THE

TOYOTA
WAY|
BOOK
REVIEW

Payel Ganguly|
15A2HP409
This book is about Toyotas unique
approach to lean management. The 14
under underlying principles of THE
TOYOTA WAY are organized into four
 THE TOYOTA WAY|BOOK REVIEW

sections which are also called 4 Ps. The

core learnings are based on
Philosophy, Process, People and
Partners, Problem Solving.

SECTION 1 LONG TERM PHILO SOPHY

PRINCIPLE 1- Base your management decisions on the long term

philosophy; even at the expense of short term financial goals.

People need purpose to find motivation and establish their goals. Moreover the
mission of any company should never be focused on making money or KPI
performance but it should consists of 3 parts

Contribution to the growth of the economy

Contribution to the wellbeing of the employees
Contribution to the growth of the company

Making money is just a requirement to achieve the above three parts. There should
be evaluative function for every company to achieve this. In fact we should be
responsible enough to decide our own fate. We should be accepting our conduct
and maintain and improve skillsets which will be a value addition. The
Philosophical mission should be the foundation for all other principles.

S E C T I O N 2 T H E R I G H T P R O C E SS W I L L P R O D U C E T H E
R I G H T R E S U LT S

This section consists of seven management principles which relates to the

technical side of lean manufacturing also known as process optimization. These 7
principles are most important from company prospective for lean implementation.
The three Ms i.e. MUDA, MURA and MURI are the important areas of focus both
from Toyota and other companies planning for lean implementation.

PRINCIPLE 2 Create continuous process flow to bring problems to the

surface.

This principle states that work process are redesigned to eliminate MUDA through
the process of continuous improvement KAIZEN. The 8 types of MUDA (waste
reduction) are as follows:

Page 1
 THE TOYOTA WAY|BOOK REVIEW

Overproduction
Waiting (time on hand)
Unnecessary transport or conveyance
Over processing/incorrect processing
Excess inventory
Unnecessary movement
Defects
Unused employee creativity

The flow should be evident throughout the organizational culture as it is a key to

true continuous improvement process by linking information fast to the people and
process together so that problems surface right away.

PRINCIPLE 3 Use pull system to avoid overproduction.

This principle states that a unique method is developed by Toyota in the production
system where a process signals its predecessor that more material is needed.
Therefore the pull system produces only the required materials after the
subsequent operation gives a signal for the need. This process curtails
overproduction.

Materials replenishment is initiated with JIT concept

Work minimization in process and warehouse inventory
Less rely on computer schedules and more responsiveness towards every
day customer demands
The signal helps the system to track wasteful inventory

PRINCIPLE 4 Level out the workload (HEIJUNKA). Work like the Tortoise
and not the Hare.

This principle is one of the best for lean implementation as it helps to achieve the
goal of minimizing waste (MUDA), not overburdening the people or equipment
(MURI), and no creation of uneven production levels (MURA).

PRINCIPLE 5 Build a culture to stopping to fix problems, to get quality

right the first time.

Here quality takes the precedence (JIDOKA). Any employee in the TPS has the
authority to stop the process and signal a quality issues. This method should be
adopted by most of the cutting edge organizations to improve, enhance and
upgrade quality of the intermediary products to get an outstanding end products.
This will only lead for any companys brand value proposition to their customers.

Page 2
 THE TOYOTA WAY|BOOK REVIEW

PRINCIPLE 6 Standardized tasks are the foundation for continuous

improvement and employee empowerment.

Many organization has a bureaucratic system like Toyota. But KAIZEN is the best
part they have adopted for the people affected by that system. Overall it
empowers the employee which enriches the growth and improvement of the
company. This principle states the foundation for flow and pull by using stable and
repeatable methods everywhere to maintain the predictability, regular timing, and
regular output of the processes. Standard work consists of takt time, a work
sequence and a standard amount of stock at hand. When every employee does the
task the same way, it is easier to improve that one best way.

PRINCIPLE 7 Use visual control so no problems are hidden.

This principle states the 5S program - steps which are used to make

a) all workspace efficient and productive

b) reduce time looking for needed tools
c) improve the work environment

SORT Unneeded items are sorted out

STRAIGHTEN There is a place for everything
SHINE Keep the area clean
STANDARDIZE Create rules and standard operating
procedures
SUSTAIN System maintenance and continuous
improvement

PRINCIPLE 8 Use only reliable thoroughly tested technology that serves

your people and processes.

This principle states that technology is pulled by manufacturing and not pushed to
manufacturing. Actual test should be conducted before implementing new
technology in business process, manufacturing systems and products.

S E C T I O N 3 A D D VA LU E T O T H E O R G A N N I Z AT I O N BY
D EVELOPING YO UR PEOPLE

PRINCINPLE 9 Grow leaders who thoroughly understand the work, live

the philosophy and teach it to others.

Without constant attention the principle may fade away. The principles should be
ingrained into ones philosophy and thought process. Employees are educated and
trained so that they can maintain a learning organization. This will help the leaders

Page 3
 THE TOYOTA WAY|BOOK REVIEW

to grow within the organization. External human resource dependency is not

required

PRINCIPLE 10 Develop exceptional people and teams who follow your

companys philosophy

The team lead should be a facilitator of his team. Because all team members
participate in continuous improvements, the standard work does not dissatisfy
operators but supports growth towards self-actualization (Maslows need based
motivation pyramid).Success is on team performance.

PRINCIPLE 11- Respect your extended network of partners and suppliers,

by challenging them and helping them improve.

There should be an equal respect for both the suppliers and the employees. Every
company should learn this approach from Toyota. There should be dedicated cross
functional teams to help suppliers discover their problems, fix them and motivate
them to grow stronger and better.

S E C T I O N 4 C O N T I N U O U S LY S O LV I N G R O O T P R O B L E M S
DRIVES O R G A N I Z AT I O N A L L E A R N I N G

PRINCIPLE 12- Go and see for yourself to thoroughly understand the

situation (GENCHI GUNBUTSU).

Managers are expected to go and see the site operations. Without having firsthand
experience managers will not be able to understand the point of improvements.
Managers can use Tadashis 10 management principles as a key learning from TTC
(Toyota Technical Centre).

Always keep the final target in mind.

Clearly assign tasks to yourself and others.
Think and speak on verified, proven information and data.
Take full advantage of the wisdom and experiences of others to send, gather
or discuss information.
Share information with others in a timely fashion.
Always report, inform and consult in a timely manner.
Analyze and understand shortcomings in your capabilities in a measurable
way.
Relentlessly strive to conduct kaizen activities.
Think "outside the box," or beyond common sense and standard rules.
Always be mindful of protecting your safety and health.

Page 4
 THE TOYOTA WAY|BOOK REVIEW

PRINCIPLE 13 Make decisions slowly by consensus, thoroughly

considering all options, implement decisions rapidly (NEMAWASHI).

There should be a go and see test followed by all the managers to detect
underlying causes of various problems within an organization. There should be
availability of broad range of alternatives, there a resolution consensus and an
efficient communication tools.

PRINCIPLE 14 Become a learning organization through relentless

reflection (HANSEI) and continuous improvement (KAIZEN)

The process of becoming a successful learning organization involves criticizing

every aspect what employees do. The general solving technique of problems is to
determine the root cause and then fix it with the following approach. The PDCA
(Plan-do-check-act) cycle can be used to solve problems.

Initial problem perception

Clarify the problem
Locate area/point of cause
Investigate root cause (5 whys)
Countermeasure
Evaluate
Standardize

CONCLUSION

Technical tools in production only work when the organization culture facilitates.
Management should live by the long term philosophy of being supportive to the
people they are leading and should be recruited internally so they can combine
their leadership skills with in-depth knowledge of the work done in the
organization. Employees at all levels of the organization should be trained in
problem solving and be involved in all implementation of tools in the production
environment to reach consensus on the new way.

Page 5
THE TOYOTA WAY|BOOK REVIEW

Page 6
THE TOYOTA WAY|BOOK REVIEW

Page 7
THE TOYOTA WAY|BOOK REVIEW

Page 8