The key ideas

The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer

Jeffrey Liker, 2004

Toyota openly shows its plants to visitors, yet almost nobody manages to repeat its success. Jeffrey Liker studied the company for twenty years and explains why: the famous tools rest on a long-term philosophy, on people, and on the habit of taking every problem apart down to its root. You'll learn Toyota's fourteen principles through its own stories and see what you can take from them into your own work.

Who it is for

For anyone who leads a team, sets up processes, or is simply tired of work that is all bustle and little result. And for everyone curious how a Japanese car maker became the model for companies around the world.

Most business processes are 90% waste and 10% value-added work.

The plant everyone is shown and nobody can copy

For decades Toyota has let visitors from other companies into its plants. They are shown almost everything: the cards that bring parts to the assembly line, the cords above the workstations, the boards with the shift's numbers. The visitors leave with full notebooks and bring in the same cards and the same boards back home. And then they wonder why it works so badly for them. If the secret is in plain sight, why is it so hard to copy?

Jeffrey Liker is a professor of industrial engineering, and the University of Michigan is where he teaches. He studied Toyota for about twenty years: he went to its plants in Japan and the United States and talked with engineers and executives. In 2004 he published a book that distilled the company's experience into fourteen principles. In English it is called The Toyota Way.

Liker's main point is this. Toyota's famous tools are only the tip. Beneath them lie three more layers: a long-term philosophy, people and partners, and the habit of constantly taking problems apart down to the very root. Most companies copy only the tools, and so they get only a small part of the result.

What follows is the story of this company, from a loom to a hybrid car. You'll see why stopping the assembly line can pay off better than running it, how extra stock hides mistakes, and what you can learn by standing in a chalk circle for eight hours.

A loom that notices when a thread breaks

Toyota's story begins not with cars but with looms. Sakichi Toyoda grew up in a poor village and saw how hard his mother worked at her loom. He became an inventor, and in the 1920s he built an automatic loom with one important feature: if a thread broke, the loom stopped by itself.

It sounds modest, but the implications are huge. Before, a person stood next to every loom and watched for defects. Now the machine itself reported the problem, and one worker could look after many looms. Defects went no further, because the work stopped that very second.

Later this idea was given the name jidoka: a machine or a person stops the process as soon as something goes wrong. Liker calls it one of the two pillars of the Toyota Production System.

In 1929 the English company Platt Brothers bought the rights to the loom. Sakichi gave the money from that deal to his son, Kiichiro, so he could go into cars. That is how the idea of a loom that stops itself gave rise to a whole company.

The principle works far beyond the shop floor. A mistake is cheapest to catch where it was born, not at the end, when it has already multiplied.

Read in Livria

About the author

Jeffrey Liker is an American professor of industrial engineering at the University of Michigan. He has studied Toyota and lean manufacturing for many years and has written or co-written a whole series of books on the Toyota way.

All books by this author: Jeffrey Liker

Terms from the book

  • Kaizen
  • kanban
  • University of Michigan: One of the largest public universities in the United States, in Ann Arbor. Liker teaches industrial engineering there.
  • Toyoda: The Japanese family that founded Toyota. Sakichi Toyoda (1867–1930) invented looms; his son Kiichiro Toyoda (1894–1952) started the car business.
  • Jidoka: A Toyota principle: a machine or a person stops the process the moment a problem is detected, so defects don't travel any further.
  • Platt Brothers: An English company from Oldham, in the early twentieth century the largest maker of textile machinery. In 1929 it bought the rights to Toyoda's loom.
  • Muda: Japanese for "waste": anything that takes time and resources but adds no value for the customer.
  • Ohno: Taiichi Ohno (1912–1990), a Toyota engineer and executive, the chief creator of the company's production system.
  • Muri: Overburdening people or equipment beyond what they can reasonably handle.
  • Mura: Unevenness in work, when the load swings sharply up and then down.
  • Heijunka: Levelling production by volume and mix, so work flows at a steady pace without rush jobs and idle time.
  • Andon: A light board on the line that shows where a problem has come up. It is switched on by pulling a cord or pressing a button.
  • Minoura: Teruyuki Minoura, a Toyota executive and a student of Taiichi Ohno. He later headed Toyota's manufacturing in North America.
  • Genchi genbutsu: A Japanese phrase meaning "the actual place, the actual thing": to understand a situation, you go and see it with your own eyes.
  • Uchiyamada: Takeshi Uchiyamada, a Toyota engineer and chief engineer of the first Prius. He later became chairman of the company's board.
  • Wada: Akihiro Wada, Toyota's executive vice president for technology in the 1990s, who set the Prius project the goal of halving fuel consumption.
  • Prius: A Toyota model, the first mass-produced hybrid car with a petrol engine and an electric motor. Sales began in Japan in December 1997.
  • Obeya: Japanese for "big room": a shared space where engineers from different departments run one project together.
  • Nemawashi: Informal consensus building: a proposal is discussed in advance with everyone it will affect, before the official decision.
  • A3: A paper size of roughly 30 by 42 centimetres. At Toyota a problem, its causes and a plan are set out on one such sheet.
  • Aisin: The Japanese company Aisin Seiki, a major supplier of car parts and part of the Toyota group.
  • Hansei: Japanese for "reflection, self-examination": the habit of honestly going over your own mistakes and shortfalls, even after a success.

All terms

Similar books