'Step Inside the Circle'

The automaker teaches the Toyota Production System.

Problem analysis methodology in the Toyota Production System (TPS) requires participants to "step inside the circle." Those manufacturing companies that accept Toyota's offer of help in optimizing production processes with TPS will encounter the phrase during the genchi genbutsu ("go and see") step in problem solving. It is a reference to the shop-floor focus of the company's TPS pioneers, Taiichi Ohno and Eji Toyoda. For example, Ohno, when teaching TPS, would take his students to a problem area and draw a circle on the production floor where they could observe, think, and analyze, says Teruyuki Minoura, president and CEO, Toyota Motor Manufacturing North America Inc. "He wanted us to watch and ask 'why' over and over again. If we did that, he knew the better ideas would come. Mr. Ohno realized new thoughts and new technologies do not come out of the blue -- they come from true understanding of the process." Toyota began its TPS missionary efforts soon after it dispatched Fujio Cho, now president, to Kentucky to initiate manufacturing in the U.S. "The idea was to offer North American manufacturers the benefits possible by focusing on internal logistics," says Hajime Ohba, vice president and general manager of the Toyota Supplier Support Center (TSSC) in Erlanger, Ky. Cho, Ohba, and Minoura all were trained by TPS guru Ohno. Since the operation's start-up in 1992 TSSC's crew of consultants has worked with 88 companies. Participants outside Toyota's supplier circle include companies with products as varied as toys, home kitchenware, and premium leather goods, says Ohba. Like a religion, converting to TPS takes time (about two years or more), an organ izational commitment to cultural change, and the acceptance of new values by everyone -- especially management. In return the process optimization that TPS makes possible can lead to huge paybacks in inventory reduction, increased product quality, and a relentless elimination of any waste that hinders efficiency. If not a religion, TPS is at the very least a rigorous philosophical approach to organized activity, says Christine Parker, TSSC's assistant manager of research and training. For converts that are sincere (determined by a preliminary visit by TSSC), Toyota's "missionaries" work for free, except for travel and hotel costs. Toyota asks the following:

  • No employees will be laid off as a result of efficiencies.
  • Senior management will stay involved.
  • Participants should harbor no expectations of business from Toyota.
  • No other consultants will be on the site.
  • The participants agree to showcase results.
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