Ineak Blog

A New Direction in Management
Early Ford put emphasis on and effort toward a vision that described a condition—the production flow ideal—but ultimately focused too little on product development and on organizing and managing the company in systematic ways. In contrast, General Motors (GM) put a lot of attention on developing systematic management and structuring [...]

In regard to pursuing the 1×1 flow ideal state, Toyota was clearly preceded by the Ford Motor Company, which undertook, arguably, Western manufacturing’s last focused and sustained pursuit of the contiguous flow vision early in the twentieth century. (Note that I am intentionally using the word contiguous rather than continuous.)
Flow Experiments in Fabrication Processes [...]

How does Toyota utilize its production vision to help manage people? A couple of examples will clarify this.
Example 1: Sensor Cables
In visiting the assembly area of a factory that produces automotive ABS-sensor cables (wires with a connector at one end and a sensor at the other), we found that the batch size in [...]

Toyota’s production system, for example, seeks to reduce cost and improve quality by moving ever closer to a total, synchronized, wastefree, one-by-one flow. But how do we get an organization of hundreds or thousands or tens of thousands of people to work continuously and effectively in the direction of a vision? We cannot simply move [...]

As depicted in Toyota’s vision for production operations, in its production operations, Toyota has for several decades been pursuing a long-term vision that consists of:

Zero defects
100 percent value added
One-piece flow, in sequence, on demand
Security for people

Toyota sees this particular ideal-state condition—if it were achieved through an entire value stream—as the way [...]

To understand Toyota’s improvement kata and coaching kata we need to consider two aspects of the context within which they operate: the business philosophy, or purpose, of the company; and its overall sense of direction.
The business philosophy of a company does much to define the thoughts and actions of everyone in the organization. However, by [...]

Not only is the list-oriented improvement approach not very effective, it also makes improvement too complicated and difficult.
To see what I mean, consider that Toyota teaches people to try to change only one thing at a time, and then to check the result against the expected result. You may work on several things simultaneously, [...]

The bottom line is that we are wasting a lot of time with the actionitem list approach. Yet if it is not very effective as a method for managing process improvement, why does it persist? Why do we tend to create such lists again and again?
One probable reason, already mentioned, is the erroneous feeling [...]

1.It doesn’t work very well. The underlying thinking with the list approach appears to be that the more action items we have, the more the process will be improved. The longer the lists of action items and the more improvement projects under way, the more we feel like something positive is happening. In many cases, [...]

As mentioned near the end of the last chapter, improvement and adaptation are critical success factors and tend to take place at the process level. How, then, are we currently trying to improve our processes? Based on observations in many factories, I currently find these main approaches: workshops, value-stream mapping, and, above all, action-item lists. [...]

Based on what I have been learning, the challenge we face is not to turn the heads of executives and managers toward implementing new production or management techniques or adopting new principles, but to achieving systematic continuous evolution and improvement across the organization by developing repeatedly and consistently applied behavioral routines: kata. Note that this [...]

Ideally we would utilize the human intellect of everyone in the organization to move it beyond forces of natural selection and make it consciously adaptive. However, our human instincts and judgment are highly variable, subjective, and even irrational. If you ask five people, “What do we need to do here?” you will get six different [...]

While nonhuman species are subject to natural selection—that is, natural selection acts upon them—humans and human organizations have at least the potential to adapt consciously. All organizations are probably to some degree adaptive, but their improvement and adaptation are typically only periodic and conducted by specialists. In other words, such organizations are not by their [...]

As most of us know, the following describes the environment in which many of our organizations find themselves.
Although they may seem steady state, conditions both outside and inside the organization are always changing. The process of evolution and change is always going on in your environment, whether you notice it or not. The shift [...]

What we have been doing is observing Toyota’s current visible practices, classifying them into lists of elements and principles and then trying to adopt them. This is reverse engineering—taking an object apart to see how it works in order to replicate it—and it is not working so well. Here are three reasons.
1. Critical Aspects [...]

The applause dies down as the next conference speaker approaches the podium. The presentation is going to be about Toyota, and in his first slide the speaker presents some impressive statistics that demonstrate Toyota’s superior performance. The audience is nodding appreciatively.
For about two decades now this scene has been repeated countless times. So many [...]

Interview on August 15, 2008, with Achim Paechtner, Former Senior Manager at Toyota of Europe
The purpose of the interview was to understand the differences of the automobile supply chain in Europe versus North America. Achim Paechtner identified four major differences in Europe:

With retailers, the major challenge Toyota faces is the heterogeneous environment: 27 [...]

Interview on September 23, 2008, with Jeffrey Smith,Vice President and General Manager, Toyota Business Unit, Johnson Controls
The purpose of the interview was to discuss how Toyota and suppliers work together as partners.
Jeffrey Smith described the forecasts shared by Toyota with Johnson Controls Inc. (JCI), a primary seat supplier, to enable stable orders and [...]

Interview on August 20, 2008, with Gary Dodd, Former President of Tire & Wheel Assembly and Former Executive with Toyota
The purpose of the interview was to discuss how Toyota suppliers interact with Toyota and to understand Toyota’s supply chain management from the supplier’s viewpoint.
Gary was one of the first general managers hired by [...]

Interview on September 3, 2008, with Steve Gates,Toyota Dealer
The purpose of the interview was to discuss how Toyota dealers interact with Toyota and to better understand the dealer’s role in the supply chain.
Steve Gates started by explaining the Toyota car allocation system to dealers. The allocation follows a “turn and earn” model where [...]

Phone Interview on September 25, 2008, with Mike Botkin, General Manager of Logistics,Toyota
The purpose of the interview was to discuss the logistics operation at Toyota in North America.
Mike Botkin is general manager of the North American Logistics division. The two departments that comprise this division are Logistics and Parts Distribution. Logistics, is responsible [...]

Interview on August 21, 2008, with David Burbidge,Vice President of Production Control,Toyota
The purpose of the interview was to discuss the role of production control regarding production planning and scheduling.
David Burbidge described how the production plans are adjusted to accommodate both minor hiccups in the production process as well as a major shift in [...]

Interview on August 21, 2008, with Jamey Lykins, Toyota Purchasing General Manager
The purpose of the interview was to understand how Toyota selects and develops suppliers.
Jamey Lykins says that Toyota’s view of procurement is to “cultivate the market and farm it” rather than “hunt for suppliers and use.” He also says that Toyota’s view [...]

Interview on August 21, 2008, with Gene Tabor, General Manager, Purchasing-Supplier Relations, Supplier Diversity, and Risk Management
The purpose of the interview was to discuss how Toyota works with its suppliers and to better understand Toyota’s working relationship with suppliers.
Gene Tabor believes that Toyota starts with a foundation that assumes that supplier relationships focus [...]

The beer game was introduced as an exercise in industrial dynamics in 1960. And what has beer to do with automobiles? The beer game is used as a fun way to illustrate some of the pitfalls of operating a supply chain. Certainly, beer gets the attention of students. Even though the product used in the [...]

The underlying principles associated with managing variety, velocity, and variability across the supply chain—the focus of Toyota’s supply chain leadership and management process—are found in many different industrial contexts. We provide several examples from service industries such as health care, insurance, banking, credit processing, and retailing. Products and services covered include apparel, wine, brake linings, [...]

Going back 20 years, the national bestseller The Machine that Changed the World: The Story of Lean Productionby Womack, Jones, and Roos devotes three chapters to supply chain coordination, dealing with customers, and managing the lean enterprise. The main ideas in these chapters have been translated into action in the Toyota supply chain setting. It [...]

Learning requires optimism and the spirit to take up challenges. The Toyota Way document states that: “We accept the challenges with a creative spirit and the courage to realize our own dreams without losing drive or energy. We approach our work vigorously, with optimism and a sincere belief in the value of our contribution.” It [...]

A classic problem studied by researchers from many fields is how firms allocate resources to the exploration of new possibilities versus the exploitation of known certainties. The returns of exploration are more long term, uncertain, and therefore risky. As March22 puts it: what is good in the long term is not always good in the [...]

How does continuous improvement take place in a supply chain? In our view, continuous improvement is learning and implementing the lessons learned; thus, much of what has been written about continuous improvement can be subsumed into the broader context of organizational learning. As we shall demonstrate, many of the methods used by Toyota in its [...]

At a very broad level, Toyota believes that continuous improvement and respect for people are at the core of its philosophy. Careful reading of the Toyota Way guidelines reveals what is meant by respect: respect for customers, respect for society, respect for suppliers and dealers, and respect for employees. The Toyota Way document puts it [...]