The 14 Principles

Section I — Long-Term Philosophy

Principle 1

• Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. People need purpose to find motivation and establish goals.

Section II — Long-Term Philosophy

Principle 2

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

Work processes are redesigned to eliminate waste (muda) through the process of continuous improvement — kaizen. The seven types of muda are:

1. Overproduction
2. Waiting (time on hand)
3. Unnecessary transport or conveyance
4. Overprocessing or incorrect processing
5. Excess inventory
6. Motion
7. Defects

Principle 3

• Use “pull systems” to avoid overproduction.

A method where a process signals its predecessor that more material is needed. The pull system produces only the required material after the subsequent operation signals a need for it. This process is necessary to reduce overproduction.

Principle 4

• Level out the workload (heijunka). (Work like the tortoise, not the hare).

This helps achieve the goal of minimizing waste (muda), not overburdening people or the equipment (muri), and not creating uneven production levels (mura).

Principle 5

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

Quality takes precedence (Jidoka). Any employee in the Toyota Production System has the authority to stop the process to signal a quality issue.

Principle 6

• Standardized tasks and processes are the foundation for continuous improvement and employee empowerment.

Although Toyota has a bureaucratic system, the way that it is implemented allows for continuous improvement (kaizen) from the people affected by that system. It empowers the employee to aid in the growth and improvement of the company.

Principle 7

• Use visual control so no problems are hidden.

Included in this principle is the 5S Program – steps that are used to make all work spaces efficient and productive, help people share work stations, reduce time looking for needed tools and improve the work environment.

• Sort: Sort out unneeded items
• Straighten: Have a place for everything
• Shine: Keep the area clean
• Standardize: Create rules and standard operating procedures
• Sustain: Maintain the system and continue to improve it

Principle 8

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

Technology is pulled by manufacturing, not pushed to manufacturing.

Section III — Add Value to the Organization by Developing Your People

Principle 9

• Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.

Without constant attention, the principles will fade. The principles have to be ingrained, it must be the way one thinks. Employees must be educated and trained: they have to maintain a learning organization.

Principle 10

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

Teams should consist of 4-5 people and numerous management tiers. Success is based on the team, not the individual.

Principle 11

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

Toyota treats suppliers much like they treat their employees, challenging them to do better and helping them to achieve it. Toyota provides cross functional teams to help suppliers discover and fix problems so that they can become a stronger, better supplier.

Section IV — Continuously Solving Root Problems Drives Organizational Learning

Principle 12

• Go and see for yourself to thoroughly understand the situation (Genchi Genbutsu).

Toyota managers are expected to “go-and-see” operations. Without experiencing the situation firsthand, managers will not have an understanding of how it can be improved. Furthermore, managers use Tadashi Yamashima’s (President, Toyota Technical Center (TTC)) ten management principles as a guideline:

1. Always keep the final target in mind.
2. Clearly assign tasks to yourself and others.
3. Think and speak on verified, proven information and data.
4. Take full advantage of the wisdom and experiences of others to send, gather or discuss information.
5. Share information with others in a timely fashion.
6. Always report, inform and consult in a timely manner.
7. Analyze and understand shortcomings in your capabilities in a measurable way.
8. Relentlessly strive to conduct kaizen activities.
9. Think “outside the box,” or beyond common sense and standard rules.
10. Always be mindful of protecting your safety and health.

Principle 13

• Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly (nemawashi).

The following are decision parameters:

1. Find what is really going on (go-and-see) to test
2. Determine the underlying cause
3. Consider a broad range of alternatives
4. Build consensus on the resolution
5. Use efficient communication tools

Principle 14

• Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen).

The process of becoming a learning organization involves criticizing every aspect of what one does. The general problem solving technique to determine the root cause of a problem includes:

1. Initial problem perception
2. Clarify the problem
3. Locate area/point of cause
4. Investigate root cause (5 whys)
5. Countermeasure
6. Evaluate
7. Standardize

Reference:
https://en.wikipedia.org/wiki/The_Toyota_Way