The Toyota Way

The Toyota Way is a set of principles and behaviors that underlie the Toyota Motor Corporation's managerial approach and
production system. Toyota first summed up its philosophy, values and manufacturing ideals in 2001, calling it "The Toyota Way
[1][2][3]
2001". It consists of principles in two key areas: continuous improvement, and respect for people.

Contents
Overview of the principles
The 14 Principles
Section I — Long-Term Philosophy
Section II — The Right Process Will Produce the Right Results
Section III — Add Value to the Organization by Developing Your People
Section IV — Continuously Solving Root Problems Drives Organizational Learning
Research findings
Long-term philosophy
Right process will produce right results
Value to organization by developing people
Solving root problems drives organizational learning
Translating the principles
Results
See also
References
Further reading

Overview of the principles

The Toyota Way has been called "a system designed to provide the tools for people to continually improve their work"[4] The 14
principles of The Toyota Way are organized in four sections:

1. Long-Term Philosophy
2. The Right Process Will Produce the Right Results
3. Add Value to the Organization by DevelopingYour People
4. Continuously Solving Root Problems Drives Organizational Learning
The two focal points of the principles are continuous improvement and respect for people. The principles for a continuous
improvement include establishing a long-term vision, working on challenges, continual innovation, and going to the source of the
issue or problem. The principles relating to respect for people include ways of building respect and teamwork.

The 14 Principles
The system can be summarized in 14 principles.[5] The principles are set out and briefly described below:

Section I — Long-Term Philosophy

Principle 1
 Base your management decisions on a long-term philosophy
, even at the expense of short-term financial goals.
People need purpose to find motivation and establish goals.

Section II — The Right Process Will Produce the Right Results

Principle 2

Create a continuous process flow to bring problems to the surface.

Work processes are redesigned to eliminate waste muda)
( through the process of continuous improvement — kaizen. The seven types
of muda are:

1. Overproduction
2. Waiting (time on hand)
3. Unnecessary transport or conveyance
4. Overprocessing or incorrect processing
5. Excess inventory
6. Motion
7. Defects
Principle 3

Use "pull" systems to avoid overproduction.

A method where a process signals its predecessor that more material is needed. The pull system produces only the required material
after the subsequent operation signals a need for it. This process is necessary to reduce overproduction.

Principle 4

Level out the workload (heijunka). (Work like the tortoise, not the hare).
This helps achieve the goal of minimizing waste (muda), not overburdening people or the equipment (muri), and not creating uneven
production levels (mura).

Principle 5

Build a culture of stopping to fix problems, to get quality right the first time.
Quality takes precedence (Jidoka). Any employee in the Toyota Production System has the authority to stop the process to signal a
quality issue.

Principle 6

Standardized tasks and processes are the foundation for continuous improvement and employee empowerment.
Although Toyota has a bureaucratic system, the way that it is implemented allows for continuous improvement (kaizen) from the
people affected by that system. It empowers the employee to aid in the growth and improvement of the company
.

Principle 7

Use visual control so no problems are hidden.

Included in this principle is the 5S Program - steps that are used to make all work spaces efficient and productive, help people share
work stations, reduce time looking for needed tools and improve the work environment.

Sort: Sort out unneeded items

Straighten: Have a place for everything
Shine: Keep the area clean
Standardize: Create rules and standard operating procedures
Sustain: Maintain the system and continue to improve it
Principle 8

Use only reliable, thoroughly tested technology that serves your people and processes.
Technology is pulled by manufacturing, not pushed to manufacturing.

Section III — Add Value to the Organization by Developing Your People

Principle 9

Grow leaders who thoroughly understand the work, live the philosophy
, and teach it to others.
Without constant attention, the principles will fade. The principles have to be ingrained, it must be the way one thinks. Employees
must be educated and trained: they have to maintain a learning or
ganization.

Principle 10

Develop exceptional people and teams who follow your company's philosophy
.
Teams should consist of 4-5 people and numerous management tiers. Success is based on the team,
not the individual.

Principle 11

Respect your extended network of partners and suppliers by challenging them and helping them improve.
Toyota treats suppliers much like they treat their employees, challenging them to do better and helping them to achieve it. Toyota
provides cross functional teams to help suppliers discover and fix problems so that they can become a stronger
, better supplier.

Section IV — Continuously Solving Root Problems Drives Organizational Learning

Principle 12

Go and see for yourself to thoroughly understand the situationGenchi

( Genbutsu).
Toyota managers are expected to "go-and-see" operations. Without experiencing the situation firsthand, managers will not have an
understanding of how it can be improved. Furthermore, managers use Tadashi Yamashima's (President, Toyota Technical Center
(TTC)) ten management principles as a guideline:

1. Always keep the final target in mind.

2. Clearly assign tasks to yourself and others.
3. Think and speak on verified, proven information and data.
4. Take full advantage of the wisdom and experiences of others to send, gather or discuss information.
5. Share information with others in a timely fashion.
6. Always report, inform and consult in a timely manner
.
7. Analyze and understand shortcomings in your capabilities in a measurable way .
8. Relentlessly strive to conductkaizen activities.
9. Think "outside the box," or beyond common sense and standard rules.
10. Always be mindful of protecting your safety and health.
Principle 13

Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly
nemawashi
( ).
The following are decision parameters:

1. Find what is really going on (go-and-see) to test

2. Determine the underlying cause
3. Consider a broad range of alternatives
4. Build consensus on the resolution
5. Use efficient communication tools
Principle 14

Become a learning organization through relentless reflectionhansei)

( and continuous improvement k( aizen).
The process of becoming a learning organization involves criticizing every aspect of what one does. The general problem solving
technique to determine the root cause of a problem includes:

1. Initial problem perception

2. Clarify the problem
3. Locate area/point of cause
4. Investigate root cause (5 whys)
5. Countermeasure
6. Evaluate
7. Standardize

Research findings
In 2004, Dr. Jeffrey Liker, a University of Michiganprofessor of industrial engineering, published The Toyota Way. In his book Liker
ir work."[4] According to Liker, the
calls the Toyota Way "a system designed to provide the tools for people to continually improve the
14 principles of The Toyota Way are organized in four sections: (1) long-term philosophy, (2) the right process will produce the right
results, (3) add value to the organization by developing your people, and (4) continuously solving root problems drives organizational
learning.

Long-term philosophy
The first principle involves managing with a long-view rather than for short-term gain. It reflects a belief that people need purpose to
find motivation and establish goals.

Right process will produce right results

The next seven principles are focused on process with an eye towards quality outcome. Following these principles, work processes
are redesigned to eliminate waste m
( uda) through the process of continuous improvement — kaizen. The seven types of muda are (1)
overproduction; (2) waiting, time on hand; (3) unnecessary transport or conveyance; (4) overprocessing or incorrect processing; (5)
excess inventory; (6) motion; and (7) defects.

The principles in this section empower employees in spite of the bureaucratic processes of Toyota, as any employee in the Toyota
Production System has the authority to stop production to signal a quality issue, emphasizing that quality takes precedence (Jidoka).
The way the Toyota bureaucratic system is implemented to allow for continuous improvement (kaizen) from the people affected by
that system so that any employee may aid in the growth and improvement of the company
.

Recognition of the value of employees is also part of the principle of measured production rate (heijunka), as a level workload helps
avoid overburdening people and equipment (muri), but this is also intended to minimize waste (muda) and avoid uneven production
levels (mura).

These principles are also designed to ensure that only essential materials are employed (to avoid overproduction), that the work
environment is maintained efficiently (the 5S Program) to help people share work stations and to reduce time looking for needed
tools, and that the technology used is reliable and thoroughly tested.

Value to organization by developing people

Human development is the focus of principles 9 through 11. Principle 9 emphasizes the need to ensure that leaders embrace and
promote the corporate philosophy. This reflects, according to Liker, a belief that the principles have to be ingrained in employees to
survive. The 10th principle emphasizes the need of individuals and work teams to embrace the company's philosophy, with teams of
4-5 people who are judged in success by their team achievements, rather than their individual efforts. Principle 11 looks to business
partners, who are treated by Toyota much like they treat their employees. Toyota challenges them to do better and helps them to
achieve it, providing cross functional teams to help suppliers discover and fix problems so that they can become a stronger, better
supplier.

Solving root problems drives organizational learning

The final principles embrace a philosophy of problem solving that emphasizes thorough understanding, consensus-based solutions
swiftly implemented and continual reflection (hansei) and improvement (kaizen). The 12th principle (Genchi Genbutsu) sets out the
expectation that managers will personally evaluate operations so that they have a firsthand understanding of situations and problems.
Principle 13 encourages thorough consideration of possible solutions through a consensus process, with rapid implementation of
decisions once reached (nemawashi). The final principle requires that Toyota be a "learning organization", continually reflecting on
its practices and striving for improvement. According to Liker, the process of becoming a learning organization involves criticizing
every aspect of what one does.

Translating the principles

There is a question of uptake of the principles now that Toyota has production operations in many different countries around the
world. As a New York Times article notes, while the corporate culture may have been easily disseminated by word of mouth when
Toyota manufacturing was only in Japan, with worldwide production, many different cultures must be taken into account. Concepts
such as "mutual ownership of problems", or "genchi genbutsu", (solving problems at the source instead of behind desks), and the
"kaizen mind", (an unending sense of crisis behind the company’s constant drive to improve), may be unfamiliar to North Americans
and people of other cultures. A recent increase in vehicle recalls may be due, in part, to "a failure by Toyota to spread its obsession
for craftsmanship among its growing ranks of overseas factory workers and managers." Toyota is attempting to address these needs
[6]
by establishing training institutes in the United States and in Thailand.

Results
Toyota Way has been driven so deeply into the psyche of employees at all levels that it has morphed from a strategy into an important
element of the company's culture.[7] According to Masaki Saruta, author of several books on Toyota, "the real Toyota Way is a
culture of control."[8][9] The Toyota Way rewards intense company loyalty that at the same time invariably reduces the voice of those
who challenge authority.[10][11] "The Toyota Way of constructive criticism to reach a better way of doing things 'is not always
received in good spirit at home.'"[12] The Toyota Way management approach at the automaker "worked until it didn't."
[7]

One consequence was when Toyota was given reports of sudden acceleration in its vehicles and the company faced a potential recall
situation. There were questions if Toyota's crisis was caused by the company losing sight of its ownprinciples.[13] The Toyota Way in
this case did not address the problem and provide direction on what the automaker would be doing, but managers instead protected
the company and issued flat-out denials and placed the blame at others.[14] The consequence of the automaker's actions led to the
2009–11 Toyota vehicle recalls. Although one of the Toyota Way principles is to "build a culture of stopping to fix problems to get
quality right the first time," Akio Toyoda, President and CEO, stated during Congressional hearings that the reason for the problems
was that his "company grew too fast."[15] Toyota management had determined its goal was to become the world's largest automotive
manufacturer.[16] According to some management consultants, when the pursuit of growth took priority, the automaker "lost sight of
[17]
the key values that gave it its reputation in the first place."

See also
oyota Way[18]
The India Way - a modern management book, after the T
Kanban: a workflow management system also pioneered at oTyota
Karoshi death from overwork
2009–11 Toyota vehicle recalls
References
1. "Environmental & Social Report 2003"(http://www.toyota.co.jp/en/environmental_rep/03/pdf/E_p80.pdf) (PDF).
Toyota Motor. p. 80. Retrieved 26 March 2012.
2. Toyota Motor Corporation Annual Report, 2003, page 19. "The Toyota Way, which has been passed down since the
Companyʼs founding, is a unique set of values and manufacturing ideals. Clearly
, our operations are going to
become more and more globalized. With this in mind, we compiled a booklet, Theoyota
T Way 2001, in order to
transcend the diverse languages and cultures of our employees and to communicate our philosophy to them." (Mr
.
Fujio Cho, President, Toyota Motor Corporation)
3. "Sustainability Report 2009"(http://www.toyota-global.com/sustainability/sustainability_report/pdf_file_download/09/p
df/sr09_p54_p59.pdf) (PDF). Toyota Motor. p. 54. Retrieved 26 March 2012.
4. Liker, Jeffrey (2004). "The 14 Principles of the Toyota Way: An Executive Summary of the Culture Behind TPS"(htt
p://ICOS.groups.si.umich.edu//Liker04.pdf)(PDF). University of Michigan. p. 36. Retrieved 26 March 2012.
5. Liker, Jeffrey K. (2004). The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer
.
McGraw-Hill. ISBN 978-0-07-139231-0.
6. Fackler, Martin (February 15, 2007)."The 'Toyota Way' Is Translated for a New Generation of Foreign Managers"(htt
ps://www.nytimes.com/2007/02/15/business/worldbusiness/15toyota.html?pagewanted=all). The New York Times.
Retrieved 26 March 2012.
7. Heskett, James L (2012).The culture cycle : how to shape the unseen force that transforms performance
(https://boo
ks.google.com/books?id=LCDoh6-opEkC&pg=P A130&dq=%22Toyota+way%22+so+shocking+that+it+may+have+le
d+to+some+amount+of+denial+as+well+as+loyal+customers) . FT Press. p. 130. ISBN 9780132779784. Retrieved
29 January 2014.
8. Glionna, John M. (24 March 2010)."Toyota's rigid culture criticized in light of recalls - Automaker's Toyota Way
handbook dictates details of employees' lives, even in their of
f time" (http://articles.chicagotribune.com/2010-03-24/n
ews/sc-biz-0325-toyota-man-20100324_1_toyota-motor-corp-toyota-of ficials-paul-nolasco). Chicago Tribune.
Retrieved 29 January 2014.
9. Hino, Satoshi (2006). Inside the mind of Toyota : management principles for enduring growth(https://books.google.c
om/books?id=rAlcjg0QhGkC&pg=PA65&dq=Masaki+Saruta+Toyota+Way). Productivity Press. p. 65. Retrieved
29 January 2014.
10. "Relations with Employees"(http://www.toyota-global.com/sustainability/csr_initiatives/stakeholders/employees/index
3.html). Toyota Motors. Retrieved 29 January 2014.
11. "Toyota Code of Conduct"(http://www.toyota.dk/Images/ToyotaCodeOfConduct_tcm200-635681.pdf)(PDF). Toyota
Motor Europe. October 2006. Retrieved 29 January 2014.
12. Stanford, Naomi (2013).Corporate culture: getting it right(https://books.google.com/books?id=nrYWDniU9X8C&pg=
PA130&lpg=PA130&dq=Atkins+noted+wryly+that+the+T oyota+Way+of+constructive+criticism+to+reach+a+better+w
ay+of+doing+things+“is+not+always+received+in+good+spirit+at+home%22) . Wiley. p. 130. ISBN 9781118163276.
Retrieved 29 January 2014.
13. Tseng, Nin-Hai (10 March 2010)."Can the Toyota Way survive Toyota's ways?" (http://money.cnn.com/2010/03/10/au
tos/toyota_way.fortune/?section=magazines_fortune). CNN Money. Retrieved 29 January 2014.
14. Ordonez, Edward (1 December 2010)."When the Toyota Way Went Wrong" (http://www.rmmagazine.com/2010/12/0
1/when-the-toyota-way-went-wrong/). Risk Management. Retrieved 29 January 2014.
15. "Hearing before the Committee on Oversight and Government Reform:oyota
T gas pedals: is the public at risk"(htt
p://www.gpo.gov/fdsys/pkg/CHRG-111hhrg58346/html/CHRG-111hhrg58346.htm). U.S. Government Printing Office,
Serial No. 111-75. 24 February 2010. Retrieved 29 January 2014.
16. Harden, Blaine (13 February 2010)." 'Toyota Way' was lost on road to phenomenal worldwide growth"(https://www.
washingtonpost.com/wp-dyn/content/article/2010/02/12/AR2010021205371.html) . The Washington Post. Retrieved
29 January 2014.
17. Harrison, Denise. "Success Sows the Seeds of Failure - T
oyota's Complacency Causes Reputation to Crash"(http://
www.cssp.com/CD0310b/SuccessSowsSeedsOfFailure/). Center for Simplified Strategic Planning. Retrieved
29 January 2014.
18. Choudhury, Uttara (10 April 2010)."Jugaad enters management jargon"(http://www.dnaindia.com/opinion/interview_
jugaad-enters-management-jargon_1369496) . DNA India. Diligent Media Corporation. DNA. Retrieved 26 March
2012.
Further reading
Hino, Satoshi (2005). Inside the Mind of Toyota: Management Principles for Enduring Growth. Productivity Press.
ISBN 978-1-56327-300-1.
Liker, Jeffrey K.; Meier, David (2005). The Toyota Way Fieldbook: A Practical Guide for Implementing o
Tyota's 4Ps.
McGraw-Hill. ISBN 978-0-07-144893-2.

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