14 Management Principles in TOYOTA

Principle 1: Take your management decision based long term philosophy; even thought it must scarifying short term financial purposes.

The principle is telling about that the important factors to achieve success is being patient, focus on long term achievement and not for a short term achievement, re-invest to the peoples, product, and factory ,and also a non-requirement commitment to the quality. Toyota has a constant commitment which is do the right thing for the company, employees, costumers and society as a whole. The deep understanding of mission and commitment toward the consumer, employees and society is a foundation to the other principles.

Principle 2: Create a continuously flow process to raising the problem to the surface.

This principle is telling about the perfect beginning to every company to start their journey to the lean organization by creating a continuously flow than can be implemented anywhere. Flow process is a core of lean organization, which is by reducing the needed time for a material becoming a finish product (or service) will resulting the best quality, minimum cost and a shortest shipping time. In a lean organization, there is a parable that reducing “ the water surface level “ from the stock ( like a coral in the sea ) will raise the problem to the surface and you must deal with the problem or you will be sinking. So, the creating of the flow process, whether it is information or material, decreasing the water surface level and trace the inefficiency that need an urgent solving. Every person that connected with the problem will motivate to solve the problem and the inefficiency immediately because the process will be stop if they did not do anything.

Principle 3: Use a “Pull system” to avoid an excessive production.

This principle is telling about that TOYOTA was thinking to pull the supply based on the present costumer demand. Not based on the push system that anticipates the costumer demand. In Toyota, “Pull” means an ideal status from just in time production system; gave a costumer (that maybe a next production process step ) what they wants, when they wants, and in the correct amount that they wants. So they are reducing the amount of inventory as a result of an excessive production.

Principle 4: Distribute evenly the working pressure (Heijunka)

In Toyota Production System (TPS), they distribute evenly their production. This thing is become the responsibilities of production control people and production management. Distribute evenly the production schedule maybe need to do the earlier shipping or late shipping and maybe they need to ask the consumer to wait in a short period of time. After the level of production was constant in a month, they can implement the pull system and balancing the assembly line.

In Toyota, there is 3M that need to be erased. The 3M are:

Ø Muda-Not give an addition value. This is non advantages activities that longer the lead time, that creating an additional movement to get the component or tool, create an excessive inventory, or resulting in any kind lead time.

Ø Muri-Give an excessive burden to people or tool. Muri is utilizing machines or people outside the capability of those machines or people.

Ø Mura-Unbalancing. The unbalancing occur because there is an un-schedule production scheduling or the fluctuation of production volume because of the internal matter, like the machines breakdown, or defect product.

Principle 5: Build a stop culture to fixing the problem, in order to achieve a good quality since the beginning

In this chapter tells about how we need to find a method t recognizing the defect when it happens, and automatically stop the production, so the worker can fix the problem before the defect product was send to the next process. This is where the idea as Jidoka results. Jidoka is sometimes called autonomation, it is a tool that fulfilled by a human intelligential to stop themselves when they meet a problem. Quality in a process (preventing problem for continue to the next process) is more effective and cheaper than check and fix the quality problem that already exist.

Principle 6: Working standardize become a foundation to continuously develop and utilizing the worker

The Toyota standard has a bigger role in just making the task of the factory floor worker continuously and repeated. Toyota produced a work standard in every work processing in the company, like engineering. Every people in the company realize the importance of the standardizing and implementing it. The work standardizing is also a facilitator key in developing a quality. Because, if the worker done the work standard but the defect product as still exist, then the standard need to be modified.

Principle 7: Use a visual control so there are no hiding problems

The visual control is the ability to see the abnormality. The principle s cleaning, and let it can be seen. In Toyota Japan, there are “5S Program” that coverage the activities to disappearing the mistake, defect, and accident in a work place. The famous 5S are:

Ø Seiri (choosing)- choose things and keep only what being needed and put away the unnecessary things

Ø Seiton (arrange)- Every things are has a place and every things must be on its place.

Ø Seiso (cleaning) – The cleaning process often in a kind of checking that raise an abnormality and condition before the mistakes that can give a bad effect to quality or damaging the machine occurs.

Ø Seiketsu (create a rule)- Develop a system and procedure to struggle and monitoring the previous 3S above.

Ø Shitsuke (self disciplining)- Keep the workplace stable is a continuous process

Principle 8: Use only a great technology that already being tested to help peoples and your process

The principle is, the new adoption of a new technology must support the people, process and values in the company. In Toyota, the new technology only will be introduced if the benefits of the new technology have been directly proven toward experiment by a bunch of people or department.

Principle 9: Develop a leader that really understand they job, soul the philosophy and teach it to other person

The principle is they develop their leader, not buying them. So, it is un-doubtful that the leadership culture in Toyota was build based on characteristics, values, and experiences from the Toyoda family, the pioneer of Toyota. The characteristics are, in one side, the leader can lead from a top-down or use a interrelation from bottom-up to develop person so the person can think and made a right decision. In other side, the leader of Toyota has a combination from the deepest definition of their job and ability to develop, guidance, and lead people, respected because their technical knowledge and also followed because of their ability in guiding.

Principle 10: Develop peoples and groups that having a special ability and take a philosophy of your company

The principle is about developing a good individual work while promoting an effective team work. Toyota has built a good balance between individual work and team work and also between qualified individual workers with an effective team. Because a team work is important, grouping the individual into 1 team can cover the disability of the individual or un-understanding about Toyota system. Toyota assumption is if one individual working together in a team company foundation, each of the workers will give them heart and soul to the successful of the company.

Principle 11: Respect your partnership link and supplier by giving a challenge and help them to improve themselves

The principle is about finding the solid partner and develops together for the sake of gaining advantages for the both sides in a long term. Sometimes, Toyota give a challenge to their partner to improve their ability and capability, so it can improve the work performance of both company. They learn together, they develop together, and thy success together.

Principle 12: Go and look by yourself to understand the real situation (Genchi Genbutsu)

The principle is about deeper understanding and report what they have just seen. The first step from every problem solving, development of a new product, or evaluating the worker’s performance is gathering the data about what is the real situation that strive for “ go to the real place”. Toyota is promoting and hoping a creative idea, and innovation. But that must be come out based on the full understanding of the real problem. They did not accept just the way it is, but they must know what they are talking about, because its all come from the direct observation and knowledge learning.

Principle 13: Make a decision step by step through a consensus, considering every choice clearly, and then implement the decision very quickly

The principle explains here is about deeper considering before making a decision. For Toyota, how we can arrived on a decision is as important with the quality of the decision it self. Spending time and efforts to done it right is an obligation.

The main considerations in making a decision are:

Ø Finding what is the real things that happened, included in genchi genbutsu

Ø Understand the basic cause that explains the things on the surface-asking “why?” 5 times.

Ø Considering the alternatives decision and develop more detail explanation for the decision that being choose.

Ø Develop a consensus in a team, including Toyota employees and partner from outside Toyota.

Ø Use a communication tool that very efficient to done the first until fourth element above.

Principle 14: Become a learning organization through a self reflection without a compromise (Hansei) and continuously improves (Kaizen)
The principle is about identifying the root causing problem and develop the preventing action. Toyota was oriented on the process, and aware through a mature consideration investing in a long term on a system that consist of employees, technology and process that working together to give a value to the consumer. The philosophy of Toyota and Toyota experienced supporting their faith that if Toyota focusing on the process and a continuous improvement, Toyota will gain an expected maximum financial.