Good OM Reading: “The Toyota Way,” by Jeff Liker

In the 1990s Toyota’s principles of production equipment became “simple, slim, and flexible,” which some people might interpret as “go slow and be cautious in adopting new technology.”  In today’s age of lightning speed in the digital world, Jeff Liker’s new book, The Toyota Way (Oct., 2020) says that would be a mistake. His message is: “adapt technology that supports your people and processes.” Where are real needs that technology can address to help achieve corporate goals? This is a question of pulling technology based on the opportunity, instead of pushing the technology because it is the latest fad. The key issue, writes Liker, is to avoid the temptation to buy and implement the latest gee-whiz digital tools, and instead to thoughtfully integrate technology with highly developed people and processes.

Toyota’s largest supplier, Denso, in Japan, has made remarkable progress in adapting real time data collection, the Internet of Things (IOT), and data analytics to support lean systems and amplify kaizen. At the center of Denso’s approach is people, and their ability to sense reality and think creatively.  Denso demonstrates that technology has the greatest potential when there is a culture of continuous improvement and the people are highly developed. Denso operates on the belief that IOT does not cut people out of the loop, but rather provides superior information to people about the process. The power of big data and AI is to give the operator information just-in-time that they previously could only guess at. But Denso expects the operator to use that information creatively to find the root cause and solve the problem through kaizen. Denso calls this “collaborative creation and growth of human, things, and equipment.”

Toyota’s system, says Liker, is about forcing people to think deeply to solve problems. Will computer systems make us lazy thinkers?  How can we marry the powerful information coming out of the computers with the creativity of people in developing and testing ideas for improvement? This is a book worth sharing with your students when you cover Chapter 16, Lean Operations.