TOYOTA BUSINESS PRACTICES EXPLAINED

These materials are from Jeffrey K. Liker and the book, Developing Lean Leaders at All Levels.

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Toyota Business Practices involve an eight-step problem-solving process. One might ask why have an eight-step problem-solving process; and how many companies have their 8D method (used in Ford) or the DMAIC method (as in Six Sigma), or some sort of problem-solving method.

Why would it be called Toyota Business Practices? Why isn't it just called a problem-solving process that you learn in a workshop? 

Let’s return to Fujio Cho, who led the effort to introduce the Toyota Way 2001.

Shortly after that introduction and shortly after starting Toyota Way Training, Fujio Cho introduced Toyota Business Practices as the concrete method by which we put the Toyota Way into action.

The Toyota Way involved a set of principles. The Toyota Way is not actionable. 

Applying Toyota Business Practices is how we're going to make the Toyota Way a living reality. This shows how important problem-solving is in Toyota. 

This reflects the extremely strong basic assumption of the company that the only way to deal with a challenging environment that's always changing, always throwing new challenges at us, is through problem-solving using PDCA. That same method, that same form of problem-solving, is going to be the same regardless of the problem. 

This means any type of problem; even if it’s the largest earthquake in the history of Japan, and we need to recover all the parts we lost. Perhaps the problem involves setting up a new car brand, like Scion. Perhaps the problem involves making one workstation more efficient. The same method will be used regardless of the problem or the scale of the problem.

The plan, do, check, act method is shown alongside the eight steps along with a description and definition. PDCA appears every place in Toyota figures and models. 

The first step is to clarify the problem versus the ideal state, which we've talked about. So you need a vision of the true north that you define. 

The true north for Toyota involves being the best producer in the world of mobility solutions for customers?this is the company’s ideal state.

PLAN

 You need an ideal state for your particular process.

So maybe your process is a workstation, for which the ideal state is producing perfect-quality parts every time with zero waste. Now, again, the true north is not achievable; you'll never be able to achieve that level of perfection 100% of the time, but at least you know the direction that you are needing to take.

PLAN

Step 2, you need to grasp the present situation and see the gaps. 

So now we're going to ground the problem in reality. We have a lofty ideal which is also known as the the ideal state; now, we'll have to get grounded and the gap between where we are and the ideal state is canyon.  It's not a little mole hill that we can jump over. And that's true for Toyota as well. You define perfection and with a very clear mind while being brutally honest, you look at your current situation. A chasm exists between you and the ideal state; there will always be and you have to accept that.                             

You have to accept that as humans we are far from perfect. When the gaps are evident, we're going to clarify the challenge that we face. But the challenge is still a huge challenge. We're looking at the gap to perfection, and we can't possibly even know where to start unless we go to step 3.

PLAN

Step 3 involves breaking the problem into smaller actionable problems with more modest but still aggressive, challenging targets. We're going to have lazer-like focus; this is where you might be asked why did you pick this problem. 

You have identified correctly your ideal state; you did a good job on understanding your current state. 

Of all the problems that separate you from your ideal state, why did you pick this one? How did you prioritise? In Toyota you need to have a rationale when you are asked a question like that.

PLAN

 Step 4 comes next. Now we know the problems that we are going to focus on and the targets we're trying to achieve, for example, cutting defects in half as a group leader for the jobs I am responsible for. 

Next we can ask what the underlying causes are, and, as I showed in the stair-step models, we don't have to find all the possible causes for all the problems. We could find the causes for the problem we're going to work on next. And we're going to do that by using metrics and by observation. I'll talk about observation in the next section about asking why five times.

Of all the problems that separate you from your ideal state, why did you pick this one? How did you prioritise? In Toyota you need to have a rationale when you are asked a question like that.

PLAN

 Step 4 comes next. Now we know the problems that we are going to focus on and the targets we're trying to achieve, for example, cutting defects in half as a group leader for the jobs I am responsible for. 

Next we can ask what the underlying causes are, and, as I showed in the stair-step models, we don't have to find all the possible causes for all the problems. We could find the causes for the problem we're going to work on next. And we're going to do that by using metrics and by observation. I'll talk about observation in the next section about asking why five times.

PLAN

Step 5 is to develop countermeasures. 

Select countermeasures that you have prioritised that have the most likely chance of succeeding. You might go back to the other countermeasures later. For now; we have to develop a plan for who's going to do what, when they are going to do it and how they're going to proceed.

Regarding countermeasures you could, in fact, say that what, when, and who, are part of the doing, or you could say they are part of the planning.

Now we are set to do and that's the phase where, like in the Nike model, we hear the statement, ”Just do it.” Often we think just do it means to skip the plan and start randomly doing things. 

There are occasions where you may want to do that if the team is stuck and they're afraid to change anything without a lot of analysis. You may see evidence that they are analysing things to the hundredth decimal place, and paralysis may be setting in. Then you would want to get them unstuck, so just do it would apply here. You could, in this case, organize a Kaizen activity and just do it. 

This is a common occurrence when Toyota is working with other companies. For example, they worked with the company Grand Haven Stamped Products, an auto supplier in Michigan. On the first visit, the Sensei walked the line, and he saw that they had disconnected processes and he asked them to put together a cell including moving a welding robot from one side of the plant to the other side so it can be in that cell.

He said he would come back at the end of the next day to see how the cell was operating. This was a just do it. It was really big; the entire management team including the company president were in the plant manually pushing this robot across the floor to get it in position. This is not the way the Sensei wants them to solve problems in the future, but it was a way of getting them unstuck. 

The doing stage involves both following the plan and deviating from the plan when you need to and then noting the deviations, which is part of the learning process. So, in fact, in some sense at every one of these steps it's a plan, do, check, act cycle within a larger plan, do, check, act cycle. 

But in the doing stage you're going to plan something; you're going to do it and check what happens; make adjustments and that's what the doing stage will look like. In the case of that Grand Haven Stamped Products, the cell didn't work. The robot, for example, was not operating enough; there was too much down time and it kept stopping the cell. So it took a lot of PDCA after that initial day to actually get the cell functioning. The Sensei had asked employees to build up some inventory in advance of actually setting up the cell because he knew they were going to have problems. But he created a challenge because they had to solve the problem in order to get products out.

CHECK

Then, consider the check phase. In The Toyota Way I refer to Hansei or reflection, and Hansei will happen throughout this process, but one big Hansei will be in the check phase where we're reflecting on what happens both in terms of results and the processes.

So you may have gotten results and been lucky because of one big idea that worked, but it was one person's idea; that person was the manager; nobody else was engaged; nobody else was developed. The process failed even though the results looked good.

ACT

Then in the act phase we are going to do another reflection on the entire process, and then we're going to standardize what works, and we're going to spread what we think should be spread.

The spread is something that Toyota calls Yokoten, and it's spelled Y-o-k-o-t-e-n. The word Yokoten in it’s original meaning gives the image of transplanting a precious plant from one environment to another, and you have to prepare the new environment and understand the conditions that allowed that plant to prosper initially. It is necessary to understand how to make conditions suitable for that exotic plant.

To be clear, you don't mindlessly implement best practices; you have to think deeply about your conditions; you have to try the best practice or whatever worked as the best practice in some other place. Then, you have to adjust using PDCA until the plant thrives in your environment.  Then, you may actually come up with some ideas that the original party can learn from and the learning can go back and forth like that.

George asks: Jeff, it seems like there is some deep meaning with the word yokoten. Is this one reason to understand some of the Japanese terms?

Jeff replies: The definition for yokoten literally, if you look it up on the internet, means spread everywhere. That is not the way it's interpreted within Toyota, although it may be interpreted that way in other Japanese companies. You have to understand the Japanese language enough to dig deep into it and be able to literally translate; but if you literally translate and if you talk to a linguist, they may say it means spread everywhere 

it doesn't mean what Toyota says it means. So what's really important is to understand the underlying thinking and principle rather than the word itself, and I wouldn't suggest memorizing of a bunch of Japanese words for that reason.

The term yokoten and the idea of best practice spreading isn’t simply mindlessly copying like a cookie cutter. I'm trying to explain the deeper meaning within The Toyota Way.

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