Currently browsing the Toyota Production System (TPS) Category

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


Webcast on the Toyota Development Process

Posted on September 18, 2008  Comments (0)

Kenji Hiranabe talks about Toyota’s development process (webcast). Kenji shares a presentation he attended earlier this year by Nobuaki Katayama, a former Chief Engineer at Toyota, and the lessons he learned from him.

The webcast takes awhile to get going. If you are impatient you might want to start at the 6 minute mark. Some thoughts from the talk:

  • Voice of the Customer is diffuse. A strong concept (for a project – new car for example) is very important to focus thought, listening to voice of the customer is important but must use strong concept to avoid losing focus (due to diffuse customer feedback).
  • Honest face to face communication is important. Bad news first – present bad news first [don't try to hide bad news - my thoughts in brackets, John Hunter].
  • Everyone must think about cost reduction, many efforts add up to big impact [the importance of reducing waste everywhere].
  • benchmark, not to copy others, but to learn from what others do well.

The webcast includes a nice (though short) discussion of agile management in software development and lean manufacturing (the different situation of manufacturing versus software development). Kenji Hiranabe has also translated several agile and lean books into Japanese including Implementing Lean Software Development.

Related: Kenji Hiranabe’s blog – Marissa Mayer Webcast on Google Innovation – Articles and webcasts by Mary Poppendieck – Future Directions for Agile Management – Interview with Toyota President

New Management Truths Sometimes Started as Heresies

Posted on September 7, 2008  Comments (0)

‘New’ management truths sometimes started as heresies by Cecil Johnson

“The most effective management ideas follow a life cycle — from heresy to outlier (championed by a small group of people) to ingrained practice to conventional wisdom,” Kleiner writes. “In the process, if they are genuinely powerful management ideas, they distinguish the organizations that adopt them.”

One of the management heresies focused upon by Kleiner that has morphed into accepted management wisdom of the highest order is the Toyota Production System, which embraces much of the thinking of heretical quality advocate W. Edwards Deming. That system, Kleiner reminds the reader, entrusts teams at each station in the assembly process to control their local operations. Performance is not evaluated on a predetermined numeral basis.

I agree with this idea except the implication that these ideas are accepted now. To the extent they are excepted it is only a surface understanding of a couple of tools and concepts. The true power of the new ideas are still adopted in a very small number of organizations. Thankfully small initial steps are being made but there is much more to be done, before we can think of these ideas as accepted.

Which of Dr. Deming’s seven deadly diseases of western management have been effectively addressed in several decades? My opinion? Zero. Granted 2 are probably closer to economic failures (political issues that management could have spent time trying to fix but not really in the control of a single company): excessive medical costs and excessive legal damage awards.

Excessive legal damage awards was the one disease most business school graduates would have agreed was a disease decades ago, and they still do. They have spent a great deal of effort to reform the legal system, but have not been effective. Many now agree the health care system is broken. But I would say less than 50% understand this, even decades later, even after the situation has deteriorated much further. And certainly little effective effort at improving the health care system has been made. At least in the last 5 years some real efforts are being made by senior executives as some companies.

And I strongly believe Dr. Deming would see the current unjustified taking of companies resources by CEOs for their own use, in ludicrous pay packages, as a new disease. If these “new” (the system of management ideas are at least 30 years old, as a system, and it has been 60 years since Dr. Deming present them in Japan after World War II) management ideas were common, such horrible behavior as we continue to see would not be tolerated.

Related: Deming Companies – Toyota Execution Not Close to Being Copied – Management Advice Failures – Purpose of an Organization – New Rules for Management? No!

Toyota Winglet – Personal Transportation Assistance

Posted on August 10, 2008  Comments (0)

Winglet Personal Mobility Device from Toyota

Toyota has a long term vision. The population of Japan is aging rapidly. Toyota has invested in personal transportation and personal robotic assistance for quite some time. I must admit this new Winglet doesn’t seem like an incredible breakthrough to me (their earlier iUnit seems much better to me – though I am sure much more expensive too). The interest to me is in their continued focus on this market which I think is a smart move. The aging population worldwide (and others) will benefit greatly from improved personal mechanical assistance.

The Winglet is one of Toyota’s people-assisting Toyota Partner Robots. Designed to contribute to society by helping people enjoy a safe and fully mobile life, the Winglet is a compact (you stand just above the wheels and it reaches about the level of your knees) next-generation everyday transport tool that offers advanced ease of use and expands the user’s range of mobility.

The Winglet consists of a body that houses an electric motor, two wheels and internal sensors that constantly monitor the user’s position and make adjustments in power to ensure stability. Meanwhile, a unique parallel link mechanism allows the rider to go forward, backward and turn simply by shifting body weight, making the vehicle safe and useful even in tight spaces or crowded environments.

Toyota plans various technical and consumer trials to gain feedback during the Winglet’s lead-up to practical use. Practical tests of its utility as a mobility tool are planned to begin in Autumn 2008 at Central Japan International Airport (Centrair) near Nagoya, and Laguna Gamagori, a seaside marine resort complex in Aichi Prefecture. Testing of its usefulness in crowded and other conditions, and how non-users react to the device, is to be carried out in 2009 at the Tressa Yokohama shopping complex in Yokohama City.

Toyota is pursuing sustainability in research and development, manufacturing and social contribution as part of its concept to realize “sustainability in three areas” and to help contribute to the health and comfort of future society. Toyota Partner Robot development is being carried out with this in mind and applies Toyota’s approach to monozukuri (“making things”), which includes its mobility, production and other technologies.

Toyota aims to realize the practical use of Toyota Partner Robots in the early 2010s.

On a personal note, I bought some more Toyota stock two weeks ago. The stock had declined a bit recently. Toyota is one of the companies in my 12 stocks for 10 years portfolio.

Related: Toyota Develops Personal Transport Assistance Robot ‘Winglet’ – No Excessive Senior Executive Pay at Toyota – More on Non-Auto Toyota

How to Develop Thinking People

Posted on August 6, 2008  Comments (0)

Toyota’s Top Engineer on How to Develop Thinking People

Hayashi says, “Developing people requires physical endurance.” Frequent follow up is necessary, in person. It is not acceptable to give an assignment and follow up or scold only after three months, during a progress report meeting. Specific actions and detailed follow up are necessary.

Excellent advice.

Also, when we are required to deliver results with speed, we only give our subordinates small projects so that even if they fail they have time to recover. In the end, we give them the solution. We must firmly carry on the practice of developing thinking people. Mr. Ohno often said to us, “Don’t look with your, look with your feet. Don’t think with you head, think with your hands.” He also taught us, “People who can’t understand numbers are useless. The gemba where numbers are not visible is also bad. However, people who only look at the numbers are the worst of all.”

And more wisdom. Great stuff from Taiichi Ohno, Nanpachi Hayashi and Jon Miller’s translation and great blog.

Related: Respect for People and Taiichi Ohno – Toyota IT for Kaizen – Management Improvement – Workplace Management by Taiichi Ohno – Posts on Respect for People

Drucker’s Ideas at Toyota

Posted on July 8, 2008  Comments (0)

The Drucker difference and Toyota’s success by Ira A. Jackson, dean of the Peter F. Drucker Graduate School of Management, the business school of the Claremont Colleges.

Because of this core belief in the power of people, Toyota invests in people. And at the same time, the company has come to realize that when people grapple with opposing views
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Embrace contradictions as a way of life. Sticking to old practices can lead to rigidity. Be fluid.

Develop routines to resolve contradictions. As the authors note, “Unless companies teach employees how to deal with problems rigorously and systematically, they won’t be able to harness the power of contradictions.” Toyota has a number of tools including the well-known ask-why-five-times practice and the Plan-Do-Check-Act model.

Encourage employees to voice their opinions even if they are contrary. The people in top management must be open to hearing critical comments from employees and listening to opposing views if they want to engender new ideas and new ways of doing things.

Related: Drucker Opinion Essays from the WSJ – Deming and Toyota – Management Pioneer Peter Drucker – The Contradictions That Drive Toyota’s Success – Extreme Toyota: Radical Contradictions That Drive Success at the World’s Best Manufacturer

The Contradictions That Drive Toyota’s Success

Posted on June 23, 2008  Comments (0)

An interesting article in this month’s Harvard Business Review looks at the seeming contradictions at Toyota – The Contradictions That Drive Toyota’s Success by Hirotaka Takeuchi, Emi Osono, and Norihiko Shimizu

Many of Toyota’s goals are purposely vague, allowing employees to channel their energies in different directions and forcing specialists from different functions to collaborate across the rigid silos in which they usually work. For example, Watanabe has said that his goal is to build a car that makes the air cleaner, prevents accidents, makes people healthier and happier when they drive it, and gets you from coast to coast on one tank of gas… Zenji Yasuda, a former Toyota senior managing director, points out the wisdom of painting with broad strokes. “If he makes [the goal] more concrete, employees won’t be able to exercise their full potential. The vague nature of this goal confers freedom to researchers to open new avenues of exploration; procurement to look for new and unknown suppliers who possess needed technology; and sales to consider the next steps needed to sell such products.”

A good explanation of how Toyota avoids the trap of arbitrary numerical goals (Innovation at Toyota).

Toyota’s eagerness to experiment helps it clear the hurdles that stand in the way of achieving near-impossible goals. People test hypotheses and learn from the consequent successes and failures. By encouraging employees to experiment, Toyota moves out of its comfort zone and into uncharted territory.

This is another key point often overlooked. Experimentation is key to gaining knowledge and improving. And they have steadily improved their method of experimentation building on the PDSA/PDCA cycle:

Toyota organizes experiments using strict routines, as is widely known. It has refined Plan-Do-Check-Act (PDCA), the continuous-improvement process used throughout the business world, into the Toyota Business Practices (TBP) process. The eight-step TBP lays out a path for employees to challenge the status quo: clarify the problem; break down the problem; set a target; analyze the root cause; develop countermeasures; see countermeasures through; monitor both results and processes; and standardize successful processes. Similarly, the A3 report… forces employees to capture the most essential information needed to solve a problem on a single sheet that they can disseminate widely.

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Outsourcing To America

Posted on May 30, 2008  Comments (0)

Outsourcing To America

Toyota (TM) began operating in North America in the mid-1980s. It currently operates seven automotive plants there, four of which are in the U.S. A fifth plant is under production in Mississippi. Toyota employs 40,000 manufacturing employees in North America.

In addition to the manufacture of cars and trucks, Toyota runs four unit factories in the U.S., where they produce such parts as engines, transmissions and wheels. Toyota also has a wholly owned subsidiary, Bodine Aluminum, an aluminum casting company, which operates three factories in Tennessee and Missouri.

BMW began operations in the U.S. in 1994, when it opened a plant in Spartanburg, S.C. “Some natural hedging was always a part of the long-term strategy, but also we have a corporate strategy of having production follow the market,” says Robert Hitt, BMW’s manager of public affairs. “Our original plan was to have about 2,000 workers here by the year 2000. We are now at 5,400 people here on the site.”
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Besides the actual manufacturing of their cars and trucks, Toyota and BMW are using domestic suppliers to provide parts and services for their operations. BMW has over 200 suppliers in North America, 52 of which are located in South Carolina, and 41 of these are new companies started for the purpose of supplying the plant. In South Carolina alone, suppliers of BMW’s Spartanburg plant employ over 14,000 people.

Toyota uses roughly 500 major suppliers in North America. “We’ve always had the philosophy that we should build vehicles where they are sold, so it makes sense to have suppliers close to your manufacturing operations,” says Mike Goss, external affairs manager for Toyota’s engineering and manufacturing division in North America.

Foreign production in the U.S., however, is not limited to the automotive industry…. In fact, almost 1 million Americans get their paychecks from Mexican companies, says Ton Heijmen, senior adviser for outsourcing and offshoring for the Conference Board.

Related: Top 10 Manufacturing Countries 2006 – Moving Jobs to Silicon Valley from India – Global Manufacturing Jobs Data – Toyota in the United States of America Economy – China Outsourcing Manufacturing to USA

Toyota Execution Not Close to Being Copied

Posted on May 7, 2008  Comments (2)

The Open Secret of Success

Toyota’s innovations, by contrast, have [focused] on process rather than on product, on the factory floor rather than on the showroom. That has made those innovations hard to see. But it hasn’t made them any less powerful.

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

Toyota Canada CIO on Genchi Genbutsu and Kaizen

Posted on April 24, 2008  Comments (2)

What’s driving Toyota Canada’s success? – CIO reveals all

for Hao Tien, chief information officer (CIO) at Toyota Canada Inc. those two Japanese phrases – Genchi Genbutsu (go and see) and Kaizen (continuous improvement) really capture it all.
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the innovation wasn’t in the technology, but in the way the various partners were brought together to agree upon processes, which were then consistently executed. CustomerOne is only project of its kind in the Toyota empire.
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A computer system links activities across multiple customer touch points, and analyzes data from the more than 13,000 daily service visits to Toyota dealers across the country. The system flags major repeat problems and Toyota Motor Corp. head office in Japan is informed so engineers can be assigned to make repairs to designs or manufacturing, if necessary.
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“For instance if a call comes into us at Toyota Canada, the dealer knows about it. So if they go back to the dealer for services, everyone offers the same resolution of the problem.” In the four years since its launch CustomerOne was has been a runaway success. Tien cites some of the more tangible benefits this initiative has brought about. They include:

* 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

Gary Convis is the New CEO of Dana

Posted on April 17, 2008  Comments (1)

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 Building Second Plant in India

Posted on April 11, 2008  Comments (1)

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 new plant will have a production capacity of 100,000 units and will become operational by 2010, he added. The company’s current plant has a capacity of 63,000 units a year.

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

Toyota’s Commitment

Posted on March 8, 2008  Comments (4)

From Toyota’s blog, Living Up to Our Commitment

We’ve received reports that on a small number of model-year 1995 to 2000 Tacomas, excessive corrosion of the frame has caused perforation of the metal. The reason for this, it appears, is that the frames of some of the 813,000 vehicles built during this time-frame may not have adequate corrosion protection.
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Because of our oft-stated commitment to standing behind our products, we’re extending the rust-perforation warranty covering these trucks for a period of 15 years from each vehicle’s original date of purchase, with no mileage limitation, for corrosion damage that results in perforation of the vehicle’s frame material. Owners of these Tacomas need not be the original owners. Even if you bought your Tacoma second- or third-hand, it’s covered by this extended warranty.

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:

The Toyota Way is a management philosophy involving 14 principles that is the essence of the DNA of our organization and really all those who make up the company. In its basic form, the Toyota Way boils down to two fundamental practices: Respect for People and Continuous Improvement.

Related: Toyota IT Overview – Deming Companies – Reacting to Product Problems – Toyota Management Develops the New Camry – Corporate Blogging – Dell Innovation

Lean Six Sigma Case Studies

Posted on February 27, 2008  Comments (1)

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

Corporations Do Not Exist Solely to Maximize the Bottom Line

Posted on February 26, 2008  Comments (3)

Do corporations exist solely to maximize their bottom lines? We don’t think so., Forbes Magazine:

When Bill Gates suggested recently that corporations should sacrifice profits to the public welfare, practicing what he called “creative capitalism,” he wasn’t the first robber baron with the idea. Henry Ford made a similar proposal in 1916, but he was defeated in court by shareholders who preferred he simply issue dividends. The countervailing view, famously expounded by Milton Friedman, is that the only responsibility of business is to increase profits.
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Customers are also demanding products that show a commitment to the public welfare. About 10% of new product introductions are environmentally sensitive–green lightbulbs and cars, for example.
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Starbucks pays Ethiopian coffee farmers a 75% premium over market prices, believing this is better than passing out the equivalent in welfare. Pfizer is spending $570 million to develop and deliver treatment in the Third World for fungal infections caused by AIDS. This outlay won’t be recovered in product sales.

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

Car Powered Using Compressed Air

Posted on February 25, 2008  Comments (11)

car powered using compressed air

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:

Refueling is simple and will only take a few minutes. That is, if you live nearby a gas station with custom air compressor units. The cost of a fill up is approximately $2.00. If a driver doesn’t have access to a compressor station, they will be able to plug into the electrical grid and use the car’s built-in compressor to refill the tank in about 4 hours.

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

An engineer has promised that within a year he will start selling a car that runs on compressed air, producing no emissions at all in town.
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Tata is the only big firm he’ll license to sell the car – and they are limited to India. For the rest of the world he hopes to persuade hundreds of investors to set up their own factories, making the car from 80% locally-sourced materials.
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“Imagine we will be able to save all those components traveling the world and all those transporters.” He wants each local factory to sell its own cars to cut out the middle man and he aims for 1% of global sales – about 680,000 per year. Terry Spall from the Institution of Mechanical Engineers says: “I really hope he succeeds. It is a really brave experiment in producing a sustainable car.”

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

Toyota Presses On

Posted on February 24, 2008  Comments (0)

At Toyota, a Global Giant Reaches for Agility

With plants in 27 countries, more new factories under construction and workers speaking languages that include Russian and Turkish, Toyota’s top executives are trying a difficult balancing act – replicating the company’s success and operating principles in other countries while ceding more control to these new outposts at the same time.
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Next year, it expects to sell more than 10.4 million cars worldwide, double what it sold in 2000.
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At Motomachi, more than 3,000 tasks on the assembly line have been translated into video manuals that are displayed on laptop computers above 30 simulated workstations, situated where their functions would be carried out inside the factory.

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

Enrich Society

Posted on January 30, 2008  Comments (0)

Jim Press and Toyota, Setting Sights on No. 1 former president of Toyota Motor North America

The Toyota family, very strongly, still has their name on the building and [have] a big influence in the company. The original founding [principal] of the company was to enrich society.

The Purpose of an Organization as stated by W. Edwards Deming described the purpose of an organization in New Economics, on page 51, as:

The aim proposed here for any organization is for everybody to gain – stockholders, employees, suppliers, customers, community, the environment – over the long term.

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

Deming Companies

Posted on December 17, 2007  Comments (4)

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

Toyota’s Partner Robot

Posted on December 6, 2007  Comments (2)

Toyota partner robot photo

Latest robot in Toyota’s line showcases violin skills

But Toyota’s new robot played a pretty solid “Pomp and Circumstance” on the violin Thursday. The 152-centimetre [about 5 feet] tall white robot used its mechanical fingers to push the strings correctly and bowed with its other arm, coordinating the movements well. Toyota Motor Corp. has already shown robots that roll around to work as guides and have fingers dexterous enough to play the trumpet.

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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Lean, Toyota and Deming for Software Development

Posted on December 2, 2007  Comments (5)

Mary Poppendieck on The Role of Leadership in Software Development, very nice 90 minute webcast:

In this 90-minute talk from the Agile2007 conference, Lean software thought leader Mary Poppendieck reviewed 20th century management theories, including Toyota and Deming, and went on to talk about “the matrix problem”, alignment, waste cutting, planning and standards. She closed by addressing the role of measurement: “cash flow thinking” over “balance sheet thinking”.

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

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