Business Book Review

Saturday, March 24, 2007

The Toyota Way - by Jeffrey K. Liker - PART III: APPLYING TPS AND THE TOYOTA WAY

“A prerequisite for change is for top management to have an understanding and commitment to leveraging the Toyota Way to become a ‘lean learning organization.’ ”
As manufacturing companies worldwide apply TPS on the shop floor and experience extraordinary improvements, many ask how the process can be applied to their technical and service operations. Although Liker acknowledges the difficulty of understanding the workflow in technical and service organizations in the same way it is possible to map the transformation of a physical product, it can indeed be made more manageable via the following five-step procedure: (1) Identify who the customer is for the each process as well as the added value the customer wants. (2) Separate the repetitive processes from those that are one-of-a-kind and apply TPS to the repetitive processes. (3) Map the flow to determine value added and non-value added. (4) Think creatively about applying the broad principles of the Toyota Way to these processes, using a future-state value stream map. (5) Start implementation and learn by implementing, using a PDCA cycle. Then, expand implementation to the less repetitive processes.
The author notes, however, that it is the broader philosophy—the way Toyota leads people and partners, solves problems, and learns—that is the most difficult for organizations to adapt, develop, and sustain. The toughest and most basic challenge is “how to create an aligned organization of individuals who each have the DNA of the organization and are continually learning together to add value to the customer.” Thus, the essential thing to take from Toyota’s example is the importance of developing a system, sticking with it, and improving it. The Toyota Way model was built from the ground up, intentionally, starting with a philosophy that starts with the CEO. The top executive and the executive team must be committed to a long-term vision of adding value to customers and society in general, and they must be committed to developing and involving employees and partners. Moreover, there must be continuity in top leadership philosophy. This does not mean that the same people should run a company forever, only that they must develop successors with the company’s DNA (as opposed to installing a new cast of characters with each crisis and/or frequent buyout).
In the meantime, Liker offers the some general tactical tips for transitioning into this kind of lean enterprise: Start with changes in the technical system; follow quickly with cultural change. Learn by doing first and training second. Start with value stream pilots as a means of demonstrating lean as a system and providing a “go see” model. Use value stream mapping to develop future state visions and to help “learn to see.” Use kaizen workshops to teach and make rapid changes. Organize around value streams. Make the shift to lean mandatory. Be opportunistic in identifying opportunities for making big financial impacts. Realign metrics with a value stream perspective. Build on your company’s own roots to develop its own “Toyota Way.” Hire or develop lean leaders and create a succession system. And, use experts for teaching and getting quick results.

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End notes by chapter, a chapter-by-chapter bibliography, recommendations for further reading,
and a subject index are provided.


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