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Harvard Business School Working Knowledg e Archive

Decoding the DNA of the Toyota Production


System
10/12/1999
How can one production operation be both rigidly scripted and enormously flexible? In this summary
of an article from the Harvard Business Review, HBS Professors H. Kent Bowen and Steven Spear
disclose the secret to Toyota's production success. The company's operations can be seen as a
continuous series of controlled experiments: whenever Toyota defines a specification, it is
establishing a hypothesis that is then tested through action. The workers, who have internalized this
scientific-method approach, are stimulated to respond to problems as they appear; using data from the
strictly defined experiment, they are able to adapt fluidly to changing circumstances.

by Steven Spear and H. Kent Bowen

Based on an article in the Harvard Business Review, September/October 1999.

The Toyota Production System is a paradox. On the one hand, every activity, connection, and
production flow in a Toyota factory is rigidly scripted. Yet at the same time, Toyota's operations are
enormously flexible and responsive to customer demand. How can that be?

After an extensive four-year study of the system in more than 40 plants, the authors came to
understand that at Toyota it's the very rigidity of the operations that makes the flexibility possible.
That's because the company's operations can be seen as a continuous series of controlled experiments.
Whenever Toyota defines a specification, it is establishing a hypothesis that is then tested through
action. This approach — the scientific method -- is not imposed on workers, it's ingrained in them.
And it stimulates them to engage in the kind of experimentation that is widely recognized as the
cornerstone of a learning organization.

The Toyota Production System grew out of the workings of the company over 50 years, and it has
never actually been written down. Making the implicit explicit, the authors lay out four principles that
show how Toyota sets up all its operations as experiments and teaches the scientific method to its
workers. The first rule governs the way workers do their work. The second, the way they interact with
one another. The third governs how production lines are constructed. And the last, how people learn
to improve. Every activity, connection, and production path designed according to these rules must
have built-in tests that signal problems immediately. And it is the continual response to those
problems that makes this seemingly rigid system so flexible and adaptive to changing circumstances.

The Experiments of the Toyota Production System

When organizations are managed according to the four rules, individuals are repeatedly conducting
experiments, testing in operation the hypotheses built into the designs of individual work activities,
customer-supplier connections, pathways, and improvement efforts. Click here to see a summary of
the hypotheses, the way they are tested, and the response if they are refuted.

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[ Order the full article ]

How Toyota's Workers Learn the Rules


If the rules of the Toyota Production System aren't explicit, how are they transmitted? Toyota's
managers don't tell workers and supervisors specifically how to do their work. Rather, they use a
teaching and learning approach that allows their workers to discover the rules as a consequence of
solving problems. For example, the supervisor teaching a person the principles of the first rule will
come to the work site and, while the person is doing his or her job, ask a series of questions:

■ How do you do this work?


■ How do you know you are doing this work correctly?
■ How do you know that the outcome is free of defects?
■ What do you do if you have a problem?

This continuing process gives the person increasingly deeper insights into his or her own specific
work. From many experiences of this sort, the person gradually learns to generalize how to design all
activities according to the principles embodied in rule 1.

All the rules are taught in a similar Socratic fashion of iterative questioning and problem solving.
Although this method is particularly effective for teaching, it leads to knowledge that is implicit.
Consequently, the Toyota Production System had so far been transferred successfully only when
managers have been able and willing to engage in a similar process of questioning to facilitate
learning by doing.

- Steven Spear and H. Kent Bowen

The Experiments of the Toyota Production System


Signs of a
Rule Hypotheses Responses
problem
The person or machine can do the Determine the true skill level of the
The activity is not
activity as specified. person or the true capability of the
done as specified.
machine and train or modify as
1 If the activity is done as specified,
The outcome is
appropriate.
the good or service will be defect
defective.
free. Modify the design activity.

Customers' requests will be for


Responses don't keep
goods and services in a specific mix Determine the true mix and volume of
pace with requests.
and volume. demand and the true capability of the
2 The supplier is idle,
supplier; retrain, modify activities, or
The supplier can respond to reassign customer-supplier pairs as
waiting for requests.
customers' requests. appropriate.

Determine why the supplier was


Every supplier that is connected to A person or machine unnecessary, and redesign the flow path.
the flow path is required. is not actually
needed.
3 Any supplier not connected to the
Learn why the nonspecified supplier was
actually required, and redesign the flow
flow path is not needed. A nonspecified path.
supplier provides an

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Decoding the DNA of the Toyota Production System - HBS Working Knowledge Page 3 of 3

intermediate good or
service.

Learn how the activity was actually


A specific change in an activity,
The actual result is performed or the connection or flow path
connection, or flow path will improve
4 cost, quality, lead time, batch size, or
different from the was actually operated. Determine the
expected result. true effects of the change. Redesign the
safety by a specific amount.
change.

http://hbswk.hbs.edu/archive/869.html 19/04/2011

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