Lean Six Sigma Academy Blog: The Toyota Way

Here is s news story that Ron, at the Lean Six Sigma Academy Blog, found on YouTube. The video is below and I had a few comments.

First off, the reporter says that Toyota builds cars just like Dell builds computers. That couldn’t be further from reality. Here is an earlier blog piece of mine on that topic.

1. Dell does not subscribe to the Toyota Production System or Toyota Way approaches. Dell has a very different management system and has only, in recent years, started looking into the Toyota approach. They have never said that they patterned themselves after Toyota.
2. Dell builds everything (or virtually everything) in a customized way for a specific customer (except maybe QVC orders, but I don’t know that for sure). Toyota builds a lot of its product for dealer orders and doesn’t have the level of customization that Dell does.
3. Dell and Toyota have very different cultures. I worked at Dell and I’ve obviously studied Toyota, going back to before my Dell days. Dell was nothing like Toyota, that’s one real weakness that Dell had, the management and leadership culture.

I don’t mean to dump on Dell. It’s just that Dell and Toyota are different in fairly significant ways. It does a disservice to true lean thinking to lump Dell in with Toyota. Sure, Dell builds computers pretty quickly and their factories are amazing examples of flow, but the similarities end there.

The difference between GM and Toyota isn’t as simple as “push” versus “pull.” There is a better example in the video about how Toyota only has one person looking at quality at the end of the line, while non-lean automakers have employees “crawling over the vehicle” as they inspect quality into the process. Toyota’s approach of “building quality in” is a better approach and the video gets that right.

The video also talks about “just in time” delivery of parts. That is something that Dell also does. But, Toyota tends to group suppliers near their final assembly plants, keeping total supply chain inventory low. Dell buys its parts from Asia, with slow and relatively unresponsive supply chains with high inventory. Dell is criticized for merely pushing inventory back on suppliers, who hold parts at a shared warehouse near Dell’s factories. It’s more of an accounting trick than real supply chain mastery.

The video also makes a proper comparison in the management cultures, including “respect for people” including employees, suppliers, and customers. That’s not something that Dell really focused on, from my experience. Dell had the production mindset and culture of mass production, at least in the way they treated people.

The video also correctly captures the culture of kaizen and teamwork. Toyota people talk about how Toyota will never “kaizen someone out of a job,” an important part of the lean culture and something I don’t remember Dell practicing at all. Toyota hasn’t had layoffs since 1950. Dell has gone through mass layoffs in this decade, after their hypergrowth slowed.

OK, sorry to get sidetracked on Dell. It *is* an excellent video about Toyota, if you ignore that comment about Dell and Toyota being the same.

About LeanBlog.org: Mark Graban is a consultant, author, and speaker in the “lean healthcare” methodology, focused on improving quality and patient safety, improving access, reducing costs, and fully engaging healthcare professionals. He is also the Chief Improvement Officer for KaiNexus.

Tagged as: Dell, Toyota, Video