14 management principles : toyota way

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14 Management Principles for Quality and Excellence

The Toyota Way

TOYOTA = The One You Only Trust , Always


In the current Global meltdown scenario,Darwinian Principle of “Survival of the fittest”

will prevail.

If you want to survive and grow, You have to be fit !


Adoption of best Management practices will make you fit and a

winner !


• Established in Japan in Year 1937,• Largest and most profitable automobile manufacturer in the world since 2008,• produced 20 crore vehicles till July 2012 (means ?)• About 70 different vehicle models, • Largest listed company in Japan,• 14th largest listed company world over,• Factories in 27 countries in the world,• Over 3,33,498 employees world over,• Following Best Management Practices since 1940

About Toyota Motor Corporation


• Though Toyota is practicing Best Practices since 1940, it defined them in 2001, terming it as “ The Toyota Way ”.• Michigan University professor Dr. Jeffrey Liker presented it to the world as book “ The Toyota Way ” in 2004

About Book “ The Toyota Way ”


Automobile industry is in turmoil world over. Recent news is that GM, Ford and Chrysler in USA are in deep financial trouble, while Toyota is less affected, thanks to its Management practices .

Toyota Motor Corporation


Also known as Lean / Flexible Manufacturing or Toyota Production System ( TPS – also called Thinking Person’s System ) is responsible for tremendous success of the company. Ideas invented in 1940s are still relevant, universal, and equally applicable to Service sector as well.

The Toyota Way


Toyota Way• The principles are no rocket science and are easy to understand and put them in practice to become and remain fit.• These principles are organized under four sections. ( 4 P )• Section 1 : Long Term Philosophy

• Section 2 : The Right Process will Produce the Right Results

• Section 3 : Add Value to Your Organization by Developing Your People and Your Partners

• Section 4 : Continuously Solving Root Problems to drive the Organizational Learning

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Philosophy( Long term Thinking )

Process( Eliminating Waste )

Process( Eliminating Waste )

People & Partners( Respect,

Challenge, Grow )

ProblemSolving

4 P Model of Toyota Way

Most organizations are here


4 P and 14 Management Principles

3 underlying cultural values are Continuous improvement, Respect and Teamwork


Toyota Way

• Section 1 : Long Term Philosophy

People need purpose to find motivation and establish goals.

Tools to establish Long Term Philosophy are –• SWOT Analysis,• Formulating Vision, Mission and Values,• Formulate Strategic Plan and deploy it by establishing goals and targets for each level of employees, from Chairman to Watchman.

Principle 1 : Base your management decisions on a long-term philosophy, even at the expense of short-term goals.


Toyota Way

Section 2 : The Right Process Will produce the Right Results

Principle 2

Create a continuous process flow to bring problems to the surface.

Work processes are redesigned to eliminate waste through the process of continuous improvement - Kaizen.

Customers are willing to pay for Products / Services and not for waste. (Waste consists of material, money, man, method, time)


Toyota Way

Principle 3

Use "pull" systems ( Just – in – Time or Kanban ) to avoid over production / delivery This helps achieve optimum use of resources, reduce inventories and free workspace of clutter.


Toyota Way

Principle 4

Level out the workload This helps achieve the goal of minimizing waste , not overburdening people or the equipment / system and not creating uneven output.


Toyota Way

Principle 5

Build a culture of stopping to fix problems, to get quality right the first time and every time.

Quality is given utmost importance. Any employee has the authority to stop the process to signal a quality issue.


Toyota Way

Principle 6

Standardized tasks and processes are the foundation for continuous improvement and employee empowerment. Its implementation allow for continuous improvement (kaizen) from the people involved in the system. It empowers the employee to aid in the growth and improvement of the company.

Tools : SOP, Work Instructions, ISO 9001 or like documents and systems.


Toyota Way

Principle 7•Use visual control to surface the problems out. Included in this principle is the 5S Program - steps that are used to make all work spaces efficient and productive, reduce time looking for needed items and improve the work environment.

SEIRI = Sort ,

SEITON = Set in Order ,

SEISO = Shine / sweep

SEIKETSU = Standardize ,

SHITSUKE = Sustain the gains .

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Toyota Way

Principle 8

Use only reliable, thoroughly tested technology that serves your people and processes.

Technology is pulled by process, not pushed to process.Do not introduce technology just for hack of it.


Toyota Way

Section 3 : Add Value to the Organization by Developing Your People and Partners

Principle 9

Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.Without walking the talk, the principles will fade. The principles have to be ingrained. Employees must be educated and trained because they have to create and maintain a learning organization. Challenge their capabilities to bring them out of their comfort zone.


Toyota Way

Section 3 : Add Value to the Organization by Developing Your People and Partners

Challenging people to bring them out of their comfort zone.


Toyota Way

Principle 10

Develop exceptional people and teams who follow your company's philosophy.

Teams should consist of 4 - 5 people and should represent all levels of management tiers and be cross functional. Success is based on the team, not on the individual.

TEAM = Together Everyone Achieves More

“ All of us ” is better than “ anyone of us ”


Toyota Way

Principle 11

Respect your extended network of partners and suppliers by challenging them and helping them improve.

Treat your suppliers much like you treat your employees, challenge them to do better and help them to achieve it. Provide cross functional teams to help suppliers discover and fix problems so that they can become a stronger, better supplier.

Trend is towards keeping only a few select suppliers.


Toyota Way

Section 4 : Continuously Solving Root Problems Drives Organizational Learning

Principle 12

Go and see for yourself to thoroughly understand the situation

Managers are expected to "go-and-see" operations.Philosophy MBWA = Management By Walking Around.Without experiencing the situation first hand, managers will not have an understanding how it can be improved.


Toyota Way

Principle 13

Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly

While deciding major things, keep every one in the process, take their opinion, consider all options and decide. Everybody will cooperate to implement the consensus decision. Once decided, implement the decisions without loss of time.


Toyota Way

Principle 14

Become a learning organization through relentless reviews and continuous improvement

The process of becoming a learning organization involves critical review of every aspect of what one does ( Organization and individuals ).Tools : Kaizen, Organizational Score Card and individual goals and targets


Toyota Way

Continuous Implementation of all these 14 principles distributed under 4 P

( Philosophy, Process, People & Partners, Problem Solving )

lends an unbeatable edge to any organization, whether inManufacturing or Service Sector.

Resolve to follow them relentlessly and success is yours.


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14 management principles : toyota way

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