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Also known as lean manufacturing, here we focus on Toyota a bit more than the lean manufacturing category (though there is a great deal of overlap). See our lean management portal, inlcuding lean articles and explanation of lean terms: one piece flow - kanban, jidoka, JIT, muda, mistake proofing, takt time, more
Recommended posts: Toyota IT Overview - No Excessive Senior Executive Pay at Toyota - Deming and Toyota - Lean Thinking and Management - New Toyota CEO's Views - Visible Data - How Toyota Turns Workers Into Problem Solvers
At the core of the company’s success is the Toyota Production System, which took shape in the years after the Second World War, when Japan was literally rebuilding itself, and capital and equipment were hard to come by. A Toyota engineer named Taiichi Ohno turned necessity into virtue, coming up with a system to get as much as possible out of every part, every machine, and every worker. The principles were simple, even obvious - do away with waste, have parts arrive precisely when workers need them, fix problems as soon as they arise. And they weren’t even entirely new - Ohno himself cited Henry Ford and American supermarkets as inspirations. But what Toyota has done, better than any other manufacturing company, is turn principle into practice. In some cases, it has done so with inventions, like the andon cord, which any worker can pull to stop the assembly line if he notices a problem, or kanban, a card system that allows workers to signal when new parts are needed.
Very true, except one thing. Toyota’s innovation is not limited to process and execution. Toyota’s long term vision results in very dramatic innovation (that granted is not getting the press today - check back in 20 years, I think you will be reading about it then). For some examples see: Toyota’s Partner Robot, Toyota as Homebuilder, Toyota Engineers a New Plant: the Living Kind and The Birth of Prius.
A company truly driven by a focus on continual improvement, respect for all employees and reasonable executive compensation might be a company serious about adopting Deming and Toyota management principles. It is hard for me to imagine such a situation that doesn’t truly seek, as the primary aim of the organization, to benefit many stakeholders (workers, owners, suppliers, customers…) not just executives (or just executives, board and owners…).
Related: Toyota Management Develops the New Camry - Better and Different - Deming and Toyota - Toyota Keeps Improving - More Positive Press for Toyota Management - Good Execution is Important
What’s driving Toyota Canada’s success? - CIO reveals all
* Cutting down the customer problem resolution from weeks to an average of three days through this initiative alone;
* Early detection of customer dissatisfaction in services
* Reducing detection of product defects (from months to days).
The Toyota Canada CIO talks about the tremendous business benefits from this seamless freeflow of information. “When a defect is detected at the dealership, the next day it would up to our engineering department.” The speed at which information traverses is of immense value – especially when new vehicles are launched. Tien cited an example.
“We recently launched a new Toyota Corolla [model]. If there were a problem with a door knob of the vehicle, the plant would know about it and a fix would be put in place.”
An article well worth reading. Related: Toyota IT Overview - Lessons from Toyota’s IT Strategy - Good Customer Service Example at Toyota - Software Supporting Processes Not the Other Way Around
Another former Toyota USA leader is talking a leading role at another company. Gary Convis from Toyota retired last year.
Related: articles by Gary Convis - Toyota Management Speech by Gary Convis - Toyota Management Develops the New Camry - Quality Conversation with Gary Convis - Jim Press, Toyota N. American President, Moves to Chrysler
Dana Holding Corporation Names Gary L. Convis Chief Executive Officer
Dana Holding Corporation (NYSE: DAN) emerged from bankruptcy recently and today announced that it has named Gary L. Convis, 65, to the post of Chief Executive Officer. Convis was appointed to Dana’s new Board of Directors in January 2008 after retiring from Toyota Motor Corporation, where he had spent more than 20 years culminating in his role as Chairman of Toyota Motor Manufacturing, Kentucky.
“We are delighted to welcome Gary as Chief Executive Officer,” said Dana Executive Chairman John Devine, who had served as the company’s acting CEO since January. “Gary is widely respected as one of the leading experts in lean manufacturing and management systems, including the Toyota Production System. Along with his strong leadership and global industry experience, we believe he is an ideal choice as our new Chief Executive.”
“I am honored by the Board’s confidence in me to lead Dana,” Convis said. “I’m also eager to join with our people in establishing world-class manufacturing systems and returning this great company to the leadership ranks of the global automotive supply industry.”
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Toyota is investing $350 million in a second Indian manufacturing plant. The plant is focused on producing vehicles for the local market - as the Toyota Production System suggests that production be close to the market.
Toyota to invest Rs1,400 crore for “strategic” small car in India
The plant will make the Corolla sedans along with the small cars The company plans to have high level of localisation for the small car by procuring several components and sub-systems from Indian vendors. Primarily the car maker plans to sell the small car in the fast growing domestic market, though some will be exported as well, the company stated.
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The Japan-based automaker said last year that it plans to capture 10 per cent of India’s market. In 2007 Toyota sales accounted for a mere 0.6 per cent of the Indian car market
Related: Manufacturing Takes off in India - Toyota Chairman Comments on India and Thailand - Top 10 Manufacturing Countries 2006 - Indian companies have received as many awards as companies from all other countries combined since 2000 - Toyota to Build New Plant in India to Make Small Cars - TVS Group Director on India - Manufacturing, Economy
From Toyota’s blog, Living Up to Our Commitment
Once again Toyota shows what it means to go beyond the traditional way of thinking (where often MBA bean-counters and lawyers decide what should be done) instead of someone interested in having the company actually live up to a higher mission. From a previous post on their blog:
Related: Toyota IT Overview - Deming Companies - Reacting to Product Problems - Toyota Management Develops the New Camry - Corporate Blogging - Dell Innovation
ValuMetrix Services provides some really nice lean six sigma case studies. Simple short but still with enough detail to actually provide some sense of what is going on.
While on the topic of online case studies let me plug the Curious Cat management improvement library. I think it is one of the more valuable resources for management improvement offered on the Curious Cat sites. Library shelves: health care articles, lean manufacturing articles, six sigma articles, newly added articles…
via: Daily Kaizen
Related: Curious Cat Management Search - Management Consulting, what does the web site show? - Lean Management Case Study
Do corporations exist solely to maximize their bottom lines? We don’t think so., Forbes Magazine:
They don’t mention the importance of other stakeholder (employees, customers, suppliers - other than the Starbucks example) but still it is nice to read some support for the principles Deming supported: the corporation seeking to benefit all stakeholders.
Related: Curious Cat management search engine - Deming on Management - Focus on Customers and Employees
Jules Verne predicted cars would run on air. The Air Car is making that a reality. The car would be powered by compressed air. Certainly seem like an interesting idea. Air car ready for production:
The car is said to have a driving range of 125 miles so by my calculation it would cost about 1.6 cents per mile. A car that gets 31 mpg would use 4 gallons to go 124 miles. At $3 a gallon for gas, the cost is $12 for fuel or about 9.7 cents per mile. I didn’t notice anything about maintenance costs. I don’t see any reason why the Air Car would cost more to maintain than a normal car. Five-seat concept car runs on air
Now does that sound like the Toyota Production System to you? It should. If I were an executive at Toyota I would sure examine this to see if it really is as promising as it looks. And if it is Toyota sure has plenty of cash and the management practice to make a very compelling case for allowing Toyota to produce this globally. The engineers desires closely match what Toyota has learned. Both seek to eliminate the waste of transportation (friction).
Related: Click Fraud = Friction for Google - Manufacturing Takes off in India - Electric Automobiles
At Toyota, a Global Giant Reaches for Agility
The videos show everything from the correct way to hold a screw to the best way to hold an air gun so that a worker’s hand will not tire in a few hours. This month, workers from Toyota’s plant in Thailand took part in training required for jobs in their plant’s paint shop. Listening as an interpreter translated from Japanese into Thai, the workers were shown how to bend their knees and spray a water gun across a clear panel of Plexiglas.
Yet another article on the management of Toyota. And here is another: Toyota heir slowly following in family footsteps. And another: Toyota explores more efficient methods to build cars.
Related: 12 Stocks for 10 Years Feb 2008 Update - No Excessive Senior Executive Pay at Toyota - New Articles on Toyota Management - Toyota’s Effort to Stay Toyota - More Positive Press for Toyota Management - Toyota in the US Economy
Jim Press and Toyota, Setting Sights on No. 1 former president of Toyota Motor North America
The Purpose of an Organization as stated by W. Edwards Deming described the purpose of an organization in New Economics, on page 51, as:
This is obviously not the view most people have, but I believe Dr. Deming was right.
Related: Jim Press, Toyota N. American President, Moves to Chrysler - No Excessive Senior Executive Pay at Toyota
I get asked for examples of Deming managed companies fairly often. And recently I have had a number of such requests. So I figured I would provide an answer as a blog post. First, Dr. Deming would respond to such questions by referring to the theory of knowledge and the fallacy of trying to learn via examples. So remember to read up on why learning from examples is dangerous before taking to much from this.
I see Toyota as the best example of a Deming company. Dr. Deming did not propose a cookbook to follow. Instead he proposed a theory that requires learning and application within the specific institution. Toyota has created a management system that is based on Dr. Deming’s ideas and then they have evolved that over 60 years into something that is consistent with Deming’s management philosophy and has new ideas Deming did not mention. As odd as it may sound that very act of developing new concepts that were not mentioned by Dr. Deming is exactly what makes them the company that most exemplifies Deming’s management system.
Other companies that have also done a great job applying his ideas. Peaker Services has done great things. Ian Bradbury is the President and a friend. He spoke at a seminar I co-presented and I included links to a couple documents of his in a blog post. He worked at GM Power System when Dr. Deming was working with GM. Richard R. Steele founder and also serves on the Deming Institute board of trustees.
Hillerich & Bradsby Company has been following Dr. Deming’s ideas since 1984. John A. Hillerich is President and Chairman of the Board of Hillerich & Bradsby Company and serves on the Deming Institute board of trustees. The companies brands include: Louisville Slugger and Powerbuilt.
A couple of good books explore companies adopting Dr. Deming’s ideas: Free, Perfect and Now by Robert Rodin (a great book by the CEO of Marshall Industries), highly recommended). Unfortunately the company was bought by a larger company and I do not believe the Deming philosophy is alive and well (but I could be wrong). Always Think Big by Jim McIngvale is by the CEO. Mattress Mack: One man, one store, one of a kind.
Omnilingua has had amazing success applying Dr. Deming’s idea and I am proud to call Eric Christiansen their president a friend. Lean Blog Podcast with Eric Christiansen “A Deming Company”. In a previous post I recapped another example: Dr. Deming’s Ideas at Markey’s Audio Visual.
Companies awarded the Deming prize can also provide good examples. Four subsidiaries of the Rane Group in India has received awards in the last few years. Numerous people have done great things within companies - creating pockets of Deming practice. Some great examples include Steven Prevette - see some of his articles on Deming. David Anderson has incorporated Deming ideas within Microsoft and then Corbis - see his Agile Management Blog. William Bellows has a long term effort at Boeing’s Rocketdyne Propulsion & Power business unit. They offer conference call study sessions on Deming’s ideas for those within Boeing and also allow outside participation. He is also a member of the Deming Institute board of trustees.
This is just off the top of my head so I am sure I have left off many good examples. Also, for me the company needs to have an understanding what they are doing evolved from Dr. Deming’s ideas to list them (many companies have practices which are Deming based but they do not have an appreciation for Deming’s system of management - I think that appreciation is needed to be a “Deming company”). Many companies that truly and deeply practice lean manufacturing are applying many of Deming’s ideas. However to me if they do not understand the roots of the ideas from Dr. Deming I don’t consider that a “Deming company.” But that label is not all that meaningful anyway - so this just explains my thinking.
Feel free to add your suggestions in the comments.
Related: The Purpose of an Organization - Deming management blog posts
Latest robot in Toyota’s line showcases violin skills
Toyota President Katsuaki Watanabe said robotics will be a core business for the company in coming years. He says Toyota will test out its robots at hospitals, Toyota-related facilities and other places starting next year. He hopes to see partner robots in use by 2010.
“We want to create robots that are useful for people in everyday life,” he told reporters at a Toyota showroom in Tokyo. Watanabe and other Toyota officials said robotics was a natural extension of the automaker’s use of robots in manufacturing, as well as the development of technology for autos related to artificial intelligence, such as sensors and pre-crash safety systems.
As I have mentioned before Toyota continues to invest and plan for the long term. And that future is not limited to automobile manufacture. We posted previously on Toyota’s partner robots. The Curious Cat Engineering Blog Robotics category has a great deal of posts on robots.
On the Toyota web site they list the following areas of non-automotive Toyota business (I don’t understand why robots are not included here): financial services, new business enterprises, marine and most surprisingly Biotechnology and Afforestation.
Related: Toyota as Homebuilder - Toyota Engineers a New Plant: the Living Kind - Toyota’s iUnit webcast (personal transport) - Toyota’s Early History - Interview with Toyota President - More on Non-Auto Toyota - 12 Stocks for 10 Years Update
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Mary Poppendieck on The Role of Leadership in Software Development, very nice 90 minute webcast:
via, Leadership is not Obsolete for Self-Organizing Teams!
Once again Mary provides a great resource. This is a great overview. Lean Software Development by Mary Poppendieck and Tom Poppendieck is an excellent book on these topics.
Related: articles and webcasts by Mary Poppendieck - posts on software development - more management webcasts
Toyota’s All-Out Drive To Stay Toyota
Related: lean manufacturing portal - Toyota management posts - Toyota IT Overview - New Toyota CEO’s Views
I find the quote “2007 has been a difficult year for Toyota” found in The Dings and Dents of Toyota a bit amusing. Toyota has had some problems as the article notes like product recalls and losing a handful of employees to Ford and Chrysler. They are about even with GM in worldwide sales and posted a profit of nearly $14 Billion (I believe maybe 20 companies have ever earned that much in any year) in the year ending March 2007 and continue to make huge profits this year (Toyota reported their best quarter ever in August). With difficulty like this who needs success 
He is right that the problems are exaggerated. I agree that Toyota has to maintain a laser-like focus on improvement. I don’t agree that they need to rethink their purpose in life (I have a feeling that is taken out of context). They need to maintain and maybe even increase their commitment to their purpose in life.
In our post New Toyota CEO’s Views in 2005, we quote the new CEO, Katsuaki Watanabe:
He was right then and that is true now.
Related: Reacting to Product Problems - Jim Press, Toyota N. American President, Moves to Chrysler - Toyota Homes - Respect for People at Toyota
Strategic Deployment: How To Think Like Toyota:
Another company using strategy deployment, HNI Corp., has used a policy deployment mechanism for more than a decade. The office furniture manufacturer, an IndustryWeek Best Manufacturing Company for five consecutive years, deploys its strategy companywide using a Plan-Do-Check-Act (PDCA) sequence that moves from a three-year corporate plan to a unit-level development process that creates one-year plans with action steps. Progress reviews and annual reviews evaluate progress and then the cycle starts again, explains Todd Murphy, vice president and general manager of The HON Co.’s Cedartown, Ga., facility, a 2005 IW Best Plants winner. HON is the largest operating company within HNI Corp.
Also central to policy deployment at HON is rapid continuous improvement, or RCI, a company culture focused on making breakthrough improvements. Further aligning policy deployment at HON is its reward system, which is linked to the achievement of policy deployment goals.
How Curiosity Empowers Toyota by Keith McFarland:
For more than 70 years, Toyota’s curiosity has allowed it to build, brick by brick, a commercial fortress. It has scanned the globe for the best ideas—from styling to manufacturing to quality management—and imbued those ideas with a power that often surprises even the people who came up with them in the first place.
Curiosity seems like just what a cat (or company) needs to grow and learn and improve
Related: Curious Cat management articles - posts on the Toyota Management System - lean manufacturing portal
Jim Press leaves Toyota to join Chrysler. I am surprised. I would imagine he is getting a huge amount of money. And I would guess it will encourage those that think you have to massively overpay executives or lose them to that that will overpay them. I don’t think it is wise to pay huge sums to executives. If that means you lose some, fine, continue to manage your system well and things will still work out fine for you. And maybe pay has nothing to do with the move.
Press will team with current Vice Chairman and President Tom LaSorda as Chrysler’s executive team makes a push to wring out landmark health-care and pension concessions from the United Auto Workers.
I agree getting Press could help Chrysler a great deal. If they will actually let him change the system. If they just want to hire a couple of executives and basically keep the same mentality in place it won’t work. For those convinced it must be Chrysler sees the errors of its past management I would caution you. Typical management practice is to hire people from companies that have been winning. So hiring Toyota people is no real indication that Chrysler is thinking any differently than they have before - it might or it might not.
Related: No Excessive Senior Executive Pay at Toyota - Toyota management posts - lean manufacturing articles
The Toyota Secret: Constant Change And Growth by Norman Bodek
Great article. Kaikaku by Bodek. via New Norman Bodek Article
Related: Lean Podcast with Bodek - Change is not Improvement - What Is Muda? - lean management resources - Curious Cat management articles
Learn how to do your work better, faster, and for less cost, plus find more time to plan your future and develop balance in your life - Attend The W. Edwards Deming Institute Fall Conference. Gain new insights to:
* Reduce product and service variation
* Enhance job satisfaction
* Redesign organizations as a system
* Appreciate the thinking behind the Toyota Production System
* Discover the role of psychology in continual improvement
* Understand trends in improving healthcare
Speakers include: Norm Bafunno (Senior Vice President - Manufacturing and Administration, Toyota Motor Manufacturing, Indiana, Inc.), Bill Bellows - Associate Technical Fellow, Pratt & Whitney Rocketdyne), Joyce Orsini (Fordham University, Deming Scholars MBA Program), John Pourdehnad - Ackoff Center for Advancement of Systems Approaches), Gipsie Ranney (Statistical Consultant) and Don Wheeler (Consulting Statistician and Author).
Related: Curious Cat Management Improvement Calendar - Thoughts on 2006 Deming Institute Conference - Improvement at UTC (2005 Deming conference) - Deming’s Ideas at Markey’s Audio Visual - Improving Problem Solving by Ian Bradbury and Gipsie Ranney.
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