[notes] What is driving Toyota Making a better Business...

My notes on the ‘What is Driving Toyota’ article by Mel Duval on Baseline:

“What strikes me about Toyota is, if you were to ask them if they have a technology strategy, they would probably say no, we have a business strategy,” says Philip Evans, a senior vice president at the Boston Consulting Group

“It’s hard work,” Liker says. “You have to be willing to commit to practicing the concepts behind Toyota Production System (TPS) every day.”

Sakichi Toyoda’s, founder of the Toyota Group, invented a loom (a device used to weave cloth) that would stop in case a thread snapped. This reduced defects and raised yields since a loom would not continue producing imperfect fabric and use up thread needlessly when broken. This process, of stopping production to prevent defects, became known as Jidoka.

Toyota constantly looks to improve its business processes by finding ways to take Muda (waste) out of the system. It fits well in their Kaizen strategy: the system for continuous improvement.

Another concept worth highlighting is Genchi Genbutsu: The literal translation of this term is, “Go and see for yourself.” Rather than hear about a problem, Toyota requires its workers, team leaders and executives to go and see a problem directly and to work collectively on a solution. At least 50% of Toyota’s information systems workers are stationed at plant sites to work directly with operations.

“Kaizen defines Toyota’s basic approach to doing business,” Convis says. “Challenge everything. The true value of continuous improvement is in creating an atmosphere of continuous learning and an environment that not only accepts, but actually embraces change.”

When rolling out a new ERP/portal system, Toyota began the initiative by mapping out its business processes, holding Kaizen workshops with its dealers, and systematically looking at all the areas where waste could be removed. And it didn’t take the plunge without thinking long and hard about the possible repercussions. For starters, not everyone agreed with dumping the old system.

Thinking about repercussions requires an ever sceptical workforce, which requires special attention for an organisation: “If people think there are going to be consequences when they uncover a problem and pull the Andon cord [a cord that stops production on the assembly line], they won’t pull it, and we won’t uncover the problem.”

Now a system is in place tracks the status of over 35,000 vehicles, constantly looking for the most cost-effective transportation strategy, and reallocating where necessary (virtual swap), speeding up time to deliver to the customer.