TOCICO 2009 Conference

Two sides of the same coin

Presented By: Guilherme Almeida Vectis Solutions Date:
2009 TOCICO. All rights reserved.

Which company is that?

TOCICO 2009 Conference

Excessive administrative One of the most admired headcount companies in the world Avoid reducing Labor Force Low speed of promotion Its products are always among the best in consumers rankings Founded in 1937 in Japan

H Homogeneous corporate t Serves 170 different management markets Accumulation of significant amount of Number 1 in the cash automotive business No clear strategic focus
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2009 TOCICO. All rights reserved.

Key questions
TOCICO 2009 Conference

Why its so difficult to emulate Toyota? What is Toyotas y DNA made of? Are the Toyota and TOC way really different? In which way Toyota and TOC can benefit from each other?

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2009 TOCICO. All rights reserved.

What is the secret of Toyota?

TOCICO 2009 Conference

They are from another planet!!!! The Toyota Production System Lack of discipline, rigor and persistance It is Toyota unique culture

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2009 TOCICO. All rights reserved.

What is culture?
TOCICO 2009 Conference

Schein Model
What we can see from direct observation

FACTS

BEHAVIOURS

POLICIES

RULES AND VALUES

What are identified id tifi d patterns

PARADIGMS

BELIEFS

What are the basic assumptions

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2009 TOCICO. All rights reserved.

The Six paradoxes in Toyota

TOCICO 2009 Conference

On one hand
Move gradually Cultivate frugality Operate efficiently Cultivate stability Respect bureaucratic hierarchy Mantain simplified communication i ti
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On other hand
Take big leaps Spending huge sums Operate redundantly Paranoid mindset Allow freedom to dissent Mantain complex communication i ti network
2009 TOCICO. All rights reserved.

Key conclusion
TOCICO 2009 Conference

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 away y 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.
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2009 TOCICO. All rights reserved.

The effect of compromising

TOCICO 2009 Conference
OBJECTIVE IMPROVE PROFITS / ROI now and d in i the th future f t

Protect & Increase Sales

Control & Reduce Costs

ACTIONS Focus on WIN for customers (Effective)

Focus on WIN for sharehoulders (Efficiency)

EFFECTS

FOCUS
Compromise

Undesirable Effects - Higher level of Costs/ Investments - Lower level of Profits/ ROI - More complaints from sharehoulders - Lower level of Investiments / Cash

Undesirable Effects More complaints from customers Lower Sales (Qty/Price) Higher rework costs Lowel levels of Profits / ROI

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2009 TOCICO. All rights reserved.

The opposing forces

TOCICO 2009 Conference

Impossible Goals Up or In

Founders Founder s Philosophies

Respect Team Work

R Respect t for f People Communication Continuous Improvement

Mutual trust and respect between Labor and Management and long term employment stability

Challenge Kaizen Genchi Genbutsu

Local Customization Nerve System

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2009 TOCICO. All rights reserved.

Eagerness to Experiment

About TOC
TOCICO 2009 Conference

TOC Ev volution o over last t 30 years s

TOC Beliefs The Choice TOC Business Strategy - Viable Vision/ S&T TOC & Technology Necessary but not Sufficient The TOC Holistic Approach 8 Video Sessions Project Management Critical Chain Distribution, Marketing, Management Skills Its Not Luck 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
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2009 TOCICO. All rights reserved.

2000

2007

The improvement challenge

TOCICO 2009 Conference

Growth
PERF FORMANCE E

Constraint What Next?

Past Now Future

Stability/ Survival

TIME

Pressure to

Change

Stakeholders Conflict:

Growth / Satisfaction
Be Successful/ Happy

Pressure to

Not Change DECISION

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2009 TOCICO. All rights reserved.

Stability / Security NEED

GOAL

TOC Overview
TOCICO 2009 Conference
Distribution and Supply Chain Operations Finance and Measurements

Applications

Project Management

Sales

Marketing

People Management

Strategy

Education

CRT

Tools

CLR Thinking Processes

FRT

S//T S//T S//T S//T S//T S//T

NBR

PRT

Cloud

TT

Processes

6 Questions of Technology

Buy In (-- & +)

3 Strategical Questions

Stability

5 Focusing Steps

Principles
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2009 TOCICO. All rights reserved.

Inherent Simplicity

Harmony

Respect

Inherent Potential

Living TOC
TOCICO 2009 Conference Full Life P
Stability

Meaningful successes t Stamina to overcome f il failures Have many opportunities Collaborate with people

Think clearly

Overcome 4 obstacles

Overcome perception of reality as complex

Dont accept conflicts as given

Avoid blaming

Dont think that you know

Inherent Simplicity

Harmony
Every conflict can be removed

Respect
People are good Win-Win is always possible 13

Inherent Potential
Every situation can be substantially improved

Every situation is simple

2009 TOCICO. All rights reserved.

TOC Principles
TOCICO 2009 Conference

Inherent Simplicity

Harmony

Respect

Inherent Potential

50 40 30 20 10 0 A 100 80 60 B C D

Undesirable Undesirable Effect Effect Bad BadBehaviour Behaviour THEN THEN by byPerson Person
Potential Potential Goal

Within our Influence under new Paradigm Out of our Control

10%

D H F A C

G E

IFIF
People are (Some) People Good are Bad

B
40 20 0

There are MANY FEW real Constraints and and Constraints 90% MOST are are 90% Out of our Within Control or BECAUSE Control Goal Influence PersonBad with Current Within our Control 10% Bad Person Current Current Current // Past Past Performance Performance

A B C D E F G H

A windmill i d ill can have 2 heights?

Belief Belief

Assumption Cause C Cause

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2009 TOCICO. All rights reserved.

Two sides of the same coin

TOCICO 2009 Conference

EVER FLOURISHING COMPANY

Impossible Goals U or In Up I Founders Philosophies
P

Stability

Local Customization

Nerve S t System

Eagerness to experiment

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2009 TOCICO. All rights reserved.

Two sides of the same coin

TOCICO 2009 Conference

PRINCIPLES
Inherent Simplicity Inherent Potential

Harmony

Respect

Respect Team Work

Respect p for People Communication Continuous Improvement

M t l trust Mutual t t and d respect between Labour and Management and long term employment stability

Challenge Kaizen Genchi Genbutsu

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2009 TOCICO. All rights reserved.

Two sides of the same coin

TOCICO 2009 Conference

VISION
Pi k a f Pick friendly i dl fi fight!!! ht!!!
Combining the words "friendly" and "fight" may seem like

Katsuaki Watanabe Toyota Motor Company Former CEO

a contradiction, but we make it work because both sides share the same goalto 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 takes place routinely. Without such discussion people will 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 thats the way it was always done

The Goal
Reality doesnt contain contradictions

The Choice
Eli Goldratt
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2009 TOCICO. All rights reserved.

How can Toyota and TOC benefit from each other?

TOCICO 2009 Conference

What is the decisive competitive edge?

How to consistently deploy TOC principles, tools and processes in a massive scale?

How to boost continuous improvement?

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2009 TOCICO. All rights reserved.

About Guilherme Almeida

TOCICO 2009 Conference

Married with Carolina, f father of f Marcelo and Marina Things I like to do: learning, working, racing and running More than 20 years working in the automotive industry y Strong belief in the tremendous potential of every human being
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2009 TOCICO. All rights reserved.

e-mail: guilherme@vectis-solutions.com Site: www.vectis-solutions.com