TPS and Lean Move Beyond Toyota - Journey to a principles view
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Are the recent problems experienced by Toyota an indictment of the much acclaimed
Toyota production system (TPS) or an indication of something else? This is a serious
question because TPS has evolved into the larger concept known as lean, which is
being promoted for use in a wide variety of operating environments—from manufac-
turing to health care.
TPS and Lean
Move Beyond Toyota
Journey to a principles view
By J. Brian Atwater, Randy Cook, Ph.D., and Paul Pittman, Ph.D., CFPIM, CSCP, Jonah
First, we must establish a clear understanding of what serve to limit broader understanding, application, and appeal.
lean actually represents. A body of evidence exists sub- Only when people begin to truly understand the concepts
stantiating our collective misunderstanding of TPS. This and see other individuals’ and organizations’ broader applica-
was demonstrated particularly during earlier stages of the tions does an approach or philosophy become wholly cred-
Toyota crisis in both articles published in the popular press ible. For example, simply equating the assembly line to Ford,
and by our own APICS members. Former General Motors market segmentation to GM, quality to Deming, and theory
(GM) vice chairman Robert Lutz stated in a March 31, 2010, of constraints to Goldratt causes decision makers to unneces-
Businessweek article, “Toyota’s God-like status will never be sarily limit their understanding of these concepts. In evolving
reclaimed.” Lutz said, while he respects Toyota’s quality and into the concept of lean operations, TPS has earned a broader
manufacturing techniques, the Japanese carmaker became status and progressed far beyond its original namesake.
too revered. For more than 20 years, members of the Shingo Prize team
Likewise, a February 2010 survey of APICS members have worked with hundreds of organizations implementing
showed that a majority put Toyota’s challenges and missteps lean. During that time, we have learned a great deal about the
in the proper context. Yet, surprisingly many felt the Toyota methodology. More importantly, we have started to under-
recalls should bring the entire TPS process into question. stand why it works well in some organizations and not in
Member comments included the following: “I feel we have all others. As a result of these experiences, we have distilled lean
been taken in with a dog and pony show; albeit a successful into a logical framework, the Shingo Model. (See Figure 1.)
one … I am questioning TPS in its entirety.” “Lean cost- This model illustrates a structure that explains how the tools,
reducing programs need to put a higher accent on quality.” “As systems, and principles fit together to provide an approach
a supply chain professional, I would have serious reservations that is greater than the sum of its parts. By understanding
about purchasing a [Toyota] vehicle.” these components and their interconnections, we can answer
A danger exists in associating any business approach or phi- fundamental questions, which include: What is lean really?
losophy too closely with an individual or organization. While How do managers make lean work in their organizations?
often helpful in gaining early exposure, such close ties can Why do successful initial efforts stall or degrade?
APICS magazine | September/October 2010 33
Figure 1: The Shingo Model for Operational Excellence Figure 2: The tools view
transformation process
Lean evolution relationship between the tools and results represented in
The Shingo Model shows that the typical lean implementa- the model. The tools help achieve the desired results, and, as
tion is not a linear progression. Tools, systems, principles, managers gain experience, understanding and appreciation of
and results are mutually reinforcing. Even so, initial steps of the tools are refined.
implementation follow a typical pattern, starting with the Managers easily can get stuck in this loop. The improved
use of one or more of the tools. It is the evolution (or lack of results reinforce the value of applying the tool, and familiarity
evolution) beyond the initial steps that determines how much with the tool gives the manager confidence to apply it over and
an organization experiences the true value of lean. over. The tools can achieve many localized improvements, but
they don’t come close to the numbers often reported by truly
The tools view impressive lean implementations. For example, setup reduc-
The literature often describes lean as a philosophy or journey. tion on a few machines or decreased scrap in a few processes
While these characterizations are accurate, they are useless will not reduce overall inventory by more than 60 percent or
to a manager trying to implement the concept. How do you lead times by more than 50 percent. Failure to achieve these
implement a philosophy or journey into a business operation? higher-level results can lead managers to mistakenly conclude
Consequently, the vast majority of leaders start their lean that lean is overhyped in the literature or only works in certain
implementations with a specific set of lean practices or tools. environments.
Following is a typical example of how the tools view is Nevertheless, we are convinced that any type of operating
implemented: environment can see impressive results, but people must move
t A manager starts with a pilot project, implementing pull to the next level of lean understanding—the systems view.
production in one area.
t To facilitate the use of pull production, the manager The systems view
changes the layout to move required resources closer In the earliest stages of the systems view, the system is seen as
together into a cell. a specific collection and arrangement of tools used together to
t Other problems that arise within the cell lead to the use of achieve a smooth material flow throughout a specific produc-
additional tools, such as setup reduction, mistake proofing, tion process. Here, the synergistic nature of the tools, used in a
five Ss, associate suggestion systems, and more. specific configuration, becomes obvious. Driven by managers
t As the manager implements the various tools to solve spe- and outside experts, a production cell’s cycle of improvement
cific problems, the tools view emerges: Lean is seen as can accelerate to the point where it operates with extremely
a collection of tools used to solve isolated problems. small lot production or even one-piece flow. At this point,
At this point, a reinforcing loop can emerge between the managers easily make the connection between a process flow
use of tools and the improvements achieved in specific, local- and improvements related to quality, cost, and delivery. Figure
ized results. Figure 2 emphasizes the reinforcing causal loop 3 shows this three-way, reinforcing loop.
34 September/October 2010 | APICS magazineHow do you implement a
philosophy or journey into
a business operation?
While managers are working through these first two views
of lean, they often experience a phenomenon similar to that
of Bill Murray in the movie Groundhog Day. Managers realize
the same benefits repeatedly as the concepts are applied in
the same way in different areas or with different products or
customers. Much like Murray’s character, managers stay stuck
in this cycle until something or someone helps them realize
they are missing the bigger picture. During this period, lean
implementations can stagnate and degrade.
While we can’t say exactly what it is that jolts managers out
of this cycle, we can explain one of the key phenomena that
signals the transition has been made. In the initial stages of
the systems view, improvements primarily are driven from the
Figure 3: The systems view top down. While there generally are kaizen events using asso-
ciate input within a production cell, the overall system is still
owned by the management team. Associates may see the value
of the new approach, but may not give it much thought, wait-
ing for managers or other experts to initiate further changes.
As the diagram illustrates, the tools are selected to create a As such, improvement is not continuous because it only
system, which enables users to achieve the higher-level results comes at the direction of the manager or management team.
described. Once again, a cycle of improvement often emerges, and The key question is: Were kaizen events initiated by a
the value of creating flowing systems is experienced across the management directive or by the workers wanting to improve
entire operation. In some organizations, managers recognize the the system? The implication is obvious. If managers stop
value of flow is not restricted to production, but is equally appli- initiating improvement efforts or are replaced by others who
cable in research and development, purchasing, and almost all are not committed to lean, progress will stop. If the associates
other business processes. Through these realizations, an organiza- come to own the systems, they will drive improvements and
tion transitions from the tools view to a systems view. While still prevent backsliding.
limited, this evolution yields tremendous benefits related to over- One last point regarding the systems view: This is a particu-
all business results, such as increased market share and profits. larly dangerous period for an organization because people can
Table 1: The principles view
Principle Long-term effect
Create value for the customer Results Achieve the purpose of the business
Create constancy of purpose
Alignment Generate synergy across the enterprise
Think systemically
Focus on process
Embrace scientific thinking
Flow and pull value Process Create a continuous-improvement environment
Assure quality at the source
Seek perfection
Lead with humility
People Construct the necessary foundation that enables future improvements
Respect every individual
APICS magazine | September/October 2010 35make the mistaken assumption that there
is no higher-level understanding and
The principle of creating value for the
practice. Furthermore, decision makers
may think stagnation means they can no
customer is universal and timeless, yet
longer expect improvements from the
application of lean concepts. The drive
often misunderstood.
to achieve continuously higher levels
of business results combined with the Some organizations have rediscov- and timeless, yet often misunderstood.
perception that users have hit the upper ered the principles that lead to better With the post-Industrial Revolution
limit of lean benefits can cause manag- long-term outcomes. In addition, the development of the assembly line and
ers to revert to other ways of extracting most effective businesspeople know mass production techniques, the avail-
value from the system. The principles these principles are interconnected, and ability of goods increased while costs
view takes lean to a higher level. people must understand and honor all decreased. Both of these developments
of them to receive their full benefits. created tremendous value for customers
The principles view We have identified 10 principles that and enabled businesses to operational-
Leadership expert Steven Covey defines describe the culture of the most suc- ize the value-creation principle.
a principle as a truth that is universal, cessful lean implementations. Listed in As managers cycled through improve-
timeless, and self-evident. However, busi- Table 1, the principles are arranged in ments using the same industrial and
ness principles can be hard to recognize the four categories related to the long- technical solutions, manufacturers
and often are misunderstood because term effects they achieve. eventually got to the point where output
humans are not required to act in accor- Consider how the principle of creat- far exceeded demand. Unfortunately,
dance with them. ing value for the customer is universal because of the success these mass-
Lean Journey Assessment Checklist
Use the following quiz to assess where you are in your lean journey
@ Tools view qSystems view z Principles view
☐☐The lean tools we use are initi- ☐☐We typically use multiple lean tools ☐☐There is explicit understanding
ated through management or linked together to improve perfor- and agreement on the guid-
the designated lean team rather mance—and, as long as manage- ing principles of operational
than by the associates (workers). ment maintains focus and interest, excellence throughout the
☐☐The lean tools we use are we can sustain the systems. organization.
predominantly point solutions ☐☐We place the most emphasis on ☐☐Most employees engage in
(projects or events) requiring one or more of the following: continuous process improve-
significant management effort to • continuous improvement ment that is focused on creating
organize and sustain. • organizational culture value or eliminating waste on a
☐☐We are implementing multiple regular and spontaneous basis
• alignment of enterprise efforts
lean tools that are predominantly without being prompted by
(including suppliers and
separate initiatives, such as five management.
customers)
Ss, value stream mapping, and ☐☐I am confident our lean efforts
• creating customer value.
total productive maintenance. would be sustainable if there
☐☐Employees cooperate with lean
☐☐It is difficult to see the connec- was a significant change in
efforts, yet still seem to lack
tion to customer value—from the leadership.
the same enthusiasm and
front-line associate all the way to ☐☐Most employees genuinely
commitment as managers and
top managers. understand why the tools
lean team leaders.
and systems are so vital to the
☐☐At least three other areas of
hecking three or more
r C business and the customer.
our business and 70 percent of
suggests a tools view.
operations are implementing the
hecking three or more
r C
same lean concepts.
suggests a principles view.
hecking three or more
r C
suggests a systems view.
36 September/October 2010 | APICS magazineproduction techniques generated, it was For example, in a culture where people quickly. Therefore, we emphasize the
difficult for managers to recognize that are respected, associates take ownership principles view is not a destination; it
overproducing unwanted goods was and responsibility for the operational is a level of practice in the discipline
not adding value. Instead, organizations system in which they work. Once they of lean. Analogous to maintaining a
developed marketing campaigns to entice feel this ownership, they gladly work healthy lifestyle, deviation from these
customers to buy the excess products, and within the system rather than around it. principles causes an organization to
accounting practices evolved to justify When combined with an understanding fall short of its desired results.
the overproduction. Excess output was and appreciation of the tools, an organi- It is through continual reflection and
capitalized as inventory, which allowed zation can genuinely experience continu- self-assessment (see sidebar) that we
organizations to defer the negative effects ous improvement, which enables people help ensure our ongoing lean journey
of overproduction, while claiming victory to overcome specific problems, address and results. Lean is by no measure a
on the cost and productivity fronts. shifts in customer value, and incorporate magic bullet that guarantees perfection.
In addition, the uniformity of output new innovations. To date, no human-made system has
resulted in everyone having the same For many years, Toyota leaders achieved that status. Nevertheless, when
things, which eventually drove consum- recognized and incorporated these lean tools and systems are aligned with
ers to want unique or custom-made fundamental principles into their busi- the right guiding principles, companies
products and services. Creating value for ness. The synergistic value of integrat- can achieve and sustain impressive
the customer is still a true principle, but ing tools, systems, and principles into business results. More importantly, they
what the customer values has changed.
Therefore, the best methods for provid-
ing that value also have changed. Today, Today, lean organizations recognize that
lean organizations recognize that true
value lies in providing the customer true value lies in providing the customer
with exactly what he or she wants, and
production beyond that amount is excess with exactly what he or she wants.
and unnecessarily increases costs, hides
inefficiencies, and decreases productivity.
Working with organizations imple- culture was readily apparent in Toyota can overcome major business problems.
menting lean for the past 20 years has from the 1970s into the early 21st cen- If the principles are violated, even the
enabled us to observe a wide variety of tury. Toyota’s market share and profit- best organizations will have challenges.
results across many organizations. It is ability reflected this positive culture. Toyota now serves as an example of
clear the extent of benefits in pursuing Then, something shifted. both outcomes.
lean vary widely—some organizations Several theories about the cause of
experience true continued success and Toyota’s problems have emerged. Some J. Brian Atwater is an associate professor
others backslide. Principles are the say the company grew too fast and its of production/operations management in
major differentiating factor between leaders could not integrate their system the Jon M. Huntsman School of Business at
these outcomes. or culture into new facilities. Others Utah State University. He has worked as an
If decision makers focus on any one propose that Toyota executives were examiner for the Shingo Prize for Excellence
of these principles to the exclusion blinded by the desire to overtake GM in Manufacturing and the Shingo Prize for
of others, they will see some benefits and become the biggest car company Research. Atwater may be contacted at
initially, but eventually the improve- in the world. Still others say it was a brian.atwater@usu.edu or (435) 797-3982.
ment efforts will stagnate or decline. breakdown in Toyota’s supply chain.
By balancing effort and focus across all Regardless of the specific cause, the Randy Cook, Ph.D., is a clinical professor in
principles, professionals can create an essential point is this: Toyota violated the Jon M. Huntsman School of Business
engaged and empowered workforce and its fundamental principles. As a result, at Utah State University with a joint
a culture where continuous improve- growth and profits became more appointment as the director of education at
ment is aligned with organizational important than creating value for the The Shingo Prize for Operational Excellence.
strategies and customer needs, resulting customer and society.
in long-term profitability, growth, and Evidence of this claim comes Paul Pittman, Ph.D., CFPIM, CSCP, Jonah,
customer satisfaction. from Toyota’s internal memos that is a professor of operations management
It is important to note that, because indicated executives intentionally at Indiana University Southeast. He
the principles previously discussed are dodged a recognized and necessary also is a partner of The LAMP Group,
universal and timeless, they apply to all recall early on in order to improve thelampgroup.com. He may be contacted
businesses, whether implementing lean the bottom line. It is almost certain at ppittman@ius.edu or (812) 941-2524.
or not. However, when the principles are that, had Toyota followed its guid-
combined with lean tools and systems, ing principles, the problems would To comment on this article, send a
companies get a truly impressive synergy. have been recognized and addressed message to feedback@apics.org.
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