14 Management Principles : Toyota Way

Excellence unLimited, Rajkot
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14 Management Principles
for Quality and Excellence
The Toyota Way
TOYOTA = The One You Only Trust , Always

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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 !

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Adoption of best Management practices
will make you fit and a winner !

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• 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

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• 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 ”

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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

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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

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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

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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

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4 P and 14 Management Principles
3 underlying cultural values are Continuous improvement, Respect and Teamwork

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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.

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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)

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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.

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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.

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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.

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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.

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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

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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.

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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.

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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.

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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 ”

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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.

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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.

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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.

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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

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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.

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Any Questions ??

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14 Management Principles : Toyota Way

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14 Management Principles : Toyota Way