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Decoding the DNA of the Toyota Production System www.hbrreprints.org The Toyota story has been intensively researched and Decoding the DNA of painstakingly documented, yet what really happens inside the Toyota Production the company remains a mystery. Here’s new insight into the unspoken rules that System give Toyota its competitive edge. by Steven Spear and H. Kent Bowen Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief—the core idea The Idea in Practice—putting the idea to work 2 Decoding the DNA of the Toyota Production System 12 Further Reading A list of related materials, with annotations to guide further exploration of the article’s ideas and applications Reprint 99509 Decoding the DNA of the Toyota Production System The Idea in Brief The Idea in Practice Toyota’s renowned production system (TPS) TPS’s four rules: clude that their demand on the next ma- has long demonstrated the competitive ad- chine doesn’t match their expectations. All work is highly specified in its content, vantage of continuous process improve- They revisit the organization of their pro- sequence, timing, and outcome. ment. And companies in a wide range of duction line to determine why the machine Employees follow a well-defined sequence of industries—aerospace, metals processing, was not available, and redesign the flow steps for a particular job. This specificity en- consumer products—have tried to imitate path. ables people to see and address deviations TPS. Yet most fail. immediately—encouraging continual learn- Any improvement to processes, worker/ Why? Managers adopt TPS’s obvious prac- ing and improvement. machine connections, or flow path must tices, without applying the four unwritten be made through the scientific method, Example: rules that make TPS successful. Like strands under a teacher’s guidance, and at the Installing the right-front seat in a Camry re- of DNA, these rules govern how people lowest possible organizational level. quires seven tasks performed in a specific carry out their jobs, how they interact with Frontline workers make improvements to sequence over 55 seconds. If a worker finds each other, how products and services flow, their own jobs. Supervisors provide direction himself doing task 6 before task 4 or falling and how people identify and address pro- and assistance as teachers. behind schedule, he and his supervisor cess problems. correct the problem promptly. Then they Example: The rules rigidly specify how every activity— determine whether to change the task At one Toyota factory, workers seeking to from the shop floor to the executive suite, specifications or retrain the worker to pre- reduce a machine’s changeover time from from installing seat bolts to reconfiguring a vent a recurrence. 15 to 5 minutes were able to reduce the manufacturing plant—should be per- time only to 7.5 minutes. A manager asked Each worker knows who provides what to formed. Deviations from the specifications why they hadn’t achieved their original 5- him, and when. become instantly visible, prompting people minute goal. His question helped them see Workers needing parts submit cards specify- to respond immediately with real-time ex- that their original goal had been a random ing part number, quantity, and required desti- periments to eradicate problems in their guess, not based on a formal hypothesis nation. Suppliers must respond to materials own work. Result? A disciplined yet flexible about how fast it could be done and why. requests within specified periods of time. and creative community of scientists Thus they couldn’t test the hypothesis to Workers encountering a problem ask for help who continually push Toyota closer to its determine what caused the less-than- immediately. Designated assistants must re- zero-defects, just-in-time, no-waste ideal. ideal results. spond at once and resolve the problem within Mastering TPS’s four rules takes time. But by the worker’s cycle time (e.g., the 55 seconds it dedicating yourself to the process, you takes to install a front seat). stand a better chance of replicating Toyota’s Failure to fulfill these specifications signals a DNA—and its performance. search for potential causes—such as ambiguous requests from colleagues or an overwhelmed assistant. Once the cause is identified, it’s re- solved rather than kept hidden. Every product and service flows along a simple, specified path. Goods and services don’t flow to the next available person or machine—but to a specific person or machine. Example: If workers at an auto parts supplier find themselves waiting to send a product to the next designated machine they con- OPYRIGHT © 2006 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. OPYRIGHT © 2006 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. C page 1 The Toyota story has been intensively researched and painstakingly documented, yet what really happens inside the company remains a mystery. Here’s new insight into the unspoken rules that give Toyota its competitive edge. Decoding the DNA of the Toyota Production System by Steven Spear and H. Kent Bowen The Toyota Production System has long been not the case. Other Japanese companies, such hailed as the source of Toyota’s outstanding as Nissan and Honda, have fallen short of performance as a manufacturer. The system’s Toyota’s standards, and Toyota has success- distinctive practices—its kanban cards and fully introduced its production system all quality circles, for instance—have been widely around the world, including in North America, introduced elsewhere. Indeed, following their where the company is this year building over a own internal efforts to benchmark the world’s million cars, mini-vans, and light trucks. best manufacturing companies, GM, Ford, So why has it been so difficult to decode the and Chrysler have independently created Toyota Production System? The answer, we be- major initiatives to develop Toyota-like pro- lieve, is that observers confuse the tools and duction systems. Companies that have tried to practices they see on their plant visits with the adopt the system can be found in fields as di- system itself. That makes it impossible for verse as aerospace, consumer products, metals them to resolve an apparent paradox of the processing, and industrial products. system—namely, that activities, connections, What’s curious is that few manufacturers and production flows in a Toyota factory are have managed to imitate Toyota successfully— rigidly scripted, yet at the same time Toyota’s even though the company has been extraordi- operations are enormously flexible and adapt- narily open about its practices. Hundreds of able. Activities and processes are constantly thousands of executives from thousands of being challenged and pushed to a higher level businesses have toured Toyota’s plants in Japan of performance, enabling the company to con- and the United States. Frustrated by their in- tinually innovate and improve. ability to replicate Toyota’s performance, many To understand Toyota’s success, you have to visitors assume that the secret of Toyota’s suc- unravel the paradox—you have to see that the cess must lie in its cultural roots. But that’s just rigid specification is the very thing that makes OPYRIGHT © 1999 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. OPYRIGHT © 1999 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. C harvard business review • september–october 1999 page 2 Decoding the DNA of the Toyota Production System the flexibility and creativity possible. That’s make explicit what is implicit. We describe what we came to realize after an extensive, four principles—three rules of design, which four-year study of the Toyota Production Sys- show how Toyota sets up all its operations as tem in which we examined the inner workings experiments, and one rule of improvement, of more than 40 plants in the United States, which describes how Toyota teaches the scien- Europe, and Japan, some operating according tific method to workers at every level of the to the system, some not. We studied both pro- organization. It is these rules—and not the cess and discrete manufacturers whose prod- specific practices and tools that people observe ucts ranged from prefabricated housing, auto during their plant visits—that in our opinion parts and final auto assembly, cell phones, and form the essence of Toyota’s system. That is computer printers to injection-molded plastics why we think of the rules as the DNA of the and aluminum extrusions. We studied not only Toyota Production System. Let’s take a closer routine production work but also service func- look at those rules (for a summary, see the tions like equipment maintenance, workers’ sidebar “The Four Rules”). training and supervision, logistics and materi- als handling, and process design and redesign. Rule 1: How People Work We found that, for outsiders, the key is to un- Toyota’s managers recognize that the devil is derstand that the Toyota Production System in the details; that’s why they ensure that all creates a community of scientists. Whenever work is highly specified as to content, se- Toyota defines a specification, it is establishing quence, timing, and outcome. When a car’s sets of hypotheses that can then be tested. In seat is installed, for instance, the bolts are al- other words, it is following the scientific ways tightened in the same order, the time it method. To make any changes, Toyota uses a takes to turn each bolt is specified, and so is rigorous problem-solving process that requires the torque to which the bolt should be tight- a detailed assessment of the current state of af- ened. Such exactness is applied not only to the fairs and a plan for improvement that is, in ef- repetitive motions of production workers but fect, an experimental test of the proposed also to the activities of all people regardless of changes.
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