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Toyota Way

The Toyota Way is a comprehensive expression of the company's management philosophy, which is based on the two foundational principles of Continuous Improvement (kaizen) and Respect for People

Toyota documented the company's management philosophy in 2001 but has not made the document publicly available. Dr. Jeffrey Liker, a professor of industrial engineering at the University of Michigan, analyzed the philosophy and principles in his 2004 book, The Toyota Way. Liker characterizes the Toyota Way as "a system designed to provide the tools for people to continually improve their work." 

According to Liker, Toyota's management philosophy can be broken into 14 guidelines categorized under four main principles:

1. Long-term philosophy:  The focus should be on extended sustainability rather than short-term gain and fostering a sense of purpose in employees for productivity.

2.  The right process will produce the right results: Continuous improvement is promoted by eliminating the seven wastes identified by Dr. Taiichi Ohno, the father of the Toyota Production System (TPS). The seven wastes (muda) are: overproduction, waiting, unnecessary transport or conveyance, overprocessing or incorrect processing, excess inventory, unnecessary motion and defects. Employee empowerment in this area comes from the fact that any employee can call a halt to production when a problem is detected.

3.  Add value to your organization by developing your people: Leaders must adopt and promote the philosophy to employees; employees and teams must embrace the philosophy and teamwork should be recognized; the development of business partners and suppliers should be fostered similarly to the development of employees.

4. Continuously solve root problems to drive organizational learning: Managers must monitor operations personally to understand problems; solutions should be determined through consensus and implemented swiftly; the organization must consistently monitor and evaluate its own practices, with the purpose of constant improvement.

Elements of the Toyota Way have been widely adopted in business areas including lean production, lean management, Agile software development and project management.

This was last updated in April 2015

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