flevyblog

Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.
MANAGEMENT & LEADERSHIP STRATEGY, MARKETING, SALES OPERATIONS & SUPPLY CHAIN ORGANIZATION & CHANGE IT/MIS Other

14 Principles of Lean Toyota Production System (TPS)

Editor's Note: Take a look at our featured best practice, Lean - Value Stream Mapping (VSM) (157-slide PowerPoint presentation). Value Stream Mapping (VSM) is a lean management technique used to analyze the flow of materials and information currently required to bring a product or service to a Customer. The goal of value stream mapping is to reduce the end-to-end lead time of a process by highlighting and eliminating [read more]

Also, if you are interested in becoming an expert on Process Improvement, take a look at Flevy's Process Improvement Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

* * * *

Editor’s Note: Charles Intrieri is a consultant with over 25 years of experience in Operational Excellence, Supply Chain & Logistics, and Metrics-driven Management.  He has made available a number of reports and tools related to these areas on Flevy, which can be viewed here.

* * * *

pexels-photo-416338Lean Management (also known as Lean Manufacturing and Lean Thinking) is a management philosophy based on Toyota Production System (TPS). TPS is a management system that organizes Manufacturing and Logistics for the Manufacturer, including interaction with suppliers and customers within its ecosystem. TPS was developed by Taiichi Ohno and Eiji Toyoda between 1948 and 1975.

Per Toyota’s website, Toyota Production System is a production system based on the philosophy of achieving the complete elimination of all waste in pursuit of the most efficient methods. TPS Lean and its approach to Cost Reduction are the “wellsprings of competitive strength and unique advantages for Toyota.”

The objective of Lean Manufacturing principles and general Lean principles is to eliminate everything that does not add value from the customer’s eyes. Through this, our organization will able to increase productivity and create greater customer value while utilizing fewer resources.

This article introduces 14 important Toyota Production System principles. Follow these Lean Toyota Way principles to cultivate a culture of Continuous Improvement and Learning.

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

  • Have a philosophical sense of purpose that supersedes any short-term decision making. Work, grow and align the whole organization toward a common purpose that is bigger than making money. Understand your place in the history of the company and work to bring the company to next level.  Your philosophical mission is the foundation for the other principles.
  • Generate value of the customer, society and the economy – it is your starting point.  Evaluate every function in the company in terms of ability to achieve this.
  • Be responsible. Strive to decide your own fate.  Act with self-reliance and trust in your own abilities. Accept responsibility for your own conduct and maintain improve the skills that enable you to produce added value.

 Principle 2: Create continuous process flow to bring problems to the surface.

  • Redesign work process to achieve high value-added, continuous flow. Strive to cut back to zero the amount of the time that any work project is sitting idle or waiting for someone to work on it.
  • Create flow to move material and information fast as well as to link processes and people together so that problems surface right way.
  • Make flow evident throughout your organizational culture. It is the key to a true continuous improvement process and to developing people.
  • Provide your downline customers in production process with what they want, when they want it and in the amount they want it. Material replenishment initiated by consumption in the basic principle of just-in-time.
  • Minimize your work in process and warehousing of inventory by stocking small amounts of each product and frequently restocking based on what the customer actually takes away.
  • Be responsive to the day-by-day shifts in customer demand rather than relying on computer schedules and systems to track wasteful inventory.

Principle 3: Use “Pull” system to avoid overproduction.

  • Provide your downline customers in production process with what they want, when they want it and in the amount they want it. Material replenishment initiated by consumption in the basic principle of just-in-time.
  • Minimize your work in process and warehousing of inventory by stocking small amounts of each product and frequently restocking based on what the customer actually takes away.
  • Be responsive to the day-by-day shifts in customer demand rather than relying on computer schedules and systems to track wasteful inventory.

Principle 4: Level out the workload (Heijunka). (“Work like a tortoise, not the hare”).

  • Eliminating waste is just one-third of the equation for making lean successful. Eliminating overburden to people, equipment and eliminating unevenness in the production schedule is just as important – yet generally not understood at companies attempting to implement lean principles.
  • Work to level out the workload of all manufacturing and service processes as an alternative to the start/stop approach of working on projects in batches that is typical at most companies.
  • Implement takt time to synchronize production pace with customer demand, ensuring that workload leveling is aligned with actual market needs and reduces overproduction.
  • Use mixed-model production to smooth the variety of products being produced, reducing fluctuations and increasing flexibility to meet diverse customer requirements without overburdening any single process.

Principle 5: Build a culture of stopping to fix problems, to get quality right at the first time.

  • Quality of the customer drives your value proposition
  • Use all the modern quality assurance methods available
  • Build into your equipment the capability of detecting problems and stopping itself. Develop a visual system to alert team or project leaders that a machine or process needs assistance. Jidoka (machines with human intelligence) is the foundation for “building in” quality.
  • Build into your organization support systems to quickly solve the problems and put in place countermeasures.
  • Build into your culture the philosophy of stopping or slowing down to get quality right the first time to enhance productivity in the long run.

Principle 6: Standardized tasks are the foundation for continuous improvements and employee empowerment.

  • Use stable, repeatable methods everywhere to maintain the predictability, regular timing and regular output of your processes. It is the foundation for the flow and pull.
  • Capture the accumulated learning about a process up to a point in time by standardizing today’s best practices. Allow creative and individual expression to improve upon the standard; then incorporate it into the new standard so that when a person moves on you can hand off the learning to the next person.
  • Encourage a culture of experimentation where employees regularly test and refine standard operating procedures, fostering an environment of continuous improvement and innovation.
  • Utilize visual management tools to document and share best practices across teams, ensuring that standardization efforts are visible, understood, and adopted universally within the organization.

Principle 7: Use Visual Control so no problems are hidden.

  • Use simple visual indicators to help people determine immediately whether they are in standard condition or deviating from it.
  • Avoid using a computer screen when it moves the worker’s focus away from the workplace.
  • Design simple visual system at the workplace where the work is done, to support flow and pull.
  • Reduce your reports to one piece of paper whenever possible, even for your most important financial decisions.

Principle 8: Use only reliable, thoroughly tested technology that servers your people and process.

  • Use technology to support people not to replace people. Often it is best to work out process manually before adding technology to support the people.
  • New technology is often unreliable and difficult to standardize and therefore endangers “flow”. A proven process that works generally takes precedence over new and untested technology.
  • Conduct actual tests before adopting new technology in business processes, manufacturing systems or products.
  • Reject or modify technologies that conflict with your culture or that might disrupt stability, reliability and predictability.
  • Nevertheless encourage your people to consider new technologies when looking into new approaches to work. Quickly implement a thoroughly considered technology if it has been proven in trials and it can improve flow in your processes.

Principle 9: Grow leaders who thoroughly understands the work, live philosophy and teach it to others.

  • Grow leaders within, rather than buying them from outside the organization.
  • Do not view the leader’s job as simply accomplishing tasks and having good people skills.  Leaders must be role models for the company’s philosophy and the way of doing business.
  • A leader must understand the daily work in great detail so that he or she can be a best teacher of your company’s philosophy.

Principle 10: Develop exceptional people and teams who follow your company’s philosophy.

  • Create a strange, stable culture in which company values and beliefs are widely shared and lived out over a period of many years.
  • Train exceptional individuals and teams to work within the corporate philosophy to achieve exceptional results. Work hard to reinforce the culture continually.
  • Use Cross functional teams to improve quality and productivity and enhance flow by solving difficult technical problems. Empowerment occurs only when people use the company’s tools to improve company.
  • Make an ongoing effort to teach individuals how to work together as teams together toward common goals. Team work is something that has to be learned.

Principle 11: Respect your extended network of partners and suppliers by challenging them and helping them improve.

  • Have respect for your partners and suppliers and treat them as an extension of your business.
  • Challenge your outside business partners to grow and develop. It shows that you value them. Set challenging targets and assists your partners in achieving them.
  • Establish joint improvement activities with suppliers, such as kaizen events, to collaboratively identify and eliminate inefficiencies, thereby enhancing the entire supply chain’s performance.
  • Develop long-term strategic partnerships with key suppliers, focusing on mutual growth and innovation, which strengthens relationships and ensures alignment with your company’s lean objectives.

Principle 12: Go to Gemba and see for yourself to thoroughly understand the situation (Genchi Genbutsu).

  • Solve problems and improve processes by going to the source and personally observing and verifying data rather than theorizing on the basis of what other people or the computer screen tell you.
  • Think and speak based on personally verified data.
  • Conduct regular Gemba Walks with cross-functional teams to gain diverse perspectives and uncover hidden issues that may not be apparent to individual departments.
  • Use real-time data collection during Gemba visits to support decision-making processes with accurate and current information, ensuring that observations lead to actionable insights.
  • Even high-level managers and executives should go and see things for themselves, so they will have more than a superficial understanding of the situation.

Principle 13: Make decision slowly by consensus (use cross functional teams), thoroughly considering all options; implement decisions rapidly.

  • Do not pick a single direction and go down that one path until you have thoroughly considered alternatives.
  • Nemawashi is the process of discussing problems and potential solutions with all of those affected, to collect their ideas and get agreement on a path forward. This consensus process, though time – consuming, helps broaden the search for solutions, and once a decision is made, the stage is set for rapid implementation.
  • Once you have established a stable process, use continuous improvement tools to determine the root cause of inefficiencies and apply effective countermeasures.
  • Design processes that requires almost no inventory. This will make wasted time and resources visible for all to see. Once waste is exposed, have employees use a continuous improvement process (kaizen) to eliminate it.
  • Protect the organizational knowledge base by developing stable personnel, slow promotion and very careful succession systems.

Principle 14: Become a learning organization through relentless reflection (Hansei) and continuous improvements (Kaizen).

  • Lean and TPS are never ending total organization journeys.
  • Implement after-action reviews (AARs) following significant projects or events to systematically capture lessons learned and integrate them into future planning and execution.
  • Create a structured feedback loop where employees at all levels can share insights and suggestions for improvement, fostering a culture where continuous learning and adaptation are part of everyday activities.
  • Develop a mentorship program that pairs experienced employees with newer team members, facilitating knowledge transfer and reinforcing a culture of continuous improvement through shared experiences.

Challenges in Implementing TPS

As highlighted above, implementing the Toyota Production System (TPS) can yield substantial benefits. However, it is important to be aware of the challenges that can arise during the implementation process. These challenges often stem from the need to shift both Organizational Culture and operational practices. Some of these key challenges include:

  1. Cultural Shift: Adopting TPS requires a cultural shift towards continuous improvement and employee empowerment. Changing established mindsets and habits can be met with resistance, particularly from long-standing employees.
  2. Leadership Commitment: Effective TPS implementation requires strong commitment and visible support from top leadership. Ensuring alignment between the principles and the organization’s strategic goals is crucial.
  3. Training and Skill Development: Lean methodologies may be unfamiliar to some employees. Comprehensive training programs are essential to ensure that all employees understand TPS principles and can apply them effectively.
  4. Resistance to Change: People often resist change due to fear of the unknown or concerns about job security. Addressing these concerns and providing a clear vision of the benefits of TPS can help overcome resistance.
  5. Complexity of Principles: The 14 principles of TPS can be complex to grasp and implement effectively. Organizations may struggle with determining how to prioritize and apply these principles to their specific context.
  6. Sustaining Momentum: TPS is not a one-time project; it’s a continuous journey of improvement. Maintaining the momentum and enthusiasm for improvement initiatives over the long term can be challenging.
  7. Measurement and Metrics: Defining appropriate metrics to measure the success of TPS implementation can be difficult. Ensuring that these metrics align with the organization’s strategic objectives is crucial.

Implementing TPS in Non-Manufacturing Settings

While TPS originated in Manufacturing, its principles can be successfully applied in non-manufacturing settings, such as service industries and healthcare. Implementing TPS in these settings requires adapting the principles to the unique challenges and characteristics of the industry. Some considerations for implementing TPS in non-manufacturing sectors include:

  1. Value Stream Mapping: Apply value stream mapping to identify the flow of activities and value creation in service processes. This helps to identify bottlenecks, inefficiencies, and opportunities for improvement.
  2. Standard Work: Standardized work is applicable beyond manufacturing. Define clear processes and procedures for service tasks, leading to consistency, reduced errors, and improved customer experience.
  3. Customer-Centricity: Just as in manufacturing, a customer-centric approach is crucial in non-manufacturing settings. Understand the customer’s needs and expectations to optimize processes accordingly.
  4. Visual Management: Implement visual management tools to improve communication and transparency in service processes. Visual cues can enhance efficiency and help in identifying issues quickly.
  5. Pull Systems and Demand Management: Adapt pull systems and demand-based workflows to manage service requests and appointments. This prevents overburdening employees and ensures efficient use of resources.
  6. Kaizen and Continuous Improvement: Foster a culture of Continuous Improvement among employees in non-manufacturing sectors. Encourage them to identify problems and suggest solutions for ongoing enhancements.
  7. Employee Empowerment: Empower employees at all levels to contribute ideas for process improvement. Their frontline insights can lead to more effective service delivery.
  8. Adaptation to Variability: Non-manufacturing environments often face greater variability. Apply TPS principles to create flexible processes that can accommodate variations while maintaining efficiency.

Implementing TPS in non-manufacturing settings requires a thoughtful approach that recognizes the unique aspects of each industry. By tailoring TPS principles to these contexts, organizations can achieve Operational Excellence and improved Customer Satisfaction.

Sustainability and TPS

In recent years, as environmental concerns elevate to the forefront of many organizations’ agendas, Sustainability has become increasingly important.  It’s important to note that Sustainability and the Toyota Production System (TPS) are closely aligned, as TPS principles emphasize waste reduction, efficient resource utilization, and minimizing environmental impact.

By integrating Sustainability practices into TPS implementation, organizations can achieve operational excellence while also contributing to environmental stewardship. Some ways TPS promotes Sustainability include:

  1. Waste Identification & Elimination: TPS focuses on identifying and eliminating waste in processes. By minimizing overproduction, defects, transportation, waiting, inventory, motion, and excessive processing, organizations can reduce resource consumption and environmental impact.
  2. Lean Supply Chains: TPS principles extend beyond the organization to suppliers. Collaboration with suppliers to reduce waste and optimize transportation can lead to leaner and more sustainable supply chains.
  3. Efficient Resource Utilization: TPS encourages optimal use of resources, which can lead to reduced energy consumption and more efficient use of raw materials.
  4. Continuous Improvement: Sustainability efforts can benefit from a culture of continuous improvement fostered by TPS. Regularly seeking opportunities for greener practices can lead to ongoing environmental benefits.
  5. Innovation and Design: TPS emphasizes designing processes that minimize waste from the start. Integrating sustainable design principles into product development can lead to products that are more resource-efficient and environmentally friendly.
  6. Long-Term Thinking: TPS encourages long-term thinking, which aligns with Sustainability goals. This involves considering the impact of decisions on future generations and making choices that promote both immediate and long-term well-being.
190-slide PowerPoint presentation
The office, by any name, is a paperwork factory. To become a Lean enterprise, office activities must fully support shop-floor manufacturing operations to eliminate waste. The adoption of 5S throughout all office functions is the first step to increase efficiency. 5S principles are dedicated to [read more]

Want to Achieve Excellence in Process Improvement?

Gain the knowledge and develop the expertise to become an expert in Process Improvement. Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

Process Improvement involves analyzing and improving existing business processes in the pursuit of optimized performance. The goals are typically to continuously reduce costs, minimize errors, eliminate waste, improve productivity, and streamline activities.

As we continue to deal with COVID-19 and its economic aftermath, most organizations will prioritize Business Process Improvement initiatives. This is true for a few reasons. First, Process Improvement is one of the most common and effective ways of reducing costs. As the global economy slows down, Cost Management will jump to the forefront of most corporate agendas.

Secondly, a downturn typically unveils ineffective and broken business processes. Organizations that once seemed agile and focused during periods of growth may become sluggish and inefficient when demand drops off.

Lastly, COVID-19 has expedited Digital Transformation for most organizations. One of the quickest and most impactful forms of Digital Transformation is Robotic Process Automation (RPA). Thus, we have included numerous RPA frameworks within this Stream.

Learn about our Process Improvement Best Practice Frameworks here.

Readers of This Article Are Interested in These Resources


206-slide PowerPoint presentation
The 8D Problem Solving Process has become a standard in many industries as problem solving or improvement process, as internal Corrective Action Request (CAR) Process or as Supplier Corrective Action Request (SCAR) Process. The 8D Problem Solving Process Training Module [read more]


 
157-slide PowerPoint presentation
 
 
100-slide PowerPoint presentation

About Charles Intrieri

Charles Intrieri is subject matter expert on Cost Reduction, Supply Chain, and 3rd Party Logistics. He is also an author on Flevy (view his documents materials). Managing his own consultancy for the past 25 years, Charles has helped dozens of clients achieve leaner and more efficient operations. You can connect with him here on LinkedIn or email him directly (cmiconsulting93@gmail.com). Charles also has a presentation Why Lean Fails in a Company? available for free download here.

, ,



Complimentary Business Training Guides


Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]

  This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]

We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]

  We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function

  

  

  

  

  

The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most of our articles are authored by management consultants and industry executives with over 20 years of experience.

Flevy (https://flevy.com) is the marketplace for business best practices, such as management frameworks, presentation templates, and financial models. Our best practice documents are of the same caliber as those produced by top-tier consulting firms (like McKinsey, Bain, Accenture, BCG, and Deloitte) and used by Fortune 100 organizations. Learn more about Flevy here.
  


OUR CORE OFFERINGS
Flevy Marketplace: Top 100
· Strategy & Transformation
· Digital Transformation
· Operational Excellence
· Organization & Change
· Financial Models
· Consulting Frameworks
· PowerPoint Templates
FlevyPro (Subscription Service)
KPI Library
Streams (Functional Bundles)
Flevy Executive Learning (FEL)
PowerPoint Services

FREE Resources

About Flevy
Management Topics
Marcus (AI-Powered Consultant)
Partner Program
LinkedIn Influencer Marketing
FAQ / Terms / Privacy / Blog
Contact Us: support@flevy.com



CONNECT WITH US!
       
TOP 100 TRENDING TOPICS
Acquisition Strategy
Agile
Analytics
Artificial Intelligence
Balanced Scorecard
Best Practices
Big Data
Breakout Strategy
Business Continuity Planning
Business Plan Financial Model
Business Transformation
CMMI
COBIT
Change Management
Cloud
Communications Strategy
Company Financial Model
Competitive Advantage
Competitive Analysis
Consulting Frameworks
Continuous Improvement
Core Competencies
Corporate Culture
Cost Reduction Assessment
Customer Experience

BROWSE BY FUNCTION
Strategy, Transformation, & Innovation
Digital Transformation
Operational Excellence and LSS
Organization, Change, & HR
Management Consulting

Customer Journey
Customer Service
Cyber Security
Data Privacy
Decision Making
Digital Marketing Strategy
Digital Transformation
Digital Transformation Strategy
Due Diligence
ESG
Employee Engagement
Employee Training
Enterprise Architecture
Growth Strategy
HR Strategy
Hiring
Hoshin Kanri
ISO 27001
ITIL
Information Technology
Innovation Management
Integrated Financial Model
Kaizen
Kanban
Key Performance Indicators

ADDITIONAL RESOURCES
Business Strategy Frameworks
Case Studies
Consulting Training Guides
COVID-19 Trend Data
Digital Transformation
Financial Advising Services (FAS)

Knowledge Management
Leadership
Lean
Lean Manufacturing
Logistics
M&A (Mergers & Acquisitions)
Manufacturing
Market Research
Marketing Plan Development
Maturity Model
McKinsey PowerPoint
McKinsey Templates
Operational Excellence
Organizational Change
Organizational Design
Performance Management
Post-merger Integration
Pricing Strategy
Process Improvement
Process Maps
Procurement Strategy
Product Launch Strategy
Product Strategy
Project Management
Quality Management


Free Resources
KPI Library
Lean Management
Lean Six Sigma Training Guides
Marcus Insights
Operational Excellence

Real Estate
Remote Work
Restructuring
Risk Management
Robotic Process Automation
SWOT
SaaS
Sales
Scrum
Service Design
Six Sigma Project
Social Media Strategy
Strategic Planning
Strategic Thinking
Strategy Development
Supply Chain Analysis
Sustainability
Target Operating Model
Team Management
Total Productive Maintenance
Value Chain Analysis
Value Creation
Value Stream Mapping
Visual Workplace
Workplace Safety


Product Strategy
Small Business Owner
Startup Resources
Strategic Planning
Strategic Planning Process
Value Innovation Strategy


© 2012-2024 Copyright. Flevy LLC. All Rights Reserved.