The Steps of Toyota Business Practices

Copyright 2006 TOYOTA INSTITUTE, Toyota Motor Corporation (Internal Use Only)

Toyota Institute

How to Teach TBP Steps


Toyota Institute

TOYOTA BUSINESS PRACTICES INTRODUCTION

Emphasize that TBP is a common language and

common business method at Toyota, and it is important for all the Toyota members in all

functions of the company.

Copyright 2006 TOYOTA INSTITUTE, Toyota Motor Corporation (Internal Use Only) 3

Outcome of TBPOutcome of TBP

TBP Provides Growth & Satisfaction

TOYOTA

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

Explain that after acquiring TBP knowledge, actual practice is even more

important.


Society and Our Customers

TOYOTA

Toyota Members Business Partners

Ourselves

Outcome of TBPOutcome of TBP

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

By practicing TBP, we can eventually contribute to

society.


Toyota’s Management

System

PD

CA

1. Toyota Way 2001

PD

CA

PD

CA

PD

CA

PD

CA

PD

CA

2. Toyota Business Practices (TBP)

4. On-the-Job Training (OJT)

Toyota Global ContentToyota Global Content

3. Hoshin Kanri

Emphasize that basic action of the Toyota Way that every

Toyota members should acquire.

By acquiring TBP, you will grow in TW depth.


[Value Base]

Toyota Business Practices [Operation Base]

Toyota Way 2001 Philosophical Value and Beliefs

Manufacturing Sales & Marketing HRM Accounting Purchasing Safety

Functional Toyota Way

[Functional base ]

Practice the Toyota WayPractice the Toyota Way

OS

ApplicationSoftware

+

+

ComputerPerformance

How to Practice TWHow to Practice TW

Any FunctionAny Function

TBP can be used in any function not only in

manufacturing environment.


President

Manager

VP/GM

P

DC

A

P

DC

A

P

DC

A

P

DC

A

P

DC

A

P

DC

A

P

DC

A

P

DC

A

P

DC

A

P

DC

ASpecialist

How to Practice TWHow to Practice TW

Any Job Title / GradeAny Job Title / Grade

TBP can be used at any levels in the company (Although the

scope of the problem is different).


TOYOTA BUSINESS PRACTICES 8 STEPS


TBP consist of:TBP consist of: 8 Steps (Concrete Actions & Processes)8 Steps (Concrete Actions & Processes) Drive & DedicationDrive & Dedication

Toyota Way

TBP

Values

Actions

Customer First

Always Confirm the Purpose

of Your Work

Ownership and 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

A

C

D

P

1. Clarify the Problem

2. Break Down the Problem

3. Target Setting

4. Root Cause Analysis

5. Develop Countermeasures

6. See Countermeasures Through

7. Monitor Both Results and Processes

8. Standardize Successful Processes

Concrete Actions & Processes Drive & Dedication

1. 1. Overall Image of TBPOverall Image of TBP

Emphasize that all 8 steps are equally important

We should avoid skipping any of

the steps.


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. 2. Drive & DedicationDrive & DedicationExplain that all the D&Ds are

integrated and related to each other.


1. Customer First

2. Always Confirm the Purpose of Your Work

3. Ownership and Responsibility

2. 2. Drive & DedicationDrive & DedicationTry to make your participants

grasp the essence of what each D&D means.


4. Visualization (Mieruka)

5. Judgment Based on Facts

6. Think and Act Persistently

7. Speedy Action in a Timely Manner

2. 2. Drive & DedicationDrive & Dedication


8. Follow Each Process with Sincerity and Commitment

9. Thorough Communication

10. Involve All Stakeholders

2. 2. Drive & DedicationDrive & Dedication


3. TBP 8 Steps (1 – 5)3. TBP 8 Steps (1 – 5)8 STEPS PROCESSES

Step 2.Break Down the Problem

Step 1.Clarify the Problem

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

1.Clarify the “Ultimate Goal” of your responsibilities & work2.Clarify the “Ideal Situation” of your work3.Clarify the “Current Situation” of your work4. Visualize the gap between the “Current Situation” and the “Ideal Situation”

1. Breakdown the problem2. Select the problem to pursue3. Specify the point of cause by checking the process through GENCHI

GENBUTSU

1. Consider causes by imagining the actual situation where the problem occurs2. Based on facts gathered through GENCHI-GENBUTSU, keep asking “Why?” 3. Specify the root cause

1. Consider as many potential countermeasures as possible2. Narrow down the countermeasures to the most practical and effective 3. Build consensus with others4. Create a clear and detailed action-plan

Step 3.Target Setting

Step 5.Develop

Countermeasures

Step 4.Cause Analysis

AGAIN, emphasize thatall 8 Steps are equally

important.


8 STEPS PROCESSES

1. Quickly and as a team, implement countermeasures2. Share progress by following the correct reporting, informing, and consulting communication procedures.3. Never give up, and proceed to the the next step quickly

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

2. Evaluate from three key viewpoints: Customer’s, Toyota’s, and Your Own3. Understand the factors behind the success or failure

1. Structure the successful processes (Standardize )2. Share the new precedent through YOKOTENKAI3. Start the next round of KAIZEN

Step 8. Standardize Successful

Processes

Step 6.See Countermeasures

Through

Step 7.Monitor Both

Results and Processes

3. TBP 8 Steps (6 – 8)3. TBP 8 Steps (6 – 8)


4. Definition of Problem in Toyota4. Definition of Problem in Toyota

What does “Problem” mean to you?

Lead your participants to think about this.


Problems are golden opportunities for KAIZEN

“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

* “Problem” is not a negative word.

* Problems are disguised KAIZENs. We need to aggressively uncover them.

At Toyota…


Emphasize the importance of showing the attitude of identifying problems

and that no problem is the biggest problem of all.


Definition of “Problem” of “Problem”

Ideal Situation

Current Situation

Gap = Problem

4. Definition of Problem in Toyota4. Definition of Problem in ToyotaBy visualizing the problem

the TBP Steps can be applied to all cases.


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


This is the basic problem

identification.Without the ability

to identify an “Event” type of

problem, “Setting” problem types will be impossible to

identify


5. 5. Concrete Actions & ProcessesConcrete Actions & Processes

Toyota Business Practices (TBP)


Step 1: Clarify the ProblemStep 1: Clarify the Problem8 STEPS PROCESSES






GENBUTSU




Step 5.Develop

Countermeasures

Step 4.Root Cause Analysis

Again, emphasize all the 8 steps are equally important and this order should not be

changed.


~ Making ambiguous problems clear ~

Gap

Am I actually contributing to the ultimate goal?

What is theideal situation?

Make explicit through

‘visualization’

Contribution

Ultimate GoalUltimate Goal

Problem

Ideal Situation

Step 1: Clarify the ProblemStep 1: Clarify the Problem

Current Situation

Firstly, think about the ultimate goal.

Then, ideal situation

Need to visualize the gap


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

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.

Step 1: Clarify the ProblemStep 1: Clarify the Problem

The Goals That Guide My Job’s

Purpose

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

Explain that the ultimate goal of your work should be connected to Toyota’s

ultimate goal.


EX1. Julie CaseEX1. Julie Case

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 4%. [Usually: less than 1%]

Step 1: Clarify the ProblemStep 1: Clarify the ProblemTry to make the participants think the process through.

You should use your company’s example if you

can.


The exterior scratches on the vehicles have increased to 4%

3 % increase in scratches found

on vehicles

The exterior scratches on the vehicles should be less than 1%


Staff members produce high-quality cars

【 Ultimate Goal 】

【 Ideal Situation 】

【 Current Situation 】

【 Problem 】

Step 1: Clarify the ProblemStep 1: Clarify the ProblemMake sure to express the Ideal situation, Current situation and Problem inas concrete as possible terms.


Step 2: Break Down the ProblemStep 2: Break Down the Problem8 STEPS PROCESSES






GENBUTSU




Step 5.Develop

Countermeasures


Participants tend to get stuck at Step 2, so repetitively

emphasize the importance of the Step 2

Lead the participants to think what would happen if the break down is NOT enough: 1) Could reach to the wrong or many root causes 2) It will be difficult to know the effect of each countermeasure 3) Cannot get continuous sustainable results


Large / Vague Problem

Problem Problem Problem

Problem Problem Problem Problem ProblemProblem Problem

Break downBreak down

what? where? when? who?


PrioritizePrioritizethe problem tothe problem toPursuePursue

Confirm facts through checking the processes checking the processes ((GENCHI GENBUTSU) GENCHI GENBUTSU)

~ Based on facts, break down the problem and clarify objectives~

Problem to Tackle

Point of Cause

Step 2: Break Down the ProblemStep 2: Break Down the ProblemEmphasize the importance of break down again.

Step 2 is to “Break down a large or vague problem and sort into smaller and more

concrete problems”.


Step 2 (1). Break Down the ProblemStep 2 (1). Break Down the Problem

Step 2: Break Down the ProblemStep 2: Break Down the Problem

Large / Vague Problem


Problem Problem Problem Problem ProblemProblem Problem


Think inwhat? where? when? who?


PrioritizePrioritizethe problem tothe problem toPursuePursue

We should ask what, where, when and how, but

NEVER ASK WHY!!!!!Make sure

the division points are

MECE

And try to start thinking from

relevant division points


Step 2 (2). Select the problem to pursueStep 2 (2). Select the problem to pursue

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 problem to pursue from this point?

No!

After break down, prioritize and decide which problem to

pursue…

…by thinking level of

importance,Urgency,

and potential for expansion.


Step 2. (3) Specify the Step 2. (3) Specify the point of causepoint of cause by checking the by checking the process through GENCHI GENBUTSUprocess through GENCHI GENBUTSU

Problem to Tackle

Point of Cause

Where does the problem occur?


Check the process through GENCHI

GENBUTSU

Emphasize that every job has a

process.

GENCHIGENBUTSU!!!!



EX1. Julie Case <Step2 (1)>EX1. Julie Case <Step2 (1)>

WHERE are most of the scratches are found?

At WHAT TIME are the cars with scratches made? Afternoon

Try to use actual examples to explain each procedure.


Go & see the process. Which process? Where? Problem to Tackle


1 2 3 4 5

Assembly (Job) FlowJulie found

the scratches

thru genchi genbutsu

Track backTrack backTrack back

Go back to 3 and observe

EX1. Julie Case <Step2 (3)>EX1. Julie Case <Step2 (3)>

Point of Cause

Observe⇒Can NOT see

Observe⇒ 　 Can see

Observe⇒ 　 Can see

Use actual examples to explain each procedure.


Many scratches of the vehicles produced in the afternoon, which are found on the bottom part of the left doors, are made in the Section 3 in the assembly line.



Problem to tackle:

Emphasize the importance of being specific.

This gives us a very focused mission.


8 STEPS PROCESSES






GENBUTSU




Step 5.Develop

Countermeasures


Step 3: Target SettingStep 3: Target Setting With enthusiasm and commitment, set challenging

but realistic output measurement guidelines.


Target

Problem to Tackle

Is it quantitative, detailed and challenging enough? How Much?

By When?

～ With enthusiasm and commitment, set challenging but realistic output measurement guidelines ～

Are we contributing to the Ultimate Goal?

(1) (1) Make the commitmentMake the commitment

Step 3: Target SettingStep 3: Target SettingAvoid writing “what to do” for

the target.

Raise your ability of setting a

challenging target.

It is important to clearly state “how

much” and “by when”.


Step 3 (2). Set measurable, concrete, and challenging targetsStep 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 tackle the problem at the (Point of Cause)

Step 3: Target SettingStep 3: Target SettingEmphasize this point!

…and by solving this, you can contribute to the ultimate goal.


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.

<Target>


<Problem to Tackle>

Step 3: Target SettingStep 3: Target SettingNote: How much and by

when.


8 STEPS PROCESSES






GENBUTSU




Step 5.Develop

Countermeasures


Step 4: Root Cause AnalysisStep 4: Root Cause AnalysisYou can now think about

WHY here!


(1)(1) Consider causes by imaging the actual situation where the problem occursConsider causes by imaging the actual situation where the problem occurs

(2)(2) Based on facts gathered through GENCHI GENBUTSU, keep asking “Why?”Based on facts gathered through GENCHI GENBUTSU, keep asking “Why?”

(3)(3) Specify the root causeSpecify the root cause

In order to clarify the root cause, thoroughly investigate the process involved

対策

Problem to Tackle

Root Cause

Cause

Cause

Cause

Cause

“WHY?”

Repeatedly ask “WHY?”

Countermeasure

Confirm facts. If there’s no cause-and-result sequence in the cause, stop asking “WHY?”

Step 4: Root Cause AnalysisStep 4: Root Cause Analysis

Every time you repeat “why”, do Genchi Genbutsu

to confirm.

The 4M can be used as a starting point in asking why.

Continue to ask why


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…

Problem to Tackle

Root Cause

Cause

Cause

Cause

Cause


Make sure there is a cause and effect relationship.


EX 1. Julie Case: Start with EX 1. Julie Case: Start with “WHY”“WHY”

Staff Machine Environment

Facilities are not appropriate

Work instructions are poor


Staff’s work methods are not appropriate

Staff’s abilities are poor

Work clothes are inappropriate

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

GENCHI GENBUTSU

Step 4: Root Cause AnalysisStep 4: Root Cause AnalysisNever claim the root cause as

someone’s poor attitude.


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 CaseEX2. Mr. Ohno’s Robot Case



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 CaseEX2. Mr. Ohno’s Robot Case

Reinforce that there is only one root cause for one

problem to tackle.


Step 5: Develop CountermeasuresStep 5: Develop Countermeasures8 STEPS PROCESSES






GENBUTSU




Step 5.Develop

Countermeasures



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 ～

(1) Develop as many countermeasures as possible(1) Develop as many countermeasures as possible

Step 5: Develop CountermeasuresStep 5: Develop Countermeasures

Stress to broadly consider

countermeasures.


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(2). Narrow down the countermeasuresto the most practical and effectiveto the most practical and effective

Step 5: Develop CountermeasuresStep 5: Develop Countermeasures

Not all countermeasures should be taken.

Choose the most effective ones by considering these

criteria.


Temporary Measures

vs.

Countermeasures

Step 5: Develop CountermeasuresStep 5: Develop CountermeasuresExplain that both Temporary

Measures and Countermeasures are

important.

The Fire Case can be used to explain the difference.


8 STEPS PROCESSES





Step 8.Standardize Successful

Processes

Step 6.See

Countermeasures Through

Step 7.Monitor Both


Step 6: See Countermeasures ThroughStep 6: See Countermeasures Through


(1)(1) Quickly and as a team, implement countermeasuresQuickly and as a team, implement countermeasures

(2)(2) Share progress by following the correct reporting, informing, and Share progress by following the correct reporting, informing, and consulting communication proceduresconsulting communication procedures

(3)(3) Never give up, and proceed to the next step quicklyNever give up, and proceed to the next step quickly

- Coordinated and speedy implementation -

Proper Checking

Persistent & Confident Implementation

Timely Reporting InformingConsulting

Speedy & Smooth

Coordination

Step 6: See Countermeasures ThroughStep 6: See Countermeasures Through

Teamwork, reporting,

informing, and consulting are all

important.


8 STEPS PROCESSES






Processes

Step 6.See


Step 7.Monitor Both


Step 7: Monitor Both Results & ProcessesStep 7: Monitor Both Results & Processes


In terms of the goal, how was the outcome?

Assessment AssessmentAssessment

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

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

(3)(3) Understand the factors behind the success or failureUnderstand 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 -

Step 7: Monitor Both Results & ProcessesStep 7: Monitor Both Results & Processes

Note that value both results and

process.


8 STEPS PROCESSES






Processes

Step 6.See


Step 7.Monitor Both


Step 8: Standardize Successful ProcessesStep 8: Standardize Successful Processes


(1)(1) Structuralize the successful processes (Standardize)Structuralize the successful processes (Standardize)

(2)(2) Share the new precedent through YOKOTENShare the new precedent through YOKOTEN

(3)(3) Start the next round of KAIZENStart the next round of KAIZEN

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

New Ideal SituationOwn work &Responsibility

OverallCompany

Standardization

KAIZEN

ＰＤ

ＣＡ Repeat PDCA until success

is achieved, then Standardize

YOKOTEN

Standardization

KAIZEN

YOKOTEN

StandardizationSuccess

Failure

Implementation


Successful cases: standardize.Failure case: kaizen

Both cases: value the process.



Society and Our Customers

TOYOTA

Toyota Members

Business Partners

Ourselves


Thank you!


Prepare for Step 1 presentation individually (for 20 min) using the given power point.

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Present for 5 minutes each within your group and make comments each other.

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Documents

The Steps of Toyota Business Practices