TOYOTA – the principles on which the company’s success is built

TOYOTA – the principles on which the company’s success is built
Picture: Wieslaw Jarek | Dreamstime

Toyota is one of the largest automotive corporations in the world, in the article we will pay attention to what principles underlie this outstanding business.

Long-term strategy

Basing your decisions on the philosophy of long-term planning

  • Look deeper to understand the true goal and develop a long-term strategy, even if you have to sacrifice short-term financial results.
  • Don’t try short term, possibly patchy solutions.
  • To work, grow and develop an entire organization towards a common goal is much more than just making money.
  • Understand your place in the history of the company and work to take the company to the next level of development.
  • Creating value for customers, society and the economy is the starting point. Consider every work cycle process in the company in relation to this point.
  • Be responsible. Strive to determine your own destiny. Act with confidence in yourself and your abilities.
KFC – the legendary fast food establishments of Colonel Sanders
KFC – the legendary fast food establishments of Colonel Sanders

This philosophy is the foundation for all other principles and their postulates.

Properly organized process – correct results

Create a continuous, integrated process loop in order to get all possible problems out in the open

  • Re-engineer business processes to achieve a continuous cycle. Strive to reduce as much as possible the time of project inactivity or the time of waiting for information from one of the participants in the cycle.
  • Create a work cycle where information or physical value moves at maximum speed. This will allow you to instantly “expose” all the problems.
  • Make the workflow clear and transparent to everyone in the organization. This is the key to the continuous development of the company and employees.

Use an integrated workflow to avoid overproduction

  • All participants involved in the process chain must receive the information they need to work in time and in the right amount. Items should only be replenished when needed – this is the all-in-time principle.
  • Minimize any unfinished activities of the overall process and unnecessary stockpiling. Warehouses should have the necessary minimum, which is updated as they are used.
  • Always ready for daily fluctuations in demand and less dependent on electronic charts and systems. This will help avoid inventory losses and avoid stockpiling.
DAF: from a small workshop to cool trucks
DAF: from a small workshop to cool trucks

It is necessary to evenly distribute the load

  • Waste elimination is only part of the overall effort to create a “lean” process. It is also important to eliminate the overload of people and equipment, as well as sharp jumps in the production schedule.
  • It is necessary to evenly distribute the load throughout the entire production and service cycle. This is an alternative to the constant stop and restart of work due to overloads of individual sections, which are typical in the processes of most companies.
Toyota Camry. Picture: Maksim Ladouski | Dreamstime

Stop the process to resolve the issue and maintain quality

  • Product quality for the end customer is the engine of the entire system.
  • Use all modern quality assessment methods.
  • Integrate automated problem detection and shutdown systems into equipment. Develop visual systems for tracking equipment problems to alert maintenance personnel and managers in time. Jidoka – machines with human intelligence – the basis of a quality process.
  • Develop support systems that will promptly resolve problems and take action in response.
  • Integrate a culture of stopping/slowing down the cycle into business processes to fix problems and maintain quality.
Amazon: tech giant’s business strategy
Amazon: tech giant’s business strategy

Task standardization is the foundation for continuous development

  • Use consistent, reproducible work practices to manage and increase predictability of deliverables and deadlines.
  • Continuously record lessons learned and standardize best practices. Do not discourage creativity and self-expression if doing so will lead to improved standards of work. And then the experience gained by one employee can be quickly standardized and transferred to the next.

Visual control – full problem control

  • Use simple visual indicators to detect points of deviation from the standard.
  • Avoid the use of computer monitors as it takes attention away from the work area.
  • Install simple visual inspection systems at key points in the workflow.
  • Reduce reports to one page wherever possible, even on important financial decisions.
Alibaba is a successful company with a distinct corporate culture
Alibaba is a successful company with a distinct corporate culture

Use only reliable and proven technologies

  • Use technology only as an aid to people, not as a substitute.
  • Sometimes a process needs to be done manually before it can be entrusted to the hardware and automated.
  • New technologies can often be unreliable and difficult to standardize, endangering the entire process. A process using proven technologies is preferable to a process using new and unproven ones.

The value of the organization is the potential of employees and partners

Growing leaders who understand the workflow, philosophy and pass on knowledge to others

  • You need to grow leaders within the company, not try to acquire them outside.
  • Don’t look at the job of being a leader as simply being good at getting things done and having good people skills. Leaders should embody the philosophy of the company and lead by example.
  • A good leader must have an exceptionally detailed understanding of everyday tasks, only then can he be a conductor of the company’s philosophy.
Picture: Nanhatai Thammachakkul | Dreamstime

To grow exceptional people and teams that follow the philosophy of the company

  • Create and maintain a strong culture of company values ​​and beliefs that will last for years.
  • Teach talented people and teams to work within a single company philosophy to achieve exceptional results.
  • Form cross-functional teams that can solve complex technical problems. This will improve the quality of the entire process. Give people modern tools to solve company problems.
  • Teamwork is something you can learn.
Renault: the story of a legendary company
Renault: the story of a legendary company

Respect for partners and suppliers, setting them difficult goals and helping them develop

  • Respect your partners and suppliers and accept them as part of your job.
  • Create conditions for partners for their development and growth. This will show them that they are appreciated. Set difficult tasks for partners and help solve them.

Finding and eliminating the source of problems is the way to continuous development

See the situation for yourself to understand

  • Solve problems and optimize processes by observing the situation directly on the spot, instead of theorizing from the words of people or computer data.
  • Think and speak based only on personally verified data.
  • Even senior managers need to be on site to see things with their own eyes, thus gaining a true understanding of the situation.

Make decisions without haste, considering all options. Implement the decision quickly

  • Don’t try to go one way until all alternatives have been considered.
  • Discuss problems and possible solutions with all involved in order to understand all ideas and agree on next steps. This is the process of developing a consensus. And although such a process may take time, it will help to find the right solution and prepare the conditions for its rapid implementation.
Netflix: Business Strategy
Netflix: Business Strategy

Become a learning organization through continuous learning and improvement

  • Once you have established a stable process, you need to constantly use improvement tools to analyze the workflow, identify possible bottlenecks and take timely action to eliminate them.
  • Develop processes that do not require inventory. This will allow you to see the wasted time and resources. Once the losses are found, they can be eliminated.
  • After completing the cycle, conduct a final analysis of problems and shortcomings and develop methods to eliminate them.
  • Protect the company’s knowledge base. Prevent turnover, gradually promote employees, develop a succession mechanism.
  • Learn from standardizing best practices rather than reinventing the wheel on every new project with a new manager.