The Toyota Way is a set of principles defining the organizational culture of Toyota Motor Corporation. The company formalized the Toyota Way in 2001, after decades of academic research into the Toyota Production System and its implications for lean manufacturing as a methodology that other organizations could adopt. The two pillars of the Toyota Way are respect for people and continuous improvement. Jeffrey K. Liker popularized the philosophy in his 2004 book, The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. Subsequent research has explored the extent to which the Toyota Way can be applied in other contexts.
Background The principles were first collated into a single document in the company's pamphlet "The Toyota Way 2001", to help codify the company's organizational culture. The philosophy was subsequently analyzed in the 2004 book The Toyota Way by American industrial engineering researcher Jeffrey Liker and has received attention in business administration education and corporate governance.
Principles The principles of the Toyota Way are divided into the two broad categories of continuous improvement and respect for human resources. The standards for constant improvement include directives to set up a long-term vision, to engage in a step-by-step approach to challenges, to search for the root causes of problems, and to engage in ongoing innovation. The standards pertain to respect for individuals and incorporate ways of building appreciation and cooperation. The system is summarized in 14 principles:
Research findings
In 2004, Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book, Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work." According to Liker, the 14 principles of The Toyota Way are organized into four sections:
long-term philosophy, the right process will produce the right results, add value to the organization by developing your people, and continuously solving root problems drives organizational learning.
Long-term philosophy The first principle involves managing with a long-term view rather than for short-term gain. It reflects a belief that people need a purpose to find motivation and establish goals.
Right process will produce right results The following seven principles are focused on process with an eye towards a quality outcome. Following these principles, work processes are redesigned to eliminate waste (muda) through continuous improvement — kaizen. The seven types of muda are:
Overproduction Waiting, time on hand Unnecessary transport or conveyance Overprocessing or incorrect processing Excess inventory Motion Defects The principles in this section empower employees despite the automaker's bureaucratic processes. Any employee in the Toyota Production System has the authority to stop production to signal a quality issue, emphasizing that quality takes precedence (jidoka). The way the Toyota bureaucratic system is implemented allows for continuous improvement (kaizen) from the people affected by that system so that any employee may aid in the growth and improvement of the company. Recognition of the value of employees is also part of the principle of measured production rate (heijunka), as a level workload helps avoid overburdening people and equipment (muri), but this is also intended to minimize waste (muda) and avoid uneven production levels (mura). These principles are also designed to ensure that only essential materials are employed (to avoid overproduction), that the work environment is maintained efficiently (the 5S Program) to help people share workstations and to reduce time looking for needed tools, and that the technology used is reliable and thoroughly tested. The concept of "standardized work" has been extended to managers referring to "standardized work for (executive) leadership" (or Leader Standard Work), looking at elements such as
Definition of leadership that satisfies the needs of internal and external customers A precise description of business principles that leaders use to perform their work A standard skill set to keep business processes operating smoothly
Value to organization by developing people Human development is the focus of principles 9 through 11. Principle 9 emphasizes the need to ensure that leaders embrace and promote the corporate philosophy. According to Liker, this reflects a belief that these principles must be ingrained in employees to survive. Principle 10 emphasizes the need for individuals and work teams to embrace the company's philosophy, with teams of 4-5 people who are judged in success by their team achievements, rather than their solo efforts. Principle 11 looks to business partners, who are treated by Toyota much like they treat their employees. Toyota challenges them to do better and helps them achieve it. The automaker provides cross-functional teams to help suppliers discover and fix problems to become more robust, better suppliers.
Solving root problems drives organizational learning The final principles embrace a philosophy of problem-solving that emphasizes thorough understanding, swiftly implemented consensus-based solutions, continual reflection (hansei), and improvement (kaizen). Principle 12 (genchi genbutsu) sets out the expectation that managers will personally evaluate operations to understand situations and problems firsthand. Principle 13 encourages thorough consideration of possible solutions through a consensus process, with rapid implementation of decisions once reached (nemawashi). The final principle requires that Toyota be a "learning organization", continually reflecting on its practices and striving for improvement. According to Liker, becoming a learning organization involves criticizing every aspect of what one does.
Implementation
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