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Why Toyota is Lean…and You’re Not

Dr. Jeffrey Liker

By Dr. Jeffrey Liker, professor of industrial and operations engineering at the University of Michigan and author of The Toyota Way.

In the wake of the latest indices showing the second straight month of manufacturing decline, some U.S. manufacturers struggling to compete globally may be looking again at moving business overseas to become more cost competitive.  Another prominent movement in manufacturing is “lean manufacturing” which promises to increase competitiveness, and possibly even keep jobs in America.

A number of companies have used lean manufacturing to gain such game-changing success that they, in fact, have kept much of their manufacturing in America and remained profitable.  Examples include Herman Miller (office furniture) and New Balance Shoes, both of which were taught lean manufacturing principles directly by Toyota.

Yet a variety of surveys have found that many manufacturers have had only limited success with lean. The Shingo Prize committee (which awards prizes for the best lean manufacturers) revisited past winners and found many had slipped backward.  Their conclusion:  the successful companies had invested in leadership and culture while those that slipped back had not.

The books that introduced the concept of lean, The Machine that Changed the World and Lean Thinking, emphasized that it is a total system and a way of thinking.  Lean goes beyond the manufacturing floor to include how a company works with outside suppliers; how products are developed; how sales, manufacturing, product development, production control, and supply chain collaborate to add value to the customer. These books also described Toyota as the model, and best example, of a lean enterprise.

The “Toyota Way” has two pillars of respect, one each for people and for continuous improvement. Respect for people starts with a passion for serving customers and society.  For Toyota, people are always at the center — people in every job function across the enterprise as well as all outside partners to the business. In the ideal, or what Toyota calls “True North”, all of these people are constantly being developed at higher levels to do their job exceptionally well and also to think about ways to continuously improve how they do their job.

As we look across manufacturing companies, we see many different “flavors” of lean. These flavors evolved because Toyota developed various tools to help people and companies develop themselves through process improvement.  Unfortunately, too many companies think short-term and see lean as a mechanical process-improvement methodology to drive direct cost benefits. The short-term thinking company typically wants very clearly defined tools that create a definitive result: Employ standardized work to reduce the number of workers.  Use just-in-time delivery to reduce inventory.

Investments in developing people don’t necessarily yield immediate results. Yet, without engaging and developing people, when the lean expert leaves, the company inevitably returns to the original mediocre state. From my studies of Toyota, I view lean as a system that challenges people to solve problems, thereby improving processes, thereby improving results for the business, and thereby further developing the people and the virtuous chain continues.

So which flavor do you want?  At the end of the day U.S. manufacturers that invest in developing skilled, motivated leaders whose passion is to develop people who can improve processes in the long-term will beat the competition every time.  In further columns of Lean Manufacturing Insights, I will write about how you can do this.

Dr. Jeffrey Liker is professor of industrial and operations engineering at the University of Michigan and author of The Toyota Way.  He leads Liker Lean Advisors, LLC and his latest book (with Gary Convis) is The Toyota Way to Lean Leadership.

This article (http://www.manufacturingpulse.com/featured-stories/2012/07/16/why-toyota-is-lean…and-youre-not) and Dr. Liker’s other Lean Manufacturing Insights columns can be found at www.ManufacturingPulse.com.

 

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