Using the Toyota Way to Transform Technical and Service Organizations

Applying the Toyota Production System outside the shop floor can be done, but this takes some creativity. Certainly, the basic principles can be applied to administrative processes. We sent some associates from our kaizen promotion office to dealers to help them. They have been able to reduce the time it takes to inspect the vehicle and do routine repairs, like changing parts or changing oil, in some cases from 60 minutes to 10 minutes. This is very good for us and makes our customers very happy. There are many more opportunities that we need to work on using our creativity.

—Fujio Cho, president of Toyota Motor Corporation

Manufacturing companies throughout the world have applied the Toyota Production System on the shop floor to varying degrees, and interest in TPS or “lean manufacturing” continues to grow. As companies experience extraordinary improvements on the shop floor, it is natural to ask how this can apply to technical and service operations. Many service companies that initially look at Toyota are attracted most by the technical TPS principles of flow and how they can apply it to a highly variable and often chaotic process. You can sum up the prospect of applying lean in-service operations by the reactions of three categories of people:

  1. Lean zealots. Manufacturing companies that have implemented lean with any degree of success have experienced people who led the transformation. These people invariably become lean zealots who eat, breathe, and sleep lean. Understanding the power of the lean philosophy through actual experience, they naturally look at the enormous waste in administering technical and service operations in their companies and want to go at it like kids in a candy store.
  2. Executive decision makers. Rarely do executive decision makers have a very deep understanding of TPS or appreciate the power of the process or the philosophy. But they love the results. So if TPS works so well in manufacturing, why not try it in engineering, purchasing, accounting, and so on? Even executives of service industries like hospitals have heard of the benefits of lean in manufacturing and want to know if they too can get in on the benefits. Often this means an assignment delegated down to a less than enthusiastic manager to check it out.
  3. Ordinary people. Managers, supervisors, or ordinary workers in technical and service organizations are so immersed in doing their jobs it is difficult for them to see the flow in their work. To them, what goes on in the repetitive work in factories is as different from their lives as night is from day. The idea that you can apply some management fad about lean “flow” to their daily work seems ludicrous at best.

Unfortunately, for the first and second categories of people who are enthusiastic about applying lean concepts, there are no ready-made models of success in lean technical or service organizations to push the idea past resisters and the natural organization inertia. Cho admits that Toyota has a lot more opportunity to implement TPS principles beyond its manufacturing and is working on it. But there are already many examples inside of Toyota of Toyota Way principles spread well beyond manufacturing. For example, we have discussed throughout the article how Toyota has continually refined its product development process to become the industry’s best in lead time. Toyota has figured out how to view product development as a repeatable process that it can continuously improve. Recognizing that any process is repetitive at some level is the starting point.

In this articles I will address only one of the four layers in the Toyota Way 4P model—the Process layer, which focuses on the technical principles of the TPS. The final chapter will address how manufacturing and service organizations can learn from the broader set of Toyota Way principles.