Lean Insights: Don’t blame the Toyota Production System

In my 25 years of experience with Toyota – working with the company in Canada, China, Japan and the United States – I’ve seen the tremendous impact that the Toyota Production System (TPS) has had in the auto market, as well as countless other environments including healthcare, aerospace, government, office and administrative.

If this first-hand experience has shown me one thing, it’s that TPS is not the source of Toyota’s problems. Moreover, TPS continues to be the leading method for continuous improvement – and the company’s most powerful tool in overcoming its recent challenges.

In a recent edition of John Shook’s Lean Management column, he interviewed Jeff Liker, a professor of Industrial and Operations Engineering at the University of Michigan, about the troubles that have recently hit Toyota. Liker said:

I see the recalls as a very, very, very poor indicator of fundamental problems. They are rare, isolated engineering issues that, in this case, seem to have nothing to do with the health of TPS in plants or even product development. So far the more than six million vehicles recalled revealed three problems – an aftermarket floor mat that was misused by the public, a sticky pedal based on a composite material selected with a supplier about six years ago, and a software coding error made early in 2009. For a vehicle with about 3000 parts per model that is not a lot of errors in six years.

The most important challenge Toyota faces right now is to stay consistent with its values and principles at a time of extreme growth. So far, throughout the company’s history, it has done this.

A most notable example occurred back in the 1990s, when Fujio Cho saw that the Toyota Way was weakening as the legions of Japanese co-ordinators and trainers failed to keep up with the company’s North American growth. 

He knew the Americans needed to become more self-reliant so, during his tenure as President of Toyota Motor Manufacturing Kentucky (TMMK), he started to develop a formal Toyota Way document. After ten years of work, he led the company to write The Toyota Way in 2001, which was eventually used as the guidebook to ensure a consistent global culture.

Cho had the foresight to see that the Toyota Way would not automatically sustain itself. Further efforts led to Toyota Business Practices – the concrete problem solving method to put the Toyota Way into practice. Then came a version of the Toyota Way for Sales and Marketing.

Toyota’s recent problems are different – but the challenge is the same. The company’s thinking has always been to "seek quality, and volume will follow". But the looming prize of becoming the world’s number one automaker led some managers to replace the company’s "quality first" policy with a "plan for volume and achieve volume" approach.

Does this mean that TPS has taken a hit? Not at all. The deficiencies for Toyota came from the managers, not the gemba. It is likely that the burden of keeping pace with the increasing complexity of today’s automobiles exceeded the pace of building capacity at the gemba.

People should remember that the Toyota Production System was born in a crisis.  If there’s one thing that Toyota does well, it’s to think its way out of a crisis. The next few months should be interesting as Toyota recaptures market share but faces judicial challenges.

FROM THE BOOKSHELF

The evolution of a manufacturing system at Toyota
by Takahiro Fujimoto

The "Toyota Bookshelf" certainly contains a number of worthwhile titles, but given my article about faults at Toyota, this book seemed to be particularly worthwhile.

Evolution of Manufacturing Systems at Toyota gets my vote for being the most insightful, even if it is somewhat dry. The take home message here comes when Fujimoto describes how Toyota has responded to change. This book tries to highlight the role of system processes that aren’t deliberately planned.

It builds on the author’s past works on functional analysis of planned manufacturing systems in the automobile industry and Toyota in particular.

Fujimoto points out that there is also an evolutionary approach – one that evolves as it encounters unplanned change or circumstances. He points out that manufacturing systems aren’t merely a product of deliberately planning. This is particularly important since we are often left with the impression that the Toyota Way is somehow completely planned out ahead of time.

It’s important to note that some of Toyota’s successful routines have originated unintentionally; that they were the result of dealing with unanticipated events.

This book gives us general idea of how a company’s organizational capabilities were born and helps us understand particularly how Toyota has created its style of manufacturing system and capabilities.

To quote Ohno, father of TPS, Toyota remains focused on reducing waste and increasing flow. New and recent challenges will spur Toyota on to a new standard of work, even if the change was unexpected. This reliance on standard work and kaizen to reduce waste and increase flow is at the heart of Toyota.

QUESTION FROM THE FLOOR

QUESTION: We’re a custom fabrication shop. We’ve brought some Lean tools in to the manufacturing floor and we’ve seen some good progress. We’re still shipping product late. Where else should we apply Lean?

ANSWER: Congratulations on getting Lean started and on seeing good results. Be sure to maintain those successes. To answer your question, think about the office.

I tell people that half of the time they’re late is because of the office side of their business. It’s relatively easy to see waste, impediments to flow or to do a 5S on the manufacturing floor. It’s not that it’s really harder to see waste in the office, but people aren’t used to looking there.

What’s worse is that waste in the office can be more costly than waste on the floor. When a large invoice is not collected, a sales proposal is delivered late, or a quote contains errors, these wastes translate into lost business and chip away at the bottom line. Millions of dollars can be at stake.

You’re often looking at the flow of information when you do a value stream map for the office. An information flow can cut across more fiefdoms than a materials flow. Get a wide range of people involved in doing the information VSM, including people from the floor.

Bear in mind that front office people are often unaccustomed to being held to the same process standards as shop floor employees. There are almost always re-dos. Information travels back and forth instead of flowing smoothly.

Do the VSM for the office and administrative functions. You’ll be pleasantly surprised when you start to deliver on your A3 problem solving!

 
Dr. Timothy Hill is an Industrial and Organizational Psychologist and Certified Lean Six Sigma Black Belt with global expertise in Human Resources/Human Capital. He can be reached at drtim@kyoseicanada.ca.