What are then the main reasons for Toyota Motor Corporation’s success in this highly competitive car industry even after the 2011 earthquake that shook Japan and the 2010 recall of more than eight million cars?
There are 14 core principles that contributes to such success:
1) Base your decisions on a long term philosophy, even at the expense of short term financial goals – Long-term plans may take years to implement to the fullest extent, but their purpose is to create a foundation for long-term growth and sustainment. And sometimes that means doing so at the sacrifice of short-term wins that did not fit with the plan.
2) Continuous flow – The beauty of continuous flow is that it features stability, continuity, balance, and doesn’t waste time. No time wasted on waiting between steps means time is being maximized for its capabilities. You can’t have a waste-less process without continuous flow, as it is the truly ideal process state.
3) Use “pull” systems to avoid overproduction – The most common example of a pull system is your neighborhood supermarket. Shelves are lined with quantities of goods for sale. When you pull a jar of peanut butter off the shelf, a vacant spot remains. At a regular interval (hourly, daily, weekly, whatever is called for in the process) shelves will be checked for quantities of goods removed and purchased and a stockperson will replenish those purchased goods.
4) Level out the workload – Maintaining optimal effort from operators is important, whether demand goes up or down. You don’t want to slow the process effort down when demand falls, nor do you want to double the individual efforts applied by operators when demand doubles.
5) Culture of identifying and fixing problems – In order to stop and fix a problem, you must first be able to identify a problem. We have to recognize a difference between a correct scenario and a problematic scenario.
6) Standardized tasks and processes – They are the foundation for continuous improvement and employee empowerment.
7) Visual Controls – use visual controls so that no problems are hidden. It should be designed to quickly communicate information to people indicating whether a condition is acceptable/not acceptable and, equally as quickly, provide some direction of action on behalf of people.
8) Use reliable and thoroughly tested technology – The way to implement new technology with the least risk of potential issues is slowly but all-encompassing – through a thorough vetting of potential technology options and isolated trial runs with sufficient training before full-scale launch.
9) Growing and developing leaders – This is one distinct difference between Toyota and nearly every other company – leaders genuinely live the philosophy and have the capability to teach it either by direct methods or by “leading by example.”
10) Develop exceptional people and teams who follow your company’s philosophy – A philosophy that is taught by leaders that believe in it and followed by people and teams has a stronger chance for success than a set of people and teams pulling in different directions than their leader.
11) Challenging your extended network – You must go beyond your internal processes and identify the inputs and outputs to further optimize your processes. This will further satisfy your customers and also reduce stress on your suppliers.
12) Go and see for yourself – Data can tell you a lot of the story, but it can’t tell you the whole story. Going to see the process or activity yourself lets you gain a better understanding of what’s truly happening, information that can transcend the data.
13) Decide slow through consensus, implement rapidly – Very few solutions will ever be perfect, so achieving full consensus is nearly impossible. Focus more on the exploration of potential problems and pitfalls instead of worrying about making everyone happy.
14) Becoming a learning organisation – It’s important to look back at what changes were implemented and what the results were, relative to what you expected. “Those who cannot remember the past are condemned to repeat it”, George Santayana.