Jeffrey Liker-TBM Toyota Way Culture

Learning from Toyota:
Creating a Culture of Continuous Improvement
Jeffrey K. Liker
Professor, Industrial and Operations Engineering The University of Michigan
TBM Lean Leaders Conference

April 26, 2008
Lean is about obtaining brilliant results from brilliant processes

By focusing on (Jim Womack & Dan Jones):
Value Value streams Flow Pull Perfection
By eliminating waste from all processes
Copyright Jeffrey Liker
Sounds good, so let s do lean !
how
Let s Implement the Lean System

Let s create a Lean Office to implement a system
We need to adapt TPS to our business And have a roadmap to implement

Model lines
Wall to wall stability
Problem with Implementing the system

We get systematic change Impressive model lines and wall to wall stability
But
BUT: Still disappointing budget results Hard to spread beyond model line Lots of conflict between the Lean Excellence Office and line management Hard to sustain
Answer: Build a Culture of Continuous Improvement

For ongoing success Integral role of shared culture
A culture of quality people working together with shared (Toyota) values to continuously improve.
Culture is an integral part of the system: It is not just brilliant processes, but exceptional people in a supportive culture Culture
Customer Inputs
Process Quality Stability
Q,C,D
Product Value Stream
People are the Heart and Soul of the Toyota Way

The Toyota DNA =
PRODUCT VALUE STREAM PEOPLE VALUE STREAM
Is shared culture necessary for Lean?

No 1. Initial low hanging fruit stage 2. If a lot of supervision will be available 3. If just better Q,C,D are good enough Yes 1. If you need highest Q,C,D as standard 2. If you want voluntary help - when Andon goes red! 3. If you want continuous improvement 4. There will never be enough managers for total quality!
What is Culture?
What we see Artifacts
Physical results, materials, operating concepts.
Norms and Behaviors

Ways of acting considered normal, authorized, habitual or taboo.
Beliefs, Assumptions, Thinking What drives us

Explicit beliefs, implicit cultural assumptions, and paradigms of thought
What is Shared Culture?

Conflicting or Disengaged Culture Shared Values and Direction Values
Supervisor
Supervisor
Direction
Joe Jane Bill Bill Forces of Entropy cause Culture Decay

Joe
Jane
Toyota s Culture
Toyota s Cultural Roots

Group identity as rice farmers in Japan Samurai Tradition - Honor and the leader protects Zen - from empty Mind comes new insight Confucius - Honor the community, rules Deming - Most problems are management issues, apply quality tools Toyoda Family - strive to contribute (looms) Henry Ford - Pragmatism, fair to working class, integrated flow
What are inspirational values to Eastern Culture?
The Great Wave Off Kanagawa

What are inspirational values to Western Culture?
Marlboro Man
Rugged, self reliant, individualist winners !
West Vs. East

World Change Interdependence Role of Individual Life and Work
Rational, Logical: Humanity exploits Project plans and financial controls
Rugged, self reliant, individualist winners Partially Concealed, Both Awesome and Threatening: Human adapts
Standards, experiment, adjustment Community partners needed to survive Individual enmeshed in group, mutual obligations Fluid, process view, Together we can adapt and learn to succeed
Individual primary, strong ego, winners and losers Concrete, Material view, Can do results oriented
Two Culture Coaching Processes On-Job Development Coaching 1. What is the standard? what should be happening? 2. What is happening now? (Go to Gemba if needed) 3. What is the biggest problem? Agree on urgency? 4. What is the next step? What action is needed? 5. Gain commitment 6. Check on progress and adjust Mentoring Values 1. Clarify the event or values in question 2. Reflect on the Thought Cycle and Experience 3. Raise the level of self-awareness thru dialogue 4. Discuss alternative Thinking or Values 5. Ask individual to self reflect (Hansei)
What to Coach? Toyota Business Process (TBP)

Concrete Actions Drive and Dedication (Principles)
Customers First Always Confirm the purpose of your work Ownership and responsibility Visualization (Mieruka) Judgment based on facts Think and act persistently Follow each process with sincerity and commitment Thorough communication Involve all stakeholders
P D C A
Clarify the problem Break down the problem Target setting Root cause analysis Develop Countermeasures See countermeasures through
Monitor both results and processes
Standardize successful processes
The Quality People Value Stream to Build a Lean Culture

Building Culture and People the Toyota Way:
The Human System for Lean Management
Organizational Supporting Processes

Human Resource Management
Commitment and Tools for Stable Employment Powerful HR Supports Fair and Consistent Policies and Practices
Slow Promotion & Rewards for Teamwork
Hoshin Kanri
Policy Deployment
INPUTS
Toyota Philosophy & Values, Toyota Production System Principles, Pool of Eligible Human Resources
OUTPUTS
Attract
Quality People Value Stream -Recruitment -Selection -Initial Orientation
Develop
-Roles -Training/ Coaching -OJD
Engage
--Follow standards --Improve standards --Problem Solving ID with Team
Enroll
--Career Development -Community/ Family -Environment --ID with Company
Practice
Plan Do
Act
Check
Trainable
Work Groups & Team Problem Solving
Able
Performing
Two-Way Communication via Visual Mgmt
Committed
Servant Leadership
Exceptional teams working to continuously improve based on shared Toyota Values
PURPOSE Long-Term Mutual Prosperity by producing high quality, low cost, and on-time products
Clean (5S) and Safe Workplace
People Supporting Processes

Daily Management
Respect for People & Continuous Improvement via Plan-Do-Check-Act
Quality People Value Stream
Inputs Select
Inputs
1. 2. 3. 4. Purpose Philosophy TPS Principle Eligible People 1. 2. 3. 4.
learn it
do it
commit
Practice
be it
Develop
Able
Clear Roles Training Coaching OJT 1. 2. 3.
Engage
Perform
Standards Problem Solve Identify with Team
Inspire
Committed
1. Values 2. Community 3. Environment 4. Company
PDCA
Engaging People with the Real Place
Purpose is Central to Philosophy

Internal
Learning Community
External
Improving Partners
People Toyota s Purpose
Business
Lean Systems Contributor to Society
Toyota s Purpose
Survive as an organization by improving and evolving how we make good products for customers.
Inputs Select
Inputs
learn it
do it
commit
Practice
be it
Develop
Able
Engage
Perform
Inspire
Committed
PDCA
Characteristics Toyota Selects For

Team Orientation Initiative Communication Skills Problem Identification Skills Problem Solution Skills Practical Learning Skills Adaptability Specific Technical Competencies Needed
Phase 1 Advertizing & Recruitment 142,000 Applicants Phase 2 Orientation, Application & Testing 28,000 Passed Phase 3 Assessment Center 12,000 Passed Phase 4 Final Screening 8000 Passed
Original Recruitment to Selection Process for Georgetown, Kentucky
Phase 5 Assess Health & References 6000 Job Offers Phase 6 Probation
Inputs Select
Inputs
learn it
do it
commit
Practice
be it
Develop
Able
Engage
Perform
Inspire
Committed
PDCA
Highly Organized Training

TMMK NEW HIRE TRAINING SCHEDULE
ASSEMBLY NEW HIRE TRAINS WITH PROFESSIONAL TEAM MEMBER TIME 1st / 2nd NO O.T. NO O.T. NO O.T.
MONDAY
WEDNESDAY
FRIDAY
5:15 - 7:15p
CQPO
Intro to Quality Circles BREAK JIT primary process
CQPO
Review/Testing Modules 1-4 BREAK OJT 25% primary
WITH PROFESSIONAL TEAM MEMBER
7:15 - 7:30p 7:30 - 9:45p 9:45 - 10:30p 10:30p - 12:30a 12:30 - 12:45a 12:45 - 1:05a 1:05 - 2:00a
GPC TRAINING IN ASSEMBLY
BY PRODUCTION T/L
OJT 25% primary LUNCH JIT secondary process

BY PRODUCTION T/L
LUNCH OJT 25% secondary

WITH PROFESSIONAL TEAM MEMBER
OJT 25% secondary BREAK Travel to Fitness Facility Core / Cardio Circuit
BREAK Travel to Fitness Facility Work Conditioning Circuit

ND
EACH NE W HIRE IS TO FILL OUT THIS FORM DAILY DURING 2 BREAK (5 MINUTES OF COMPANY TIME) AND LEAVE IT WITH THEIR G/L. EACH NEW HIRE IS TO RETURN THIS TRAINING SCHEDULE TO HFC STAFF BY F RIDAY. Did you train with a professional team member? Was the training schedule followed? Are you experiencing any discomfort performing processes? If yes, did you report it to your TL or GL? Is additional training needed?
Y Y Y
/ / /
N N N
NEW HIRE COMMENT SECTION DAILY NH SIGNATURE
Copyright Jeffrey Liker (Source: Precision Staffing Document, TMMK Temporary Contractor) s
GROUP LEADER / TEAM LEADER COMMENT SECTION
Human Resources Development Modes
OJD TJI Motivation & Practical Application
Classroom Training
Personal Training Opportunities
Step-by-Step Progression to Stable Job Performance

ID Fundamental Skills for a Class of jobs
Train in Fundamental Skills off of Line (GPC) Job Breakdown to Work Elements for Specific Job Use Toyota Job Instruction (TJI) to Train Associate
Continuously Improve Job & Job Instruction
Off-Line Skills Training
On-JobDevelopment
Follow-up & Support until Masters Job
Global Production Center Station to Teach about Center of Gravity

Center of Gravity
These two missing cancel each other out
Center of Gravity moves up 1/9 away from the open space toward the weight
These two missing cancel each other out Center of Gravity moves 1/9 of the way up toward the weight
GPC Greatly Improves Instructional Efficiency
Benefits: Instruction efficiency 6-10 times greater

How Do we Develop People? Research in occupational training shows that individuals retain about: 10 % of what they read 10 % of what they read 20 % of what they hear 20 % of what they hear 30% of what they see 30% of what they see 50% of what they hear and use 50% of what they hear and use 70% of what they say 70% of what they say 90% of what they say and do 90% of what they say and do
Job Instruction Training is designed to teach Job Instruction Training is designed to teach
people how to do aaparticular job by: people how to do particular job by:
Hearing (what to do) Hearing (what to do) Seeing (how it is done) Seeing (how it is done) Using (what was learned) Using (what was learned) Saying (what was learned) Saying (what was learned) Doing (the task) Doing (the task) REPEATEDLY !! REPEATEDLY !!
The Toyota Job Instruction Training Method

The Four Steps of TJI
Step 4: FOLLOW UP
Action Plan
Major Steps
Step 1: PREPARE WORKER
Key Points
Check
Reasons
Do
Step 3: TRY OUT PERFORMANCE
Step 2: PRESENT OPERATION
NOTE: The JI method originated with the American Training Within Industry (TWI) program.
Bumper Trimming Job Breakdown Sheet

JOB BREAKDOWN SHEET
DATE: AREA: Bumper molding 7/20/2006 Phil Turek Team Leader Todd Chambers Supervisor Phil Turek JOB: Rear bumper molding operator - Trimming WRITTEN BY:
MAJOR STEPS
Step # 1 Trim flash ball on left side
KEYPOINTS
SAFETY: Injury avoidance, ergonomics, danger points QUALITY: Defect avoidance, check points, standards TECHNIQUE: Efficient movement, special method COST: Proper use of materials 1. Hold flash straight up and tight 2. Trim away from body and arm 3. Blade flush with top surface
REASONS FOR KEYPOINTS

1. Makes trimming easier 2. Prevents injury- cuts 3. Visible surface, flash line 1mm max.
Step # 2
1. Start on trim line- 1 mm variation 2. Blade must be perpindicular 3. Follow trim line- 1mm variation 4. Curving motion while trimming
1. Visible surface- quality spec. 2. Angled cut not acceptable 3. Visible surface- quality spec. 4. Technique to make trimming easier 1. Prevents twisting of bumper during cut 2. Helps make cut horizontal and straight 3. Cut is easier 4. Stopping will cause a jagged cut
Trim left side core flash
Step # 3
1. Hold gate up horizontally 2. Rest blade on bumper edge horizontally 3. Angle knife handle back (blade is horizontal) 4. One continuous movement
Trim gate flash
Step # 4 Trim flash ball on right side
1. Hold flash straight up and tight 2. Trim away from body and arm 3. Blade flush with top surface
1. Makes trimming easier 2. Prevents injury- cuts 3. Visible surface, flash line 1mm max.
Step # 5 Trim right side core flash
1. Start on trim line- 1 mm variation 2. Blade must be perpindicular 3. Follow trim line- 1mm variation 4. Curving motion while trimming
1. Visible surface- quality spec. 2. Angled cut not acceptable 3. Visible surface- quality spec. 4. Technique to make trimming easier
L EAN ASSOCIATES, IN C.
www.leanassociates.com
Importance of Key Points

Key Points are what people really need to know in order to Key Points are what people really need to know in order to successfully complete the job task. successfully complete the job task. The single greatest determinant of aasuccessful training outcome The single greatest determinant of successful training outcome (employee can learn the job quickly and perform with no (employee can learn the job quickly and perform with no injuries and with minimal problems) is the ability to identify and injuries and with minimal problems) is the ability to identify and convey CRITICAL Key Point information convey CRITICAL Key Point information
Auditing Standardized Work
How it works: Group leader checks one process/day --cards contain questions --notes discrepancies/countermeasures --move card to slot in next row --turn card dark side out if discrepancy Assistant Manager checks daily --randomly select card --obtain standard work sheet --go through audit with group leader **NUMMI has 90+ boards throughout plant
Leaders at all Levels Support Value Added Process

General Manager and VP Level
Business Planning and Policy Deployment Tools: Hoshin Planning & Toyota Business Practices (TBP)
Manager Level Focus on Shop Floor and Systems Improvement. Tools: Visual Factory & TBP TBP Team Leader and Group Leader Manage Standardized Work, Process Improvement and Develop Problem Solving Skills. Tools: FMDS, TBP & OJD
Team Member Focus on Fundamental Skills & Standardized Work Tools: Skills Training, Job Instruction, Standardized Work and 5-S
Multifunction Training Chart for Team Leader to Prepare for Future Group Leader Role
GL: (Group Leader Name) Name: Dept.: Date: Jeff Assy 1/2/12
Process or Skill
Team Leader Name Mike Mary Mark Margaret
Key 0% 50% 100%
1 2 3 4 5 6 7 8 9 10
Team 1 Processes Team 2 Processes Team 3 Processes Team 4 Processes Time/Attendance Safety Task Force Lead Quality Circle Cost Committee Scrap processing TPM on equipment
Inputs Select
Inputs
learn it
do it
commit
Practice
be it
Develop
Able
Engage
Perform
Inspire
Committed
PDCA
The Silver Bullet of Change
Inspires Problem Solving and Kaizen Engages
Develops
Practices
Joint Problem Solving and Kaizen are the driving force of a functioning daily lean culture!
Daily Problem Solving Culture It is this constant coaching of the problem solving process that develops the culture and level of skill that Toyota has been able to achieve. Having the opportunity to practice and develop daily problem solving is the Toyota Culture. Every deviation is seen as a chance to problem solve.
Toyota Culture p. 186
TPS and Toyota Way

JIT Standards
How?
Lean Processes Surface Problems Problems openly Identified Solve problems one by one
Improve management standards
Mentor-Mentee Chain
Goals Targets, Metrics Dialogue Go and see Open Questions No Blame System Problems PDCA 5 Why? One Page A3 s Regular Checks against Plan Go and See Please Try All practice the same basic patterns of Just Do Now
What Should Be? What Is Happening? Biggest Problem? What is Next Step?
Problem solving, dialogue, and mentoring values everyday
Inputs Select
Inputs
learn it
do it
commit
Practice
be it
Develop
Able
Engage
Perform
Inspire
Committed
PDCA
Lean Leadership
Upper Management Role
Jeffrey Liker, The Toyota Way
Make people think:

By going to the workplace Observing operations with them Showing typical problems Outlining typical solutions
We were asked to stand in a circle for 1 week and come up with 240 improvements and Implement most of them. --Toyota Japan TPS Training
Role of Management Question, Challenge, Do Not Give Answers!
To keep kaizen going Top management must go to the workplace Look at problems revealed day to day, hour by hour Give people problems to solve and follow up
Role of lean coach

Use the lean tools to teach managers and their teams To visualize problems Experiment And solve them
Teamwork!
To develop employees by problem solving
P C
D A
Plan - Do - Check - Act
Traditional Western leadership compared to Toyota leadership

Traditional Western Leader Quick Results Proud Climb Ladder Rapidly Results at all Costs Accomplish objectives through People Overcome Barriers Toyota Leader Patient Humble Learn Deeply and Horizontally and gradually work way up ladder The Right Process will Lead to the Right Results Develop People Take Time to Deeply understand Problems and Root Cause before Acting Deeply understand the process
Manage by the Numbers
HR Supports the People Value Stream

Building Culture and People the Toyota Way:
The Human System for Lean Management
HR Supports a Safe, Secure, and Fair Environment
Organizational Supporting Processes

Human Resource Management
Commitment and Tools for Stable Employment Powerful HR Supports Fair and Consistent Policies and Practices
Slow Promotion & Rewards for Teamwork
Hoshin Kanri
Policy Deployment
INPUTS
Toyota Philosophy & Values, Toyota Production System Principles, Pool of Eligible Human Resources
OUTPUTS
Attract
Quality People Value Stream -Recruitment -Selection -Initial Orientation
Develop
-Roles -Training/ Coaching -OJD
Engage
--Follow standards --Improve standards --Problem Solving ID with Team
Enroll
--Career Development -Community/ Family -Environment --ID with Company
Practice
Plan Do
Act
Check
Trainable
Work Groups & Team Problem Solving
Able
Performing
Two-Way Communication via Visual Mgmt
Committed
Servant Leadership
Exceptional teams working to continuously improve based on shared Toyota Values
PURPOSE Long-Term Mutual Prosperity by producing high quality, low cost, and on-time products
Clean (5S) and Safe Workplace
People Supporting Processes

Daily Management
Respect for People & Continuous Improvement via Plan-Do-Check-Act
Mutual Trust Connects the Product and People Value Streams

TOYOTA CULTURE
PRODUCT VALUE STREAM
Culture
PRO BLEMS IDENTIFIED
PRO BLEMS S OLVED
MUTUAL TRUST
PEOPLE VALUE STREAM
JUST-IN-TIME
Lean Structure and Systems
STABILIZATION VISUALIZATION STANDARDIZATION
Stable Workforce Planning is the Foundation of Mutual Trust: Key Methods

Flexible Staffing: Flexible workforce (broad job classifications, cross-training, job rotation) Part-time workforce and freshman jobs Flexible daily overtime (2 shift system) Planned production Saturdays Flexible Factories: Multiple cars on same line Multiple factories make products (e.g., Japan and US) Leveled schedule Zero changeover time (e.g., paint, body shop)
Two Shift Production with Overtime Capability Provide Flexible Production

Shift First Second Third Shift Maintenance Production Time 6:30 A.M. 3:15 P.M. (with 45 minutes unpaid lunch) 5:15P.M. 2:00 A.M. None utilized for Preventative Maintenance Overtime Capability 3:15 P.M. 5:15 P.M. 2:00 A.M. 4:00 A.M. None for Production 4:00 A.M. 6:30 A.M.
Example NEED/HAVE monthly report

Needed # of Employees Actual # of Employees Forecasted long term absences Forecasted attrition/transfer promotions Need/Have Gap Body 299 304 5 2 Paint 199 208 6 1 Assembly 398 410 10 3 Quality 100 100 2 1 Total 996 1022 23 7
-2
+2
-1
-3
-4
Hoshin Goal-Setting Directs Continuous Improvement from Top to Bottom

Hoshin System Hoshin Breakdown
Background
Division
Division Hoshin (Direction/activity & Targets)
Section
Section Hoshin (Direction/activity & Targets)
Assessment of individual performance, bonus
Team/ Group
Individual
Understanding, interpretation, freedom of how to support, ownership, motivation
Implementation Plan (Direction /activity & Targets) Individual Priority (Activities & Targets)
Connecting Hoshin and Floor Management Development System

1. What do we need to do? (Company Department Group)
Hoshin Objectives KPI s
2. How should we do it? (Process)
FMDS Daily Activities
3. How are we doing? (Results)

Main KPI Sub-KPI Process KPI
Team Board for Floor Management Development System
Reward System base on Long-Term Trust Economy
Commodity Economy One for one exchanges Low risk Easy to rectify bad exchange Relationship must be renewed after each exchange Terms available to all Each side maximizes its advantage at the expense of the other side Goal is individual advantage Currency is money
Trust Economy Fair exchange works it self out over time High risk Betrayals hard to repair Open-ended relationship Terms highly personalized Both sides give up something for the common goal Goal is mutual growth Currency is trust
Three Compensation Components and their Respective Percentages of Total Pay for Georgetown Hourly Team Associates in Typical Year
Base
Bonus 12% 5%
Performance Award
83%
Bonus= Company performance Performance= Plant performance (based on key performance indicators) **Managers also have an individual development plan for individual bonus
Can culture be re-trained?

What is the track record of the following? Executive or cross-functional teambuilding? Diversity training? Corporate mergers? Transfer of culture and practices off-shore?
Realizing New Values

Hansei
Result Behavior
Feeling
Values
Mentoring Process
1. Clarify the event or values in question 2. Reflect on the Thought Cycle with the individual 3. Raise the level of self-awareness thru dialogue 4. Discuss alternative approaches and values 5. Ask individual to self reflect (Hansei)
Key Points for Implementing Lean System
Process improvement and people development must go hand in hand You must be patient for people development
Keep your eyes open to the growth and strengthening of people (culture change) Push when procrastination is preventing the growth of people (avoiding action) Provide necessary challenges and support for people development!
The lean journey starts with oneself

How can I learn to identify waste? How can I become a teacher of waste elimination?
You must become the change you want to see.

Gandhi

Jeffrey Liker-TBM Toyota Way Culture

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Learning from Toyota:

Creating a Culture of Continuous Improvement

TBM Lean Leaders Conference

Lean is about obtaining brilliant results from brilliant processes

By eliminating waste from all processes

Copyright Jeffrey Liker

Sounds good, so let s do lean !

Copyright Jeffrey Liker

Let s Implement the Lean System

We need to adapt TPS to our business And have a roadmap to implement

Wall to wall stability

Copyright Jeffrey Liker

Problem with Implementing the system

Copyright Jeffrey Liker

Answer: Build a Culture of Continuous Improvement

Copyright Jeffrey Liker

Product Value Stream

Copyright Jeffrey Liker

People are the Heart and Soul of the Toyota Way

PRODUCT VALUE STREAM PEOPLE VALUE STREAM

Copyright Jeffrey Liker

Is shared culture necessary for Lean?

Copyright Jeffrey Liker

Norms and Behaviors

Beliefs, Assumptions, Thinking What drives us

Copyright Jeffrey Liker

What is Shared Culture?

Joe Jane Bill Bill Forces of Entropy cause Culture Decay

Copyright Jeffrey Liker

Toyota s Cultural Roots

Copyright Jeffrey Liker

What are inspirational values to Eastern Culture?

The Great Wave Off Kanagawa

What are inspirational values to Western Culture?

West Vs. East

What to Coach? Toyota Business Process (TBP)

Monitor both results and processes

Standardize successful processes

Copyright Jeffrey Liker

The Quality People Value Stream to Build a Lean Culture

Organizational Supporting Processes

Exceptional teams working to continuously improve based on shared Toyota Values

Clean (5S) and Safe Workplace

People Supporting Processes

Respect for People & Continuous Improvement via Plan-Do-Check-Act

Copyright Jeffrey Liker

Quality People Value Stream

Engaging People with the Real Place

Copyright Jeffrey Liker

Purpose is Central to Philosophy

People Toyota s Purpose

Copyright Jeffrey Liker

Copyright Jeffrey Liker

Quality People Value Stream

Engaging People with the Real Place

Copyright Jeffrey Liker

Characteristics Toyota Selects For

Copyright Jeffrey Liker

Original Recruitment to Selection Process for Georgetown, Kentucky

Copyright Jeffrey Liker

Quality People Value Stream

Engaging People with the Real Place

Copyright Jeffrey Liker