Sociotechnical System

First, one needs to understanding the purpose of why Toyota exists before you can ask yourself why Toyota is so successful in what they do. How can they be so successful? How do they pull it all together? This post will focus on the latter; how Toyota pulls it all together.

Toyota’s success lies within that there is no single secret pulling it all together. Toyota’s success comes from hard work, excellent engineers, a culture of teamwork, an optimized process, simple but powerful tools that work, and kaizen that improves, and improves on all of these.¹

Sociotechnical System (STS)

A Sociotechnical system (STS) suggests that in order for an organization to be successful it must find the appropriate adjustment between social and technical system that will fit the organizational purpose and its external environment. Continue reading →

Why does Toyota exist?

Why is Toyota succeeding while others fail? One of the very interesting answers on this question is the way Toyota considers their whole organization. As you can see below the purpose of Toyota’s existence is to contribute to..

.. economic growth of the country in which it is located (external stakeholders).
.. the stability and well being of team members (internal stakeholders).
.. the overall growth of Toyota.

Now, what is making this so interesting is that Toyota’s primary existence is to contribute to the economical growth of the country. Second, it focuses on the stability and well being of all the workers. Third, we find the overall growth of Toyota(!). Hence, the purpose of almost any western company would probably be just the opposite..

Obsession of eliminating waste

In today’s dynamic and complex global world spiced with today’s financial crisis, companies are more than eager to cut down costs and work more efficient. Companies tend to start become limited in their ways of acting and adapting to upcoming changes, and thereby too often focusing on short-term solutions. Hence, the activity of iterative (adaptive) planning is even more important! The concept and importance of; “the plan is nothing; planning is everything” is getting invaluable in order to survive today’s dynamic and extreme business context.

However, let’s go back to my starting point where I argue that companies are more than eager to cut down costs and work more efficient. I will try to exemplify this argumentation of how we think we are cutting down costs and working more efficient, while we (ironically) might be doing the exact opposite by sub-optimizing and building inventories! I would like focus my discussion based on two wide areas of; the obsession of eliminating waste and the ambition to optimize. Continue reading →

Queuing Theory

It is important to examine and understand why the seven wastes are so prevalent. It’s mostly because no company truly can understand how to eliminate these wastes until it understands their true root cause. Considering the queuing theory will provide some important insights about the root cause of waste in product development. However, as a reference, traditional product development practices that are particularly problematic include that..

.. product development working in large batches created by the stage-gate or milestone based product development processes.

.. product development working with differing levels of capacity at any point in time creating capacity mismatches and resulting in a general ignorance of the capacity and is followed by constant system overburdening.

.. unpredictable product development workloads expanding to take up all the time of all engineers assigned to projects.

.. highly cyclic product development workloads characterized by lulls in workload followed by tremendous system congestion, and thereby expanding lead times beyond planned deadlines.

.. low levels of task execution and scheduling discipline, leading to high levels of both task and interarrival variability.

Continue reading →

What is waste?

What is waste? Waste (in Japanese muda), this term has become one of the most commonly used terms within today’s global business world. But what is waste.. really? Waste is defined as; “Any activity that does not add value to the customer”. Furthermore, the customer is always the starting point in a lean system, so defining waste starts with defining what a customer values. According to Toyota, waste in product development generally occurs in one of two broad areas:

1. Waste by poor engineering that results in low levels of product or process performance. This is the most destructive waste.
2. Waste in the product development process itself.

Furthermore what is very interesting and needs to be highlighted is that Toyota has managed to “level the flow”, not only by eliminating waste (muda) but also by eliminating “unevenness” (mura) and “overburden” (muri). Battling and eliminating muda does not accurately represent all that “lean” is about. True lean thinking does not focus on one-dimensional muda elimination; it works to eliminate three types of interrelated waste: muda, mura, and muri. Continue reading →