Jeffrey K. Liker

The Toyota Way in Services: The Case of Lean Product Development

Executive Overview Toyotas Production System (TPS) is based on “lean” principles including a focus on the customer, continual improvement and quality through waste reduction, and tightly integrated upstream and downstream processes as part of a lean value chain. Most manufacturing companies have adopted some type of “lean initiative,” and the lean movement recently has gone beyond the shop floor to white-collar offices and is even spreading to service industries. Unfortunately, most of these efforts represent limited, piecemeal approaches—quick fixes to reduce lead time and costs and to increase quality—that almost never create a true learning culture. We outline and illustrate the management principles of TPS that can be applied beyond manufacturing to any technical or service process. It is a true systems approach that effectively integrates people, processes, and technology—one that must be adopted as a continual, comprehensive, and coordinated effort for change and learning across the organization.

Customer-driven product development through Quality Function Deployment in the U.S. and Japan

Quality Function Deployment is a tool for bringing the voice of the customer into the product development process from conceptual design through to manufacturing. It begins with a matrix that links customer desires to product engineering requirements, along with competitive benchmarking information, and further matrices can be used to ultimately link this to design of the manufacturing system. Unlike other methods originally developed in the U.S. and transferred to Japan, the QFD methodology was born out of Total Quality Control (TQC) activities in Japan during the 1960s and has been transferred to companies in the U.S. This article reports on the results of a 1995 survey of more than 400 companies in the U.S. and Japan using QFD. The research questions investigated in this study were developed both inductively from QFD case studies in the U.S. and Japan and deductively from the literature. The reported results are in part counterintuitive. The U.S. companies reported a higher degree of usage, management support, cross-functional involvement, use of QFD driven data sources, and perceived benefits from using QFD. For the most part, the main uses of QFD in the U.S. were restricted to the first matrix (“House of Quality”) that links customer requirements to product engineering requirements and rarely was this carried forward to later matrices. U.S. companies were more apt to use newly collected customer data sources (e.g., focus groups) and methods for analyzing customer requirements. Japanese companies reported using existing product data (e.g., warranty) and a broader set of matrices to a greater extent. The use of analytical techniques in conjunction with QFD (e.g., simulation, design of experiments, regression, mathematical target setting, and analytic hierarchy process) was not wide spread in either country. U.S. companies were more likely to report benefits of QFD in improving cross-functional integration and better decision-making processes compared to Japanese companies. Possible reasons for these cross-national differences as well as their implications are discussed.

User acceptance of expert systems: a test of the theory of reasoned action

Abstract Expert Systems pose significant challenges for management and may potentially have a profound impact in the workplace. This paper develops and tests a model based on the theory of reasoned action. The model is tested using a cross-sectional design based on a self-administered questionnaire completed by a sample of 94 users and non-users from two of the largest accounting firms in the U.S. The outcome measures were attitudes toward the system and intentions to use the system in the future (or continue to use it among existing users). The results supported several hypotheses. Intentions to use the system were influenced by social norms encouraging system use and by perceptions of the impacts of system use on valued skills, controlling for the effect of attitudes. Attitudes toward use of the system were affected by the perceived usefulness of the system and its impacts on valued skills. Attitudes were also strongly related to ease of system use, an unanticipated finding. The most surprising result was that general attitudes were not found to predict intentions to use the system. The data show no evidence of fearful reactions of employees to Expert Systems in this particular context. We discuss implications for user acceptance of expert systems, and how our results compare to those for other information technologies.

Modularity as a Strategy for Supply Chain Coordination: The Case of U.S. Auto

Companies across industries have admired the success of Dell Computersin using modularity as part of a mass customization strategy to achieve build-to-order and a streamlined supply chain. Many companies are attempting to emulate this successful model, including the American automotive industry. This paper focuses on how the auto industry has been attempting to move to modularity, in part, motivated by a desire to build cars to order. This movement has led to major changes in supply chain practices based partly on imitation of successful keiretsu models in Japan and a move toward modules. This study finds significant impact of modularity on outsourcing, product development, and supply chain coordination based on interviews conducted with automakers and suppliers from 2000-2003. Based on our interviews, we observe that modularity has accompanied a major reorganization of the automotive supplier industry. We identify two major issues that appear to block U.S. automakers from gaining most of the advantages possible through modularity. First, most modularity activities appear to be primarily strategically cost reduction driven, leaving the potential of modularity for mass customization largely untapped. Second, the shift in industry reorganization has not been accompanied by changes in the supply chain infrastructure to encourage long-term partnerships. We contrast this to the more gradual approach used by Toyota as it incorporates modularity on a selective basis and moves to a build-to-order model

Panel Data and Models of Change: A Comparison of First Difference and Conventional Two-Wave Models

The method of first differences as an approach to modeling change is described and it is compared to more conventional two-wave panel models. Substantial advantages are found to the first-difference approach, especially if there are unmeasured, unchanging predictor variables in the model. It is also argued that there are substantial problems in the interpretation of results from the conventional two-wave models. Some of the analytic results are illustrated with a number of applications to the area of stressful life events.

The Toyota Production System and art: making highly customized and creative products the Toyota way

The Toyota Production System has led to a movement of ‘lean production’ focused on taking waste out of value streams. Most applications have been to high volume, and relatively standardized products. Under this system work becomes highly standardized specifying to the second what the operator should do. Buffers are precisely sized and controlled through various types of pull signals. When possible, use of one-piece flow cells result in a completely balanced production line. The performance benefits of these lean systems are often remarkable, greatly improving quality, cost, and delivery. But what of companies that are not making standardized products at high volume? What can they learn from lean? In this paper we argue there is a fundamental misunderstanding of TPS, viewing it as a specific tool kit technically implemented in a formulaic way to achieve pre-specified results. In fact, TPS is a philosophy that can be better described as a set of general principles of organizing and managing an enterprise which can help any organization get on a path of positive learning and improvement. A case example of a low volume, highly customized artistic clay tile company illustrates the process by which the firm used TPS to learn how to understand its process, gain stability and control, empower its workforce, and become far more profitable.

Flexibility and Standardization: Test of a Contingency Model of Product Design–Manufacturing Integration

This article proposes and tests a contingency model of system integration of product design and manufacturing among producers of goods involving tooling development. The model predicts which combinations of organizational and technical practices will be most effective under conditions of high and low design newness. The results, based on data from 74 firms, largely support the model. Differentiating mechanisms, such as a tall hierarchy and job specialization, are negatively associated with design–manufacturing integration, particularly for new designs. Socio-integrative mechanisms, including such flexible practices as cross-functional teaming and collocation, are positively related to design–manufacturing integration for new designs only. However, the use of in-process design controls is positively related to design–manufacturing integration regardless of design newness, which suggests that some modes of standardization may be beneficial even for new designs.

Key factors in the successful application of quality function deployment (QFD)

In the product design and development process, quality function deployment (QFD) provides a comprehensive, systematic approach to ensure that new products meet or exceed customer expectations. This paper reports on the results of a survey of more than 400 companies in the United States and Japan using QFD. The objective of the study was to understand the key factors that result in the successful application of QFD. The research questions investigated in this study were developed both inductively from QFD case studies in the United States and Japan and deductively from the literature. Regression analysis estimates the effects of organizational characteristics, data sources, and QFD tools and techniques on QFD improvements in the product and process. The results show that QFD is most likely to have a positive impact when there is management support for QFD and new customer data specifically collected for the QFD study are used. The benefits of QFD are independent of the tools and techniques used as part of the QFD study.

Electronic Meeting Systems: Evidence from a Low Structure Environment

The research literature to date on electronic meeting systems EMS has been dominated by studies of high structure systems. High and low structure are defined here in terms of the preponderance of influence that technology and groups exert on each other. High structure EMS attempt to directly influence group structure and processes through explicit rules and procedures embedded in the software. Low structure EMS do not explicitly build in rules or procedures that govern group interaction. Low structure EMS are hypothesized to increase task focus through the use of shared flexible software tools and shared views of joint work. Results of two experiments, that compare low structure EMS-supported groups to manually-supported groups on equality of participation, degree of task focus, task performance and member satisfaction, for two different tasks, are reported. The experiments found that this low structure EMS had no effect on participation equality or member satisfaction. Contrary to the hypotheses, the EMS was found to decrease task focus. The EMS led to marginally better task performance on a simple evaluative task, and to worse performance on a complex generative task. A revision of the studys theoretical model is developed which takes into account the nature of the task.

Evolving Models of Supplier Involvement in Design: The Deterioration of the Japanese Model in U.S. Auto

The U.S. auto industry in the 1990s was in a state of transition, driven by a rapidly changing environment and attempts to adopt best practices from other automakers. The Japanese supplier management system is regarded as extremely effective in delivering high-quality component systems integrated into the vehicle with short design lead times. American automakers dedicated themselves to reengineering their product development systems, benchmarking the Japanese model, and outsourcing increasing levels of vehicle content and design responsibility. This paper analyzes how these attempts at institutional imitation evolved new approaches to supplier involvement in design in the U.S. auto industry based on interviews conducted during 1998-2001. Although once copying the Japanese model, the United States has chosen a modified approach and developed models distinctively different from the original. The authors identify two dominant supplier management models emerging during this time and a newly emerging hybrid original equipment manufacturer/supplier relationship style. Concepts from organizational design and behavioral economic theories are used to explain observations across industries overtime. Evidence suggests that American automaker practices have not evolved to support the great responsibility being outsourced to suppliers. There are still barriers that create adversarial relationships when a partnership model is required for true integration of design efforts.