The Toyota Production System is a classic in the world of business operations. It has a tremendous track record of turning businesses around in very little time. Most important it has changed the way people think and observe process and by-the-way everything is a process.
Even at Mc Donald's another real favorite company of mine as a mature example of Lean employs many of the foundational attributes found within the Toyota Production System. The primary difference between Toyota and Mc Donald's is that Toyota assumes you will become a lifetime employee while at Mc Donald's they model their production system using a transitional workforce.
Today I want to share with you 5 Toyota principles that can help your business improve and collect higher profit margins.
(Want to apply these Toyota principles to your business but don't have the expertise or the time? We're currently accepting new clients. Book a complimentary call today to discuss what Kunst's consulting engagements look like.)
1. Eliminating Waste
The Toyota Production System scrutinizes each step, from raw materials to finished goods, to banish waste—be it time, resources, or storage costs.
Step 1: Conduct a Comprehensive Waste Audit
Begin by scrutinizing every facet of your production process, from the procurement of raw materials to the delivery of finished products. Identify and document instances of waste, whether it's idle time, surplus inventory, overproduction, or excessive resource consumption.
Step 2: Root Cause Analysis
Dive deep to identify the root causes of waste. Is it due to inefficient processes, unnecessary steps, or suboptimal resource allocation? Pinpointing these factors is essential to effective waste elimination.
Step 3: Implement Lean Techniques
Utilize Lean methodologies such as 5S (Sort, Set in order, Shine, Standardize, Sustain), Value Stream Mapping, and Just-In-Time inventory management to systematically banish waste. Streamline processes, optimize inventory levels, and reduce excess resource usage.
2. Creating Flow
TPS endeavors to establish a smooth flow across the production line. By doing so, it shuns wasteful steps and unnecessary processes, optimizing production efficiency.
Step 1: Map Your Production Line
Create a visual map of your production process, highlighting each step and the flow of materials or information. This provides a clear understanding of the current state.
Step 2: Identify Bottlenecks and Redundancies
Analyze the process map to identify bottlenecks, areas of congestion, and redundant steps. These are the obstacles to smooth flow that need to be addressed.
Step 3: Implement Flow Principles
Redesign your processes to ensure a seamless flow. Minimize handoffs, reduce wait times, and implement work cells or production cells to enable work to flow continuously without interruptions.
3. Pull System
Unlike push systems which operate on forecasting, TPS champions a pull-based production system.
In this approach, the production cycle and supply chain adapt to real-time customer demand, reducing waste and amplifying responsiveness.
Step 1: Understand Customer Demand
Gain insights into real-time customer demand by analyzing historical data and trends. Develop a deep understanding of your customer's needs and preferences.
Step 2: Align Production with Demand
Reconfigure your production scheduling and supply chain to respond dynamically to customer demand. Implement a pull system that triggers production only when there is a genuine customer demand signal.
Step 3: Collaborate with Suppliers
Extend the pull system philosophy to your suppliers, fostering collaboration and communication to ensure they also respond to your changing requirements in real-time.
4. Continuous Improvement (Kaizen)
TPS is not a static model; it thrives on continuous process improvement.
Kaizen events become the crucible where staff and management collaborate to continuously improve the system.
Step 1: Establish a Kaizen Culture
Create a culture of continuous improvement within your organization. Communicate the importance of Kaizen to all employees, from the shop floor to top management.
Step 2: Kaizen Events
Regularly schedule Kaizen events where cross-functional teams come together to analyze processes, identify improvement opportunities, and implement changes. These events should be well-structured and focused on specific areas.
Step 3: Measure and Evaluate
Implement key performance indicators (KPIs) to measure the impact of Kaizen initiatives. Continuously monitor and evaluate the results to ensure that improvements are sustained.
5. Pursuing Perfection
While Kaizen focuses on incremental gains, the overarching goal remains unwavering—pursue perfection.
Step 1: Define Perfection
Clearly define what perfection means for your business. Is it the highest level of product quality, unparalleled customer satisfaction, or something else? This definition will guide your pursuit.
Step 2: Strive for Incremental Gains
Embrace the philosophy of Kaizen as the vehicle for achieving perfection. Continuously seek incremental improvements in quality, efficiency, and customer experience.
Step 3: Never Settle
Maintain an unwavering commitment to never settling for the status quo. Encourage your team to challenge existing processes and embrace change as a constant on the path to perfection.
Conclusion
TPS aims not just to reduce costs but also to improve quality, ultimately enhancing customer satisfaction.
These principles are so effective that they gave birth to the well-known Lean method.
Using them in your business can be a complete game changer!
Want to apply these Toyota principles to your business but don't have the expertise or the time? We're currently accepting new clients. Book a complimentary call today to discuss what Kunst's consulting engagements look like.