THE TOYOTA WAY MANAGEMENT PRINCIPLES

Principle 6: “Standardized tasks are the foundation for continuous improvement and employee empowerment”

The Inception of Standardization can be traced to 1900’s and it was based on principles set forth by Fredrick Taylor, the “father of scientific management”. Work standards were developed and time and motion studies were conducted to improve productivity of workers. But, this lead to severe conflicts between the management and workers as expectations kept on rising without significant increase in incentives. Standardization was believed to be a deterrent in the path of creativity and was not well received by employees and workers of various manufacturing units. Standardization became a ‘science’ when mass production replaced the craft from of production. E.g. Ford Motor Company adopted standardization and became a rigid bureaucracy. This marred the creative abilities of workers and restricted their free thinking to improve and innovate.

In contrast Toyota adopted a partial standardization philosophy wherein, room for creativity and innovative thinking was given to workers. It was inspired by American Military’s “Training Within Industry” (TWI) service, based on the belief that the way to learn about industrial engineering methods was through application on shop floor and the standardized work should be cooperative work effort between the foreman and the worker.

At Toyota standardized work consists of three elements:

‘Takt’ time – the time required to complete one job at the place of customer demand Sequence of doing things/process and; Stock on hand a worker needs to have in order to accomplish the work

And it doesn’t means enforcing rigid standards that can make jobs degrading and monotonous rather it forms the basis for empowering workers and innovation at the work place.

Standardization is religiously practiced at Toyota to the extent that an engineer can go to any factory in the world and see identical processes being followed irrespective of anything. Further, the philosophy of Kaizen (continuous improvement) is based on standardization and the management believes unless a process is stabilized and standardized any new improvement will be considered just another variation used hence chances are that it will be ignored.

Toyota believes in its high class engineering and boasts of its unmatched quality standards which again result from standardized work processes and in case of defects the first question that arises is “whether the standardized work was followed or not”?

Coercive vs. Enabling Bureaucracies- Employee EmpowermentFredrick Taylors Scientific management principles were used by various firms to increase the productivity of employees but it created rigid bureaucracies in which managers were supposed to do the thinking and the workers blindly followed. This resulted in following;

- Red tape- Tall hierarchical structures- Top-down control- Plethora of written rules and procedures- Slow implementation and application- Poor communication- Resistance to change- Static and inefficient rules and procedures

It is always believed that most bureaucracies are static, internally focused on efficiency, controlling of employees, unresponsive to changes in environment and unpleasant to work in. Bureaucracy becomes efficient when the changes in technology and business environment are not dynamic and hence for organizations which are flexible, focused on effectiveness and believe in employee empowerment should not use bureaucratic standards and policies. Toyota Way doesn’t believe in aforesaid theories and statements. Example of NUMMI plant shows how a plant with bureaucratic characteristics such as a strict discipline about time, cost, quality and safety with highly standardized jobs is yet very flexible, organic and involves high employee participation.

Adler an organizational theory expert classifies Toyota in Enabling Bureaucracy quadrant wherein technical standardization is supported with empowered social structures where employee is considered as the most valuable resource.

Standardizing Work for a new Product LaunchToyota avoided Taylorism and chaos by ensuring a new product launch is not either entrusted to team of engineers or every worker has a say in it. Instead they devised an innovative approach of “Pilot teams”. Workers representing each department worked together as team for a product launch. Standardization aided in carrying out effective teamwork. Employees spoke same terminologies, they had similar skills, rules and the thinking was synchronized.

Toyota engineers since their day of joining are trained extensively on various standards and practices followed at the manufacturing plant. The practice of “learning by doing” is followed and every good practice is recorded which is improved and developed as a standard. This philosophy is inimitable and has given Toyota a competitive edge in the industry.

Standardization as enablerToyota has laid down two rules regarding the way a standard is documented. First, it has to be specific enough to be useful guide yet general and allow for flexibility. Second, the people doing the work are entrusted with the job of improving the standards. Improvements by a worker which may become standards are considered very prestigious, and this forms the foundation of motivation towards continuous improvement.

Principle 7: “Use Visual Control So No Problems Are Hidden”

This Principle was laid down by Mr.Taiichi Ohno as a part of TPS. It stresses on use of 5S philosophy which are; Seiri, Seiton, Seiso, Seiketsu and Shitsuke which mean sorting, straightening, Shining, Standardizing, and Sustaining respectively. 5S principles help in reducing inventory levels and eliminate waste. Various color coding and standards are to segregate items on basis of value add, usability and frequency of usage. E: g hazardous materials or rarely used items are tagged red in color and moved out of work area. Permanent tools locations are assigned for each tool e: g a hammer can only fit shape made for keeping hammers and so on. Shining ensures the tools are kept clean and tidy. Standardization helps improve quality and sustain helps ensuring first 4 S. At Toyota 5S is used in lean system to ensure smooth flow to ‘Takt’ time and is used to make problems easily identifiable.

Similarly, Visual controls are used to capture deviations from target or goal. Visual controls don’t require anyone to study the process in detail. Any worker can see deviations from normal and report to rectify at source, thus ensuring quality at each stage of production. Toyota uses shadow tool boards as a part of their 5S activity so that a tool goes into right place after use every time and can be retrieved easily for next use.

TPS uses other methods of visual control e: g Kanban, Andon etc. Kanban ensures there is no overproduction and exactly same quantity is produced as is required in the next stage. Andon signal any deviation from the standard operating procedure.

Visual Control to enhance Flow in a service Parts WarehouseToyota warehouses use sophisticated technology and facility to ensure Just in time supply of spare parts and product. The Hebron facility at Kentucky has a state of art warehouse which is organized into cells called home positions. These home positions have similar sized parts stored in the same way and teams are dedicated to each home position. Also a powerful computer system is custom designed which stores the data about volume of each part available. This computer also guides in packaging the parts in boxes of suitable sizes. And, lastly it uses visual control system extensively. Process control boards are put up at various locations to capture information about status of operation and other production related information and ensure continuous flow of work throughout the day.

Toyota uses the latest concept of OBEYA wherein all kinds of visual management tools are displayed and maintained by representatives of different departments. These tools capture the status of each area against the schedule, design graphics, competitor results, quality information, financial charts, manpower charts etc. This system enables fast and accurate decision making, improves communication, maintains synchronization, speeds up information gathering and creates sense of team work.

Capturing all you know on one sheet of paper

Toyota emphasizes to capture all information related to budget, quality, operations and other key areas on one side of an A3 sized paper. This has ensured reduction in time wastage associated with reading huge reports and focus on specific issues in much greater detail. E; g a problem solving A3 paper would contain problem statement, current situation, root cause of the problem, alternative solutions and recommendation backed up by pictorial and graphical representations.

Principle 8: “Use Only Reliable, Thoroughly, Tested Technology That Serves Your People and Processes”

Over the years, Toyota tends to lag behind its competitors in acquiring but not using new technology. The Toyota way is to move slowly, because many technologies have failed to pass their litmus test of supporting people, process and values and have not been implemented in favor of simpler, manual systems. However, it is a global benchmark on how to use value-added technology that supports their processes and people.

Steps followed before adopting new technology are as follows:

Visualization of value-added work being performed by the workers for particular process Look out for new ways to eliminate waste and smooth the flow Use a pilot area to improve the process with existing technology, equipment and people Check for any additional improvement by adding new technology If yes, then analyze for conflicts with Toyota’s philosophies and operating principles

(Valuing people over technology, consensus decision making and operational focus on waste reduction).

In case of violation or disruption of stability, reliability and flexibility; reject or delay the adoption until the problems can be resolved.

In case of acceptance, the guiding principle is to design and use it to support continuous flow and help employees better within the Toyota Way standards.

Find ways to support the actual work process while not distracting people from the value-added work.

People do the work, Computers move the Information.

IT doesn’t drive the way Toyota does business and certainly is not allowed to disrupt the values of the Toyota way. It is looked as any other tool to support the people and the process. For example, their service part operations continue to use old software system developed in house years ago under much simpler situations and it has continuously evolved over the years and does exactly what is needed today. It had experience with pushing technology that is latest and greatest, only to later regret it.

IT in Toyota’s Product Development Process

In early 1980s, the trend was to develop their own internal CAD system for designing parts on a computer rather than on paper blueprints. Like others, Toyota also did it but in a way that preserved and embodied the Toyota problem-solving philosophy. The designers found basic questions and found the best alternative was a low-tech solution. So, they implemented a simpler solution. In contrast, U.S. automakers implementing CAD system did this stress analysis using software and made impractical recommendations to die designers. Toyota maintained its homegrown system to the chagrin of engineers and suppliers. The software is clearly outdated but it works. Finally, they used the careful consideration in decision making and after two years of thinking and debating, shifted to CATIA. It was slow in implementing, taking time for customization to fit their development process. Toyota has continued to streamline its product development process using very specific software solutions from 48 to 12 months to develop a new vehicle which they refer as “Collaborative Vehicle Development Using Digital Engineering”.

The Role of Technology – Adapting It Appropriately

Originally, Toyota used its flexibility to compete with global players. But to Toyota, it does not mean pushing the latest and greatest technology onto operations and struggling to make it work. Toyota follows their Principle-8 and testing involves both the existing and new cutting-edge technology that they have evaluated and piloted to prove that it works.