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The Toyota Way and the Foundations of Lean Manufacturing

Introduction

Lean manufacturing is a living system, which interconnects every entity and person from the organisation to deliver value to the customer. Lean manufacturing is based on the Toyota Production System.

Toyota started as a small automobile manufacturing company of the Toyoda family, during World War II in Japan.

At the end of the war, the company had not enough financial resources and space; also, the market demand of vehicles was very low due to war impact. The Toyoda family asked one of the engineers of the plant, Taiichi Ohno, to solve this problem. Ohno came up with the Toyoda Production Systems (TPS), based on the philosophies of their founders, Sakichi Toyoda and his son Kiichiro Toyoda

1. Always be faithful to your duties, thereby contributing to the company and to the overall good.

2. Always be studious and creative, striving to stay ahead of the times.

3. Always be practical and avoid frivolousness.

4. Always strive to build a homelike atmosphere at work that is warm and friendly.

5. Always have respect for spiritual matters and remember to be grateful at all times.

Ohno created a production system with near zero waste to reduce costs; he kept low inventories to avoid tying up cash in parts and finished products. He created a production line with small quantities of multiple models in the same production line, in less time than United States manufacturing companies. This allowed the cars to get faster into the market, and therefore improving cash return to pay suppliers. Ohno illustrated the system as in the following figure:

, The Toyota Way and the Foundations of Lean Manufacturing

Toyota Production System

The Toyota Production System is built on two main pillars: Jidoka and Just in Time (JIT).

Jidoka, developed from Sakichi Toyoda’s ideas, focuses on preventing defects by stopping machines automatically when problems occur. This allows errors to be fixed immediately and prevents faulty products from moving to the next stage.
Just in Time (JIT), introduced by Kiichiro Toyoda, aims to remove waste and improve efficiency by producing the right items at the right time and in the right amount.

The system is supported by a stable and levelled workflow foundation, while flexible, skilled, and motivated employees are placed at the centre to achieve quality production, efficient delivery, and continuous improvement.

The house became the basis of today Toyota’s 14 Principles :

Principle 1. Base your management decisions on long-term systems thinking, even at the expense of short-term financial goals.

Principle 2. Connect people and processes through continuous process flow to bring problems to the surface.

Principle 3. Use “pull” systems to avoid overproduction.

Principle 4. Level out the workload, like the tortoise, not the hare (heijunka).

Principle 5. Work to establish standardized processes as the foundation for continuous improvement.

Principle 6. Build a culture of stopping to identify out-of-standard conditions and build in quality.

Principle 7. Use visual control to support people in decision-making and problem solving.

Principle 8. Adopt and adapt technology that supports your people and processes.

Principle 9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.

Principle 10. Develop exceptional people and teams who follow your company’s philosophy.

Principle 11. Respect your value chain partners by challenging them and helping them improve.

Principle 12. Observe deeply and learn iteratively (PDCA) to meet each challenge.

Principle 13. Focus the improvement energy of your people through aligned goals at all levels.

Principle 14. Learn your way to the future through bold strategy, some large leaps, and many small steps.

These fourteen principles are the key to implement the Toyota Way, which is not only a set of isolated tools to implement lean manufacturing in the shopfloor; it is the philosophy to live every day in the whole organisation. Moreover, they are a set of guidelines to keep growing and improving so that a company can continue to reach higher maturity levels. It is recommended to focus on those principals that are in a critical situation or need more attention than the others.

The following table can help you in developing a critical analysis of the maturity level of each principle according to the context and situation of an organisation, as well as to set the strategies and goals to achieve or to be integrated into a strategic plan.

Instructions: circle maturity level for each principle that best fits. If between two levels put an X on the border. Then mark your desired future state, where you would prefer to be.

Meanwhile, other scholars started to analyse the Toyota Production System and they came up with the name of “lean”. They analysed how Toyota established a way to work with less, and how Toyota managed to reduce everything that is a waste for the organisation (resources, time), they called it “lean production”

James Womack, Dan Jones, and Dan Roos called the Toyota Production System as “lean production” in their book The Machine That Changed the World. The authors give the name “lean production” based on a five-year study of the worldwide automobile industry, specially in Toyota´s Japanese and United State plants.

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