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Learning From The Toyota Way: A Candid Review

We started a book club at Mingo. Yes, you read that right, a book club. Does it sound strange for a manufacturing analytics company to start a book club? Maybe. But, the point of book club was to create a learning organization constantly striving to improve which is why the first book we chose was the perfect fit, The Toyota Way by Jeffrey K. Liker.

Initially, the purpose of our newly founded “book club” was to introduce the world of manufacturing to some of our newer employees who aren’t involved in the direct installation of our software. But, it evolved into much more, illustrating the things we could improve upon and learn from, both as an organization internally and for our customers.

We’re also taking those learnings and applying it within our customer training – think of it as paying it forward in hopes our customers will also take these ideas and work them into their own systems.

The concepts we learned have proved to be invaluable for our growth going forward. This blog will detail those learnings in detail, organized by topic rather than by chapter. Our hope is that you’ll not only be prompted to read this book but take away useful tips and learnings, too. Much of what we learned and have applied to our own business can be applied to yours, too.

The bulleted list of topics is the areas of focus we received the most value from and will focus on in this blog, too. Let’s begin:

  • The Toyota Way Explained
  • What is Lean Manufacturing?
  • Communication will Improve and Maintain Process
  • Focus on Long Term Philosophy and Goals
  • Support Employees and Leadership
  • Always Add Value, Challenge Yourself to Do Better, Always
  • Listen and Learn
  • Mingo Supports Continuous Improvement
    • What We Learned Influenced the Development of an Add-On

About The Toyota Way

Learning From The Toyota Way: A Candid Review

The Toyota Way is an example of top-notch manufacturing, not only in the quality of Toyota’s products but in their organizational structure and culture. All organizations, manufacturing or otherwise, turn toward Toyota as an example to follow, and for a very good reason. The first few chapters explain the story of Toyota, insights learned over time, and how they’ve become the pillar of excellence in automotive manufacturing, and how to operate a business efficiently. Their influence has been felt across the globe.

It’s important to note that the Toyota Way rose from the exemplary instruction of The Toyota Production System (TPS), both of which we learned from. TPS greatly influenced the structure of our software solution, the way we implement, and train customers while The Toyota Way had a considerable impact on our internal structure. Both are invaluable resources of teaching that inevitably gave rise to this blog – hoping to educate others on the things we’ve learned.

Lesson #1: The biggest takeaways are the importance placed on people and leadership, consistency, and learning.

Defining Lean Manufacturing

The Toyota Production System, and by association, the Toyota Way incorporates lean principles. The principles Toyota uses not only in manufacturing, but in their organization as a whole, were created over a period of many years, since 1926 when Toyota was founded as Toyoda Automatic Loom Works, and not a direct result of the Lean fanfare. Those principles have been developed, followed, and improved upon over time.

In his writing, Jeffrey Liker has long studied Toyota and its systems. Using that knowledge, he defines “lean manufacturing as a five-step process: defining customer value, defining the value stream, make it “flow”, “pulling” from the customer back, and striving for excellence.” Those five pillars largely define the structure of the rest of the book.

Each step within lean manufacturing leads to continuous improvement, making it a pillar of the overall concept. The idea is to proceed through all five steps and learn from the steps you’ve taken and the insights gained. This process will generate new ideas that can be used to improve further.

As it will likely come as no surprise, we’ve evaluated our own processes to follow the “lean” way, not only internally, but in the ways, we work with customers. The lean way of thinking has proven to be a win for us, better organizing our processes.

Things like visual modeling, goal setting, and simple, concise documentation have proven to be very effective. For example, we now have a poster of the “customer journey” illustrating key details in each step, organized by role and function. We document the customer on-boarding and implementation processes with complete transparency so whether an internal engineer or the customer is curious, that person can track where we are in the process. Each task we work to accomplish has a pre-determined goal.

While examples, all are steps in accomplishing the greater goal of becoming a lean organization.

Lesson #2: Implementing the “lean” way of thinking can offer vast organizational transformations.

Improving and Maintaining Process Through Communication

Communicating front to end is most important in maintaining an organization. Communication doesn’t need to be linear but should exist within all facets of the organization from development to marketing to customer success to engineering, and beyond, even to customers.

How effective communication is important to an organization. How do you know you’re effectively communicating? Is there a process improvement method in place? What can you do to ensure there is always a way to fix processes?

In our organization, we refined the definition of customer value while placing significant emphasis on each step within the customer journey and what that looks like from start to finish. To measure success, we created metrics that could be measured to truly determine if our efforts were working. In that instance, it’s not unlike a Kaizen system that helps to streamline processes, adding value in every step.

This particular system helps to standardize processes and work, including the communication between team members and what needs to be accomplished to be successful. In our case, we applied that system to our sales, implementation, and onboarding process and developed a checklist to ensure each step is assessed and accomplished, helping to facilitate customer success and ensure our internal processes were working properly. That standardization of work helped to build a consensus within our own teams.

The idea is to not only ensure our customers are successful but to incorporate a big way of thinking. What is the big picture and the big goals we want to achieve over time? With that in mind, we evaluate our structure, product, and the tools in place to ensure success.

When we began to ingrain these into our culture, we immediately saw the areas that needed improvement and the areas that were widely successful. Organizing by value stream and communication needed to be successful and provided the opportunity to work on continually improving our processes through standardization.

Lesson #3: Communicate effectively, standardize work, and document everything to improve.

Focus on the Long Term Philosophy, Even When it Goes Against Conventional Wisdom

It’s easy to get stuck in tunnel vision, only looking at the present time and how to fix problems now, but the goal should be to move forward and improve in the future. Determine goals and how those goals will add value to the organization down the road. The focus is on the long term philosophy, even when it may go against conventional wisdom.

Ask yourself, “What’s the most important thing for my company?” and apply that to your long-term goals.

In our own experience, we learned to apply that to our customers – the most important thing we can provide for them is visibility. How can we continue to deliver on that promise, in the long term?

In your case, it’s really a difference in how you do it. If you’re going to half-ass attempt to improve the floor and processes, it will probably not work out in the long term, but if you’re willing to execute efficiently at each step of the way, the improvements you will see will be vast. Those efforts also correspond with a greater cultural change. There is no technological silver bullet, but paired with a culture that supports employees’ continuous learning and improvement, you’ll gain more.

Lesson #4: Don’t get stuck in the short-term. Make decisions based on the company’s long-term goals.

An Organizational Structure Supports Employees and Leadership

It may sound obvious, but for many companies, it isn’t uncommon to overlook the importance of people, the employees who contribute day in and day out to the betterment of the company and its mission.

Toyota on the other hand strongly supports a “deeper business philosophy based on its understanding of people and human motivation.” Simply, they understand the value their people have within the organization. They understand that without the combined efforts of employees, the company would cease to exist. It’s a belief that we, and all other organizations, can learn from and need to deeply ingrained within our own structures.

Culture should incorporate employees, striving for both the positive progression of the company and individual excellence. Build up leaders from within. Communicate the principles of the culture upfront, be transparent about processes, encourage feedback, both positive or negative. If implementing software such as manufacturing analytics, engage the company to encourage widespread adoption and usage. All of these can lead to success for the company and should not be overlooked.

Lesson #5: People = important. Don’t underestimate the value of an employee.

Always Add Value and Challenge Yourself to do Better

This brings us to the next topic – always be adding value, whether it’s a customer-focused initiative or a blog (such as this one), and challenge yourself, your teammates, your company, to do better. There is always room for improvement.

Always, always, always ask yourself, your team before starting any task, no matter the importance, “What do we want to accomplish and will it provide value?” Having a goal in place helps provide guidance. Be thoughtful about any approaches taken.

One of the best things we gained from this book was the concept of ‘The 5 Whys’. Simply, ask yourself “Why?” 5 times regarding each issue. The clarification you’ll get from taking a deep dive into a topic will give you the clarity needed to determine if a project (or problem to be fixed) will add value.

By challenging ourselves and the company to do better, we learned how we can continue to make improvements (rounding back to the concept of continuous improvement). That same mindset can be applied to your customers, too.

Lesson #6: Before beginning a task, determine if that particular task will add value. If you need help determining that, incorporate ‘The 5 Whys’.

Listen and Learn

Listening and continually learning is one of the most important things an organization can do. How do you improve without first listening to feedback and improving based on that feedback? Learn from yourself, learn from each other, customers, partners, anyone in your circle because insights can be gained.

Lesson #7: To continually learn, always listen to feedback.

Use Mingo to Support Continuous Improvement

At this point, we’ve become a bit of a broken record because we’ve repeated over and over how the book has helped us to improve, but it also supported what we already knew – manufacturing analytics can provide big benefits. The most important being visibility into the floor.

The Toyota Way and The Toyota Production System are supported by visibility. The plant floor manager knows what is happening on the floor at all times, and if there’s a problem, he goes to see what is happening, maybe even asking ‘The 5 Why’s’ to further explain the issue. While only one example, it illustrates the need for visibility and the fact that Mingo can deliver visibility and show manufacturers how they can win the day.

Specifically, Mingo can:

• Show where problems and inefficiencies exist
• Find quality issues before delivery to customers
• Eliminate waste – product, time
Track how close production is to the schedule and the rate at which you need to produce to deliver on time to your customer
• Alert team leaders of problems

For each feature, we found specific examples in the book that illustrated the product we’re supplying to manufacturers is working towards the larger goal of providing visibility and accountability, the main idea of The Toyota Way. It’s truly a value-added technology solution for manufacturers.

Think of it in this way: the purpose of The Toyota Production System is to eliminate waste in any way possible while working towards one-piece flow on the floor. Our product eliminates time waste, one of the worst offenders in non-value-added waste, by providing automated data collection, no longer relying on outdated Excel documents or whiteboards. The data collected is going directly to the system to be analyzed.

Or the need for visual management. On factory floors, this is also represented in a whiteboard with graphs and diagrams, but with Mingo, there are scoreboards and dashboards that allow operators to keep track of the production schedule, without taking the focus away from their work all while providing alerts of potential problems to team leaders. Then, the data collected can be shared with anyone in the organization with concise manufacturing insights emails.

The visuals accomplish a much-needed focus on technology that serves both people and processes.

The key is visibility and continuous improvement. Nothing is hidden on the floor and you’re constantly learning and improving, and that is key to creating a production system that emulates that of Toyota’s production system.

Lesson #8: Mingo drives continuous improvement by providing visibility, a key philosophy of the Toyota Way.

Our Reading Influenced the Development of Schedule and Work Management Module

We’ve talked broadly of the things we’ve learned, but have yet to touch on a direct example of the influence the book had on a current initiative. When we first started reading The Toyota Way, our development team was in the process of creating a scheduling module. As we read more and more, it was evident that the things we learned about could greatly improve and influence the module.

First, a little background on that particular project. The main idea of the scheduling module is to give customers the information they needed to understand where their inefficiencies are. This is accomplished by providing more flexibility in the schedule and smoothing the “go-between” of ERP or MES systems and Mingo. Essentially, it gives the ability to look at and track current production on the floor by monitoring the schedule and forecasted production. It provides the ability to determine if production is on schedule, behind, or moving too quickly.

There is quite a bit of information in the book discussing a Kanban system and how Toyota has used it to efficiently organize its processes. That got us thinking, “Why could that method not also be applied to the scheduling module?” It led to a very insightful discussion within the development team. How much of the schedule module could be used to implement Kanban? Considering the need to produce just in time, and on schedule, versus balancing the load, how could Kanban be useful?

We also realized that anything built will never be perfect, but in order to get feedback on how to improve, we just needed to push it live. The realization helped us move forward and start delivering the module to customers.

(Beyond the customer aspect, we also developed a Kanban system in our own office to track equipment which has proved to be exceptional in terms of organization.)

Lesson #9: Apply what you’ve learned to improve, whether that be on a process or product.

The Toyota Way is a Great Resource

In short, we gained more than we ever thought possible from The Toyota Way.

The thing to remember, though, is not every manufacturer is the same. Each will have different goals, different ways of doing things, and there is no one static method that will provide the answers and solutions needed for every manufacturer. In the case of The Toyota Way, it’s a great example for organizations to learn from, but to be successful, customized solutions need to be implemented. In that case, Mingo is the next step because of the ability to customize to your needs while providing the most important thing, visibility.

We help manufacturers think of their floor in another way, showing the areas for improvement.

The purpose of our newly founded book club was to learn about manufacturing, but in the process, we learned so much about organizational structure and how to continually improve. No, we’re not a manufacturer but are heavily involved in the industry, and the things we learned from this book will continue to impact our organization and how we operate positively.

If you’ve learned nothing else, look at your organization and ask questions to see if you’re operating at optimal efficiency. You’d be surprised at what you find.

We highly recommend this book. 

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Picture of Bryan Sapot
Bryan Sapot
Bryan Sapot is a lifelong entrepreneur, speaker, CEO, and founder of Mingo. With more than 24 years of experience in manufacturing technology, Bryan is known for his deep manufacturing industry insights. Throughout his career, he’s built products and started companies that leveraged technology to solve problems to make the lives of manufacturers easier. Follow Bryan on LinkedIn here.