The Toyota Way
by Jeffrey K. Liker, Ph.D.
Buy the 8-page summary today!Toyota is the world's most profitable automaker. Its "secret weapon" is lean production - the revolutionary approach to business processes that it invented in the 1950s and has spent decades perfecting. Today, businesses around the world are trying to emulate Toyota's remarkable success by working to implement the company's radical system for speeding up business and service processes, reducing waste, and improving quality. It is a system that is derived from balancing the role of people in an organizational culture that expects and values their continuous improvements, with a technical system that is focused on high-value-added "flow."
To help other companies learn to continually improve on what they do, Professor of Industrial and Operations Engineering at the University of Michigan Dr. Jeffrey K. Liker describes the results of his year-long research into Toyota and its managers, executives, suppliers and training centers.
While detailing the company's culture, processes and people, Liker provides readers with a management model that can be used to transform business across industries, and the key principles that drive the techniques and tools of the Toyota Production System and the management of Toyota in general. These principles embody the long-term philosophy, processes, results, people, partners and problem solving that drive the organizational learning at Toyota, and can make the Toyota Way work for any organization.
Using Operational Excellence as a Strategic Weapon
Toyota first caught the world's attention in the 1980s, when it became clear that there was something special about Japanese quality and efficiency. Japanese cars were lasting longer than American cars and required much less repair. By the 1990s, it was apparent that there was something even more special about Toyota compared to other automakers in Japan. It was the way Toyota engineered and manufactured the autos that led to unbelievable consistency in the process and product.
Toyota designed autos faster, with more reliability, yet at a competitive cost, even when paying the relatively high wages of Japanese workers. Equally impressive was that every time Toyota showed an apparent weakness and seemed vulnerable to the competition, Toyota fixed the problem and came back even stronger.
Today, Toyota is the third-largest auto manufacturer in the world, behind General Motors and Ford, with global vehicle sales of over 6 million per year in 170 countries. Auto industry analysts estimate that Toyota will pass Ford in global vehicles sold in 2005, and if current trends continue, it will eventually pass GM to become the largest automaker in the world.
Quality Reputation
Much of Toyota's success comes from its astounding quality reputation. In 2003, Toyota recalled 79 percent fewer vehicles in the United States than Ford and 92 percent fewer than Chrysler. According to a 2003 study in Consumer Reports, 15 of the top 38 most reliable models from any manufacturer over the last seven years were made by Toyota/Lexus.
The Toyota Production System is Toyota's unique approach to manufacturing. It is the basis for much of the "lean production" movement that has dominated manufacturing trends for the last 10 years. Lean manufacturing is a five-part process that includes defining customer value, defining the value stream, making it "flow," "pulling" from the customer back, and striving for excellence. To be a lean manufacturer requires a way of thinking that focuses on making the product flow through value-adding processes without interruption (one-piece flow), a "pull" system that cascades back from customer demand by replenishing only what the next operation takes away at short intervals, and a culture in which everyone is striving continuously to improve.