The Toyota Way

The book The Toyota Way was firstly published in 2004 and its second German version ‘Der Toyota Weg’, which is used by the researcher, in 2007. In fact this book evolved from Toyota´s internal training document ‘The Toyota Way 2001’ and describes the whole Toyota´s lean manufacturing system – TPS. The system is illustrated in Figure 4.1in the form of a house that was borrowed from Liker and Hoseus (2009:27).

Figure 4. 1: The model of the Toyota Way 2001 Source: Liker and Hoseus (2009:27)

Figure 4.1 depicts the first model of the Toyota Way, a house reinforced by two pillars – ‘Continuous Improvement’ and ‘Respect for People’. The foundation of the house is built from five elements, presenting the core values of Toyota, which are ‘Challenge’;

77 The second model of the Toyota Way is called the ‘4P-Model’ and was introduced by Liker (2007). Figure 4.2 portrays the ‘4P-Model’ in the form of the pyramid with four levels: Philosophy, Process, People and Partners, and Problem Solving. The pyramid represents a system where each level in the pyramid provides the foundation for the next level and if any of the levels are incomplete the system will not function.

Figure 4. 2: 4P-Model of the Toyota Way Source: Liker (2007:30)

The levels of the pyramid are can be summarized as follows (Liker 2007:30):

Long-term Philosophy –Toyota leaders strongly emphasize generating value to

customers, society and the community. This drives a long-term approach to building a learning organization. Indeed it is the starting point, thereby setting the foundation for all the other principles.

The right Process will produce the right results – Toyota leaders believe that to get the

right results one needs to follow the right processes, as their company is process- oriented. Creating flow is a key to a continuous improvement process and to developing people. Moreover, it is a key for achieving the best quality at the lowest cost and at the same time ensuring high safety and good morale.

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Add value to the organization by developing your People and Partners – Toyota

leaders add value to the organization by challenging the people, partners and suppliers to grow. Toyota builds people, not only cars: moreover its tools are designed to support people to continuously improve and develop.

Continuously solving root Problems drives organizational learning – Toyota´s highest

principle is organizational learning. Their ‘Continuous Learning System’ focuses on solving root problems continuously and preventing problems from occurring.

The four levels of the pyramid simultaneously represent four categories, including fourteen lean principles, which are the foundation of TPS. The principles were categorized by Liker (2007:29), who studied the complex Toyota management system for more than 20 years. The fourteen principles are listed as follows in Table 4.1:

Fourteen principles of the Toyota Way

Long-term philosophy

1. Base your management decisions on a long-term philosophy, even at the expense of short-term

financial goals

Lean processes: the right process will produce the right results

2. Create continuous process “flow” to bring problems to the surface

3. Use “pull” systems to avoid overproduction

4. Level out the workload (Heijunka). (Work like the tortoise, not the hare) 5. Build a culture of stopping to fix problems, to get quality right the first time

6. Standardized tasks are the foundation for continuous improvement and employee empowerment 7. Use visual control so that no problems are hidden

8. Use only reliable, thoroughly tested technology that serves your people and processes Add value to the organization by developing your people and partners

9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others 10. Develop exceptional people and teams who follow your company´s philosophy

11. Respect your extended network of partners and suppliers by challenging them and helping them

improve

Continuously solving root problems drives organizational learning

12. Go and see for yourself to thoroughly understand the situation (Genchi Genbutsu)

13. Make decisions slowly by consensus, thoroughly considering all options; implement decisions

rapidly

14. Become a learning organization through relentless reflection (Hansei) and continuous improvement

(Kaizen)

Table 4. 1: Fourteen principles of the Toyota Way

79 Despite both models in Figures 4.1 and 4.2 being differently structured, they have a lot in common. The models represent a system with many interrelated parts, processes, tools, techniques and methods. Both models place the highest value on people and on a philosophy of continuous improvement. Lean tools, such as Kanban, 5S or cells, are not visible in any of the models. They are hidden at a deeper level and are the sub- elements of the surface features. The lean tools and processes serve to help people to solve problems and to continuously develop. Finally, all parts of the models are interrelated with Toyota’s unique culture which is the key ingredient in Toyota´s success.

The Toyota Way is the blueprint of Toyota´s management philosophy, values and

business methods, documenting the whole of Toyota´s system. It is basically focused on tacit knowledge, not explicit procedural knowledge. The book provides specific tools and techniques, but does not provide an effective way of implementing them. A more practical book providing advice on ‘how-to’ learn from the Toyota Way and explaining the implementation of the 4P-Model is to be found in Liker and Meier (2006).

Many companies worldwide are trying to adopt the TPS and copy the 4P-Model. Unfortunately, they focus mainly on the ‘Process level’ and adoption of lean tools and techniques. Most of the companies lack an understanding of how the fourteen principles work together in a system (Liker 2007:38). Moreover, managers do not understand the power behind the TPS, and more specifically that it is the continuous improvement culture that sustains these principles. Finally, Liker and Morgan (2006:5) recommend adoption of a lean approach aimed at a continual, comprehensive, and coordinated effort for change and for learning across the organization.