EP 172 – The Toyota Way – Boost Productivity with These Principles

Could the 14 principles from “The Toyota Way” transform your industry? 🤯 Learn how Toyota’s TPS revolutionized operations & discover how you can apply these principles for continuous improvement. #AdvancedQualityPrograms #TheQualityGuy #TheToyotaWay

In The Toyota Way, engineering professor Jeffrey K. Liker explains how businesses can improve their operations by adopting Toyota’s core ideologies. Since its founding in the 1930s, Toyota has focused on continuously improving its products and processes. The company developed a production method called the Lean Method, or the Toyota Production System (TPS), which has helped many businesses eliminate waste in their manufacturing processes.

The 14 principles that make up the Toyota Way enable the company to produce products that meet consumer expectations and market demand. With the help of this system, Toyota fosters a corporate culture where employee safety and well-being are the priority. For example, the company avoids layoffs; instead, it reassigns workers to different roles or departments when necessary.

By learning from Toyota’s principles and practices, executives can build profitable and efficient companies without sacrificing quality or overworking employees.

How it came to this point is interesting: In the late 1800s, Sakichi Toyoda from rural Japan saw how hard women worked at weaving. To help them, he invented an automated loom that stopped when errors occurred. After launching his own factory in 1926, he saw his invention quickly spread across Japan and evolve.

Later in his life, Toyoda encouraged his son Kiichiro Toyoda to start an automobile business, and he advised him to run the company in a way that would benefit society. On this venture, the first of Toyota’s 14 guiding principles was developed: businesses should base their decisions on a stable, long-term philosophy rather than on short-term profits.

The story continued developing, and more than a decade later, a Toyota plant manager named Taiichi Ohno developed the Lean Method to improve on the principle of Henry Ford’s assembly line. While assembly lines allow companies to quickly produce uniform products, they often reward leaders based on the quantity of items produced rather than the efficiency or profitability of their methods. Ohno recognized that standard mass production often led to stockpiled inventory, which could hide problems in the company’s workflow.

Lean Manufacturing, on the other hand, requires Toyota to consider how each action adds value for the customer. It also requires the company to strive for a flow system, which creates a product in one continuous process and only starts manufacturing when the customer needs the product.

While perfect flow may never be achieved, TPS can still serve as an aspirational ideal. That’s why Toyota has encouraged and invited other companies to use the TPS method and has directly coached businesses on how to apply its principles.

Companies that fail to implement the Lean Method often do so because they do not completely understand and use the 14 principles of the Toyota Way. Roughly summarized, the principles are as follows:

  1. Create a company that focuses on long-term strategy.
  2. Implement a method that encourages continuous improvement, or kaizen.
  3. Develop a manufacturing process called the Just-in-Time system, which uses customer demand to determine how quickly to restock materials and finish products.
  4. Even out production volumes to reduce stress on staff and machinery.
  • Fix problems as they arise, even if it means temporarily halting production.
  • Standardize methods and use visual systems to help leaders keep track of manufacturing.
  • Use technology only if it adds value to the production process.
  • Develop leaders, employees, and partners who thoroughly embody the business’s guiding philosophy.
  • Learn and grow as an organization by solving problems and making decisions as a group.
  • Encourage relentless improvement and habitual reevaluation of existing methods.

The book explains these principles in depth for a good understanding of their application. These principles are not synonymous with TPS, but they are essential to its effectiveness. Implementing TPS and the principles of the Toyota Way may take time and incur initial costs, but companies that successfully do so will learn how to create valuable products in healthier, more productive work environments.

Let’s finish with a summary of the key insights:

  • TPS is best learned through experimentation and selective implementation.
  • Most jobs have tasks that can be standardized and placed into a one-piece flow system.
  • Companies can standardize production methods without eliminating flexibility or learning opportunities.
  • Creating a diagram of the production process can help a company identify waste (muda).
  • Businesses can prevent overproduction by using visual systems to initiate the next step in a process.
  • To maintain flow, companies must be willing to temporarily halt production.
  • Buying better technology will not create a lean manufacturing process.

Toyota’s corporate culture has remained intact because it has carefully cultivated its leaders. Observing and learning the principles over time has been the reason for Toyota’s stability and growth.

This summary is based on the second edition of The Toyota Way, which was released in 2004.