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Liker David Meier A Practical Guide for Implementing Toyota’s 4Ps McGraw-Hill New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi San Juan Seoul Singapore Syd

The Toyota Way Fieldbook

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The Toyota

Way Fieldbook

Jeffrey K Liker David Meier

A Practical Guide for

Implementing Toyota’s 4Ps

McGraw-Hill

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Acknowledgments xi

2 Define Your Corporate Philosophy and Begin to Live It 17

Making a Social Pact with Employees and Partners 25

Part III Creating Lean Processes Throughout Your Enterprise 31

Developing a Long-Term Philosophy of Waste Reduction 37

Benefits of the Value Stream Mapping Approach 41

Contents

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Developing a Current State Map 42Understand Your Objectives When Mapping the Current State 43Limitations of the Value Stream Mapping Approach 47

Sequential and Concurrent Continuous Improvement 52

Standardized Work as a Tool to Identify and Eliminate Waste 61

Consolidate Waste Activities to Capture Benefits 65

Level the Workload to Create a Foundation for

Less Is More: Reduce Waste by Controlling Overproduction 83

6 Establish Standardized Processes and Procedures 111

Types of Standardization 118Quality, Safety, and Environmental Standards 119

Some Challenges of Developing Standardized Work 131

Standardized Work as a Baseline for Continuous Improvement 135

7 Leveling: Be More Like the Tortoise Than the Hare 145

Heijunka Provides a Standardized Core for Resource Planning 146

8 Build a Culture That Stops to Fix Problems 171

The Role of Jidoka: Self-Monitoring Machines 177

9 Make Technology Fit with People and Lean Processes 198

What Do You Believe About Technology, People, and Processes? 200

Tailor Technology to Fit Your People and Operating Philosophy 203

Part IV Develop Exceptional People and Partners 217

10 Develop Leaders Who Live Your System and

Toyota Georgetown Production Leadership Structure 222Toyota Georgetown Staff Leadership Structure 224

Group Leader Responsibilities on a Typical Workday 226

Assimilating Team Associates into Your Culture 246Job Instruction Training: The Key to Developing Exceptional Skill Levels 247Making a Training Plan and Tracking Performance 255

Developing Team Associates for Leadership Roles 263

12 Develop Suppliers and Partners as Extensions

Supplier Partners in a Globally Competitive World 270Short-Term Cost Savings vs Long-Term Partnerships 271

Seven Characteristics of Supplier Partnering 275

Traditional vs Lean Models of Supplier Management 294

Contents viii

Part V Root Cause Problem Solving for Continuous Learning 305

14 Develop a Thorough Understanding of the

Find the True Problem to Get the Most Significant Results 327

15 Complete a Thorough Root Cause Analysis 341

Distill Root Cause Analysis to Simplest Terms 349

Putting It All Together: The A3 One-Page Report 351

16 Consider Alternative Solutions While Building Consensus 356

Simplicity, Cost, Area of Control, and the Ability to Implement Quickly 357

Define the Right Problem and the Solution Will Follow 362

Act: Make Necessary Adjustments to Solutions and to the Action Plans 371

Determining How to Use an A3 377

19 Lean Implementation Strategies and Tactics 393

Lean Implementation Levels, Strategies, and Tools 394

Can We Avoid Politics in Lean Transformation? 427

Contents x

IT IS ALWAYS DIFFICULTfor an author to narrow the list of acknowledgments, letalone for coauthors So many people have affected the learning and writingprocess We decided to list them separately within this section, which also gives

us the opportunity to thank each other and those who helped bring us together

From David Meier

As I began to reflect on the various people who have helped me in some way, Iwas overwhelmed by the large number of individuals who had a part in bring-ing me to the point where I could contribute to this book It really would not bepossible to mention each person by name here I want to say that any achieve-ment I have reached is based on two broad groups: the individuals who trained

me to think and worked patiently with me, and the people whom I have beenteaching, and from whom I have learned a great deal

I wish to thank the many teachers and trainers at Toyota who made greatsacrifices to help all of us at Toyota Motor Manufacturing, Kentucky The legacy

of understanding and ability has been passed along from generation to tion, like a special family recipe, within Toyota I hope that my efforts honor thespirit of those who have struggled and persevered to develop this process Iwould like to give special thanks to: Takeuchi-san, Kusukabi-san, Kidokoro-san,Nakano-san, Ito-san, Honda-san, Miyagowa-san, and Ohno-san I know that attimes I was a great challenge, and I appreciate your patience

genera-After leaving Toyota, I have continued on my journey of discovery andgrowth, and I owe that largely to the people who have been students—and thus

my teachers I am listing them in chronological order, as that is how I see mypersonal development

My first foray outside the walls of Toyota as a lean advisor was with CedarWorks, in Peebles, Ohio It may be that the first time is always the best, but the expe-rience at Cedar Works was good enough to encourage me to take a larger leap

Acknowledgments

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I would like to thank John Beakes and Dr Robert Deutch of RWD Technologies,Inc for taking the first chance on me as a consultant My wife and I are especiallygrateful for the wonderful insurance coverage, which provided in-vitro-fertilizationservices We were blessed with two wonderful boys as a result.

Thanks to Mike Scarpello and the folks at Ford for making my transitionaway from the comfort of Toyota a pleasant one Thanks also to my colleagues

at Total Systems Development, and especially John and Charlie for providingthe opportunity to learn the ropes and develop my skills as a consultant

To all my friends at Hoffman—it was a big challenge, but everyone made itworthwhile Special thanks to Dennis Spiess and his family for sharing your

“home away from home.” Thanks to Ray, Michelle, Mark, Al, and Lyle for ing challenging situations and opportunities to try new ideas To Don Westman:

provid-I appreciate your confidence in me and your willingness to “stay the course.” TheKentucky Management team—Diane, Duane, Mark, Bill, and Gene—was one ofthe most unified management teams I have worked with

Paul Kenrick has provided opportunities to challenge my abilities and tocontinuously improve my methods To the many folks at Parker-Hannifin—Dave, Diane, Joe, Tim, Alex, Millie, Phil, Donnie, Glenn, Greg, and everyone inthe plants—who are working hard and facing the challenges of lean

This acknowledgement would not be complete without a special thank-you to

my good friend, and fellow “guru,” Bill Costantino Our paths have been alignedfrom the first day at Toyota in 1987 I appreciate your continued support, guidance,and many exciting opportunities along the way It was Bill who connected me withJeff Liker for this book I will always cherish your friendship and insights

I am grateful to Jeff Liker for trusting in Bill’s recommendation and taking

on a novice writer in this process It is a great bounty to work with an plished author on such a great project

accom-Most importantly, I must thank my family—my wife Kimberly, who vided life support while I was working, my daughter Jennifer, and my sonsMatthew and Michael Each of them has made sacrifices while I have been busywith this project They heard me say over the years that I was going to “write abook.” Now I finally have! My mother, Patricia Meier, spent countless hoursreviewing and editing my work, utilizing her great attention to detail to find thecountless punctuation errors She has always been there to support me as I pur-sued my crazy dreams

pro-From Jeff Liker

It was great working with David and sharing his insider Toyota perspectivewith my outsider view of the Toyota Way As an outsider, I depend on the kind-ness of strangers inside Toyota for access to the constantly evolving system we

Acknowledgments xii

call the Toyota Way Actually, I have developed many close relationships overthe years and continually learn through my visits to Toyota and its affiliates, aswell as intense discussions with my friends and colleagues inside and outside

of Toyota I also continually learn from my experiences consulting to companiesthroughout the world that try to learn from the Toyota Way Indirectly, I am con-stantly learning from the consultants who work for me through Optiprise,which is on the front lines of implementing lean and transforming culture inmany different types of organizations

Since I wrote the book, I have spent a good deal of time at the Toyota plant

in Georgetown, Kentucky (TMMK), at NUMMI in California, and at Denso inBattlecreek, Michigan I had a similar epiphany in each case All three havestruggled and had to work really hard to maintain the Toyota Way culture andbecome self-sufficient from their early Japanese mentors There are case studiesfrom all three of these Toyota group sites in this book Many people spent agreat deal of time patiently showing me and teaching me, in particular, GaryConvis, president of TMMK, and Wil James, vice president of manufacturing,despite the intense demands on their own time Mike Brewer, who has the dis-tinction of being the only NUMMI alumni who worked for General Motors to

be brought back to NUMMI as a Toyota Production System (TPS) advisor, showed

me the progress being made at that continuing TPS success story AndrisStaltmanis, assistant general manager of Denso in Battlecreek, is helping to leadthat location to a new level of TPS, and he shared generously his insights

I was able to draw on companies that I advise to develop case examples thatillustrate the struggles and victories of American companies outside Toyotalearning to think lean Pasquali Digirolamo personally has helped lead TennecoAutomotive toward a global transformation with endless passion and energy.Mike Butler has been working tirelessly as a civil servant to make theJacksonville Naval Air Depot one of the benchmarks for lean to better serve theAmerican defense effort through quicker turnaround of aircraft John Mathesonhas led the U.S operations of Framatome Technologies into lean models toteach its French parent what lean can do in the very customized nuclear fuelindustry David Nelson took his deep learning from Honda to John Deere andthen to Delphi Automotive Systems to try to teach American companies whattrue lean supplier partnerships are all about

I am also grateful to Bill Costantino for bringing David Meier and metogether on this important applied volume on the Toyota Way

Last but most, I am blessed with a wonderful family, my wife Deborah andchildren Jesse and Emma They have been remarkably supportive and resilient

in the wake of all the demands on my time since the success of The Toyota Way.

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John Shook

Former Toyota Manager

WHEN JEFF LIKER AND DAVID MEIER asked me to write a foreword for thisfieldbook, I immediately and enthusiastically replied yes, but then had animmediate and nagging feeling of concern A “fieldbook” on the Toyota Way?What exactly is a fieldbook, and how would it describe the Toyota Way? Acookbook with recipes? A roadmap?

But what you the reader will find in these pages is no cookbook or roadmap,but more of a compass to set direction and help you steer your own course Yourguides Jeff and David are fellow travelers and well-equipped to help you, a fact

I know well Somewhat coincidentally, I was on the ground with both Jeff andDavid the first time they set foot on Gemba in Toyota City, though in quite dif-ferent circumstances for each I met Jeff Liker when I was still with Toyota andJeff was a professor at the University of Michigan continuing the research intosocio-technical systems that he had begun years earlier as a student at theUniversity of Massachusetts I met David Meier in Toyota City when I wasintroducing many new American employees of Toyota to the Toyota ProductionSystem and he was there to began learning the Toyota Way the way you’re reallysupposed to learn it—on the plant floor

Jeff found Toyota through a formal education and subsequent research paththat combined equal interest and experience in the “soft side” of industry withthe “hard side.” As an industrial engineering major and co-op student atNortheastern University, Jeff worked for General Foods Corporation, doingindustrial engineering work such as operations research, plant layout, and soforth, but what came to interest him most was the Topeka dog food plant thatwas organized around self-directed work teams using a socio-technical systems(STS) approach—joint design of the social and technical systems After getting

a Ph.D in sociology at University of Massachusetts, Jeff joined the faculty of the

Foreword

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Department of Industrial and Operations Engineering where he has remainedsince Jeff’s study of the auto industry and Japan developed through involvementwith David Cole and Robert Cole through the famous University of MichiganUS-Japan auto study This led him to Toyota and the Toyota Production System,where he found actual application of the STS approach he had begun studyingmany years before At Toyota, he felt he had at last found an organization inwhich the social and technical systems were truly integrated.

Jeff, along with John Campbell, professor of political science, and BrianTalbot, professor at the Michigan Business School, created the Japan TechnologyManagement Program—where I was also privileged to work for several years—

which had as its mission the study of how successful organizations in Japan

man-aged technology, recognizing that the competitive advantage that many Japanese

firms had gained in their respective industries came not from advantages in

“hard” technology—Toyota purchases stamping machines and robots from the

same sources available to GM or Ford—but from the way they managed the same

technology The program focused particularly on the way some firms, notablyToyota, attained holistic integration of technology with people, organization,product, and strategy While few Japanese firms would have explained it inthese terms, the difference lay in their socio-technical system

David’s hands-on learning began on the plant floor when he was in the firstgroup of front-line supervisors from Toyota’s Georgetown, Kentucky, Camryplant (TMMK) to visit Toyota City for supervisor’s training in the Summer of

1987 Toyota had “practiced” on NUMMI, and Georgetown was the company’sfirst full-blown solo operation outside Japan Working with the Commonwealth

of Kentucky, Toyota developed a comprehensive assessment that evaluated100,000 applicants for an initial 3,000 jobs! David was one of a highly selectgroup of individuals chosen to be shop floor leaders The selection process wasextensive, but it was just a prelude to the training and development process thatDavid would experience in the subsequent years Toyota knew from the startthat the key to success at TMMK was going to be the degree to which thecompany could—in short—establish the Toyota Way

They didn’t call it “the Toyota Way” then It was just “the way Toyota didthings.” The Toyota Production System was fully articulated by then, as was basiccompany philosophy, especially in such areas as quality and human resources.But the philosophy didn’t stop with those key functions; it played out in eachand every company activity Just as David underwent training as a productiongroup leader, every leader at the new Georgetown operation, paid a similar visit

to Toyota City, spending time not only at Tsutsumi, the Camry production plant,but also in their counterpart department at the company’s headquarters, in suchareas as accounting, purchasing, community relations, and facilities management.TMMK community relations professionals learned how Toyota the company

Foreword xvi

works and cooperates with Toyota City the city Why? Did Toyota think it’s tionship with Toyota City was a benchmark of best practice? Or that the rela-tionship the company had with the local community outside Nagoya, Japan,was somehow something to emulate in central Kentucky?

rela-No, of course not What Toyota knew was that its culture—its corporate ture not its “Japaneseness”—was what defined it, what gave definition to how

cul-it operates at every level, in every function David and his colleagues didn’thear the phrase “the Toyota Way” at that time, but “Toyota’s way” was preciselywhat was being passed on, in all its aspects, both technical and social

That’s what makes Jeff and David a great team to produce this fieldbook.Jeff’s years of academic study of socio-technical systems in general, and Toyota inparticular, combined with David’s front-line experience of living the Toyota Way

on the plant floor add up to the practical, yet conceptually insightful guide youare holding now

Among experienced Toyota Production System sensei, any attempt such asthis one to “write down” the Toyota Way is a controversial undertaking It is dif-ficult to capture in words the essence of any system laced extensively with tacit

knowledge, as is the Toyota Way This is not, however, because the Toyota Way

is so mysterious that it has to be intuited but simply because it is a “learn through

doing” system As such, even if you are successful at writing it down

accurate-ly, there is still a danger of misleading some readers Corporate executives aresmart people, often highly educated, accustomed to keeping up with the latestmanagement fads through books, seminars, executive education The dangerwith attempts at learning TPS through such means is that some readers have atendency to think that if they’ve read about something they know it

The Toyota Way is deceptively simple It can be too easy to read one of thesimple principles and say, “Sure, I know that .” Jeff and David have chosen

an approach with this Fieldbook that will try to help you avoid that tendency.Rather than putting the book down with a sigh of relief thinking “I got it,” you will

be encouraged to embody in practice what you are reading: read, try, reflect and learn

John Shook

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APARADOX OF THETOYOTAWAYis that though it is continually improving andchanging, the core concepts remain consistent We are continuously learningnew aspects of the process and seeing different applications in different situations.Yet as our understanding deepens, the “basics” continually resurface, guidingdecisions and methods.

One thing that seems to shock many of the people we teach and advise isthe difficulty even Toyota has had in globalizing the Toyota Way Consider some

of the icons of the Toyota Production System in North America: the Toyota plant

in Georgetown, Kentucky; Toyota’s joint venture with General Motors, NUMMI

in California; and Toyota’s largest supplier, Denso, in Battlecreek, Michigan Allthree locations went through a dip on the Toyota Way around 2000 as they wererapidly expanding and dealing with a changing workforce and managementteam, and all three have made heroic efforts to bring the level of Toyota Way think-ing back up and are now moving to even higher levels of self-sufficiency in theToyota Way

This is important because it suggests the culture underlying all the neat leansystems many companies are busily working to implement does not necessarilycome naturally, particularly outside of Japan, and takes constant effort to main-tain Even Toyota group companies in America, with their lean tools that arethe envy of most other companies, slip back and must work to move forward

We have had many experiences in observing, teaching, and consultingthroughout the world At each step we realize that the core concepts and philoso-phies are applicable in every situation and are truly the most important aspects

to learn The greatest challenge in facing each new and unique situation is tounderstand how to flexibly apply the methods of the Toyota Way, yet remaintrue to the core concepts

Outside Toyota, the challenge becomes the explanation of concepts that werelearned through continuous repetition but never described in terms of “absolutes.”

Preface

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There is no “one way” to do any of the lean processes We have finally concludedthat there are certain things that a good Toyota Production System (TPS) senseiinstinctively knows and understands but they “don’t know how they know.” Thisprovides an ongoing challenge to effectively communicate with and teach others The Toyota Way is passed from person to person through a process ofrepeated suggestions to “just do,” multiple attempts, reflections, and review,further attempts and reviews, and so on, continuing again and again until intu-itional ability is achieved This method of learning creates a challenge when itcomes to explaining “why” something is done, or why it is important How do

we know what we know? How do we know what to do next? How do we seetraps? The answer is: It seems intuitive and right

We always insist in any company we work with that individuals be assignedfull-time as disciples of the Toyota Way They must be coached by a lean expertone-on-one, much as anyone experienced at a craft (cooking, sewing, sports)would pass on his or her accumulated wisdom to a student This method isslow and tedious; however, it develops individuals capable of facing any con-dition and understanding an appropriate course of action It develops individ-uals who believe in their gut and “know” the right thing to do next This isimportant, since they will continually have to convince others who do notbelieve, and do not know, and wish to continue the old ways

This book is an attempt to clarify the thought process used by Toyota andhow those ideas are applied and used to create the tremendous success Toyotahas achieved We focus on how to think about the process and about solutions.This process will provide many challenges along the way Always rememberthe frequent admonitions and challenge that is issued at Toyota: “Please try”and “Do your best.”

Preface xx

Part I Learning from

Toyota

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Why The Toyota Way Fieldbook?

Toyota’s success as a company has been well documented It has a well-earnedreputation for excellence in quality, cost reduction, and hitting the market withvehicles that sell The result has been a highly profitable company by any stan-dards Earning billions of dollars per year and amassing at any point in time $30

to $50 billion in cash reserves would be enough to convince anyone this company

must be doing something right Since The Toyota Way initially hit the shelves in

January 2004, Toyota has continued to break records, earning over ¥10 trillion(about $10 billion) that year and becoming the most profitable company in thehistory of Japan That pattern continues into 2005 breaking continuing profitabilityrecords while many of its competitors are losing market share and struggling toearn a profit In 2005 Toyota in North America also won top honors in the covetedJ.D Power Initial Quality Award winning first place in 10 of 18 categories.Toyota then was recognized by Harbour Associates as having the most productiveplants in North America All this was accomplished while steadily increasingsales volume in North America at a time while its domestic competitors were los-ing volume

But Toyota’s impact on the world has gone beyond making money It haseven gone beyond making excellent vehicles people can enjoy driving Toyotahas contributed a new paradigm of manufacturing “Lean production,” a term

coined in The Machine That Changed the World, is widely considered the next big

step in the evolution of manufacturing beyond Ford’s mass production Who

Background to the Fieldbook

Chapter 1

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