Lean manufacturing first came out of Toyota. This term is not used in Toyota itself. Internally they refer to the Toyota Production System (TPS), and the Toyota Way as the set of principles that underlie the system.
Lean was the term used when the methodology was exported to other organisations.
However, TPS and the Toyota Way are not just a set of tools and activities. Organisations that try to adapt Lean with that mindset miss important parts of the methodology.
These are 5 important ideas shared by Jeff Liker in his book The Toyota Way that are key to Toyota’s success.
1. Lean is a culture not a tool
Lean is not just a tool or one-off activity that is applied like shoe polish and magically improves an organisation. It is easy for senior leadership to bring in consultants, have them run activities, observe, change some of the organisation’s processes, and suggest future improvements. Driving long term organisational change is much harder and takes more effort.
It is tempting to take the easy way out: “dear consultants, take this money and make us Lean.” Throwing money at a problem is the simplest way to address it (when you have the money to throw, of course). You may even get some results. However, the real value of TPS is not just the tools that Toyota uses; it is the culture of motivated individuals in the company that operate following these principles.
Even with short term success the organisation will revert over time unless the principles and culture underpinning the success are maintained.
Driving cultural change asks much more of leadership than just inviting consultants. To start, it requires that they understand the principles of the system that they seek to put in place. It takes effort to learn, then practise new ideas. This is both a blessing and a curse: there is no price tag but it is not something that you can fix with money.
Cultural change also requires time. An important practice from Toyota is to not implement Lean at once throughout the organisation. Instead, leaders learn by implementing these principles for a single product line or area. After months or years the lessons are then moved out to the rest of the organisation.
In short, whereas Lean consultants will happily take your money to help implement Lean, there is also a burden on the organisation, especially leadership, to adopt the culture and principles that underpin the methodology.
2. An institution requires long-term thinking
This seems obvious on the surface, but there are decisions an organisation makes that will promote or harm its long term health.
One-piece flow and the practices of alerting and stopping production—either manually (andon) or mechanically (jidoka)—are in conflict with a short term view of improvement. They are however important practices for Toyota.
By stopping production the moment a defect is found it minimises the impact of that defect and starts rectifying it as quickly as possible. It is much better to resolve a defect after the first or second time it occurred than to discover it after stockpiles of defective parts or end products are built.
This practice requires a cultural shift to concentrate on the long term interests of the production process and the company: maintaining a high quality production process even if that includes short term interruptions.
Counterintuitively, this practice actually increases the uptime of the production process. By discovering and resolving defects quickly, production is maintained at a higher level.
This also increases the benefits of one-piece flow. A defect is discovered earlier—soon after it was created—rather than after an extended time accumulating in stockpiles. Once rectified there is considerably less to fix.
3. Improve iteratively
People might think that dramatic improvement requires a big, disruptive change. Toyota has hoshin kanri, the process of implementing strategic goals throughout an organisation. However, the most important advances happen piecemeal in iterative steps of improvement.
Toyota developed a culture of scientific thinking in its organisation. The key to this was a 4 step process to:
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establish the target condition,
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document the current condition,
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set the next intermediate target; and,
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experiment, develop a solution to achieve the next intermediate step.
Toyota developed starter kata to establish the culture of scientific thinking and iterative improvement. These are a series of questions to ask during the 4 step process above.
In short, the key to Toyota’s success is a culture of iterative, continuous improvement in which a rational, scientific mindset is used to incrementally improve. This is a set of practices and a culture that was built over many years throughout the organisation. It is not a simple tool or process that once applied brought success.
4. Use a level workload (Heijunka)
Even more important than hard work is consistent work. Some people step up to a crisis and put in additional hours. Programmers sometimes glorify the all-nighter in which a developer stays up all night to code. However, these are activities to remove rather than celebrate.
Toyota sees the three Ms as interrelated and each contributing to waste: muda (waste), mura (unevenness), and muri (overburden). It is much more effective to work consistently than intermediate bouts of hard work followed by the inevitable rebound.
This is often not obvious. Success requires consistent, rather than extreme work. The cadence of work needs to be sustainable. The sum total achieved over a long period of consistent work is greater than a cycle of all-nighters, crashes, bounce-back, crises followed by further all-nighters.
Toyota has practices to even the workflow. Rather than manufacturing several vehicles of one type, to then change over to a different vehicle, Toyota will instead interleave the types of vehicles manufactured.
Building one vehicle type in large batches means some areas of the plant are underworked, then overworked when the line shifts to a different type that requires more of their effort.
This interleaving of vehicle types also requires and encourages adaptation, e.g., more efficient changeovers of setup and tooling to accommodate changing requirements.
5. The Toyota culture was built from within Toyota
Toyota has a company culture that is remarkable and built from within the company. It is common practice for some companies to bring in a new CEO from outside of the organisation. How could an external leader—not steeped in the Toyota way and the company’s culture—do anything except undermine the very thing that brought Toyota its success?
Toyota develops leaders that are culturally aligned with the Toyota way.
A company that brings leadership from outside is almost admitting failure: that its culture is unremarkable and that it needs to bring somebody outside to fix it, to redirect the company away from the current path of failure.
Outside leadership makes sense for failing companies. Sometimes the culture developed within a company is toxic, dysfunctional, precisely what needs to be changed.
For Toyota their culture is precisely the key to success and an important part of the company worth preserving.
The culture goes well beyond just the choice of leadership. Personnel performance appraisals include how an individual aligns with the Toyota culture, in addition to their immediate performance. Toyota also developed practices throughout the company to mentor and develop individuals and leaders to maintain the company’s culture.