Page 138 - The Toyota Way Fieldbook

Chapter 6. Establish Standardized Processes and Procedures 115

Philosophy
Low Unit Cost

Performance Principle
Measures Improve Individual
Unit Cost, Earned Efficiencies
Hours, Absorption
Strategy
Standard Costing and
Standard Hours

Tools Method
Computer Systems Time Studies, Work
(MRP), Time Clocks, Standards
Reports
Reason
Verify Employee
Performance to
Standard and Cost
Estimating
Result
Control Method Effect Waste is
Management reviews Encourages behaviors increased and
reports, adjusts that increase Non- Total System
standards Value-Added activities Cost is higher

Figure 6-1. Traditional unit-cost-focused manufacturing

The Toyota Way seeks the same objective in terms of low cost; however, the
primary focus is on reducing the waste within the system (Figure 6-2). As such,
Toyota considers the development of standardization to be a baseline for contin-
uous improvement, meaning that future results are expected to improve from
the standard. The traditional method considers standards as the objective to
achieve, as if the standard were the ultimate level of performance, which pre-
cludes the possibility of improvement. This fundamental difference in thinking
is the basis for many of the paradoxical elements of a lean system. The objectives