The Toyota Way

Learning from The ToyotaWay

Jeffrey K. LikerProfessor, Industrial and Operations Engineering

The University of Michiganand Principal, Optiprise, Inc.

BIFMA Leadership ConferenceJanuary 31, 2008

© Copyright Jeffrey Liker and Michael Balle (most slides thanks to Michael Balle)

What is lean?• Obtaining brilliant results from brilliant

processes

• By focusing on (Jim Womack & Dan Jones):– Value– Value streams– Flow– Pull– Perfection

• By eliminating waste from all processes


Sounds Good, so Let’sdo lean!

But how?


Answer #1:

Eliminate waste from our processes

Lean ManufacturingPRODUCTPRODUCT

BUILT & SHIPPEDBUILT & SHIPPEDCUSTOMERCUSTOMER

ORDERORDER

Time (Shorter)

Waste


Rapid improvementevents

Let’s hire consultants,who will run lots

of workshops


Rapid improvementevents

• Every workshop hasgood results

• But these results areseldom sustained

• And don’t show up inthe budget

• And many managersgrumble

But…


The problem:

“What is important is having all theelements together as a system. It must

be practiced every day in a veryconsistent manner - not in spurts - in a

concrete way on the shop floor.”Mr. Fujio Cho


Answer #2:Lean is a production system

CompanyPurpose

People

Lean Tools

Lean Processes

ProblemSolving

X O X O

20

LR

2020

20

OP

1

OP

3

OP

2AO

P 2B

takt time


Lean Production Elements

CUSTOMER SATISFACTION:Quality, Lead-time, Cost, Safety

Auto-quality

Just-In-

Time

Standardized Work / Kaizen

Stability


Implement the system

Let’s create aLean Office

to implementa system

We need to adaptTPS to our business

And have aroadmap

to implementModel lines Wall to wall stability


Implement the system• More systematic change

• Impressive model lines and wallto wall stability

• But still disappointing budgetresults

• Hard to spread beyond modelline

• Lots of conflict between theLean Office and linemanagement

• Hard to sustain

But…


The problem:

“Creating a Buddha image and forgettingto inject soul into it”

Mr. Hajime ObaTPS Expert


Answer #3:

Lean is a production system supported bymanagement behavior


Manage for lean

Find a senseiYou can work withLet’s go to the workplace

Gemba is great teacher!

And teachchange from

The top


Manage for lean

• Start to get real topmanagement support

• We can see budget levelresults each year

• But it’s very uneven--resultsof a few large projects

• And a constant fight: “thefrozen middle managers justdon’t get it!”

But…


The problem:

“Kaizen consciousness must be themindset of all employees”

Mr. Nampachi Hayashi

“The people whoperpetuate a negative,

disengaged culture maybe the leadersthemselves!”


What is a mindset?

Typical problems Typical solutions


Typical lean mindset problems

Completely satisfy customers by engineering products thatsolve their usage problems

Completely satisfy customers by engineering andmanufacturing defect free products

Completely satisfy customers by offering a full product rangeat market price and renewing models frequently

Lower costs by continuously value engineering parts Lower costs by designing products fit for lean manufacturing Lower costs by assembling different products in the same

production units Lower costs by eliminating all waste in company activities


Typical lean mindset solutions

• “Avoiding overproduction has to be built into thesystem, a difficult task.”

• “And each problem will have to be made visible, andthen tackled by every one of the workers.”

• “Visiting our factory, you will see that on one line wehave eight different types of cars, not just variations.”

• “At the start, the line keeps stopping, for example.Even when you see it, it is difficult to understand.”

Mr. Fujio Cho


Answer #4:Lean is a system to make people think & grow

DeviationFromStandard

Problem Solving Learn &

Grow

1 2 38

49

510 11

6 712 13 14

Tighten Standard


The sensei teach us that

Lean is not applying lean tools or systemsto each process

butDeveloping a kaizen mindset in every

employee


TPS and Toyota Way

Make the production line visible

Improve management standards

Reveal problems at all times

Solve problems one by one

How?


Measuring and understandingperformance


Measurelocal performance

Express gapagainst target:

best day, hour, cycle


Visualizing problems:quality


Auto-quality

Stop and notifyany abnormality, now!

Workers stop line for every abnormality

and team leaders respond


Visualizing problems:overproduction


Auto-quality

Just-In-

Time

One piece flow

At Takt Time

With a PULL system


Analyzing and solvingproblems


Auto-quality

Just-In-

Time


Work is specifiedin detail

And carried outconsistently

Ask why 5 timeson any

problem

And experimentto try new things


Following a learning cycle


Auto-quality

Just-In-

Time


Stability


Typical ImprovementOpportunities Available


Improvement Approaches ofTypical Companies


Toyota Leverages Opportunitiesat all Levels


Make people think:• By going to the workplace

• Observing operations with them

• Showing typical problems

• Outlining typical solutions

“We were asked to stand in a circle for 1 week and come up with 240 improvements andImplement most of them 140.”

--Toyota Japan TPS Training


Role of management

To keep kaizen going

Give people problems to solve and follow up

Look at problems revealed day to day, hour by hour

Top management must go to the workplace


Role of lean coach• Use the lean tools to

teach managers andtheir teams

• To visualize problems

• Experiment

• And solve them

Teamwork!


To develop employees byproblem solving

P D

C A

Plan - Do - Check - Act


Toyota Mentor-MenteeChain

•Goals Targets, Metrics•Dialogue•Go and see•Open Questions•No Blame•PDCA•5 Why?•Regular Checks against Plan

What Data?What’s theProblem?What can youdo next?

All practice the same basic patterns ofProblem solving, dialogue, and mentoring


Answer #5:

Lean is a business model


Not a production tactic,but a business strategy

Challenge!

What do we needto achieve for

Success?

Let’s get agreementand plans at all

levels


Hoshin Kanri

Not a production tactic,but a business strategy

Workplace Visual Control

catchball Hansei


Connecting Hoshin and FloorManagement System

1. What do we need to do?(Company Department Group)

2. How should we do it? (Process)

3. How are we doing? (Results)

HoshinObjectives

KPI’s

DailyActivities

Main KPISub-KPI

Process KPI

Floor Mgmt


Team Board for Floor Management Development System

Learning from the ToyotaWay


The lean journey

Eliminate waste

Implement system

Management behavior

Business model

Lean culture


The lean journey startswith oneself

• How can I learn to identify waste?

• How can I become a teacher of waste elimination?

“Here’s your school lesson for today. Don’t listen to your teachers, justwatch what they do.”

Woody Allen to his niece in Anne Hall

“You must become the change you want to see.”Ghandi


To help others with the journey• Are people clear on their own

processes, do they follow their ownstandards?

• Are they focusing on the rightproblems?

• Are they solving them following ourvalues and principles?


“Something is wrong if employees do notlook around each day, find things thatare tedious or boring, and then rewrite

the procedures. Even last month’smanual should be out of date.”

Mr. Taiichi Ohno

To develop kaizen consciousness


The 4 PsKey Elements of ‘The Toyota Way’


Key Points for ImplementingLean System

• Process improvement and peopledevelopment must go hand in hand

• You must be patient for people development– Keep your eyes open to the growth and

strengthening of people (culture change)– Push when procrastination is preventing the

growth of people (avoiding action)– Provide necessary challenges and support for

people development!


““A long journey that needs commitment,A long journey that needs commitment,patience, long-term thinking, positivepatience, long-term thinking, positivemindset and attitude, and continuousmindset and attitude, and continuousimprovement which are merged togetherimprovement which are merged togetheras operational excellence and as a strategicas operational excellence and as a strategicweapon.weapon.””

LetLet’’s start the journey and Do our Best!s start the journey and Do our Best!

Lean isLean is……