14 Management Principles Toyota Way

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Information about 14 Management Principles Toyota Way

Published on December 23, 2008

Author: DineshKakkad

Source: slideshare.net

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Presentation given to Board of Directors and Senior Management Team of Rajkot Nagarik Sahakari Bank Limited on 19th Dec., 2008

Excellence unLimited, Rajkot

Excellence unLimited, Rajkot In the current Global meltdown scenario, Darwinian Principle of “Survival of the fittest” will prevail.

Excellence unLimited, Rajkot 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 14 Management principles . The Toyota Way

Excellence unLimited, Rajkot Known as Lean Manufacturing, Flexible Manufacturing or Toyota Production System ( TPS ), ideas invented in 1940s are still relevant and equally applicable to Service sector as well. The Toyota Way

Excellence unLimited, Rajkot 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. Section 1 : Long Term P hilosophy Section 2 : The Right P rocess will Produce the Right Results Section 3 : Add Value to Your Organization by Developing Your P eople and Your P artners Section 4 : Continuously Solving Root P roblems drive the Organizational Learning

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.

Section 1 : Long Term P hilosophy

Section 2 : The Right P rocess will Produce the Right

Results

Section 3 : Add Value to Your Organization by Developing

Your P eople and Your P artners

Section 4 : Continuously Solving Root P roblems drive

the Organizational Learning

Excellence unLimited, Rajkot Process ( Eliminating Waste ) 4 P Model of Toyota Way Most organizations are here Philosophy ( Long term Thinking ) People & Partners ( Respect, Challenge, Grow ) Problem Solving

Excellence unLimited, Rajkot Toyota Way Section 1 : Long Term Philosophy Principle 1 : Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. 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.

Section 1 : Long Term Philosophy

Principle 1 : Base your management decisions

on a long-term philosophy, even at the

expense of short-term financial goals.

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.

Excellence unLimited, Rajkot 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, method, time.

Excellence unLimited, Rajkot 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.

Excellence unLimited, Rajkot 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.

Excellence unLimited, Rajkot Toyota Way Principle 5 Build a culture of stopping to fix problems, to get quality right the first time. Quality takes precedence. Any employee has the authority to stop the process to signal a quality issue.

Excellence unLimited, Rajkot 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, ISO 9001 or like documents and system.

Excellence unLimited, Rajkot 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: Sort out unneeded items Seiton = Straighten: Have a place for everything Seiso = Shine: Keep the area clean Seiketsu = Standardize: Create rules and standards of housekeeping Shitsuke = Sustain: Maintain the system and continue to improve it

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: Sort out unneeded items

Seiton = Straighten: Have a place for everything

Seiso = Shine: Keep the area clean

Seiketsu = Standardize: Create rules and

standards of housekeeping

Shitsuke = Sustain: Maintain the system and continue

to improve it

Excellence unLimited, Rajkot Toyota Way Principle 8 Use only reliable, thoroughly tested technology that serves your people and processes. Technology is pulled by process, not p ushed to process. Do not introduce technology just for hack of it.

Excellence unLimited, Rajkot 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 constant attention, the principles will fade. The principles have to be engrained. Employees must be educated and trained because they have to maintain a learning organization.

Excellence unLimited, Rajkot 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. “ All of us is better than anyone of us ”

Excellence unLimited, Rajkot 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.

Excellence unLimited, Rajkot 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. Without experiencing the situation first hand, managers will not have an understanding how it can be improved.

Excellence unLimited, Rajkot 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.

Excellence unLimited, Rajkot 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 : Organizational Score Card and individual goals and targets

Excellence unLimited, Rajkot Toyota Way Continuous Implementation of all 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 Growth and sustainability are yours. Wish you all the Best in such journey of Excellence ! I will be happy to help you in this journey.

Excellence unLimited, Rajkot Thank You

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