The Toyota Way – Part 3

This post continues my summary of the The Toyota Way by Dr Jeff K. Liker.

Principle 3: Use the “Pull-System” to Avoid Over Production

The pull-system hinges on the idea of restocking inventory based on the day-to day demand of the customers rather than on a fixed schedule or system. This calls for a flexible system that relies on consumer demand. The Just-in-Time (JIT) system provides customers with what they want, when they want it and in the amount they want it. Material restocking based on consumption minimizes work in process and warehousing of inventory. You only stock small amounts of each product and frequently replenish based on what the customer actually takes away.

Principle 4: Level out theWorkload (heijunka)

A strict build-to-order system builds a lot of inventory, over-head cost, poorer product and service quality and hidden problems. To eliminate this problem, Toyota came up with a scheme of leveling out the production schedule. The leveling of production by volume and product mix is known as heijunka. The process does not build up products according to the actual flow of customer orders. Rather, it takes the total volume of orders in a period and levels them out. This results to having the same amount and mix made each day.

Benefits of a Leveling Schedule

1. Flexibility to make what the customer wants when they want it.
2. Reduced risk of unsold goods.
3. Balanced used of labor and goods.

Principle 5: Build a Culture of Shopping to Fix the Problem, to Get the Quality Right the First Time

Quality for the customers should be the driving force behind any company’s philosophy. Quality should be built in your company and your production processes. Building an Early Warning Device into your line or equipment prevents problems from being passed down the line. This reduces costs and is more effective than inspecting and repairing quality problems after the fact. You should also build a support system that can quickly solve problems and create counter measures. The development of a company principle of stopping or slowing down work when a problem is detected and getting the quality right enhances productivity and profitability in the long run.

Principle 6: Standardized Tasks are the Foundation for Continuous Improvement and Employee Empowerment

Standardization is the foundation for continuous improvement, innovation, growth and quality. It is impossible to enhance any process until it is standardized. Quality is likewise guaranteed through standard procedures to ensure consistency in the process and product. When implementing standardization, it is important to strike a balance between providing the employees with firm procedures and providing them the freedom to innovate and be creative. Standards should be specific enough to offer useful guidelines yet general enough to allow for some flexibility.

Principle 7: Use Visual Control So No Problems are Hidden

Five S’s for Elimination of Waste

1. Sort.
2. Straighten.
3. Shine or cleanliness.
4. Standardize or create rules.
5. Sustain.

• Keep only what is needed and dispose of what is not.
• Maintain orderliness. Remember, there is a place for everything and everything in its place.
• The cleaning process often acts as a form of inspection that can identify defects or abnormal conditions that can affect quality.
• Develop systems and procedures to maintain and monitor the first three rules stated above.
• Maintaining a stabilized workplace is an ongoing process of continuous improvement.

Principle 8: Use Only Reliable, Thoroughly Tested Technology that Serves Your People and Process

Adaptation of new technologies must support your people, process and values. It must not displace or replace them. Introduce new technology after it has been tested and proven with the involvement of a broad cross-section of your organization. Before adopting any new technology, Toyota first analyzes the impact it might have on existing processes. If it determines that the new technology adds value to the existing process, it analyzes it further to determine if it does not conflict with the company’s philosophy and operating principles. If it violates any of the principles,Toyota rejects the new technology. The introduction of new technology is done through a process of consensus, analysis and planning involving the employees and all the stakeholders in the process. This painstaking process results in the smooth implementation of the new technology without employee resistance and process disruption.

The next post in the series will cover the remainder of the fourteen points and how to apply the Toyota Way in your organization.