The Toyota Way Fieldbook

1. Develop a long-term philosophy focused on creating value

Toyota always starts with the goal of generating value for the customer, society, and the economy.

Long-term thinking. Toyota's philosophy goes beyond short-term financial goals. The company sees itself as having a larger purpose to contribute value to customers, employees, and society. This long-term orientation allows Toyota to make decisions and investments that may not pay off immediately, but create sustainable success.

Value creation focus. Rather than fixating solely on profits, Toyota aims to generate value in multiple ways:

• For customers: High-quality, innovative products
• For employees: Job security, skills development
• For society: Economic growth, technological progress
• For the environment: More efficient, less polluting vehicles

This philosophical foundation shapes Toyota's approach to business decisions, guiding the company to prioritize long-term value over short-term gains.

2. Create continuous process flow to surface problems

Flow is most evident in the Toyota Production System, but it is also evident throughout Toyota in the organizational culture, which has a focus on value-added flow as an alternative to the normal stop/start approach to working on projects a little bit at a time.

Establishing flow. Toyota strives to create smooth, continuous flow in all processes - from manufacturing to product development to administrative work. This means eliminating delays, batches, and inventory between steps.

Surfacing problems. The real power of flow is that it quickly exposes any issues or inefficiencies in the process. When one part of the process stops, the entire flow is disrupted, making problems immediately visible and creating urgency to solve them. This allows Toyota to:

• Identify and address problems rapidly
• Continuously improve processes
• Develop problem-solving capabilities in employees

By creating flow, Toyota transforms its entire organization into a finely-tuned system for continuous improvement and learning.

3. Use pull systems to avoid overproduction

Toyota found a better approach, modeled after the American supermarket system. Stock relatively small amounts of each product and restock the supermarket shelf frequently, based on what the customer actually takes away.

Pull principle. Toyota uses a pull system where production is triggered by actual customer demand, rather than forecasts. This is modeled on supermarkets, which restock shelves based on what customers buy.

Key aspects of Toyota's pull system:

• Kanban cards signal when to produce/move materials
• Small amounts of inventory at each stage
• Frequent replenishment in small batches
• Production paced to actual customer demand (takt time)

Benefits of the pull approach:

• Reduces overproduction and excess inventory
• Improves cash flow by reducing working capital tied up in inventory
• Increases flexibility to respond to changes in demand
• Surfaces problems that were previously hidden by excess inventory

By producing only what is needed when it is needed, Toyota avoids the waste of overproduction while staying responsive to customer needs.

4. Level out the workload (heijunka)

Smoothing demand for upstream processes

Smoothing production. Heijunka refers to leveling out the production schedule in terms of both volume and product mix. Even if customer demand fluctuates, Toyota tries to keep a steady, level schedule.

Key aspects of heijunka:

• Produce in small batches to maintain mix
• Use a heijunka box to visually manage the production sequence
• Buffer fluctuations with strategic inventory

Benefits of leveling:

• Reduces burden on people and equipment
• Enables standardized work
• Smooths demand on suppliers
• Minimizes inventory while maintaining flexibility

While it may seem counterintuitive to not produce exactly to customer demand, leveling creates stability that enables Toyota to be more efficient and responsive overall.

5. Build a culture of stopping to fix problems

Toyota sees it as an opportunity to identify a weakness within the system, to attack the weakness, and to strengthen the overall system.

Stop and fix. Toyota empowers workers to stop production when they spot a problem, rather than letting defects continue down the line. This may seem costly in the short-term, but pays off through higher quality and continuous improvement.

Key elements of Toyota's problem-solving culture:

• Andon cords allow any worker to stop the line
• Leaders quickly respond to andon calls
• Root cause analysis to prevent recurrence
• Errors seen as system failures, not individual faults
• Celebration of problem identification

This approach turns every employee into a quality inspector and problem solver, dramatically improving quality while developing people's capabilities.

6. Standardize tasks for continuous improvement

Standardization is actually the starting point for continuous improvement.

Standardized work. Toyota views standardization not as a rigid constraint, but as the foundation for kaizen (continuous improvement). By defining the current best practice, it becomes possible to improve upon it.

Key aspects of Toyota's approach to standardization:

• Detailed definition of work steps, timing, and outcomes
• Worker involvement in creating and updating standards
• Visual management to make standards clear
• Frequent auditing to ensure adherence
• Standards seen as temporary, always subject to improvement

Benefits of this approach:

• Ensures consistency and quality
• Makes abnormalities immediately obvious
• Provides a stable base for experimentation and improvement
• Allows best practices to be easily shared

By standardizing work, Toyota creates a dynamic tension between current standards and ideas for improvement, driving continuous progress.

7. Use visual control so no problems are hidden

People looking at well-designed charts on a wall can have very effective discussions.

Visual management. Toyota makes extensive use of visual controls to make the status of processes immediately apparent to everyone. This supports the principle of surfacing problems quickly.

Examples of visual controls at Toyota:

• Andon boards showing line status
• Kanban cards signaling production needs
• Heijunka boxes displaying production schedules
• 5S color-coding and markings
• Performance boards tracking key metrics
• A3 reports summarizing projects visually

Benefits of visual control:

• Problems become immediately obvious
• Enhances communication and alignment
• Supports fact-based decision making
• Empowers workers to manage their own areas

By making information visual and accessible, Toyota creates an environment where problems can't hide and everyone can contribute to improvement.

8. Use only reliable, thoroughly tested technology

Toyota has had experience with pushing the latest and greatest technology, and now avoids repeating this mistake.

Thoughtful adoption. While Toyota is a leader in many technologies, it is cautious about adopting new tech in its core processes. New technology is thoroughly vetted to ensure it truly serves the needs of the people and processes.

Toyota's approach to technology:

• Proven reliability is prioritized over novelty
• New tech must clearly support Toyota Way principles
• Extensive testing before full implementation
• Preference for flexible, right-sized equipment
• Focus on how tech supports/develops human capabilities

This approach helps Toyota avoid:

• Disruptions from immature technology
• Dependence on inflexible, complex systems
• Technology that inhibits continuous improvement

By carefully evaluating technology through the lens of its principles, Toyota ensures that new tools enhance rather than detract from its core strengths.

9. Grow leaders who thoroughly understand the work and live the philosophy

Leaders at Toyota are grown; they are not bought.

Developing leaders. Toyota invests heavily in growing leaders from within who deeply understand the work and embody the Toyota Way philosophy. This ensures continuity of culture and approach.

Key aspects of Toyota's leadership development:

• Leaders expected to have deep technical knowledge
• Extensive job rotation to build broad understanding
• Expectation to teach and develop others
• Long apprenticeship periods (e.g. 10 years) before senior roles
• Leaders judged on their ability to develop people

Benefits of this approach:

• Leaders can effectively coach and problem-solve
• Consistent application of Toyota Way principles
• Strong alignment between all levels of the organization
• Sustainability of the culture and methods long-term

By growing leaders who live and breathe its philosophy, Toyota creates alignment and continuity that sustains its approach across generations.

10. Develop exceptional people and teams

Toyota stresses the inclusion of self-inspection in all standardized work.

People development. Toyota views its people as its most crucial asset and invests heavily in their development. This goes beyond just technical skills to developing problem-solving capabilities and teamwork.

Key elements of Toyota's approach:

• Extensive initial training (e.g. several months for new hires)
• Continuous skill development through job rotation
• Problem-solving expected at all levels
• Quality circles for team-based improvement
• Suggestion systems to leverage every employee's ideas

Benefits:

• Highly skilled, flexible workforce
• Strong problem-solving capabilities throughout the organization
• High levels of employee engagement and retention
• Continuous flow of improvement ideas

By developing exceptional people and teams, Toyota creates a powerful engine for continuous improvement and adaptation.

11. Respect your extended network of partners and suppliers

A partner becomes an extension of Toyota.

Supply chain development. Toyota views its suppliers as long-term partners to be developed, not just sources of low-cost parts. This approach extends the Toyota Production System beyond the company's walls.

Key aspects of Toyota's supplier relationships:

• Long-term partnerships vs. frequent rebidding
• Extensive sharing of Toyota Production System knowledge
• Joint problem-solving and improvement activities
• Expectation of continuous cost reduction through kaizen
• Suppliers included in early stages of product development

Benefits:

• Higher quality and reliability from suppliers
• Faster innovation and problem-solving
• More stable supply chain
• Shared continuous improvement culture

By respecting and developing its extended network, Toyota creates a larger ecosystem that operates on Toyota Way principles.

12. Go and see for yourself to thoroughly understand the situation (genchi genbutsu)

There is a basic belief in Toyota that people solving problems and making decisions need to have a deep understanding that can only come from personally verified data: seeing for yourself.

Direct observation. Toyota emphasizes the importance of going to the actual place where work is done to observe and understand first-hand. This applies to everyone from shop floor workers to top executives.

Key aspects of genchi genbutsu:

• Managers expected to regularly visit the gemba (actual place)
• Decisions based on first-hand observation, not just reports
• Problems studied where they occur, not in conference rooms
• "5 Whys" analysis conducted at the source of issues
• Respect for the knowledge of front-line workers

Benefits:

• More accurate understanding of situations
• Better decision-making
• Faster problem-solving
• Stronger connection between management and front lines

By insisting on first-hand observation, Toyota ensures that its improvement efforts and decisions are grounded in reality rather than assumption.

Last updated: October 3, 2024