Way TOYOTA = The One You Only Trust , Always
  2. 2. Excellence unLimited, Rajkot 2 In the current Global meltdown scenario, Darwinian Principle of “Survival of the fittest” will prevail. If you want to survive and grow, You have to be fit !
  3. 3. Excellence unLimited, Rajkot 3 Adoption of best Management practices will make you fit and a winner !
  4. 4. Excellence unLimited, Rajkot 4 • Established in Japan in Year 1937, • Largest and most profitable automobile manufacturer in the world since 2008, • produced 20 crore vehicles till July 2012 (means ?) • About 70 different vehicle models, • Largest listed company in Japan, • 14th largest listed company world over, • Factories in 27 countries in the world, • Over 3,33,498 employees world over, • Following Best Management Practices since 1940 bout Toyota Motor Corporation
  5. 5. Excellence unLimited, Rajkot 5 • Though Toyota is practicing Best Practices since 1940, it defined them in 2001, terming it as “ The Toyota Way ”. • Michigan University professor Dr. Jeffrey Liker presented it to the world as book “ The Toyota Way ” in 2004 bout Book “ The Toyota Way ”
  6. 6. Excellence unLimited, Rajkot 6 Automobile industry is in turmoil world over. Recent news is that GM, Ford and Chrysler in USA are in deep financial trouble, while Toyota is less affected, thanks to its Management practices . Toyota Motor Corporation
  7. 7. Excellence unLimited, Rajkot 7 Also known as Lean / Flexible Manufacturing or Toyota Production System ( TPS – also called Thinking Person’s System ) is responsible for tremendous success of the company. Ideas invented in 1940s are still relevant, universal, and equally applicable to Service sector as well. The Toyota Way
  8. 8. Excellence unLimited, Rajkot 8 Toyota Way • The principles are no rocket science and are easy to understand and put them in practice to become and remain fit. • These principles are organized under four sections. ( 4 P ) • Section 1 : Long Term Philosophy • Section 2 : The Right Process will Produce the Right Results • Section 3 : Add Value to Your Organization by Developing Your People and Your Partners • Section 4 : Continuously Solving Root Problems to drive the Organizational Learning
  9. 9. Excellence unLimited, Rajkot 9 Philosophy ( Long term Thinking ) Process ( Eliminating Waste ) Process ( Eliminating Waste ) People & Partners ( Respect, Challenge, Grow ) Problem Solving 4 P Model of Toyota Way Most organizations are here
  10. 10. Excellence unLimited, Rajkot 10 4 P and 14 Management Principles 3 underlying cultural values are Continuous improvement, Respect and Teamwork
  11. 11. Excellence unLimited, Rajkot 11 Toyota Way • Section 1 : Long Term Philosophy People need purpose to find motivation and establish goals. Tools to establish Long Term Philosophy are – • SWOT Analysis, • Formulating Vision, Mission and Values, • Formulate Strategic Plan and deploy it by establishing goals and targets for each level of employees, from Chairman to Watchman. Principle 1 : Base your management decisions on a long-term philosophy, even at the expense of short-term goals.
  12. 12. Excellence unLimited, Rajkot 12 Toyota Way Section 2 : The Right Process Will produce the Right Results Principle 2 Create a continuous process flow to bring problems to the surface. Work processes are redesigned to eliminate waste through the process of continuous improvement - Kaizen. Customers are willing to pay for Products / Services and not for waste. (Waste consists of material, money, man, method, time)
  13. 13. Excellence unLimited, Rajkot 13 Toyota Way Principle 3 Use "pull" systems ( Just – in – Time or Kanban ) to avoid over production / delivery This helps achieve optimum use of resources, reduce inventories and free workspace of clutter.
  14. 14. Excellence unLimited, Rajkot 14 Toyota Way Principle 4 Level out the workload This helps achieve the goal of minimizing waste , not overburdening people or the equipment / system and not creating uneven output.
  15. 15. Excellence unLimited, Rajkot 15 Toyota Way Principle 5 Build a culture of stopping to fix problems, to get quality right the first time and every time. Quality is given utmost importance. Any employee has the authority to stop the process to signal a quality issue.
  16. 16. Excellence unLimited, Rajkot 16 Toyota Way Principle 6 Standardized tasks and processes are the foundation for continuous improvement and employee empowerment. Its implementation allow for continuous improvement (kaizen) from the people involved in the system. It empowers the employee to aid in the growth and improvement of the company. Tools : SOP, Work Instructions, ISO 9001 or like documents and systems.
  17. 17. Excellence unLimited, Rajkot 17 Toyota Way Principle 7 •Use visual control to surface the problems out. Included in this principle is the 5S Program - steps that are used to make all work spaces efficient and productive, reduce time looking for needed items and improve the work environment. SEIRI = Sort , SEITON = Set in Order , SEISO = Shine / sweep SEIKETSU = Standardize , SHITSUKE = Sustain the gains . સવચછતા સરળતા સંસકાર સવભાવ / સહજતા સુઘડતા
  18. 18. Excellence unLimited, Rajkot 18 Toyota Way Principle 8 Use only reliable, thoroughly tested technology that serves your people and processes. Technology is pulled by process, not pushed to process. Do not introduce technology just for hack of it.
  19. 19. Excellence unLimited, Rajkot 19 Toyota Way Section 3 : 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.Without walking the talk, the principles will fade. The principles have to be ingrained. Employees must be educated and trained because they have to create and maintain a learning organization. Challenge their capabilities to bring them out of their comfort zone.
  20. 20. Excellence unLimited, Rajkot 20 Toyota Way Section 3 : Add Value to the Organization by Developing Your People and Partners Challenging people to bring them out of their comfort zone.
  21. 21. Excellence unLimited, Rajkot 21 Toyota Way Principle 10 Develop exceptional people and teams who follow your company's philosophy. Teams should consist of 4 - 5 people and should represent all levels of management tiers and be cross functional. Success is based on the team, not on the individual. TEAM = Together Everyone Achieves More “ All of us ” is better than “ anyone of us ”
  22. 22. Excellence unLimited, Rajkot 22 Toyota Way Principle 11 Respect your extended network of partners and suppliers by challenging them and helping them improve. Treat your suppliers much like you treat your employees, challenge them to do better and help them to achieve it. Provide cross functional teams to help suppliers discover and fix problems so that they can become a stronger, better supplier. Trend is towards keeping only a few select suppliers.
  23. 23. Excellence unLimited, Rajkot 23 Toyota Way Section 4 : Continuously Solving Root Problems Drives Organizational Learning Principle 12 Go and see for yourself to thoroughly understand the situation Managers are expected to "go-and-see" operations. Philosophy MBWA = Management By Walking Around.Without experiencing the situation first hand, managers will not have an understanding how it can be improved.
  24. 24. Excellence unLimited, Rajkot 24 Toyota Way Principle 13 Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly While deciding major things, keep every one in the process, take their opinion, consider all options and decide. Everybody will cooperate to implement the consensus decision. Once decided, implement the decisions without loss of time.
  25. 25. Excellence unLimited, Rajkot 25 Toyota Way Principle 14 Become a learning organization through relentless reviews and continuous improvement The process of becoming a learning organization involves critical review of every aspect of what one does ( Organization and individuals ). Tools : Kaizen, Organizational Score Card and individual goals and targets
  26. 26. Excellence unLimited, Rajkot 26 Toyota Way Continuous Implementation of all these 14 principles distributed under 4 P ( Philosophy, Process, People & Partners, Problem Solving ) lends an unbeatable edge to any organization, whether in Manufacturing or Service Sector. Resolve to follow them relentlessly and success is yours.
  27. 27. Excellence unLimited, Rajkot 27 Any Questions ??
  28. 28. Excellence unLimited, Rajkot 28 I will be happy to help you in this journey. Just call : +91-99250 28020 or e-mail
  29. 29. Excellence unLimited, Rajkot 29 Thank You