What Do Toyota and TOC Have in Common

TOCICO 2009 Conference
Two sides of the

same coin
Presented By: Guilherme Almeida – Vectis Solutions
Date:
© 2009 TOCICO. All rights reserved. 1
Which company is that?
• Excessive administrative • One of the most admired

headcount companies in the world
• Avoid reducing Labor • Its products are always
Force among the best in
consumers rankings
• Low speed of promotion
• Founded in 1937 in Japan
• H
Homogeneous corporate t
management • Serves 170 different
markets
• Accumulation of
significant amount of • Number 1 in the
cash automotive business
• No clear strategic focus
2
© 2009 TOCICO. All rights reserved.
Key questions
• Why it’s so difficult to emulate Toyota?
• What is Toyota’s
y DNA made of?
• Are the Toyota and TOC way really different?
• In which way Toyota and TOC can benefit

from each other?
3
What is the secret of Toyota?
• They are from another planet!!!!
• The Toyota Production System
• Lack of discipline, rigor and

persistance
• It is Toyota unique culture
4
What is culture?
Schein Model
What we can see

FACTS from direct
BEHAVIOURS observation
POLICIES RULES What are

identified
id tifi d
AND patterns
VALUES
What are the

PARADIGMS basic
BELIEFS assumptions
5
The Six paradoxes in Toyota
On one hand On other hand

Move gradually Take big leaps
Cultivate frugality Spending huge sums
Operate efficiently Operate redundantly
Cultivate stability Paranoid mindset

Respect bureaucratic Allow freedom to dissent
hierarchy
Mantain simplified Mantain complex
communication
i ti communication
i ti
network
6
Key conclusion
“
Contradictions, opposites, and paradoxes
within
ithin To
Toyota
ota are self
self-generated
generated and ”
deliberately imposed.
Toyota strives to remain "extreme," a state of
disequilibrium where radical contradictions coexist,
pushing
p g it awayy from the comfort zone to create healthy
y
tension and instability within the organization. This
tension becomes the catalyst for movement forward. The
organization finds new solutions beyond opposing traits,
sending it off on a new trajectory. This trajectory moves
upward in an expanding spiral as the firm continuously
pursues innovation and self-renewal in the resolution of
opposites.
7
The effect of compromising
OBJECTIVE IMPROVE
PROFITS / ROI
now andd in
i the
th future
f t
Protect & Increase

Control & Reduce Costs
Sales
ACTIONS
Focus on WIN for
Focus on WIN for
sharehoulders
customers (Effective)
(Efficiency)
EFFECTS
FOCUS
Compromise
Undesirable Effects Undesirable Effects

- Higher level of Costs/ Investments - More complaints from customers
- Lower level of Profits/ ROI - Lower Sales (Qty/Price)
- More complaints from - Higher rework costs
sharehoulders - Lowel levels of Profits / ROI
- Lower level of Investiments / Cash
8
The opposing forces
Impossible
Goals
Founder’s
Founder s
Up or In Philosophies
Mutual trust and

Respect respect between
Team Work Labor and
Management and
long term
Continuous employment
Improvement stability
R
Respect
t for
f
People
Communication
Challenge
Kaizen
Genchi Genbutsu
Local Eagerness to
Customization Experiment
Nerve
System
9
About TOC
TOC Beliefs
– The Choice
over lastt 30 years
s
TOC Business Strategy

- Viable Vision/ S&T
TOC & Technology
– Necessary but not Sufficient
The TOC Holistic Approach
– 8 Video Sessions
volution o
Project Management
– Critical Chain
Distribution, Marketing, Management Skills
– It’s Not Luck
TOC Ev
The Thinking Processes

– Jonah Program
TOC for Production, Throughput Accounting
– OPT,
OPT The Goal
Goal, The Race
Race, The Haystack Syndrome
1975 1985 1990 1995 2000 2007

10
The improvement challenge
Growth
FORMANCE
E
Constraint Stability/
Survival
PERF
What Next?
Past Now Future

TIME
Pressure to Growth /
Change Satisfaction
Stakeholder’s Be
Successful/
Conflict: Happy
Pressure to Stability /
Not Change Security GOAL
DECISION NEED
11
TOC Overview
Distribution
Finance and
Operations and Supply
Measurements
Chain
Applications Project
Management
Sales Marketing
People
Strategy Education
Management
CRT
S//T
CLR FRT
Tools Thinking
Processes S//T S//T
NBR PRT
Cloud TT S//T S//T S//T
P
6 Questions
of
Buy In
Processes Technology (-- & +)
3
Stability
5 Focusing
Strategical
Steps
Questions
Principles Inherent
Simplicity
Harmony Respect
Inherent
Potential
12
Living TOC
Full Life P
Stability
Meaningful successes
Stamina to overcome Have many Collaborate with

f il
failures opportunities people
Think clearly
Overcome 4
obstacles
Overcome Don’t accept Avoid blaming Don’t think that

perception of conflicts as given you know
reality as complex
Inherent Inherent
Harmony Respect
Simplicity Potential
Every situation is Every conflict can People are good Every situation
simple be removed can be
substantially
Win-Win is always improved
possible
13
TOC Principles
Inherent Inherent
Harmony Respect
50
40 A Undesirable
Undesirable
B Effect Within our Influence
30 Effect under new Paradigm
20 Potential
C Potential Out of our Control 10%
10 D Bad
BadBehaviour
Behaviour Goal
0 THEN
THEN by
byPerson
Person There
FEW arereal
MANY
A B C D Constraints and
Constraints and
MOST are are 90%
100
D Out of our
Within 90%
80 G
IFIF BECAUSE ControlControlor
60 H Goal Influence
People
(Some) are
People PersonBad
with Current Within our Control 10%
B E
40 areGood
Bad Bad
Person Current
C Assumption
F Belief “Cause” Current
Current // Past
Past
20
Performance
Performance
A windmill
i d ill Belief “C
“Cause”
”
0 A
A B C D E F G H can have 2
heights?
14
Two sides of the same coin
EVER FLOURISHING COMPANY

Impossible Goals
Founder’s
Philosophies
U or In
Up I
Stability
t
Local Eagerness to
Customization Nerve experiment
S t
System
15
PRINCIPLES
Inherent Inherent
Harmony Respect
M t l trust
Mutual t t and
d
Respect respect between
Team Work Labour and
Management and
long term
Continuous employment
Improvement stability
Respect
p for
People
Communication
Challenge
Kaizen
Genchi Genbutsu
16
VISION
Pi k a ffriendly
Pick i dl fifight!!!
ht!!!
“Combining the words "friendly" and "fight" may seem like
a contradiction, but we make it work because both sides
share the same goal—to produce cars that make
customers happy.
happy The first item on my list of my priorities
is to make this an organization where nobody hides
concerns or problems and where constructive discussion
Katsuaki Watanabe takes place routinely. Without such discussion people will
Toyota Motor Company
Former CEO tend to let problems slide with slapdash solutions that
barely scratch the surface”
What is needed is just the courage to face

inconsistencies and avoid running away from them
just because “that’s the way it was always done”
The Goal
Reality doesn’t contain contradictions
The Choice
Eli Goldratt 17
How can Toyota and TOC benefit
from each other?
What is the decisive How to consistently

competitive edge? deploy TOC principles,
tools and processes in
a massive scale?
How to boost continuous improvement?
18
About Guilherme Almeida
Married with Carolina,

f
father off Marcelo and
Marina
Things I like to do:
learning, working, racing
and running
More than 20 years
working in the e-mail: guilherme@vectis-solutions.com
automotive industry
y Site: www.vectis-solutions.com
Strong belief in the

tremendous potential of
every human being
19

What Do Toyota and TOC Have in Common

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TOCICO 2009 Conference

Two sides of the

• Excessive administrative • One of the most admired

• Why it’s so difficult to emulate Toyota?

• Are the Toyota and TOC way really different?

• In which way Toyota and TOC can benefit

• They are from another planet!!!!

• The Toyota Production System

• Lack of discipline, rigor and

• It is Toyota unique culture

What we can see

POLICIES RULES What are

What are the

On one hand On other hand

Cultivate frugality Spending huge sums

Operate efficiently Operate redundantly

Cultivate stability Paranoid mindset

Protect & Increase

Undesirable Effects Undesirable Effects

Mutual trust and

TOC Business Strategy

The Thinking Processes

1975 1985 1990 1995 2000 2007

Past Now Future

Cloud TT S//T S//T S//T

Processes Technology (-- & +)

Stamina to overcome Have many Collaborate with

Overcome Don’t accept Avoid blaming Don’t think that

EVER FLOURISHING COMPANY

What is needed is just the courage to face

What is the decisive How to consistently

How to boost continuous improvement?

Married with Carolina,

Strong belief in the

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