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

Towards an IS Enabled Lean EnterprisePierre MasaiVP of Information Systems & Telematics

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IntroductionToyota Way & Business PracticeManufacturing TPS and ISThe IS Enabled Lean EnterpriseAgenda

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Toyota in the World

Established in 193777 manufacturing companies in 27 countriesVehicles sold in more than 170 countries worldwide7.95 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 2011-12217 billion forecast for FY 2012-13Approx. 318,000 employees worldwide

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Toyota Motor Corporation(TMC)Toyota Motor Asia Pacific Pte Ltd. (TMAP-MS)Toyota Motor Europe NV/SA (TME)Toyota Motor North America, Inc. (TMA)

Regional Headquarters

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TMIP Diesel engines

Toyota Caetano PortugalCommercial Vehicles

TMUK - Engines

TPCA - AYGO

TMMF Yaris & Yaris Hybrid

TMMP - Engines &Transmissions

TMMR - Camry

TMMT - Auris & Verso

TMUK Auris, Auris Hybrid & Avensis

Manufacturing Facilities

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Approx. 2/3 of our vehicles sold in Europe are made in Europe:

Toyota AYGO Toyota Yaris Toyota Yaris Hybrid Toyota Auris Toyota Auris Hybrid Toyota Verso Toyota Avensis Toyota Camry Toyota Dyna

Manufactured Vehicles

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National Marketing & Sales Companies

Not shown: Toyota Caucasus LLP, Union Motors Ltd (Israel), Toyota Motor Kazakhstan LLP

30 NMSCs56 Countries275 Lexus retailers2,835 Toyota retailers

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Continuous ImprovementThe Toyota Way Values

Genchi genbutsuKaizen

Challenge

TeamworkRespect

Respect for People

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The Toyota Way ValuesWithout ever being satisfied with the current situation, and always pursuing the most practical and effective solutions, we strive to continually increase our knowledge

We respect people, and believe the success of our business is created by individuals and good teamwork.

Continuous ImprovementRespect for People

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Toyota Way Values Respect for PeopleRespect for PeopleRespect the ability of people to solve problemsPeoples ability to think is boundlessBenefitsProvide opportunities for personal developmentSense of achievement, self-realization, self-improvement

Respect

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Continuous ImprovementThe Toyota Way Values and Toyota Business Practices

Genchi genbutsuKaizen

Challenge

TeamworkRespect

Respect for PeopleToyota Business Practices

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Toyota Business Practices

Toyota Business PracticesMotivational GuidelinesConcrete Actions & ProcessesCustomer FirstAlways Confirm the Purpose of Your WorkTake Ownership and Responsibility Visualization (MIERUKA) Judgment Based on Facts Think and Act Persistently Speedy Action in a Timely Manner Follow Each Process with Sincerity and Commitment Thorough Communication Involve all StakeholdersPlanDoCheckActClarify the Problem Break Down the Problem Target Setting Root Cause Analysis Develop Countermeasures See Countermeasures Through Monitor both Results and Processes Standardize Successful Processes and Start next iteration

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Why is Process Important ?

We get brilliant results from average people managing brilliant processes. We observe that our competitors often get average (or worse) results from brilliant people managing broken processes.

Source: Decoding the DNA of the Toyota Production System Steven Spear and Kent Bowen, Havard Business Review, September October 1999

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TBP Training within TMEMandatory training for all employeesMulti-day formal training in Toyota Way and Toyota Business PracticesMulti-month training projectWith an assigned coachEnds with a formal presentation of a Toyota Business Practices A3If required, a second chance presentation can be scheduled several months after the firstFollow-up on-the-job training:In daily work: Identifying Problems, taking DecisionsIn all management processes: reporting, KPIs, etc.

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Types of Problems in ToyotaCurrent Situation

Standard

Future Possible Level of Performance

Exception or Gap type of problem

Setting or Stretch type of problem

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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

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IntroductionToyota Business PracticeManufacturing TPS and ISThe IS Enabled Lean EnterpriseAgenda

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Linking TPS and ISImplement continuous flow to highlight problemsGo and see (Genchi-Genbutsu).Stop to fix problems & JidokaDesign software deliverables with small lot sizes, with a short PDCA cycle to highlight issues very quickly after they occur.Encourages Heijunka and allows Jidoka In requirements gathering ensure that the IS member spends time with the business, engaged in their proces.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 stops early in the project to fix problems.Maximise value of human checking by automating where possible

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Linking TPS and ISDevelop the team (including Suppliers)Use technology to help the processVisualise your process and ResultsEncourage team members to understand the entire process, by job rotation and special assignments.Involve suppliers fully, being open about process and measures.Once basic principle and operation are clear, use technology to support it.Dont follow a products operation without thought.In Software development visualise defects and causes.Visualise entire project using one document Plan, Issues/Risks, Costs and Quality.

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Visualisation 1

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Visualisation 2

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Lean IS or Lean EnterpriseHow 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.

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Lean IS or Lean Enterprise

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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.

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Objective Benefits of a Lean EnterpriseIDC Survey of 800 manufacturers showed an average 40% increase in profitability between Lean and non Lean companies.

Source: IDC Manufacturing Insights Q1 2012W o r l d w i d e L e a n C o m p a n i e s M e d i a n Q u a r t e r l y N e t P r o f i tM a r g i n T r e n d s , 1 Q 0 2 4 Q 1 1

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Elements Required for Lean SystemsClear 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.

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Mid to Long Term Viewpoint. Vertical Alignment Horizontal Coordination Process and Results Management.Human Resource DevelopmentDirection = HoshinHoshin Kanri; Management of Direction

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Hoshin Kanri

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Stop and Solve problems vs Hoshin

Countermeasure orStandardizeDraft the Annual Hoshin PlanDetermine Daily Management ItemsCheck Progress2. Breakdown the Problem3. Set the Targets4. Root Cause Analysis5. Develop Counter-measures6. See the Countermeasures through7. Monitor both Process and Results8. StandardizeKaizen theHoshin Management Process

Implement thePlanCreate aDeployment PlanEngage in NemawashiIdentify GapsGrasp the Current SituationDevelop an Image of the Desired Future SituationPDCA

PDCA

1. Clarify the ProblemProblem Solving StepsAnnual Hoshin Kanri Cycle

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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 isnt an excellent system.

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PDCA and Continuous improvement

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Plan

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Do

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Check

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Act

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PDCA RecapClarifying 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.

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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.

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Pan E Telematics What we delivered

Search Engine Providers

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Pan E TelematicsCentralised management of our customer and vehicle data

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Pan E Telematics

TME

Vendors

TME IS is responsible for functions in the vehicle for the first time

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IntroductionToyota Way & Business PracticeManufacturing TPS and ISThe IS Enabled Lean EnterpriseIn SummaryAgenda

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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.

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Thank you

Thank you for your attention today at the #Lean #IT Summit

@PierreMasai

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