Decoding the DNA of the Toyota Production System

Steven Spear and H. Kent BowenHarvard Business Review

October 2002 Decoding Toyota DNA rev 1.ppt2

Introductory Points• Companies that have tried to adopt practices

are diverse as aerospace, consumer products, metal processing and industrial products

• Toyota’s performance secret does not lie in cultural roots - as other Japanese companies have also tried and failed

• Observers confuse tools/practices with the system itself

• Must understand the paradox of the system - rigid specifications is the key to flexibility and creativity

October 2002 Decoding Toyota DNA rev 1.ppt3

Rule One: How People Work

• All work shall be highly specified as to content, sequence, timing and outcome– variation impacts quality

• Learning by doing, managers and coaches ask key question to help the learners achieve understanding and develop problem solving skills– How do you do this work? How do you know you

are doing this correctly or free of defects? What do you do if you have a problem?

• Visual management techniques applied to help with error detection

October 2002 Decoding Toyota DNA rev 1.ppt4

Rule Two: How the Production Line is Constructed

• Every customer-supplier connection must be direct and there must be an unambiguous yes-or-no way to send requests and receive promises (Kanban Cards)– Most companies devote substantial resources to

coordinating people - but information flow is not so direct

• Workers who encounter a problem are expected to ask for help immediately– This is the opposite of our current expectations for

workers to try to resolve the problem on their own

October 2002 Decoding Toyota DNA rev 1.ppt5

Rule Three: How the Production Line is Constructed

• The pathway for every product and service must be simple and direct– Products flow along a simple and specified path

• Good and services do not flow to the next available person or machine but to a specific person or machine– This too is the opposite of our current expectations

and beliefs

• All ambiguity is removed from the process

October 2002 Decoding Toyota DNA rev 1.ppt6

Rule Four: How to Improve

• Any improvement must be made in using the scientific method– Change are never made with out thorough discussion

and defining the expected outcome of the change

– Before any changes are made people are expected to present the explicit logic of the hypotheses

• Production workers make improvements to their own jobs, supervisors provide direction and assistance

October 2002 Decoding Toyota DNA rev 1.ppt7

Countermeasures

• Temporary responses to a specific problem until a permanent resolutions can be implemented– Kanban or andon used until a better approach is found

or conditions change

• Safety stock is used to protect against unpredictable downtime or yields

• Buffer stock is kept at or near shipping points to help manage variation in customer

• Safety stock and buffer stock kept separate and is owned by different people

• Reducing changeover times and batch sizes decreases the need for large amounts of inventory

October 2002 Decoding Toyota DNA rev 1.ppt8

Toyota’s Notion of Ideal

• Defect free (features and performance is what customer expects)

• Delivered one request at a time (small batch or one piece flow)

• Supplied on demand in the version requested• Delivered immediately• Produced without wasting any materials, labor,

energy or other resources• Produced in a work environment that is safe

physically, emotionally and professionally for every employee

October 2002 Decoding Toyota DNA rev 1.ppt9

Organizational Impacts

• Make people capable of and responsible for doing and improving their own work

• Standardizing connections between customer and suppliers

• Pushing process improvements and resolutions of problems to the lowest level of the organization

• Creates a modular structure that allows changes to be made without unduly affecting other parts– This allows the delegation of responsibility without creating

chaos!