Lessons Learned from the Toyota Way Presented by:

Lessons Learned from the Toyota Way Presented by:

Lessons Learned from the Toyota Way Presented by: Jeffrey K. Liker University of Michigan Western Massachusetts APICS Keynote Copyright David Meier & Jeffrey Liker 01/31/20 Page 1 4 P Model of the Toyota Way Problem Solving (Continuous Improvement and Learning) Continual organizational learning through Kaizen Go see for yourself to thoroughly understand the situation. (Genchi Genbutsu) Make decisions slowly by consensus, thoroughly

considering all options; implement rapidly (Nemawashi) People and Partners (Respect, Challenge and Grow Them) Grow leaders who live the philosophy Respect, develop and challenge your people and teams Respect, challenge, and help your suppliers Adding Value to Customers & Process Society (Eliminate Waste) Create process flow to surface problems

Level out the workload (Heijunka) Stop when there is a quality problem (Jidoka) Use pull systems to avoid overproduction Standardize tasks for continuous improvement Use visual control so no problems are hidden Use only reliable, thoroughly tested technology Philosophy (Long-term Thinking) Copyright David Meier & Jeffrey Liker Base management decisions on a long-term philosophy, even at the expense of short-term financial goals 01/31/20 Page 3 Base management decisions on a long term philosophy, even at the expense of short-term financial goals 1

Toyota mission: Contribute to the economic growth of the country in which it is located (external stakeholders) Contribute to the stability and well being of team members and partners (internal stakeholders) Contribute to the overall growth of Toyota Copyright David Meier & Jeffrey Liker 01/31/20 Page 4 Principle One 1 The most important factors for success are patience, a focus on long term rather than short-term results, reinvestment in people, product, and plant, and an

unforgiving commitment to quality. -Robert B. McCurry, former Executive V.P., Toyota Motor Sales Copyright David Meier & Jeffrey Liker 01/31/20 Page 5 4 P Model of the Toyota Way Problem Solving (Continuous Improvement and Learning) Continual organizational learning through Kaizen Go see for yourself to thoroughly understand the situation. (Genchi Genbutsu) Make decisions slowly by consensus, thoroughly considering all options; implement rapidly (Nemawashi)

Eliminate Waste through Flow People and Partners & Standardization (Respect, Challenge and Grow Them) Grow leaders who live the philosophy Respect, develop and challenge your people and teams Respect, challenge, and help your suppliers Process (Eliminate Waste) Create process flow to surface problems Level out the workload (Heijunka) Stop when there is a quality problem (Jidoka) Use pull systems to avoid overproduction Standardize tasks for continuous improvement

Use visual control so no problems are hidden Use only reliable, thoroughly tested technology Philosophy (Long-term Thinking) Copyright David Meier & Jeffrey Liker Base management decisions on a long-term philosophy, even at the expense of short-term financial goals 01/31/20 Page 6 Lean Manufacturing is a manufacturing philosophy which shortens the time between the customer order and the product build / shipment by eliminating sources of waste. Business as Usual CUSTOMER ORDER Waste PRODUCT

BUILT & SHIPPED Time Lean Manufacturing CUSTOMER ORDER PRODUCT BUILT & SHIPPED Waste Time (Shorter) Copyright David Meier & Jeffrey Liker 01/31/20 Page 7 Product Lead Time Waiting Casting Transportation Raw Material Assembly

Machining Staging Inventory Time = Value Added Time = Non-Value Added Time (WASTE) Staging Finished Parts Value Added Time is only a very small percentage of the Lead time. Traditional Cost Savings focused on only Value Added Items. LEAN FOCUSES ON NON-VALUE ADDING ITEMS. Copyright David Meier & Jeffrey Liker 01/31/20

Page 8 Before Lean: Organization By Machine Type With Convoluted Flow No Organization and No Control LATHE LATHE LATHE PART FLOW LATHE 500pcs. MILL MILL MILL MILL MILL 750pcs.

GRINDER GRINDER GRINDER 250pcs. DRILL DRILL DRILL Copyright David Meier & Jeffrey Liker 01/31/20 Page 9 After Lean: U-Shaped One-Piece Flow Cell Organization and Control PART FLOW Build to Takt Time! Copyright David Meier & Jeffrey Liker 01/31/20

Page 10 Simplified Pull System Downstream processes withdraw what they need when they need it. Empties + production kanban A B C D E F New product G H Empties + withdrawal kanban PULL Customer Plant Needed Components + kanban Supplier Plant Preceding processes replenish what is taken away. Value Stream Perspective

Get away from isolated perspective / improvements Process 1 Process 2 Kaizen Process 3 Kaizen Kaizen Copyright David Meier & Jeffrey Liker 01/31/20 Page 12 Why Focus on Flow? If some problem occurs in one-piece-flow manufacturing then the whole production line stops. In this sense it is a very bad system of manufacturing. But when production stops everyone is forced to solve the problem immediately. So team members have to think, and through thinking team members grow and become better team members and people. -Teruyuki Minoura, former President,

Toyota Motor Manufacturing, North America Copyright David Meier & Jeffrey Liker 01/31/20 Page 13 Lean Tools to Support Flow 5S-Visual Workplace Total Productive Maintenance Quick Changeover Standardized Work Quality Methods Copyright David Meier & Jeffrey Liker 01/31/20 Page 14 What is a Visual Workplace? When anyone can walk into a workplace and visually

understand the current situation. Copyright David Meier & Jeffrey Liker 01/31/20 Page 15 4 Describe this area... Copyright David Meier & Jeffrey Liker 01/31/20 Page 16 Describe this area... Copyright David Meier & Jeffrey Liker 01/31/20 Page 17 What is TPM? Total Productive Maintenance (TPM) is Productive Maintenance with EVERYONEs participation

Maintenance=Teachers, Doctors of Equipment Operators=Clean, inspect, routine repair Copyright David Meier & Jeffrey Liker 01/31/20 Page 18 Why Quick Change Over? Change Over Difference in average inventory level with more changeovers Inventory level Average inventory levels Time The more quickly we changeover, the more our inventory levels decrease. This helps accomplish our goal of waste elimination. Copyright David Meier & Jeffrey Liker 01/31/20 Page 19

Standard Work Tools Standardized Work Chart Detail of each Process Step Takt 90s 1 3 4 5 Stack Chart (Yamazumi) Work Element Sheet Detail of the Elements of each Process Step 2 Assembly Process #

A Visual Tool for Balancing Processes Copyright David Meier & Jeffrey Liker 01/31/20 Page 20 Standardized tasks are the foundation for continuous improvement and employee empowerment 6 Todays standardizationis the necessary foundation on which tomorrows improvement will be based. If you think of standardization as the best you know today, but which is to be improved tomorrow-you get somewhere. But if you think of standards as confining, then progress stops. Henry Ford, Today and Tomorrow, 1926 Copyright David Meier & Jeffrey Liker 01/31/20 Page 21

4 P Model of the Toyota Way Problem Solving The heart & soul of The Toyota Way (Continuous Improvement and Learning) Continual organizational learning through Kaizen Go see for yourself to thoroughly understand the situation. (Genchi Genbutsu) Make decisions slowly by consensus, thoroughly considering all options; implement rapidly (Nemawashi) People and Partners (Respect, Challenge and Grow Them) Grow leaders who live the philosophy

Respect, develop and challenge your people and teams Respect, challenge, and help your suppliers Process (Eliminate Waste) Create process flow to surface problems Level out the workload (Heijunka) Stop when there is a quality problem (Jidoka) Use pull systems to avoid overproduction Standardize tasks for continuous improvement Use visual control so no problems are hidden Use only reliable, thoroughly tested technology Philosophy (Long-term Thinking)

Copyright David Meier & Jeffrey Liker Base management decisions on a long-term philosophy, even at the expense of short-term financial goals 01/31/20 Page 22 People and Partners Respect, Challenge, and Grow Them: 9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others 10. Develop exceptional people and teams who follow your companys philosophy 11. Respect your extended network of partners and suppliers by challenging them and helping them improve Copyright David Meier & Jeffrey Liker 01/31/20 Page 23 One-Piece Flow Demands Team Work! x x

x x x Station B Traditional Western Team x x x x x x x x Station A x x

Station C Need help? Need help? X Toyota Way Team Workcell Copyright David Meier & Jeffrey Liker 01/31/20 Page 24 x x Principle Five: Stop & Fix Problems Mr. Ohno used to say that no problem discovered when stopping the line should wait longer than tomorrow morning to be fixed. Because when making a car every minute we know we will have the same problem again tomorrow. -Fujio Cho, President, Toyota Motor Corporation

Copyright David Meier & Jeffrey Liker 01/31/20 Page 25 STOP BUTTON 1 2 8 9 10 11 12 13 14 (STOP THE L INE AUTHOR ITY ) 4 3 4 5 6 7

STOP BUTTON (STOP THE L INE AUTHOR ITY ) 5 Abnormality Station 5 Team Leader Typical TypicalToyota ToyotaOrganization Organizationtotosupport supportContinuous ContinuousImprovement Improvement Team Size Team Member {5-8} Kaizen Team Leader {3-4} Group Leader {5-8}

Asst. Manager { 4 - 10 } Manager Source: Bill Costantino, former group leader, Toyota, Georgetown. How Do we Develop People? Research in occupational training shows that individuals retain about: 10 10 % % of of what what they they read read 20 20 % % of of what what they they hear hear 30% 30% of of what what they

they see see 50% 50% of of what what they they hear hear and and use use 70% 70% of of what what they they say say 90% 90% of of what what they they say say and and do do Copyright David Meier & Jeffrey Liker 01/31/20 Page 28

Job JobInstruction InstructionTraining Trainingisisdesigned designedtototeach teach people peoplehow howtotodo doaaparticular particularjob jobby: by: Hearing Hearing(what (whatto todo) do) Seeing Seeing(how (howititisisdone) done) Using Using(what (whatwas

waslearned) learned) Saying Saying(what (whatwas waslearned) learned) Doing Doing(the (thetask) task) REPEATEDLY REPEATEDLY!!!! Copyright David Meier & Jeffrey Liker 01/31/20 Page 29 The Four Steps of TJI Step 4: FOLLOW UP Step 1: PREPARE WORKER Action

Plan Major Steps Key Points Check Step 3: TRY OUT PERFORMANCE Reasons Do Step 2: PRESENT OPERATION Copyright David Meier & Jeffrey Liker 01/31/20 Page 30 Bumper Trimming Job Breakdown Sheet JOB BREAKDOWN SHEET DATE: AREA: Bumper molding

MAJOR STEPS 7/20/2006 Phil Turek Team Leader JOB: Rear bumper molding operator - Trimming Todd Chambers Supervisor WRITTEN BY: Phil Turek KEYPOINTS SAFETY: Injury avoidance, ergonomics, danger points QUALITY: Defect avoidance, check points, standards TECHNIQUE: Efficient movement, special method COST: Proper use of materials 1. Hold flash straight up and tight 1. Makes trimming easier 2. Trim away from body and arm

2. Prevents injury- cuts Trim flash ball on left side 3. Blade flush with top surface 3. Visible surface, flash line 1mm max. Step # 2 1. Start on trim line- 1 mm variation 1. Visible surface- quality spec. 2. Blade must be perpindicular 2. Angled cut not acceptable 3. Follow trim line- 1mm variation 3. Visible surface- quality spec. 4. Curving motion while trimming 4. Technique to make trimming easier 1. Hold gate up horizontally 1. Prevents twisting of bumper during cut

2. Rest blade on bumper edge horizontally 2. Helps make cut horizontal and straight Trim gate flash 3. Angle knife handle back (blade is horizontal) 4. One continuous movement 3. Cut is easier 4. Stopping will cause a jagged cut Step # 4 1. Hold flash straight up and tight 1. Makes trimming easier Trim flash ball on right side 2. Trim away from body and arm 3. Blade flush with top surface 2. Prevents injury- cuts 3. Visible surface, flash line 1mm max. Step # 5

1. Start on trim line- 1 mm variation 2. Blade must be perpindicular 1. Visible surface- quality spec. 2. Angled cut not acceptable Trim right side core flash 3. Follow trim line- 1mm variation 3. Visible surface- quality spec. 4. Curving motion while trimming 4. Technique to make trimming easier Step # 1 Trim left side core flash Step # 3 L EAN ASS OCIATES, INC. www.leanassociates.com REASONS FOR KEYPOINTS Auditing Standardized Work

Copyright David Meier & Jeffrey Liker 01/31/20 Page 32 Roles and Responsibilities General Manager and VP Level Concentrate on Business Planning and Policy Improvement. Tools: Hoshin Planning & TBP Manager Level Focus on Shop Floor and Systems Improvement. Tools: Visual Factory & TBPT TBP Team Leader and Group Leader Manage Standardized Work, Process Improvement and Develop Problem Solving Skills. Tools: FMDS, TBP & OJD Team Member Focus on Fundamental Skills & Standardized Work Tools: Skills Training, Job Instruction, Standardized Work and 5-S Copyright David Meier & Jeffrey Liker

01/31/20 Page 33 Toyota Way Principles in 4P Model The dynamic of The Toyota Way Problem Solving (Continuous Improvement and Learning) Continual organizational learning through Kaizen Go see for yourself to thoroughly understand the situation. (Genchi Genbutsu) Make decisions slowly by consensus, thoroughly considering all options; implement rapidly (Nemawashi) People and Partners (Respect, Challenge and Grow Them)

Grow leaders who live the philosophy Respect, develop and challenge your people and teams Respect, challenge, and help your suppliers Process (Eliminate Waste) Philosophy Create process flow to surface problems Level out the workload (Heijunka) Stop when there is a quality problem (Jidoka) Use pull systems to avoid overproduction Standardize tasks for continuous improvement Use visual control so no problems are hidden Use only reliable, thoroughly tested technology

(Long-term Thinking) Copyright David Meier & Jeffrey Liker Base management decisions on a long-term philosophy, even at the expense of short-term financial goals 01/31/20 Page 34 Typical Improvement Opportunities Available Copyright David Meier & Jeffrey Liker 01/31/20 Page 35 Improvement Approaches of Typical Companies Copyright David Meier & Jeffrey Liker

01/31/20 Page 36 Toyota Leverages Opportunities at all Levels Copyright David Meier & Jeffrey Liker 01/31/20 Page 37 Most common mistake Jumping from problem to solution without clear understanding and analysis PROBLEM SOLUTION Copyright David Meier & Jeffrey Liker 01/31/20 Page 38 Principle Twelve Genchi Genbutsu

12 Observe the production floor without preconceptions and with a blank mind. Repeat why five times to every matter. -Taiichi Ohno Copyright David Meier & Jeffrey Liker 01/31/20 Page 39 No Problem is problem Problems are opportunities to learn Hiding problems undermines the system Copyright David Meier & Jeffrey Liker 01/31/20 Page 40 Learning from the Toyota Way Characteristics of Effective Lean Transformation Top Down Directive that this is the new way. Bottom-up involvement in concrete projects with clear results.

Develop internal experts through learning by doing. Expert sensei to guide the process and teach. Learning philosophy: every project, activity, is a chance to learn. Start with value stream transformation projects. Build on successes to transform broader organization and culture over time---YEARS! Copyright David Meier & Jeffrey Liker 01/31/20 Page 42 Why is this hard to do? Traditional organizations in fire fighting mode No clear vision of the future state culture change is hard Organizational change is disruptive Management has to change its role from managing from the office to deeply understanding processes! Copyright David Meier & Jeffrey Liker

01/31/20 Page 43 Lean is A long journey that needs commitment, patience, long-term thinking, positive mindset and attitude, and continuous improvement which are merged together as operational excellence and as a strategic weapon. Lets start the journey and Do our Best! Copyright David Meier & Jeffrey Liker 01/31/20 Page 44

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