The Toyota Way to Service Excellence

In 'The Toyota Way to Service Excellence: Lean Transformation in Service Organizations' by Jeffrey K. Liker (Liker, 2017), Liker describes Toyota's unique approach to lean management. 14 principles that organizations should follow to create a learning company can be grouped and analyzed using a four-part model: Philosophy, Process, People and Problem Solving.

I found this book helpful in setting the agenda for lean transformation. The Toyota Production System (TPS) is not only a set of tools that fit only the process part of the 4P model, but also the culture.

Strategic weapon of operational excellence?

The Toyota Production System (TPS) and Lean Production

Toyota focused on eliminating waste of time and materials at every step of the production process (from raw materials to finished goods). The result is a fast and flexible production process that gives customers what they want, when they want it, at the highest quality and lowest cost.?

Toyota improved production by:

? Expelling wasted time and resources.

? Embedding quality into workplace systems.

? Finding cost-effective yet reliable alternatives to expensive new technologies.

? Flawless business processes.

? Building a learning culture for continuous improvement.

Toyota 4P model.?

Elimination of Waste

The aim of TPS is to minimize the time spent on non-value-added activities by placing materials and tools as close as possible to the point of assembly.

The main types of non-value-added waste in the business or production process are:

1. overproduction.

2. queues or waiting time.

3. superfluous transport or conveyance.

4. excessive processing or incorrect processing.

5. exorbitant inventory.

6. unnecessary movements.

7. defects.

8. unused creativity of employees.

THE 14 TOYOTA WAY MANAGEMENT PRINCIPLES:

Principle 1: Apply a long-term philosophy?

Make your decisions based on a long-term philosophy. This principle is the foundation for all other principles and is rooted in Toyota's mission: to do what is right for the company, its employees, customers and society as a whole.

Principle 2:Create continuous flow?

?Flow is a way in which all types of waste, as defined by Ohno (1988), are brought to the surface. The introduction of one-piece flow, the optimal process, reduces inventory between steps that hides problems in upstream steps. Quality defects are detected earlier in the one-piece flow, reducing the amount of scrap.

Principle 3: Use "pull" systems to avoid overproduction.?

Unfortunately, not every part of the process can be done in one-piece flow. For example, it would not be efficient for a supplier to deliver one screw with every shipment. But it also would not be efficient if the truck was loaded with as many screws as possible on each delivery. The next best solution, according to Liker, is a pull system, like Kanban. The philosophy is that you should only deliver material exactly when it's needed.

Advantages of one-piece/continuous process flow?

1. Builds in quality.

2. generates real flexibility

3. creates higher productivity.

4. frees up space.

5. improves safety.

6. improves morale.

7. reduces inventory costs.

Principle 4: Balance the workload (Heijunka).

Levelling production by volume and product mix is called heijunka. In this process, products are not built up according to the actual flow of customer orders. Rather, the overall volume of orders in a given period is utilized and leveled. This comes about within the same volume and blend being delivered each day.

To decrease inconsistency. Making the same amount of different products at each interval has several advantages over making one type of product as long as possible to reduce changeovers. Aside from reducing the risk of unsold products and making production more flexible in response to customer demand, an even workload ensures balanced use of labor and machinery, as well as smooth demand from upstream processes and suppliers.

Advantages of a levelling plan?

1. Flexibility to produce what the client wants, when they want it.

2. lowering the?risk of unsold goods.

3. balanced use of labor and goods.

Principle 5: Stop the problem and fix it To improve quality.?

A method should be in place to detect defects when they occur and automatically stop production (Jidoka). It is better to stop production and correct the problem at its root than to continue production at the risk of causing more defects.

Quality for customers should be the driving force behind every company's philosophy. Quality should be embedded in your business and production processes.

Building an early warning system into your production line or equipment prevents problems from being passed down the line. This reduces costs and is more effective than checking and fixing quality problems after the fact.

Principle 6: Work with Standards?

Standardization is the basis for continuous improvement, innovation, growth and quality. It is impossible to improve a process unless it is standardized. Quality is also ensured by standardized procedures to ensure consistency of the process and the product.

Standard work consists of a takt time, a work sequence, and a standard amount of inventory. If every employee performs the job the same way, it's easier to improve that one best practice or procedure.

Principle 7: Make problems visible

?The 5S system (Sort, Straighten, Shine, Standardize, and Sustain) can be viewed as a continuous process for improving the work environment as well as a just-in-time system for information flow.

Principle 8: Use only reliable and tested technology.

The adaptation of new technologies must support your people, processes and values. It must not take their place or jobs . Only introduce new technologies after they have been tested and proven with the involvement of a broad cross-section of your organization.

Before introducing a new technology, Toyota first analyses the impact it could have on existing processes. If the company determines that the new technology adds value to the existing process, it is further analyzed to determine whether it does not conflict with the company's philosophy and operating principles. If it violates any of the principles, the new technology will be rejected.

The introduction of a new technology is carried out through a process of consensus, analysis and planning involving employees and all stakeholders. This careful process results in a smooth introduction of the new technology without employee resistance and disruption to operations.

Principle 9: Train your leaders internally?

It is important that the organization grow the next generation of leaders internally to ensure that they adopt the same philosophy as current leaders. Internally grown leaders have a more in-depth knowledge of the workings of the business and should be trained to support and coach the people on their team.

Toyota's philosophy of promoting and recruiting middle and senior level managers within the company stems from the company's belief that they eliminate inequalities (muri) at the managerial level

Principle 10: Develop exceptional people and teams.?

Encourage teamwork and get teams doing something rather than talking about something. The team leader should be a facilitator of his or her team. Since all team members are involved in continuous improvement, standard work does not lead to employee dissatisfaction, but supports growth toward self-actualization (Maslow's pyramid).

1. Maslow's theory of hierarchy of needs, according to which lower level needs are satisfied and employees move up the hierarchy towards self actualization. Toyota's approach to good pay, job security and safe working conditions meets employees' needs. Toyota's culture of continuous improvement supports growth towards self-actualization.

2. Herzberg's hypothesis of eliminating "dissatisfiers" and designing work to create positive satisfiers was the basis for the development of the 5 S's, ergonomic programs, visual management and HR policies to address hygiene factors. Toyota's continuous improvement, job rotation and built-in feedback motivators act as positive satisfiers.

3. Taylor's theory of scientific management calls for selecting and designing standardized jobs scientifically and training and rewarding performance in relation to performance. Toyota follows all the principles of scientific management at the group level rather than the individual level, based on employee involvement.

4. Behavior modification theory calls for reinforcement of behavior Toyota's continuous flow creates shorter lead times for rapid feedback. Problems are addressed quickly and managers are constantly on hand to support employees.

5. Goal Setting theory

?calls for setting specific, measurable, achievable and challenging goals. Toyota sets targets that meet these standards through hoshin kanri(policy development).

Principle 11: Respect your network partners

?Treat partners and suppliers as an extension of your business. Work with your partners, focus on a long-term partnership, and grow together toward common goals. Liker describes the supply chain hierarchy of needs, according to which you first establish a stable relationship with your partners before transforming into a learning organization. You can not optimize the supply chain if business relationships are unfair, unreliable, or if expectations are unclear.

Principle 12: Make up your own mind.?

Never make your decisions based on data from your computer screen, but always go to the Gemba (workshop) to see the problem for yourself, and talk to the employees who encounter the problem and support them in solving it. Liker also mentions, "As?a manager, a call from the store floor is more important than a call from top management.

Principle 13: Make decisions slowly by consensus and implement them quickly

Because without the consensus of store-floor employees, they will never use the tools you put in place according to Principles 2-8. For any problem: Go to the Gemba, involve all team members, and explore all possible solutions. According to Liker, the A3 form can be the most important tool for reaching consensus on complex decisions.

The decision making process elements are:

1. understand what is really going on.

2. investigate the root causes of the problem. Ask "why" 5 times.

3. comprehensively consider alternative solutions and develop a detailed rationale for the preferred or selected solution.

4. building consensus with the team, staff and suppliers.

5. using effective and efficient communication channels to communicate steps one to four.

Principle 14: Use hansei (reflection) and continuous improvement (kaizen) to become a learning organization?

Growth is only possible if you take time to reflect on performance (hensei), perform root cause analysis of problems (5x why), and take appropriate countermeasures (improvements; kaizen) to prevent the problem from occurring again. Take time to define the real problem by focusing on the process rather than the results. Use the Plan-Do-Check-Act (PDCA) cycle to solve your problems.

References:

(Liker, 2017)

Liker, J. and Ross, K., 2017. The Toyota way to service excellence. 1st ed.