In his presentation "The Toyota Way in Information Technology – Lean IT and IT for the Lean Company" at the European lean IT Summit 2012, Pierre Masai explained how the Toyota Production System is applied to the IS function of Toyota Motor Europe, showing with a number of concrete examples how the principles of Just In Time and Jidoka are applied in an IS context, then more generally, how they are progressing on their journey to move from ‘lean IS’ to ‘IS enabled lean enterprise’. More Lean IT presentations and videos on www.lean-it-summit.com

1. Towards an IS Enabled
Lean Enterprise
Pierre Masai
VP of Information Systems & Telematics

2. Agenda
Introduction
Toyota Way & Business Practice
Manufacturing TPS and IS
The IS Enabled Lean Enterprise

3. Agenda
Introduction
Toyota Way & Business Practice
Manufacturing TPS and IS
The IS Enabled Lean Enterprise

4. Toyota – in the World
 Established in 1937
 77 manufacturing companies in 27 countries
 Vehicles sold in more than 170 countries worldwide
 7.95 million vehicles sold worldwide in 2011
 Market share
• (2011): 44% in Japan, 12.6% in US
• (2011): 4.2% in Europe
 Net revenue:
• €170 billion in FY 2011-12
• €217 billion forecast for FY 2012-13
 Approx. 318,000 employees worldwide

5. Regional Headquarters
Toyota Motor Europe NV/SA
(TME) Toyota Motor
Corporation
Toyota Motor North America, Inc. (TMC)
(TMA)
Toyota Motor Asia
Pacific Pte Ltd. (TMAP-MS)

6. Manufacturing Facilities
TMMR - Camry
TMIP – Diesel engines
TMUK - Engines TMUK – Auris, Auris
Hybrid & Avensis
TMMP - Engines &
Transmissions
TMMF – Yaris &
Yaris Hybrid
TPCA - AYGO
Toyota Caetano Portugal
Commercial Vehicles
TMMT - Auris & Verso

7. Manufactured Vehicles
Approx. 2/3 of our vehicles sold in Europe
are made in Europe:
• Toyota AYGO
• Toyota Yaris
• Toyota Yaris Hybrid
• Toyota Auris
• Toyota Auris Hybrid
• Toyota Verso
• Toyota Avensis
• Toyota Camry
• Toyota Dyna

8. National Marketing & Sales Companies
 30 NMSCs
 56 Countries
 275 Lexus retailers
 2,835 Toyota retailers
Not shown: Toyota Caucasus LLP, Union Motors Ltd (Israel), Toyota Motor Kazakhstan LLP

9. Agenda
Introduction
Toyota Way & Business Practice
Manufacturing TPS and IS
The IS Enabled Lean Enterprise

10. The Toyota Way Values
Continuous Improvement Respect for People
Challenge
Respect
Kaizen
Teamwork
Genchi genbutsu

11. The Toyota Way Values
Continuous Improvement Respect for People
Without ever being satisfied with the
current situation, We respect people,
and always pursuing the most practical and believe the success of our business is
and effective solutions, created by individuals
we strive to continually increase our and good teamwork.
knowledge

12. Toyota Way Values – Respect for People
Respect for People Benefits
Respect the ability of Provide opportunities for
people to solve problems personal development
People’s ability to think is Sense of achievement,
boundless self-realization, self-
improvement

13. The Toyota Way Values and Toyota Business Practices
Toyota Business Practices
Continuous Improvement Respect for People
Challenge
Respect
Kaizen
Teamwork
Genchi genbutsu

14. Toyota Business Practices
Clarify the Problem Customer First
Always Confirm the Purpose of Your
Break Down the Problem Work
Take Ownership and Responsibility
Plan
Target Setting
Visualization (MIERUKA)
Toyota
Root Cause Analysis Judgment Based on Facts
Business
Develop Countermeasures Practices Think and Act Persistently
Speedy Action in a Timely Manner
See Countermeasures Through
Do
Follow Each Process with Sincerity and
Commitment
Check
Monitor both Results and
Processes Thorough Communication
Standardize Successful Processes
Act
and Start next iteration Involve all Stakeholders

15. Why is Process Important ?
“We get brilliant results from
average people managing brilliant
processes. We observe that our
competitors often get average (or
worse) results from brilliant people
managing broken processes.“
Source: “Decoding the DNA of the Toyota Production System“ Steven Spear and Kent Bowen,
Havard Business Review, September October 1999

16. TBP Training within TME
Mandatory training for all employees
Multi-day formal training in Toyota Way and Toyota Business Practices
Multi-month ‘training’ project
With an assigned coach
Ends with a formal presentation of a Toyota Business Practices “A3”
If required, a ‘second chance’ presentation can be scheduled several months
after the first
Follow-up “on-the-job” training:
In daily work: Identifying Problems, taking Decisions
In all management processes: reporting, KPIs, etc.

17. Types of Problems in Toyota
Future Possible Level
of Performance
‘Setting’ or ‘Stretch’
type of problem
Standard
Exception or Gap
type of problem
Current
Situation

18. Problems – Some advice from Ohno San
“No one has more trouble, than the
person who claims to have no
trouble.”
(Having no problems is the biggest
problem of all.)
Taiichi Ohno

19. Agenda
Introduction
Toyota Business Practice
Manufacturing TPS and IS
The IS Enabled Lean Enterprise

20. Linking TPS and IS
Implement  Design software deliverables with small lot sizes, with a short
PDCA cycle to highlight issues very quickly after they occur.
continuous flow to
highlight problems  Encourages Heijunka and allows Jidoka
 In requirements gathering – ensure that the IS member spends
Go and see (Genchi- time with the business, engaged in their proces.
Genbutsu).  In Software development and Project management create Virtual
Gemba and deliver meaningful KPIs to clarify the facts.
 By using continuus flow and Heijunka encourage frequent lines
Stop to fix problems stops early in the project to fix problems.
& Jidoka
 Maximise value of human checking by automating where possible

21. Linking TPS and IS
 Encourage team members to understand the entire process, by
Develop the team job rotation and special assignments.
(including Suppliers)
 Involve suppliers fully, being open about process and measures.
 Once basic principle and operation are clear, use technology to
Use technology to support it.
help the process
 Don’t follow a product’s operation without thought.
 In Software development visualise defects and causes.
Visualise your
process and Results  Visualise entire project using one document Plan, Issues/Risks,
Costs and Quality.

22. Visualisation 1

23. Visualisation 2

24. Agenda
Introduction
Toyota Way & Business Practice
Manufacturing TPS and IS
The IS Enabled Lean Enterprise

25. Lean IS or Lean Enterprise
• How does TME create IS Systems that embody lean business processes ?
• If we only make the IS process lean – this benefits IS and has some
benefits for the business.
• .. but if we can implement systems that 'make us lean' as an Enterprise -
this benefits the whole company.

26. Lean IS or Lean Enterprise
• Lean IS can deliver big impact in the
scope of the IS department.
…like high revs in first gear.
• If we can engage the higher gears,
through operating at an Enterprise
scope, larger opportunities become
available to us.

27. Objective Benefits of a Lean Enterprise
IDC Survey of 800 manufacturers showed an average 40% increase in
profitability between Lean and non Lean companies.
WorldwideLean Companies Median Quarterly Net Profit
Margin Trends,1Q02–4Q11
Source: IDC Manufacturing Insights Q1 2012

28. Elements Required for Lean Systems
• Clear Direction;
• Consistent from Global to Company to individual Level.
• Consistent between each Division & Department.
• Complementary approach to Strategic and Practical objectives.
• Management of Process and Results.
• IS Management has objective to deliver Business Improvement not simply
deliver Software.

29. Direction = Hoshin
Hoshin Kanri; Management of Direction
• Mid to Long Term Viewpoint.
• Vertical Alignment
• Horizontal Coordination
• Process and Results Management.
• Human Resource Development

30. Hoshin Kanri

31. “Stop and Solve problems” vs Hoshin
Problem Solving Steps Annual Hoshin Kanri Cycle
1. Clarify the Problem
Develop an Image of the Desired Future Situation
P
Grasp the
Current Situation A D
Identify
C
Gaps
Draft the Annual Determine Daily Management Items
2. Breakdown the Problem
3. Set the Targets Hoshin Plan
Engage in
4. Root Cause Analysis
Nemawashi
5. Develop Counter-measures
Create a
Deployment Plan
Implement the Countermeasure
6. See the Countermeasures through P
Plan or
A D
7. Monitor both Process and Results Standardize
C Kaizen the
8. Standardize Check Progress
Hoshin Management Process

32. Hoshin Kanri - Recap
• Forget about IS and Enterprise alignment.
• … this concept is based upon IS and the company business being separate.
• We are one team, with one aim.
• Hoshin Kanri allows us to clarify the aims and each give maximum
contribution.
• If an “excellent” IS system does not give business value – it isn’t an excellent
system.

33. PDCA and Continuous improvement

34. Plan

35. Do

36. Check

37. Act

38. PDCA Recap
• Clarifying the direction and the essential logic of business value is a one
team activity – all parties must contribute.
• Checking the benefits is the same.
• Honest and measurable evaluation of benefits result in wisdom that can
be carried forward.
• .. “When we blame we lose the power to change”.

39. Example – Pan E Telematics
• Ambition to take an early step into Telematics for mass produced vehicles.
• Our Pan E organisation structure was optimised for country by country
support.
• Toyota needed to introduce a new business flow and we did this by
introducing a Telematics system that could implement that.

40. Pan E Telematics – What we delivered
Search Engine
Providers

41. Pan E Telematics
Centralised management of our customer and vehicle data

42. Pan E Telematics
TME Vendors
•TME IS is responsible for functions in the vehicle for the first time

43. Agenda
Introduction
Toyota Way & Business Practice
Manufacturing TPS and IS
The IS Enabled Lean Enterprise
In Summary

44. Summary
•TME believe that the Toyota Way principles strengthen our
work and our organisation.
•Through a sincere implementation of Lean thinking the
Enterprise can move forward, with Kaizen and Innovation.
•Our customers cannot do this without an IS team fully
committed to business benefit.
•The IS team cannot do it without their customers.

45. Thank you
Thank you for your attention today at the #Lean #IT
Summit
@PierreMasai