Agile roots: Toyota Production System

Agile methodology - converging fast to a perfect product.

This methodology and set of principles has the root in the company with the same name. After the Second World War, the Japan and its companies were almost ruined both physical and financial. To recover the economy, they had to rethink all the processes of production in order to maximize their efficiency. This was required because not only that they lack financial resources, but even the loans that they could do as a country came with big price. In Toyota Company, a smart man called Taiichi Ohno, created a new way to build cars, focusing on creating as many quality products possible with limited amount of resources.

The three principles that guided the rebirth of Toyota and other Japanese companies were:

1. Build only what is needed – literally, they strived to build only products for which they knew that a customer exists. There was no room for additional expenses with storage and building stocks of merchandises, thus only the products quickly convertible in money survived. Also the quality of them assured that they were solvable.

2. Eliminate anything that doesn’t add value – meaning that the product should be really useful to the customer, but also more usable than the one of the competition – assuring that the entire production is sold fast, thus improving also the flow of money in the Japan’s almost ruined economy.

3. Stop if something goes wrong – this is almost a sum of above principles, ensuring once again that only quality products are built. In any process there can be faults, but if stopped when they are minor, by the first worker who noticed the defect, a lot of time and resources can be saved. This is the base principle of zero-defect production, based on a quick feedback of wrong action rather than the late confirmation that an error occurred somewhere along a long line of production.

Besides respecting and caring for budget and products, the Toyota Production System also settled in work environments a set of values, creating a philosophy of work, which:

· respects those engaged in the work

· strives for full utilization of workers’ capabilities

· places authority and responsibility for the work with those doing it, enabling any worker to stop the entire line of production if he knew about a defect.

These principles thrived in Japan, as we all know now, after more than 50 years, bringing it to the top of the biggest economies in the world. Almost all companies soon adopted these principles who were tested by Toyota, becoming the usual way to conduct a business in this country. Very surprising, they weren’t very appreciated in other areas until 1980. These ideas were so well implemented in Japan’s industry, that their almost destroyed industry became the main producer of cars, expanding throughout the world. Even more, during the oil crisis in 1975, they quickly adjust their production to new demands that prove again that Ohno’s principles aren’t obsolete and don’t depend only on the theory behind, but more on the people that implements it.

The Toyota Production System entered into the largest economy, USA, late in 1980 as a tiny idea and later in 1990 they actually started to think seriously about it. The pioneers in this area were James Womack, Daniel Jones and Daniel Roos in the book “The Machine that Changed the World” published in 1990 and by Womack and Jones in the sequel “Lean Thinking” in 1996. They coined the term “Lean Thinking”, depicting a set of five principles, more general and not limited to industry, but to all enterprises independent of field of activity, as follows:

· Specify value

· Identify the value stream – line up activities which contribute value, eliminate those which add no value

· Create the conditions for value to flow smoothly through the stream

· Have the customer pull value from the stream

· Pursue perfection – work on improving the responsiveness of the production system to the customer demand for value

These principles didn’t remain only as ideas, but were quickly adopted by the economy and also fundament a new base for research, in the newly founded Lean Enterprise Research Centre in Wales, England, where it became an instrument of researching, documenting and spreading the lean techniques for improving the work processes.

Note: This is an excerpt from my work during Agile Lab and Seminar in Fall 2009