Pms Toyo

he Toyota Way, by Jeffrey K.
Liker: Bibliographic Review

Liker, Jeffrey K. The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. New York: McGraw-Hill, 2004. Overview Pursuant to his 20 years of studying Toyota, Industrial and Operations Engineering professor Jeffrey Liker distills its teachings into 14 management principles, which he terms the Toyota Way. Toyota has consistently performed financially (its net profit margin is 8.3 times higher than industry average, 4), yet also maintains the highest standards of quality. Liker suggests that these trends are the direct result of the correct implementation of the Toyota Way. Lean is an outgrowth of the Toyota management philosophy. Liker breaks the book into three parts. The first part is concerned with building a case for the excellence of Toyota and linking this to the Toyota Way, providing a history of the Toyota company, outlining the Toyota culture, and examining two case studies that show how Toyota creates new cars. The second part explains each of the 14 principles in detail, and the third part suggests some practical ways of implementing the Toyota way in an organization. Toyota was formed when a young Japanese man, Sakichi Toyoda, invented a power-driven loom in the late 1800's. In 1926, Toyoda Automatic Loom Works was born (and still exists). His son, Kiichiro, was tasked with building the automobile business. Impoverished after World War II, Toyota was forced to build small numbers of a variety of cars inexpensively, as opposed to big American companies like Ford, which were set up to produce large amounts of a few kinds of cars. Taiichi Ohno developed the Toyota Production System in the 1950's after a visit to the United States. Toyota Production System is a way of applying the Toyota Way. The heart of the Toyota Production System is eliminating waste. Eight types of waste are identified: 1)Overproduction, 2)Waiting-time on hand, 3)Unnecessary transport or conveyance, 4)Overprocessing or incorrect processing, 5)Excess inventory, 6)Unnecessary movement, 7)Defects, and 8)Unused employee creativity (28,29). When the Lexus was developed, it needed to defeat other popular luxury cars such as BMW, Benz, Audi, Volvo, Jaguar, and Cadillac in areas such as performance, quietness, and fuel economy. After extensive research, "no compromise" goals were established, such as great high-speed handling/stability yet a pleasant ride, and fast and smooth ride, yet low fuel consumption. Many of the goals were thought to be mutually exclusive, but handson problem solving and good communication, all of the goals were met. The Toyota Prius was designed and produced in less than two years. The idea of a hybrid car was a calculated risk, but after great deliberation, Toyota moved rapidly and confidently. Here are the 14 principles: 1) Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. This sense of purpose ultimately drives a company toward excellence. Short-term financial goals are not sufficient to create a great company. 2) Create continuous flow to bring problems to the surface. Create zero idle time. Strive to keep product and operators in constant movement. If there is a problem, it will not be masked by opaque processes. 3) Use "pull" systems to avoid overproduction. This means avoiding stocking large amounts of product, but instead stocking small amounts, and creating more as more is needed. 4) Level out the workload. Strive to create a consistent amount of product daily to avoid overburdening people or equipment. 5) Build a culture of stopping to fix problems, to get quality right the first time. This involves developing a visual system to alert employees of problems. Stopping to fix problems forces operators to avoid waste and focus
on quality. 6) Standardized tasks are the foundation for continuous improvement and employee empowerment. Predictability is needed for consistency within the system. However, encourage employee creativity in problem-solving to improve the system. 7) Use visual control so no problems are hidden. Reports should be limited to one piece of paper. Avoid computer screens that distract from the real work being done. 8) Use only reliable, thoroughly tested technology that serves your people and processes. Efficiency is challenged if there are equipment problems or redundancies. What works trumps what's new. 9) Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. Leaders are grown from within rather than purchased from without. 10) Develop exceptional people and teams who follow your company's philosophy. This means painstakingly developing a culture that adheres to the correct philosophy, and encouraging teamwork. 11) Respect your extended network of partners and suppliers by challenging them and helping them improve. Respect is setting high standards for your partners, and them helping them achieve them. 12) Go and see for yourself to thoroughly understand the situation.Management has to go and see problems for themselves in order to make good decisions. When possible, information should not be mediated through others, but seen for oneself. 13) Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly. Thoroughly consider alternatives and build consensus with all involved, then aggressively pursue what has been chosen. 14) Become a learning organization through relentless reflection and continuous improvement. Design processes for transparency, to highlight errors and allow for improvement. Use reflection after projects to identify shortomings. Standardize the best practices. Lean processes are implemented by tools such as value-stream mapping and 5S (Sort, straighten, shine, standardize, sustain). However, real change within an organization requires cultural change, and an organic embrace of the Toyota Way. If only the tools are used, change will be short-term and ineffective. Discussion I see several connections between this and Risk Management. The idea of making processes transparent so that errors are quickly found echoes Reason's ideas about opaque systems and latent errors. The discussion of valuing individual creativity in improving procedures connects with the RM idea of valuing employee input when operations are carried out, to avoid error. In both systems, employees are encouraged to think critically about the system. They are masters of the system, and not vice-versa. The fact that Toyota pulls off the difficult feat of balancing profit and quality suggests that there might be a third way in high-risk systems. If profit and quality can be produced without compromise, and if other seemingly opposed goals can be met as in the Lexus production, why not safety and production? Perhaps seeing the two as a binary is too one-dimensional.

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he Toyota Way, by Jeffrey K.

Liker: Bibliographic Review

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