Copyright 2007 TOYOTA INSTITUTE, Toyota Motor Corporation (Internal Use Only) TOYOTA BUSINESS PRACTICES Overview

Copyright 2007 TOYOTA INSTITUTE, Toyota Motor Corporation (Internal Use Only)

TOYOTA BUSINESS PRACTICESTOYOTA BUSINESS PRACTICESOverviewOverview

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TBP Provides Growth & SatisfactionTOYOTA

Toyota MembersCombining our efforts and attaining

mutual growth

Achieving greater challenges Sharing the accomplishments Growing together

Business PartnersMutual trust through successful business

Achieving long-term prosperities Sharing the accomplishments Growing together

OurselvesPersonal growth and accomplishment

Possessing a strong desire to succeed and a drive for continual improvement Seeing a project through to the end Continual growth

Outcome of TBP

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Society and Our Customers

TOYOTA

Toyota Members Business Partners

Ourselves

TBP Provides Growth & Satisfaction

The satisfaction of having the best products and services available

The satisfaction of steady company growth and prosperity

Combining our efforts and attaining mutual growth

Mutual trust through successful business

Personal growth and accomplishment

Outcome of TBP

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Toyota Global Content

Long-term prosperity and growth as an organization (Individual:Feeling sense of achievements/growth ）

Toyota Way

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Toyota Way

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Hoshin KanriHo

shin

Kan

ri OJDOJDOJ

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OJD

OJD

OJD

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Sales Admin Manufacturing R&D

President

Manager

VP/GM

Specialist

Every Job Title / GradeEvery Job Title / Grade

How to Practice TW

Every FunctionEvery Function

PD

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1. Overall Image of TBP

Evaluate

TBP consists of:• 8 Steps (Concrete Actions &

Processes)• Drive & Dedication

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

Concrete Actions & 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

Drive & Dedication

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TBP

Toyota WayValues

Actions

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2. Toyota Way 2001

Respect for People

RespectRespect others, make every effort to understand each other, take responsibility and do our best to build mutual trust.

TeamworkStimulate personal and professional growth, share the opportunities of development and maximize individual and team performance.

ChallengeForm a long term vision, meeting challenges with courage and creativity to realize our dreams.

KaizenWe improve our business operations continuously, always driving for innovation and evolution.

Genchi GenbutsuPractice Genchi Genbutsu......go to the source to find the facts to make correct decisions, build consensus and achieve goals at our best speed.

Continuous Improvement

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Drive & DedicationDrive & Dedication:

Ex: Breakdown (Step 2) & Genchi Genbutsu etc…

• Motivational GuidelineMotivational Guideline

• Mind-setMind-set

Based on the Toyota WayBased on the Toyota Way

2. Drive & Dedication

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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 Commitment9. Thorough Communication

10. Involve All Stakeholders

2. Drive & Dedication

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4. Definition of Problem in Toyota

What does “Problem” mean to you?

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Problems are golden eggsgolden eggs for KAIZEN

•“Problem” is not a negative word.

•Problems are disguised KAIZEN.

•We need to aggressively uncover them.

At Toyota…


“No one has more troublethan the person who claims to have no trouble.”(Having no problems is the biggest problem of all.)

Taiichi Ohno

“No one has more troublethan the person who claims to have no trouble.”(Having no problems is the biggest problem of all.)

Taiichi Ohno

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Definition of “Problem” of “Problem”

IdealSituation

Current Situation

Gap = Problem


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Types of Problems

““Event” Type of ProblemEvent” Type of ProblemGAP

Acceptable (Current) Ideal Situation

Current Situation

Normal Status

(Future) Ideal Situation

GAP ““Setting” Type of Setting” Type of ProblemProblem


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3. TBP 8 Steps Overview

Step 6.See

Counter-measures Through

Step 7.Evaluate Both

Results & Processes

Step 8. Standardize SuccessfulProcesses

Step 5.Develop Counter-measures

Step 4.Root Cause

Analysis

Step 3.Target Setting

Step 2.Break Down the Problem

Step 1.Clarify the Problem

ActCheckDoPlan

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Activity

• For the TBP Step you are assigned, list;– Important points to remember when

applying this step– Common mistakes people make when

applying this step– One piece of advice you would give to

others to apply this step well

• You have 15 minutes

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Step 1: Clarify the Problem8 STEPS PROCESSES



1. Make a commitment2. Set measurable, concrete, and challenging targets

1. Clarify the Ultimate Goal of your responsibilities & work2. Clarify the Ideal Situation and Current Situation of your work3. Visualize the gap between the Current Situation and the Ideal Situation

1. Break down the problem2. Prioritize the broken down problems3. Specify the Point of Occurrence by checking the process through GENCHI

GENBUTSU

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 possible2. Select the highest value-added countermeasures3. Build consensus with others4. Create a clear and concrete action-plan

Step 5.Develop

Countermeasures

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Step 1: Clarify the Problem

～ Making ambiguous problems clear ～

Ultimate Goal

Ideal SituationIdeal Situation

Current SituationCurrent Situation

ProblemProblemProblemProblemGapGap

Visualization(Make Explicit)

contribution

What is the Ideal

Situation?

Am I actually

contributing to the

ultimate goal?

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Department ⇒

To produce the best products and

services at fair prices

【 Research &Development 】

【 Engineering】【 Procurement 】【 Production 】【 Sales 】【 Finance 】

To improve customers lives through Toyota

automobiles

My Job’s Purpose

To build the best

automobiles

To sell lots of

automobiles

To correctly settle all accounts

To build the most efficient production

lines

To acquire the best parts at the best

prices

To produce without mura, muri & muda*

Draft Blueprints

Design Production

Lines

Select Parts to Purchase

Design Production

Plans

Create Sales & Marketing

Campaigns

Issue and Collect

Payments

My Work & Responsibilities

Toyota’s Goal: To provide the satisfaction from our products and services to societies and our customers

The “Ultimate Goal” of your work should be connected to

Toyota’s Ultimate Goal.

The Goals That Guide My Job’s

Purpose

To provide customers with highly functional and high-quality cars at reasonable prices

Step 1 (1): Clarify the “Ultimate Goal” of your responsibilities & work

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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% (average 18 cars per day) over the past 3 days.

[For the past 6 months the line has had 0 defects]

Example 1. Julie Case

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【 Ultimate Goal 】

【 Ideal Situation 】

【 Current Situation 】

【 Problem 】The exterior scratches on the vehicles should be 0



To provide customers with high quality vehicles in a timely

manner at a low cost

The exterior scratches on the vehicles averaged 18/600 per day over 3 days

Increase in exterior scratches found on

vehicles (Av. 18 per day)

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Step 2: Break Down the Problem8 STEPS PROCESSES






GENBUTSU






Step 5.Develop

Countermeasures

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Step 2: Break Down the Problem

～ Break down the problem and clarify the Point of Occurrence based on facts ～

Large / Vague Problem

Problem Problem Problem

what? where? when? who?

Point of Occurrence

Break down

Break down

Prioritize

See the Process(GENCHI

GENBUTSU)

PrioritizedProblem Problem ProblemProblem Problem the problem Problem Problem

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Step 2 (1). Break Down the Problem

Large / Vague Problem


Problem Problem Problem Problem ProblemProblem Problem

Break downBreak down

Think inwhat? where? when? who?

Break downBreak down

PrioritizePrioritizethe problemthe problem


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Example 1. Julie Case <Step2 (1)>

WHERE are most of the scratches are found?

At WHAT TIME are the cars with scratches made?


WHAT type of scratches are found?

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Increase in exterior scratches found on vehicles (Av. 18 per day)

Bonnet

(1)

Front Bumper

(1)

Roof

(1)

Back

(1)

L Rear Door

(top) (2)

L Rear Door

(bottom) (1)

L Front Door

(top) (1)

L Front Door

(bottom) (10)

Shallow Scratch

(2)

Deep Scratch

(1)

Long Scratch

(7)

Morning Shift

(1)

Afternoon Shift

(6)

<WHERE>

<WHAT>

<WHEN>

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Division Points

What would be relevant division points for the following large vague problems?

• The employee satisfaction rate for Co. X is 30% below Toyota Global HR standards.

• Customer satisfaction rate has dropped 10% below past trends (av. 90%)

• Although employees attend TBP training 80% are not applying TBP in their jobs.

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Step 2 (2). Select the Prioritized Problem

Priority ItemsPriority Items

Level of ImportanceLevel of Importance

Level of UrgencyLevel of Urgency

Potential for ExpansionPotential for Expansion

Is this enough to proceed to the next step????Is this enough to proceed to the next step????

Problem


How to select the prioritized problem from this point?

No!


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Increase in exterior scratches found on vehicles (Av. 18 per day)

Bonnet

(1)

Front Bumper

(1)

Roof

(1)

Back

(1)

L Rear Door

(top) (2)

L Rear Door

(bottom) (1)

L Front Door

(top) (1)

L Front Door

(bottom) (10)

Shallow Scratch

(2)

Deep Scratch

(1)

Long Scratch

(7)

Morning Shift

(1)

Afternoon Shift

(6)

<WHERE>

<WHAT>

<WHEN>

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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 through

GENCHI GENBUTSU

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Go & see the process. Which process? Where? Point of Occurrence

Assembly (Job) FlowJulie found the

scratches at Section 3 with Genchi Genbutsu

Example 1. Julie Case <Step2 (3)>


Problem Perception Point of Occurrence

scratches discovered

scratches present

Trace back

No scratches

Trace backTrace back

scratches present

Trace back

scratches present

Trace back

No scratches

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6 (33%) of the (exterior) long scratches found on the bottom part of the front left door, were

made during the afternoon shift in Section 3 on the assembly line


Prioritized Problem at the Point of Occurrence:


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Step 3: Target Setting8 STEPS PROCESSES






GENBUTSU






Step 5.Develop

Countermeasures

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Step 3: Target Setting

～ With enthusiasm and commitmentset challenging target. The target should be measurable ～

Target

Prioritized Problem at the Point of Occurrence

Target should be quantitative, concrete and challenging

How Much?

By When?

Targets should not be what to do

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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


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By the end of this month, eliminate all exterior long scratches on the bottom part of the left doors of the vehicles produced in the

afternoon in the Section 3

<Target>

6 (33%) of the (exterior) long scratches found on the bottom part of the front left

door, were made during the afternoon shift in Section 3 on the assembly line

<Prioritized Problem>



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Step 4: Root Cause Analysis8 STEPS PROCESSES






GENBUTSU






Step 5.Develop

Countermeasures

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Step 4: Root Cause Analysis

Confirm facts, and if there’s no

cause-and-result sequence

in the cause, stop asking

“WHY?”.

～ In order to find the root cause, thoroughly investigate the Prioritized Problem at the Point of Occurrence ～


Possiblecause

Possiblecause

Possiblecause

Possiblecause

Check whether it is a fact or not

Think the possible cause

Not a factNot a factNot a fact FactRepeat

Possiblecause

Possiblecause

Possiblecause

Not a factNot a fact Fact

Possiblecause

Possiblecause

Not a fact Fact

Root cause Countermeasure

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Checklist: □ Look at the causes horizontally on the tree

Check 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…


Possiblecause

Possiblecause

Possiblecause

Possiblecause

Not a factNot a factNot a fact Fact

Possiblecause

Possiblecause

Possiblecause

Not a factNot a fact Fact

Possiblecause

Possiblecause

Not a fact Fact

Root causeRoot cause

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Welding Robot stops in the middle of its operationWelding Robot stops in the middle of its operation

Why did the robot stop?Why did the robot stop?

A fuse in the robot has blownA fuse in the robot has blown

Why is the fuse blown?Why is the fuse blown?

Circuit overloadedCircuit overloaded

Why is the circuit overloaded?Why is the circuit overloaded?

The bearings have damaged one another and locked upThe bearings have damaged one another and locked up


EX2. Mr. Ohno’s Robot Case

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Why is the intake clogged with metal shavings?Why is the intake clogged with metal shavings?

There was insufficient lubrication on the bearingsThere was insufficient lubrication on the bearings

Why was there insufficient lubrication on the bearings?Why was there insufficient lubrication on the bearings?

Oil pump on robot is not circulating sufficient oilOil pump on robot is not circulating sufficient oil

Why is the pump not circulating sufficient oil?Why is the pump not circulating sufficient oil?

Pump intake is clogged with metal shavingsPump intake is clogged with metal shavings

No filter on pump intake (as designed) (Root Cause)No filter on pump intake (as designed) (Root Cause)

Why have the bearings damaged one another?Why have the bearings damaged one another?


EX2. Mr. Ohno’s Robot Case

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Staff Machine Environment

Facilities are not appropriate

Work instructions are poor

6 (33%) of the (exterior) long scratches found on the bottom part of the front left door, were made during the afternoon shift in Section 3 on the assembly line

Staff’s work methods are not appropriate

Staff’s abilities are poor

Work clothes are inappropriate

= TM’s (John’s) belt buckle scratched vehicles!

GENCHI GENBUTSU

Example 1. Julie Case: Start with “WHY”

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Step 5: Develop Countermeasures

8 STEPS PROCESSES






GENBUTSU






Step 5.Develop

Countermeasures

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Temporary Measures

vs.

Countermeasures


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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

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Proposal

Proposal

Proposal

Proposal

Proposal

What people or parties

are involved?

Proposal

Root Cause CountermeasureProposal

Can We Get Rid of it?

What are therisks involved? Framework of

Preconceived Ideas

Framework of own Responsibilities

～ Broadly considering all stakeholders and risks involved,

develop countermeasures with the highest added-value ～


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Target

Contents

Distribution Effectiveness Budget RiskOverall

AssessmentCategoryHow to

Summarize

Dept. Manager

Total # of vehicles +

Key model types

Graph+ Charts

Paper ○- Guaranteed to be

seen- Can be carried

anytime

○No problem if the target is

only directors

△How to

distribute when not available in

the office

○

Internet △-Doesn’t check

internet-Overburdened with materials

already

◎No budget required

△How to

distribute when not in the office

×

Establish priorities with respect to:■ Benefits■ Manpower / Cost■ Risks

(2). Narrow down the countermeasures to the most practical and effective


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Step 6: See Countermeasures Through

8 STEPS PROCESSES

1.With united efforts, implement countermeasures with speed and persistence2.Share information with others by informing, reporting and consulting3.Never give up in seeking to eliminate the root cause

1.Evaluate the results and the processes and share it with members involved2.Evaluate from three key perspectives: Customer’s, Toyota’s, and Your Own3. Understand the reasons of success and failure

1. Set successful processes as new standards2. Share the new standard (YOKOTEN)3. Start the next round of KAIZEN

Step 8.Standardize Successful Processes


Results and Processes

Step 6.See Countermeasures

Through

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Step 6: See Countermeasures Through

～ Speedy action together as a team Never give up and act persistently ～

Proper Checking

Never give up and act persistently

Timely Reporting, Informing,Consulting

Speedy actionTogether as a team

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8 STEPS PROCESSES








Through

Step 7: Evaluate Both Results & Processes

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In terms of the goal, how was the outcome?

Assessment AssessmentAssessment

(1) Evaluate the overall results, and the processes used, then share the evaluation with involved members

(2) Evaluate from the three key viewpoints: Customer’s, Toyota’s, and Your Own

(3) Understand the factors behind the success or failure

From the Customer’s Viewpoint

From the Customer’s Viewpoint

From Toyota the Company’s

Viewpoint

From Toyota the Company’s

Viewpoint

From Your Own Personal

Viewpoint

From Your Own Personal

Viewpoint

What was the result?

What wasthe process?

- Evaluate both results and processes and learn from both success and failure -


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Evaluate whether or not the target was achieved

Evaluate the results Evaluate the results


Result TargetResult

Target

SuccessFailure

Countermeasures Achieved

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Evaluate the processesEvaluate the processes

Equipment modification

Change the order of processes

Change material

What was most effective?


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Confirm positive and negative effects Confirm positive and negative effects

Deviation from Std – Late Deliveries

Labor-hours of

after hours delivery

Cost for equipment modification

Achieved

Positive effects

Negative effects


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Step 8: Standardize Successful Processes

8 STEPS PROCESSES








Through

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- Establish the successful process as precedent, and continue to raise the standard

level of success-


Standardization

Success

Implementation

YOKOTENYOKOTEN

OverallCompany

Own work &Responsibility

Ideal SituationIdeal Situation

KAIZENKAIZEN

YOKOTENYOKOTEN

YOKOTENYOKOTEN

KAIZENKAIZEN

KAIZENKAIZEN

Standardization

Standardization

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<example of standardization >

FormsManual Checklists Flow-chart

If possible, the precedent’s overall structure should clarify all relevant factors so that anyone, at anytime, without muda, mura, or muri can implement the precedent.


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Your work is a repeating cycle ofProblem solving.Start the next round of KAIZEN when you have solved one problem.


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Society and Our Customers

TOYOTA

Toyota Members

Business Partners

Ourselves


Copyright 2007 TOYOTA INSTITUTE, Toyota Motor Corporation (Internal Use Only)

Thank you

Documents

Copyright 2007 TOYOTA INSTITUTE, Toyota Motor Corporation (Internal Use Only) TOYOTA BUSINESS PRACTICES Overview