Creating and nurturing Lean Leaders is a challenge faced by any organization looking to embed Lean thinking & values deeply into their business: Lean Leadership Assignment, UOB, Ireland

Creating and nurturing Lean Leaders is a challenge faced by any organization looking to embed Lean thinking & values deeply into their business. Read the Steven Spear article “Learning to Lead at Toyota” and then select and read an appropriate executive interview (see “Executive interviews on Lean Leadership – LEI”.

Comment on any differences or similarities that exist between the attitudes or approaches outlined in the articles you’ve read and those in an organization you know. Was there a single key element from the articles that you would prioritize within this organization? Why?

Learning to Lead at Toyota

Toyota is one of the world’s most storied companies, drawing the attention of journalists, researchers, and executives seeking to benchmark its famous production system. For good reason: Toyota has repeatedly outperformed
its competitors in quality, reliability, productivity, cost reduction, sales and market share growth, and market capitalization. By the end of last year, it was on the verge of replacing DaimlerChrysler as the third-largest North American car company in terms of production, not just sales.

In terms of global market share, it has recently overtaken Ford to become the second-largest carmaker. Its net income and market capitalization by the end of 2003 exceeded those of all its competitors. But those very achievements beg a question: If Toyota has been so widely studied and copied, why have so few companies been able to match its performance?

In our 1999 HBR article, “Decoding the DNA of the Toyota Production System,” H. Kent Bowen and I argued that part of the problem is that most outsiders have focused on Toyota’s tools and tactics—kanban pull systems, cords, production cells, and the like—and not on its basic set of operating principles.

In our article, we identified four such principles, or rules, which together ensure that regular work is tightly coupled with learning how to do the
work better. These principles lead to ongoing improvements in reliability, flexibility, safety, and efficiency, and, hence, market share and profitability.

As we explained in the article, Toyota’s real achievement is not merely the creation and use of the tools themselves; it is in making all its work a series of nested, ongoing experiments, be the work as routine as installing seats in cars or as complex, idiosyncratic, and large scale as designing and launching a new
model or factory.

We argued that Toyota’s much-noted commitment to standardization is not for the purpose of control or even for capturing a best practice, per se. Rather, standardization—or more precisely, the explicit specification of how work is going to be done before it is performed—is coupled with testing work as it

The Program

Dallis arrived at Toyota’s Kentucky headquarters early one wintry morning in January 2002. He was greeted by Mike Takahashi (not his real name), a senior manager of the Toyota Supplier Support Center (TSSC), a group responsible for developing Toyota’s and supplier plants’ competency in TPS. As such, Takahashi was responsible for Dallis’s orientation into the company.

Once the introductory formalities had been completed, Takahashi ushered Dallis to his car and proceeded to drive not to the plant where Dallis was to eventually work but to another Toyota engine plant where Dallis would begin his integration into the company.

That integration was to involve 12 intensive weeks in the U.S. engine plant and ten days working and making observations in Toyota and Toyota supplier plants in Japan. The content of Dallis’s training—as with that of any other Toyota manager—would depend on what, in Takahashi’s judgment, Dallis most needed

The Power of Principles

The insight that Toyota applies underlying principles rather than specific tools
and processes explains why the company continues to outperform its competitors. Many companies have tried to imitate Toyota’s tools as opposed to its principles; as a result, many have ended up with rigid, inflexible production systems that worked well in the short term but didn’t stand the test of time.

Recognizing that TPS is about applying principles rather than tools enables
companies that in no way resemble Toyota to tap into its sources of success.
Alcoa, a company whose large-scale processes—refining, smelting, and so on bear little resemblance to Toyota’s

The U.S. Engine Plant Assembly Line—Before and After

The following table describes the impact of the changes Dallis made to the
U.S. engine plant assembly line during his first six weeks there. He made substantial improvements in productivity—reducing the number of workers
and cycle times.

He and the group also made significant improvements in safety (eliminating four processes and improving the rest). But machine availability actually decreased during the period from 90% to 80%. In Dallis’s second six weeks, he and his team were able to restore availability back to 90%, but this was still below the 95% target.

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