The Toyota Way by Jeffrey Liker14 Management Principles from the World’s Greatest Manufacturer

Book Review

- Mehul

Bardia IIM Raipur

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Introduction

The Toyota Approach – 4P’s

Key Learning's

Current Performance

Applying Toyota Way in our life

Contents

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Respect for People

Strategic Weapon. 1980’s – Automotive

Industry in USA

•Failure of the American Companies

and the rise of Japanese Companies.

The Heart of

Toyota Production

System – MANAGEMENT

OF WASTE

Continuous

Improvement

Toyota’s Model was however

different.

•It was neither an American

Way or Japanese Way

Operational Excellence

Choose a “handwritten” font to make this book more like a notebook or a standard font to look more like a printed book.

Introduction

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The Right Process Will Produce the Right Results

Add

Value to the Organization by Developing Your People and

Partners

Continuously Solving Root Problems

The Toyota Approach – 4P’s

Principles 12 -14

Principles 9 - 11

Principles 2 - 8

Principle 1

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o Philosophyo Base your management decisions on a long term philosophy, even

at the expense of short term financial goals.o Process

o Create continuous process flow to bring problems to the surface.o Use “pull” systems to avoid overproduction.o Level out workload (heijunka).o Build a culture of stopping to fix problems, to get quality right the

first time.o Standardized tasks are the foundation for continuous

improvement and employee empowermento Use visual control so no problems are hidden.o Use only reliable thoroughly tested technology that serves your

people and processes.

14 Principles

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o People and Partnerso Grow leaders who thoroughly understand the work, live the

philosophy, and teach it to otherso Develop exceptional people and teams who follow your

company’s philosophyo Respect you extended network of partners and suppliers by

challenging them improve.o Problems

o Go and see for yourself to thoroughly understand the situation.o Make decisions slowly by consensus, thoroughly considering all

options; implement decisions rapidlyo Become a learning organization through relentless reflection

(hansei) and continuous improvement (kaizen)

14 Principles

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o Working Capital Management as a Competitive Advantage

o The real meaning of Valueo Self-Improvemento Applying the Toyota Way

Key Learning’s

8

20022003200420052006200720082009201020110

0.5

1

1.5Current RatioQuick Ratio

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

Working Capital Management

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0

10

20

30

NWCCFOMoving average (CFO)

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Cash Cycle

20022003200420052006200720082009201020110

20

40

60

80

100

120

140

CCCDSIDSODPO

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2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

NPMGPMROAROE

Profitability

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Current Performance (Consumer Report 2011)

Automaker Overall Score

Honda 74Subaru 73Toyota 71Volvo 68Ford 67Hyundai 66Mazda 65Nissan 65Volkswagen 63Mercedes – Benz

57

BMW 57General Motors

56

Chrysler 43

Make & Model Overall Score

Lexus LS 460L 99BMW 135i 97Infiniti G37 (sedan) 95Toyota Camry Hybrid XLE 93Audi A6 (3.0T) 93Infiniti M37 93Nissan Altima 3.5 SR 93Chevrolet Corvette Z06 92Hyundai Genesis 3.8 (sedan)

92

Toyota Camry XLE (V6) 92Audi A8 L 91Lexus ES 350 91Nissan Altima 2.5 S 91

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Customer and the added value.

Identify Repetitive processes

Map the flow

Think creatively.

Start doing it and learn by doing using a PDCA.

Applying Toyota Way in your life

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THANK YOU