söndag 31 augusti 2014

Philip Kotler: Marketing from Chicago Humanities Festival

A good and interesting summary of the foundations of marketing by Philip Kotler, one of the largest in marketing. He discusses how marketing begins to how it looks today.

torsdag 28 augusti 2014

The Toyota Way

Toyota use 14 different principles to work out their organizational culture. These 14 principles are more a philosophy than ready-made tools that can only be implemented. It is important within Toyota that everyone understands the principles of philosophy before they even start working on implementing Lean or the TPS (Toyota Production System) tools for the organization. Toyota usually see flaws in various companies as they help to introduce TPS or Lean. These companies see only the tools of Lean and if the implements these tools, it will be succsessfuly for the company. According to Toyota, this is misleading because these companies do not understand the Lean philosophy that makes all the puzzle pieces fall into place.

Principle 1: Base the decision on long-term thinking, even when it is at the expense of short-term financial goals.
The first principle of The Toyota Way is to get a company philosophy that always are looking at the business on a long term perspective. To achieve this, Toyota has quality as their top priority. To achieve the highest quality they have to concentrate on all aspects of the business to achieve this. There is everything from staff who thrive in the workplace, to get a close collaboration with their suppliers and customers. It is a holistic approach that Toyota wants to last in all areas, for everything is mixt together with the end result "quality".

Principle 2: Create continuous process flow to bring problems to the surface.
Second rinciple is about building up one-way flow to minimize overproduction and large storage spaces. Here, they have tried to remove all the congestion that mean that products will be standing between the different stations instead of having a steady flow throughout the manufacturing process. This principle will mean less cost in inventory and even quicker delivery to customers by having coordinated the production chain in order to create an even flow.

Principle 3: Let demand control to avoid overproduction.
It is about building up a system where the customer decides when and how it wants to have a supply of  there products. Instead of it becoming the printed products that ultimately can not sell. It is a way to increase customer satisfaction and getting rid of unnecessary layers of products, which costs money for the business. To do this, they use Kanban to have a system that is both computerized and a human indulgence to minimize the risk of errors.

Principle 4: Level out the workload.
This allows you to find a balance between production, to minimize over and under load on staff. With this principle, the effort to find a steady pace in the workflow and try to minimize peaks and troughs in production that creates unnecessary congestion. If you succeed with this principle, you get a business that works in harmony, and it becomes much easier for the company to plan their feeds.

Principle 5: If necessary, stop the process to solving problems so that it is right from the beginning.
It is usually very costly to stop an assembly line, but it is even more costly to correct the errors that have occurred as time takes for anyone to discover the error. That is why Toyota has built a system to get everyone involved in the process to stop and correct the error, and thereby build in quality
in the product. This means that it minimizes the number of errors and create quality products right from the start instead of having to correct it afterwards.

Principle 6: Add standardized approach as a basis for continuous improvement and employee involvement.
The foundation of TPS is to constantly standardize the work to reduce the risks of making mistakes. It is also easy to debug if there has been an error in the procedure if everyone works in a standardized way. This also makes the staff more involved with constantly changing standards if they feel they have a better solution to the task. This system also makes it easyer introducing new employers to perform the tasks.

Principle 7 Use visual control so no problems remain hidden.
Visual control is that they should be easy to follow up the targets and everything must be visible so that all concerned may take part of the Information. Toyota has also introduced with this that all documents must not be bigger than one A3 sheet, if it is larger, it completely misses the overview of visual control that should make quick decisions and give a quick overview of the situation.

Principle 8: Use only reliable, well-proven technology that supports staff and processes.
This means that you will have a long-term thinking to shift in new technology. This does not mean that one should not invest in the renewal of the technology in the company. But it is important that the new technology adds no value-added for the customer process. To bring the latest technology often means that it is not proven and they can not predict if it will create problems in practice. So why is Toyota waiting to introduce new technology until it is really needed and until it sees that they will increase the value-added process to the customer.

Principle 9: Develop leaders who thoroughly understand the work, live the philosophy of Toyota and teach it to others.
Toyota is trying to create a corporate culture that permeates the entire organization. This makes it important that the managers are trained by their philosophy. The easiest way to do this is to train existing employees. Since the basic idea is that managers must have strong understanding of the work on the floor, so it could be easier to train existing employes, then to take one outside which must familiarize themselves with all the elements that the staff performs.

Principle 10: Develop exceptional people and teams who follow your company's philosophy
This basically want the business to be sure to get together functioning team. Constantly working for the company philosophy. It is about giving praise to the teams not individuals and reward them for good work. At Toyota, they do not see money as the greatest reward, but they are trying to create something more. They had, among other things a concept in the United States to all who were present on the job for a year would be rewarded with a dinner and have the opportunity to win a car. thus so reduced Toyota number of sick days and delays to work, at a small cost.

Principle 11: Respect the extended network of partners and suppliers by challenging them and helping them become better
Toyota puts high demands and challenges to their suppliers to get better at Lean. Most often, they buy one share portfolio with their suppliers in order to create a win-win situation. This means that if Toyota is going well so it is also good for their suppliers. It's hard to get a Toyota supplier when they put pressure on them to achieve the goals they have set and continue to challenge them with. But if you have come into Toyota's supplier network so you do not change supplier, but will help them become better. Toyota has a number of experts as they send out to their suppliers to help them solve problems. To challenge their suppliers so they always have two suppliers for a component. They do this in order to be able to achieve just-in-time but also to challenge the suppliers against each other. So they are constantly trying to get better one its competitor.

Principle 12: Go and see with your own eyes to truly understand the situation (Genchi genbutsu).
Genchi genbutsu is not to rely on various reports, tests, complaints, etc. but to go out and see it with your own eyes. As head of Toyota so it is accepted not to make excuses if we have made ​​an error. Toyota needs to get a solution rather than an excuse. This makes the Toyota managers are skilled to go out and see in practice how it works, and then make decisions and determinations after that. This principle is a way to go deeper into the problem to find the root of why the error occurred. To achieve Genchi Genbutsu so placed Toyota's managers as close as possible to the factory floor to the whole time to have an insight into what happens at the factory to be able to quickly go out and see if it really reports is consistent with Hanns mindset. Or to follow the plans and goals that have been added

Principle 13: Make decisions slowly by consensus. Consider all the options and then perform selected decisions quickly.
Toyota is known to work fast. In this principle, it is the reverse. Making a decision takes a long time at Toyota and they teach their staff to carefully review and evaluate all the facts and suggestions slowly and detail to reach a consensus. They do this to avoid problems later presented at the implementation, this makes the order that they will be both expensive and difficult to solve a problem the further ahead in planning you will. So when decision must be taken, they shall not be thinking if we have made the right decision. Toyota is constantly working with its staff to become proficient in this aspect by challenging staff in things they do not know or believe that they are capable of. This strengthens the communication and internal coordination within Toyota since the employees are forced to counsel ask people who they might not otherwise have a partnership with.

Principle 14 Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen).
This is about our constant search for improvements. this means that Toyota will never be satisfied, there is always something to improve, even if it basically looks good. Toyota has chosen to focus on what is negative rather a focus on what is good. They see that they contribute to continuous improvement to focus on the negative and they see no benefit to adding energy to focus on something that they have achieved. Toyota's philosophy means that there is nothing that has reached its final destination, everything is going to improve.

The story behind Lean

It all started with an inventor named Sakichi Toyoda during the 1800s. The father of Toyota's founder Kiichiro Toyoda. Sakichi used their skills in developing a loom factory. There, he made ​​use of the steam engine to make these mechanical looms. They also had a built-in system so that the machine would shut down automatically if a thread broke. He had great success with its production and became very famous in Japan and in other countries. His biggest inspiration came from Samuel Smiles's book Man's own power. This book is about a philosophy that is not about making money but to help others improve their lives. Sakichi is faounder of many terms that even today is used by Toyota for example Keiretsu, genchi, Genbutsu, jidoko etc.

1929 Sakichi sent his son Kiichiro to England to sell the patent rights to his loom to Platt Brothers for a hundred thousand pounds. This capital is then used to start the Toyota Motor Corporation 1930. Because Sakichi thought it was something that was in time, and that looms in the future would not be such a big market.

It has not been an easy road that Toyota has undergone in order to succeed in becoming a world leading automotive companies. They have had to undergo major crises to eventually succeed in reaching to the top. This they have achieved a lot because of the philosophy that Kiichiro has inherited from his father. But even from many of the studies that Taiichi Ohno did at Ford's automobile production and their philosophy of scientific management developed by Frederick Taylor. Taiichi Ohno was also the person who faound the term TPS (Toyota Production System), which is the foundation of Lean production.