In 2001, Toyota Motor Corporation summed up the philosophy, values and manufacturing ideals it used to guide the company to success. By cultivating and promoting a culture of continuous improvement and respect for others, Toyota had grown into the world’s second-largest automotive manufacturer and the first manufacturer to produce 10 million vehicles.
The company philosophy served as the cornerstone of the empire. Toyota’s strategy to woo customers came from creating and maintaining extremely high standards. Organized into four categories, these powerful principles were known as ‘The Toyota Way’.
- Management decisions should be based on long-term objectives, even if it means foregoing short-term financial goals.
The Right Process Will Produce The Right Results
- Design a process that eliminates wasted time by connecting processes and creating a single continuous workflow. By simplifying the workflow, problems can be more easily identified when things go wrong.
- To reduce wasted efforts and overproduction, design systems that can communicate what is needed. When one component signals “I need more” of a certain material, only then does the associated component work to provide it.
- Level out the workload. The ideal scenario is one where neither the machines nor the workers are overburdened. This is important in extending the lifespan of both the equipment and worker and lead to a more consistent output.
- Stop and fix problems first. Building a culture that does not tolerate problems will lead to superior quality. In the Toyota Production System, an employee can halt production anytime he or she sees a quality issue.
- Standardize tasks by setting benchmarks against which all future processes are measured. Standardization helps with quality control, specialization, and faster production. Standardize work in such a way that there is room for workers to improve the company and themselves.
- Use visual control to bring problems to light. There are five steps that can be used to improve workspace, improve flow of work, and prevent conflicts: Sort the unneeded things from the needed things. Straighten everything into its proper place. Maintain a clean and tidy workspace to make work easier. To maintain better control, create standards for everything. Rinse, repeat, and improve this process.
- Use only reliable technology: The manufacturer has the privilege to choose the technology and therefore should always choose the most reliable for its needs.
Add Value To The Organization By Developing Your People
- Grow leaders internally. Recruiting people from the outside is more expensive and less reliable. It is better to train the employees so there will exist a pool of highly skilled workers who can take up higher positions whenever needed.
- Develop exceptional people and exceptional teams. The management should focus on a team-building philosophy that follows the company’s mission, continually investing in its staff.
- Help your partners and suppliers improve. Treats your partners and suppliers as extended employees, challenging them and helping them improve. By strengthening each link, the whole chain gets stronger.
Continuously Solving Root Problems Drives Organizational Learning
- See for yourself. Before making decisions just by looking at data, make the effort to go to the shop floor and see the operations firsthand. One cannot improve a situation without first experiencing it themselves.
- Make decisions slowly but implement rapidly. Carefully evaluate every option and its consequences and only then make the decision. Managers should ensure that the workers agree with the decision or solution. Once the decision has been made, an implementation should be quick. Otherwise, the entire plan is at risk falling apart.
- Reflect and improve. One should continuously try to improve through retrospection. Become a learning organization through reflection and improvement — Hansei and Kaizen.
When Toyota lost its way…
Between 2009–2011, Toyota was forced to recall an incredible 9 million of its cars in response to 3 separate recalls. The issue was the unintended acceleration some drivers had experienced leading to several severe incidents. How did this happen? How did the world’s largest, most trustworthy automobile manufacturer make such a serious mistake?
It began with a shift in priorities. At the turn of the millennia, Toyota began to slowly favor its dominance in the market over the quality of its vehicles. They began to cut corners and ignore consumer feedback — two behaviors it would never have tolerated before. The company that at one time had invested a minimum of ten years into training each new engineer began hiring less qualified workers and invested less in mentoring them.
In an effort to rapidly increase growth, they allowed their standards to fall, and in return, the quality of their cars greatly suffered. In the aftermath of such a scandal, Toyota would suffer $2 billion in losses, and see their shares drop in value by 15%. Toyota had lost sight of what had made it great. Toyota had lost its way.