Decoding the DNA of the Toyota Production System

The Toyota story has been intensively researched and painstakingly documented, yet what really happens inside the company remains a mystery. Here’s new insight into the unspoken rules that give Toyota its competitive edge.

by

Steven Spear

and

H. Kent Bowen

by

Steven Spear

and

H. Kent Bowen

From the Magazine (September–October 1999)

Summary.

The Toyota production system is a paradox. On the one hand, every activity, connection, and production flow in a Toyota factory is rigidly scripted. Yet at the same time, Toyota’s operations are enormously flexible and responsive to customer demand. How can that be? After an extensive four-year study of the system in more than 40 plants, the authors came to understand that at Toyota it’s the very rigidity of the operations that makes the flexibility possible. That’s because the company’s operations can be seen as a continuous series of controlled experiments. Whenever Toyota defines a specification, it is establishing a hypothesis that is then tested through action. This approach – the scientific method – is not imposed on workers, it’s engrained in them. And it stimulates them to engage in the kind of experimentation that is widely recognized as the cornerstone of a learning organization. The Toyota Production System grew out of the workings of the company over 50 years, and it has never actually been written down. Making the implicit explicit, the authors lay out four principles that show how Toyota sets up all its operations as experiments and teaches the scientific method to its workers. The first rule governs the way workers do their work. The second, the way they interact with one another. The third governs how production lines are constructed. And the last, how people learn to improve. Every activity, connection, and production path designed according to these rules must have built-in tests that signal problems immediately. And it is the continual response to those problems that makes this seemingly rigid system so flexible and adaptive to changing circumstances.

The Idea in Brief

Toyota’s renowned production system (TPS) has long demonstrated the competitive advantage of continuous process improvement. And companies in a wide range of industries—aerospace, metals processing, consumer products—have tried to imitate TPS. Yet most fail.

Why? Managers adopt TPS’s obvious practices, without applying the four unwritten rules that make TPS successful. Like strands of DNA, these rules govern how people carry out their jobs, how they interact with each other, how products and services flow, and how people identify and address process problems.

The rules rigidly specify how every activity—from the shop floor to the executive suite, from installing seat belts to reconfiguring a manufacturing plant—should be performed. Deviations from the specifications become instantly visible, prompting people to respond immediately with real-time experiments to eradicate problems in their own work. Result? A disciplined yet flexible and creative community of scientists who continually push Toyota closer to its zero-defects, just-in-time, no-waste ideal.

Mastering TPS’s four rules takes time. But by dedicating yourself to the process, you stand a better chance of replicating Toyota’s DNA—and its performance.

The Idea in Practice

TPS’s four rules:

All work is highly specified in its content, sequence, timing, and outcome. Employees follow a well-defined sequence of steps for a particular job. This specificity enables people to see and address deviations immediately—encouraging continual learning and improvement.

Example:

Installing the right-front seat in a Camry requires seven tasks performed in a specific sequence over 55 seconds. If a worker finds himself doing task 6 before task 4 or falling behind schedule, he and his supervisor correct the problem promptly. Then they determine whether to change the task specifications or retrain the worker to prevent a recurrence.

Each worker knows who provides what to him, and when. Workers needing parts submit cards specifying part number, quantity, and required destination. Suppliers must respond to materials requests within specified periods of time. Workers encountering a problem ask for help immediately. Designated assistants must respond at once and resolve the problem within the worker’s cycle time (e.g., the 55 seconds it takes to install a front seat).

Failure to fulfill these specifications signals a search for potential causes—such as ambiguous requests from colleagues or an overwhelmed assistant. Once the cause is identified, it’s resolved rather than kept hidden.

Every product and service flows along a simple, specified path. Goods and services don’t flow to the next available person or machine—but to a person or machine.

Example:

If workers at an auto parts supplier find themselves waiting to send a product to the next designated machine they conclude that their demand on the next machine doesn’t match their expectations. They revisit the organization of their production line to determine why the machine was not available, and redesign the flow path.

Any improvement to processes, worker/machine connections, or flow path must be made through the scientific method, under a teacher’s guidance, and at the lowest possible organizational level. Frontline workers make improvements to their own jobs. Supervisors provide direction and assistance as teachers.

Example:

At one Toyota factory, workers seeking to reduce a machine’s changeover time from 15 to 5 minutes were able to reduce the time only to 7.5 minutes. A manager asked why they hadn’t achieved their original 5-minute goal. His question helped them see that their original goal had been a random guess, not based on a formal hypothesis about how fast it could be done and why. Thus they couldn’t test the hypothesis to determine what caused the less-than-ideal results.

The Toyota Production System has long been hailed as the source of Toyota’s outstanding performance as a manufacturer. The system’s distinctive practices—its kanban cards and quality circles, for instance—have been widely introduced elsewhere. Indeed, following their own internal efforts to benchmark the world’s best manufacturing companies, GM, Ford, and Chrysler have independently created major initiatives to develop Toyota-like production systems. Companies that have tried to adopt the system can be found in fields as diverse as aerospace, consumer products, metals processing, and industrial products.

A version of this article appeared in the September–October 1999 issue of Harvard Business Review.

SS

Steven Spear is a senior lecturer at MIT’s Sloan School of Management and a senior fellow at the Institute for Healthcare Improvement.
HB

H. Kent Bowen is the Bruce Rauner Professor of Business Administration, also at Harvard Business School. Professor Bowen is the coauthor of “Regaining the Lead in Manufacturing” (HBR September–October 1994).

Decoding the DNA of the Toyota Production System

The Idea in Brief

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