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Thursday, January 21, 2010

2 Toyota Principles

Having researched the auto industry for several years culminating with a 170+ page MBA thesis (The Hybrid Phenomenon) that exceed expectations by boiling down 1,000 pages of research into publication (The Futurist) after a three year investment that included visiting a Toyota production line in the USA and talking to end users in Japan...

I have boiled Toyota (including lean) down to a few basic principles:

TOYOTA PRINCIPLE 1
The first is that Toyota is NOT a car company in an industry full of struggling car companies.

Toyoda started out as a loom copmany, so it's DNA started with a very simple high volume low defect rate production system. Manufacturing was simple, few moving parts with empowered machine operator.

The founder's son I believe, started Toyota. He ventured into cars because of his passion. But in Japan, sons almost always obey and respect elders, especially fathers, so the DNA of duplicating simple materials with a low defect rate were transferred to the new subsidiary.

Even Today, almost all of Toyota's car products look similar. For example the shape of the Camry, Corolla and Prius noses share the same lines.

So from the old school Toyoda non-car company DNA, I believe lean was inherited from a simple loom (few moving parts) producing a high volume amount of cloth with almost no defects. A very simple, yet automated process with few moving parts and an operator that stopped the machine anytime a problem arose...

TOYOTA PRINCIPLE 2
After visiting NUMMI for a factory tour, my second principle became crystal clear. Aside from all the details that follow Japan's DNA of kaizen, Toyota's production line had one SIMPLE process that differed from anything in any production line, let alone the world's largest business (auto and realted industries).

ANY employee, team member, manager, temp, etc. had the ability to STOP THE PRODUCTION LINE for ALMOST ANY RELATIVE REASON!!!

When each second could cost the parent company millions of dollars, why would Toyota build in this stop safe into the world's leading production line?

Let's go back to the loom company (Toyoda) that Toyota really is. Think of machines weaving cloth run by one worker each. When a defect or accident occurred, every yard or meter of cloth thereafter would be ruined. In other words Toyoda, decades before Toyota, learned that stopping the production process immediately yielded higher quality in the longer run.

After all, if anything interfered with the production of a material, it was naturally apparent via the human eye. Lean relies on the operators.

I believe that lean is a HUMAN PROCESS OPPOSING the view of much of the literature and comments above that treat lean as a system of machines and processes.

I disagree with the Western's interpretation of
"lean" and "waste" and "continuous improvement"
from my decade long analysis of the auto industry
and years living in and researching Japan on the ground
as well as visiting NUMMI's production line!

SUMMARY
If you want lean, give ANY team member, worker, temp,
employee, partner, supplier, downstream customer, etc.
THE ABILITY TO SHUT DOWN YOUR OPERATIONS
SO THAT YOU LOSE REVENUES IN THE SHORT RUN
in exchange for continous change (literal translation of kaiken)
and an acceptance of mistakes for higher quality in the long run.


ACHESON'S TOYOTA FORMULA

empowering everyones' mistakes

-

rewarding short term revenue loss

+

acceptance of continuous change
(not necessarily improvement)

=

LEAN

defined by John Acheson as

"holistic organizational viability"
that values internal and external members
while empowering inwards and delivering
highest quality utility outwards!!!

by John Acheson, CEO, MBA
Author of the Hybrid Phenomenon
www.johnacheson.blogspot.com

PS Did you know???

The Toyota brand is over 500 different companies including a few that build and sell houses in Japan???

2 comments:

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Anonymous said...

Good day, sun shines!
There have were times of hardship when I didn't know about opportunities of getting high yields on investments. I was a dump and downright pessimistic person.
I have never thought that there weren't any need in big initial investment.
Nowadays, I feel good, I begin take up real money.
It gets down to select a proper companion who uses your money in a right way - that is incorporate it in real business, parts and divides the income with me.

You may ask, if there are such firms? I'm obliged to answer the truth, YES, there are. Please be informed of one of them:
http://theinvestblog.com [url=http://theinvestblog.com]Online Investment Blog[/url]

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