The Toyota Way – 14 Management Principles from the World’s Greatest Manufacturer to Thrive in 2021 and Beyond

Written by: equipmentfx

August 8, 2021

What OEMs and Dealers Can Learn from Toyota Manufacturing

14 Simple Ways to Improve Practically Everything at Your OEM or Dealer

In doing a review of past research and recommended reading, I found an old book summary of “The Toyota Way,” written by Jeffrey Liker. Even though the material is dated, the management philosophies of Toyota are still as true as ever and definitely worth a read.

Doing our work at EquipmentFX, we follow the same basic processes to bring projects to life for clients using modern methods and tools to track progress and continuous improvement.

Principle #1: Base your management decisions on a long-term philosophy, even at the expense of short-term goals. Does your company have a strategic plan to adopt better operational, digital and transformational initiatives to drive your success for years and decades to come?

Principle #2: Create continuous process flow to bring problems to the surface. Does your company, in every department, for every task and project, have a way to see and correct problems before they become really big problems?

Principle #3: Use “pull” systems to avoid overproduction. Translated, this might mean not having too many people for too few tasks. Identify idle time, match time to tasks by employees and get them involved in doing new things.

Principle #4: Level out the workload (Heijunka). Consistent with principle #3, identify areas where someone might be overworked and others who are underworked. Identify and train them on new tasks, and balance the workload without adding new resources if at all possible.

Principle #5: Build a culture of stopping to fix problems to get quality right the first time. At an OEM or dealer level, this means an open culture of engaging employees in a way that values their input when they see a problem.

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

Standardizing tasks, job descriptions, and other work roles are changing every day, and the pace of change is accelerating. Are you current with standardized tasks today, given the pace of change?

Principle #7: Use visual control so that no problems are hidden.

At the OEM or dealer level, visual controls come in many forms. Open communication, open-door policies, project management tools, production line controls. Are they all in place, in use and understood by all stakeholders?

Principle #8: Use only reliable, thoroughly tested technology that serves your people and processes.

With so many new technologies to drive sales, marketing and operational effectiveness throughout any organization, how do you choose and evaluate what is truly best for your company and situation? Is there a formal evaluation process in place for all new initiatives and/or any technology integration your company is considering?

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

There are some great management teachers in our industry and programs for employee improvement. Do you know who your next great leaders are? Are you managing a leadership development program proactively?

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

Do you have a sound, understandable and executable company philosophy? Is there buy-in on all levels, and how do you measure this buy-in?

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

Partners and suppliers can get lazy and fall into patterns. Sometimes they need to be challenged and compared, service and price-wise. Keep them honest; ask for feedback and fairness relative to competitive options.

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

I used to put on a pair of coveralls once per quarter and ride with a technician to see the most persistent, high-priced warranty costs that weren’t covered. We established a pattern of feedback to the OEM and got reimbursed in the process outside of the normal policy. We had the details!

Principle #13: Make decisions slowly by consensus, implement decisions rapidly (Newamashi). Today, it’s hard to make decisions slowly given the pace of change. We have to strike a balance now in building consensus through evaluation and review of key initiatives. Then find the tools, partners and processes to implement faster than ever before.

Principle #14: Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen).

I believe Toyota is best known for #14, specifically continuous improvement. Today, there are thousands of resources to leverage and learn from in order to become a “learning” organization. The challenge is identifying the most meaningful resources based on your unique company needs, get buy-in, measure learning or engagement and test any outcome of any learning.

I hope you enjoyed this summary. It’s a great reminder of solid fundamentals that apply every day to everything we do.

About EquipmentFX Services

Over the years, the services we offer have evolved to meet each client’s unique needs. We like to lead with our proprietary A3 assessment to really understand the gaps and opportunities. From there we can discuss follow-on services that we can customize together.

After each assessment, the two questions clients usually ask us are “Can you just do this stuff for us?” followed by “We have marketing people—how can we make them and our processes more efficient?” And sometimes we simply deliver the road map and provide support as needed. At the end of any engagement, you will have a formal framework and internal audit process to improve your program or build a program from scratch to create more new customers and to sell more to existing ones.

To find out more about the EquipmentFX A3 assessment, digital marketing or technology consulting services, please contact us.

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