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TOYOTA BUSINESS PRACTICES Overview

TOYOTA BUSINESS PRACTICES Overview. Outcome of TBP. TBP Provides Growth & Satisfaction. TOYOTA. Toyota Members. Business Partners. Combining our efforts and attaining mutual growth. Mutual trust through successful business. Achieving greater challenges Sharing the accomplishments

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TOYOTA BUSINESS PRACTICES Overview

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  1. TOYOTA BUSINESS PRACTICESOverview

  2. Outcome of TBP TBP Provides Growth & Satisfaction TOYOTA Toyota Members Business Partners Combining our efforts and attaining mutual growth Mutual trust through successful business • Achieving greater challenges • Sharing the accomplishments • Growing together • Achieving long-term prosperities • Sharing the accomplishments • Growing together Ourselves Personal growth and accomplishment • Possessing a strong desire to succeed and a drive for continual improvement • Seeing a project through to the end • Continual growth

  3. Outcome of TBP TBP Provides Growth & Satisfaction Society and Our Customers The satisfaction of having the best products and services available TOYOTA The satisfaction of steady company growth and prosperity Toyota Members Business Partners Combining our efforts and attaining mutual growth Mutual trust through successful business Ourselves Personal growth and accomplishment

  4. Toyota Global Content Long-term prosperity and growth as an organization (Individual:Feeling sense of achievements/growth） OJD OJD P P A A D D OJD Hoshin Kanri Hoshin Kanri C C OJD P P OJD P P OJD A A D D A A D D C C C C P P P P P P A A D D A A D D A A D D C C C C C C Toyota Way Toyota Way P P A A D D C C P P P P P A A D D A D A D A D C C C C C P P P P P A D A D A A D D A D C C C C C

  5. How to Practice TW P P P P P P P P P P A A A A A A A A A A D D D D D D D D D D C C C C C C C C C C Sales Admin Manufacturing R&D President VP/GM Manager Specialist Every Function Every Job Title / Grade

  6. 1. Overall Image of TBP P D C A • TBP consists of: • 8 Steps (Concrete Actions & Processes) • Drive & Dedication Drive & Dedication Concrete Actions & Processes 1. Clarify the Problem 2. Break Down the Problem 3. Set a Target 4. Analyze the Root Cause 5. Develop Countermeasures 6. See Countermeasures Through 7. Evaluate Both Results and Processes 8. Standardize Successful Processes • Customer First • Always Confirm the Purpose of Your Work • Ownership & Responsibility • Visualization (MIERUKA) • Judgment Based on Facts • Think and Act Persistently • Speedy Action in a Timely Manner • Follow Each Process with Sincerity and Commitment • Thorough Communication • Involve All Stakeholders TBP Actions ToyotaWay Values Evaluate

  7. 2. Toyota Way 2001 Respect for People Continuous Improvement Challenge Form a long term vision, meeting challenges with courage and creativity to realize our dreams. Kaizen We improve our business operations continuously, always driving for innovation and evolution. Genchi Genbutsu Practice Genchi Genbutsu......go to the source to find the facts to make correct decisions, build consensus and achieve goals at our best speed. Respect Respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust. Teamwork Stimulate personal and professional growth, share the opportunities of development and maximize individual and team performance.

  8. 2. Drive & Dedication Drive & Dedication: • Motivational Guideline • Mind-set Based on the Toyota Way • Ex: Breakdown (Step 2) & Genchi Genbutsu etc…

  9. 2. Drive & Dedication 1. Customer First 2. Always Confirm the Purpose of Your Work 3. Ownership and Responsibility 4. Visualization (Mieruka) 5. Judgment Based on Facts 6. Think and Act Persistently 7. Speedy Action in a Timely Manner 8. Follow Each Process with Sincerity and Commitment 9. Thorough Communication 10. Involve All Stakeholders

  10. 4. Definition of Problem in Toyota What does “Problem” mean to you?

  11. 4. Definition of Problem in Toyota “No one has more trouble than the person who claims to have no trouble.” (Having no problems is the biggest problem of all.) Taiichi Ohno Problems are golden eggs for KAIZEN At Toyota… • “Problem” is not a negative word. • Problems are disguised KAIZEN. • We need to aggressively uncover them.

  12. 4. Definition of Problem in Toyota Ideal Situation Gap = Problem Current Situation Definition of “Problem”

  13. 4. Definition of Problem in Toyota (Future) Ideal Situation GAP “Setting” Type of Problem Normal Status Acceptable (Current) Ideal Situation GAP Current Situation Types of Problems “Event” Type of Problem

  14. 3. TBP 8 Steps Overview Plan Do Check Act Step 1.Clarify the Problem Step 2.Break Down the Problem Step 3.Target Setting Step 4.Root Cause Analysis Step 5.Develop Counter-measures Step 6.See Counter-measures Through Step 7.Evaluate Both Results & Processes Step 8. Standardize SuccessfulProcesses

  15. Step 1: Clarify the Problem Step 1. Clarify the Problem 8 STEPS PROCESSES 1. Clarify the Ultimate Goal of your responsibilities & work 2. Clarify the Ideal Situation and Current Situation of your work 3. Visualize the gap between the Current Situation and the Ideal Situation Step 2. Break Down the Problem 1. Break down the problem 2. Prioritize the broken down problems 3. Specify the Point of Occurrence by checking the process through GENCHI GENBUTSU 1. Make a commitment 2. Set measurable, concrete, and challenging targets Step 3.Target Setting 1. Examine the Point of Occurrence and think of possible causes without any prejudice 2. Gather facts through GENCHI GENBUTSU and keep asking “Why?” 3. Specify the root cause Step 4.Root Cause Analysis 1. Develop as many potential countermeasures as possible 2. Select the highest value-added countermeasures 3. Build consensus with others 4. Create a clear and concrete action-plan Step 5.Develop Countermeasures

  16. Step 1: Clarify the Problem ～ Making ambiguous problems clear ～ Ultimate Goal contribution Am I actually contributing to the ultimate goal? Ideal Situation What is the Ideal Situation? Problem Gap Current Situation Visualization(Make Explicit)

  17. Step 1: Clarify the Problem My Work & Responsibilities Draft Blueprints Design Production Lines Select Parts to Purchase Design Production Plans Create Sales & Marketing Campaigns Issue and Collect Payments Step 1 (1): Clarify the “Ultimate Goal” of your responsibilities & work Toyota’s Goal: To provide the satisfaction from our products and services to societies and our customers The Goals That Guide My Job’s Purpose To provide customers with highly functional and high-quality cars at reasonable prices To improve customers lives through Toyota automobiles To produce the best products and services at fair prices My Job’s Purpose To build the best automobiles To sell lots of automobiles To correctly settle all accounts To produce without mura, muri & muda* To build the most efficient production lines To acquire the best parts at the best prices Department ⇒ 【Research &Development】 【Engineering】 【Procurement】 【Production】 【Sales】 【Finance】 The “Ultimate Goal” of your work should be connected to Toyota’s Ultimate Goal.

  18. Julie is supervising the assembly line which equips auto parts to the car models A, B & C. Her assignment is to supervise and to make sure the quality of both interior and exterior of the cars before proceeding to the next assembly line. She recently realized that the (exterior) scratches on the cars have increased to around 3%. [For the past 6mths the line has had 0 defects] Step 1: Clarify the Problem Example 1. Julie Case

  19. Step 1: Clarify the Problem Example 1. Julie Case 【Ultimate Goal】 To provide customers with high quality vehicles in a timely manner at a low cost 【Ideal Situation】 The exterior scratches on the vehicles should be less than 0% 【Problem】 3% increase in scratches found on vehicles 【Current Situation】 The exterior scratches on the vehicles have increased to 3%

  20. Step 2: Break Down the Problem Step 1. Clarify the Problem 8 STEPS PROCESSES 1. Clarify the Ultimate Goal of your responsibilities & work 2. Clarify the Ideal Situation and Current Situation of your work 3. Visualize the gap between the Current Situation and the Ideal Situation Step 2. Break Down the Problem 1. Break down the problem 2. Prioritize the broken down problems 3. Specify the Point of Occurrence by checking the process through GENCHI GENBUTSU 1. Make a commitment 2. Set measurable, concrete, and challenging targets Step 3.Target Setting 1. Examine the Point of Occurrence and think of possible causes without any prejudice 2. Gather facts through GENCHI GENBUTSU and keep asking “Why?” 3. Specify the root cause Step 4.Root Cause Analysis 1. Develop as many potential countermeasures as possible 2. Select the highest value-added countermeasures 3. Build consensus with others 4. Create a clear and concrete action-plan Step 5.Develop Countermeasures

  21. Step 2: Break Down the Problem ～ Break down the problem and clarify the Point of Occurrence based on facts～ Large / Vague Problem Break down what? where? when? who? Problem Problem Problem Break down Prioritize Problem Problem Problem Problem Prioritized Problem Problem Problem the problem See the Process (GENCHI GENBUTSU) Point of Occurrence

  22. Step 2: Break Down the Problem Step 2 (1). Break Down the Problem Large / Vague Problem Break down Think in what? where? when? who? Problem Problem Problem Break down Prioritize the problem Problem Problem Problem Problem Problem Problem Problem

  23. Step 2: Break Down the Problem Example 1. Julie Case <Step2 (1)> WHERE are most of the scratches are found? WHAT type of scratches are found? At WHAT TIME are the cars with scratches made?

  24. Narrow Down the Problem 3% increase in scratches found on vehicles <WHERE> Bonnet (0.02%) Front Bumper (0.06%) Roof (0.02%) Back (0.3%) L Front Door (top) (0.3%) L Front Door (bottom) (1.4%) L Rear Door (top) (0.3%) L Rear Door (bottom) (0.6%) <WHAT> Long Scratch (1.1%) Deep Scratch (0.1%) Shallow Scratch (0.2%) <WHEN> Morning Shift (0.1%) Afternoon Shift (1.0%)

  25. Step 2: Break Down the Problem Level of Importance Priority Items Level of Urgency Potential for Expansion Step 2 (2). Select the Prioritized Problem Problem How to select the prioritized problem from this point? Problem Problem Problem No! Is this enough to proceed to the next step????

  26. Narrow Down the Problem 3% increase in scratches found on vehicles <WHERE> Bonnet (0.02%) Front Bumper (0.06%) Roof (0.02%) Back (0.3%) L Front Door (top) (0.3%) L Front Door (bottom) (1.4%) L Rear Door (top) (0.3%) L Rear Door (bottom) (0.6%) <WHAT> Long Scratch (1.1%) Deep Scratch (0.1%) Shallow Scratch (0.2%) <WHEN> Morning Shift (0.1%) Afternoon Shift (1.0%)

  27. Step 2: Break Down the Problem Point of Occurrence Step 2. (3) Specify the point of occurrence by checking the process through GENCHI GENBUTSU Where does the problem occur? Check the process throughGENCHI GENBUTSU

  28. Step 2: Break Down the Problem No scratches scratches present scratches present scratches present No scratches Trace back Trace back Trace back Trace back Trace back Problem Perception Point of Occurrence Go & see the process. Which process? Where? Point of Occurrence Example 1. Julie Case <Step2 (3)> Julie found the scratches at Section 3 with Genchi Genbutsu Assembly (Job) Flow scratches discovered

  29. Step 2: Break Down the Problem Example 1. Julie Case Prioritized Problem at the Point of Occurrence: 1/3 of the scratches on the vehicles produced in the afternoon, that are found on the bottom part of the left doors, are made in the Section 3 in the assembly line.

  30. Step 3: Target Setting Step 1. Clarify the Problem 8 STEPS PROCESSES 1. Clarify the Ultimate Goal of your responsibilities & work 2. Clarify the Ideal Situation and Current Situation of your work 3. Visualize the gap between the Current Situation and the Ideal Situation Step 2. Break Down the Problem 1. Break down the problem 2. Prioritize the broken down problems 3. Specify the Point of Occurrence by checking the process through GENCHI GENBUTSU 1. Make a commitment 2. Set measurable, concrete, and challenging targets Step 3.Target Setting 1. Examine the Point of Occurrence and think of possible causes without any prejudice 2. Gather facts through GENCHI GENBUTSU and keep asking “Why?” 3. Specify the root cause Step 4.Root Cause Analysis 1. Develop as many potential countermeasures as possible 2. Select the highest value-added countermeasures 3. Build consensus with others 4. Create a clear and concrete action-plan Step 5.Develop Countermeasures

  31. Step 3: Target Setting ～ With enthusiasm and commitment set challenging target. The target should be measurable ～ Target Target should be quantitative, concrete and challenging Targets should not be what to do • How Much? • By When? Prioritized Problem at the Point of Occurrence

  32. Step 3: Target Setting Step 3 (2). Set measurable, concrete, and challenging targets ■ Sufficient & efficient breakdown will let us set targets that are measurable ■ Write targets in an “output” form including “by when” and “how much”⇒concrete targets ■ Challenging targets let us grow in the long-term Set the target which will eliminate the problem at the point of occurrence

  33. Step 3: Target Setting Example 1. Julie Case <Target> By the end of this month, eliminate all scratches on the bottom part of the left doors of the vehicles produced in the afternoon in the Section 3. <Prioritized Problem> 1/3 of the scratches on the vehicles produced in the afternoon, that are found on the bottom part of the left doors, are made in the Section 3 in the assembly line.

  34. Step 4: Root Cause Analysis Step 1. Clarify the Problem 8 STEPS PROCESSES 1. Clarify the Ultimate Goal of your responsibilities & work 2. Clarify the Ideal Situation and Current Situation of your work 3. Visualize the gap between the Current Situation and the Ideal Situation Step 2. Break Down the Problem 1. Break down the problem 2. Prioritize the broken down problems 3. Specify the Point of Occurrence by checking the process through GENCHI GENBUTSU 1. Make a commitment 2. Set measurable, concrete, and challenging targets Step 3.Target Setting 1. Examine the Point of Occurrence and think of possible causes without any prejudice 2. Gather facts through GENCHI GENBUTSU and keep asking “Why?” 3. Specify the root cause Step 4.Root Cause Analysis 1. Develop as many potential countermeasures as possible 2. Select the highest value-added countermeasures 3. Build consensus with others 4. Create a clear and concrete action-plan Step 5.Develop Countermeasures

  35. Step 4: Root Cause Analysis Repeat Not a fact Not a fact Not a fact Fact Not a fact Not a fact Fact Not a fact Fact ～ In order to find the root cause, thoroughly investigate the Prioritized Problem at the Point of Occurrence ～ Prioritized Problem at the Point of Occurence Think the possible cause Possiblecause Possiblecause Possiblecause Possiblecause Check whether it is a fact or not Confirm facts, and if there’s no cause-and-result sequence in the cause, stop asking “WHY?”. Possiblecause Possiblecause Possiblecause Possiblecause Possiblecause Root cause Countermeasure

  36. Step 4: Root Cause Analysis Prioritized Problem at the Point of Occurence Possiblecause Possiblecause Possiblecause Possiblecause Not a fact Not a fact Not a fact Fact Possiblecause Possiblecause Possiblecause Not a fact Not a fact Fact Possiblecause Possiblecause Root cause Not a fact Fact Checklist: □ Look at the causes horizontally on the treeCheck for thoroughness and non-redundancy. □Do not allow root causes to be easily defined by a human factor ie: attitude and motivation. □ Look at the causes vertically and check for causal relationships Ask: X happens because of Y Y happens because of Z, etc…

  37. EX2. Mr. Ohno’s Robot Case Step 4: Root Cause Analysis Welding Robot stops in the middle of its operation Why did the robot stop? A fuse in the robot has blown Why is the fuse blown? Circuit overloaded Why is the circuit overloaded? The bearings have damaged one another and locked up

  38. Step 4: Root Cause Analysis EX2. Mr. Ohno’s Robot Case Why have the bearings damaged one another? There was insufficient lubrication on the bearings Why was there insufficient lubrication on the bearings? Oil pump on robot is not circulating sufficient oil Why is the pump not circulating sufficient oil? Pump intake is clogged with metal shavings Why is the intake clogged with metal shavings? No filter on pump intake (as designed) (Root Cause)

  39. Step 4: Root Cause Analysis GENCHI GENBUTSU Example 1. Julie Case: Start with “WHY” 1/3 of the scratches on the vehicles produced in the afternoon, that are found on the bottom part of the left doors, are made in the Section 3 in the assembly line. Staff Machine Environment Staff’s abilities are poor Facilities are not appropriate Staff’s work methods are not appropriate = TM’s (John’s) belt buckle scratched vehicles! Work clothes are inappropriate Work instructions are poor

  40. Step 5: Develop Countermeasures Step 1. Clarify the Problem 8 STEPS PROCESSES 1. Clarify the Ultimate Goal of your responsibilities & work 2. Clarify the Ideal Situation and Current Situation of your work 3. Visualize the gap between the Current Situation and the Ideal Situation Step 2. Break Down the Problem 1. Break down the problem 2. Prioritize the broken down problems 3. Specify the Point of Occurrence by checking the process through GENCHI GENBUTSU 1. Make a commitment 2. Set measurable, concrete, and challenging targets Step 3.Target Setting 1. Examine the Point of Occurrence and think of possible causes without any prejudice 2. Gather facts through GENCHI GENBUTSU and keep asking “Why?” 3. Specify the root cause Step 4.Root Cause Analysis 1. Develop as many potential countermeasures as possible 2. Select the highest value-added countermeasures 3. Build consensus with others 4. Create a clear and concrete action-plan Step 5.Develop Countermeasures

  41. Step 5: Develop Countermeasures Temporary Measures vs. Countermeasures

  42. Temporary Measure vs. Countermeasure • Temporary Measure • To solve an existing undesirable situation, or bring a situation back to its original state for a set period of time • Can not fix the root cause • May not last for long, the problem may arise again • Countermeasure • Will eliminate the root cause and, • Solve the prioritised problem at the point of occurrence • Prevent the problem from reoccurrence

  43. Step 5: Develop Countermeasures ～Broadly considering all stakeholders and risks involved, develop countermeasures with the highest added-value ～ Proposal Proposal What are therisks involved? Framework of Preconceived Ideas Framework of own Responsibilities Proposal Root Cause CountermeasureProposal Can We Get Rid of it? What people or parties are involved? Proposal Proposal Proposal

  44. Step 5: Develop Countermeasures (2). Narrow down the countermeasures to the most practical and effective Establish priorities with respect to: ■ Benefits ■ Manpower / Cost ■ Risks

  45. Step 6: See Countermeasures Through Step 6.See Countermeasures Through PROCESSES 8 STEPS 1.With united efforts, implement countermeasures with speed and persistence 2.Share information with others by informing, reporting and consulting 3.Never give up in seeking to eliminate the root cause Step 7.Evaluate Both Results and Processes 1.Evaluate the results and the processes and share it with members involved 2.Evaluate from three key perspectives: Customer’s, Toyota’s, and Your Own 3. Understand the reasons of success and failure Step 8.Standardize Successful Processes 1. Set successful processes as new standards 2. Share the new standard (YOKOTEN) 3. Start the next round of KAIZEN

  46. Step 6: See Countermeasures Through ～ Speedy action together as a team Never give up and act persistently ～ Never give up and act persistently Speedy action Together as a team Timely Reporting, Informing,Consulting Proper Checking

  47. Step 7: Evaluate Both Results & Processes Step 6.See Countermeasures Through PROCESSES 8 STEPS 1.With united efforts, implement countermeasures with speed and persistence 2.Share information with others by informing, reporting and consulting 3.Never give up in seeking to eliminate the root cause Step 7.Evaluate Both Results and Processes 1.Evaluate the results and the processes and share it with members involved 2.Evaluate from three key perspectives: Customer’s, Toyota’s, and Your Own 3. Understand the reasons of success and failure Step 8.Standardize Successful Processes 1. Set successful processes as new standards 2. Share the new standard (YOKOTEN) 3. Start the next round of KAIZEN

  48. Step 7: Evaluate Both Results & Processes • Evaluate both results and processes and learn from both success and failure - What wasthe process? What was the result? In terms of the goal, how was the outcome? Assessment Assessment Assessment From the Customer’s Viewpoint From Toyota the Company’s Viewpoint From Your Own Personal Viewpoint • Evaluate the overall results, and the processes used, then share the evaluation with involved members • Evaluate from the three key viewpoints: Customer’s, Toyota’s, and Your Own • Understand the factors behind the success or failure

  49. Step 7: Evaluate Both Results & Processes Evaluate the results Evaluate whether or not the target was achieved Achieved Not achieved Target Result Target Result

  50. Step 7: Evaluate Both Results & Processes Evaluate the processes What was most effective? Equipment modification Change material Change the order of processes

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