The Toyota Preparation System or the “Bank of Preparation”

Toyota is great at doing what appear to be common sense things extraordinarily well. They take the time to do preparation, then execute quickly. There is a reference to this in Jeffrey Liker’s The Toyota Way where (I am paraphrasing) he says a typical company will spend three months in preparation, nine months in execution and as much as another year working out the bugs in the system. Toyota will prepare for nine months, execute in three and have worked out the bugs in advance.
Lean manufacturing is built around the Toyota Preparation System whether it is having Standard Work documented and ready when a line is started up, moved or redesigned, the daily discipline of maintaining 5S and being ready to perform the work the next day with the same materials and tools in place, or the production preparation process itself (as the name implies, it is a fast yet thorough preparation approach).
The daily checks that are part of autonomous maintenance and TPM are there so workers are prepared to notice the slow degradation of equipment that leads to accidents or poor quality. These are examples at the micro level but the emphasis place on the five why and root cause analysis that is part of the Plan phase of PDCA is another example of preparation allowing for more rapid and accurate action.
You could call this execution or “back to basics” but it is true. While Toyota has figured out some very good ways of making high quality products in a high mix at high speed, their adaptability as a company comes down to preparation.
Here I will coin a new phrase, the “Bank of Preparation”. Each time we cut a corner we are making a withdrawal from this bank. Each time we check and prepare we are making a deposit. The more prepared you are for when things do not go according to plan, the more reserve you have in the Bank of Preparation to draw from and the quicker and more accurate is your response. If you have been making withdrawals and you are in debt to the Bank of Preparation, you can be sure this bank will collect.
When we tour Toyota factories of companies that have faithfully implemented TPS down the Toyota Preparation System, we see that machines are well-maintained through daily checks and cleaning and aisle markings are clear and respected. When the factory manager walks us across an intersection in the factory, he will look left and right, pointing his finger in each direction, saying “yoshi”. This means “OK” as in it is safe in both directions. This might seem like a simple thing, yet when is the last time you did this?
Compare this to another factory we visited in the U.S. no to so long ago, Japanese owned but not part of the Toyota group and doing Lean manufacturing on the surface, at best. The group that toured us during this assessment walked on both sides of the aisle marking (holding up the forklift in a way that would make time-based material logistics all but impossible) and when crossing the aisle only quickly glancing in each direction, each person trusting that it was safe since others looked for them.
This type of behavior, when multiplied across 900 people in all aspects of the work they do, leads to a lack of preparedness. The habitual, small daily preparation and checks make a huge difference in how people think and work and this is part of what I call the Toyota Preparation System.
On the flip side, you could say that Toyota’s recent spike in recalls is a result of the drive to cut down product development and launch times which puts pressure on the traditional value Toyota has placed in preparation. Quality suffers as a result.
Luck is where preparation meets opportunity. He who keeps his axe sharp chops the most wood. You already have an account with the Bank of Preparation. What’s your balance?

5 Comments

  1. Konrad Grondek

    November 9, 2006 - 4:55 am

    As the saying (also paraphrased):
    Ruin to plan (or to prepare) is plan (prepare) to ruin.
    BTW
    Great blog. Thanks.

  2. Michael Schaffner

    November 10, 2006 - 6:44 am

    Excellent post. You make a very strong case for abandoning the old “Ready, Fire, Aim” concept.

  3. Anonymous

    November 10, 2006 - 9:19 am

    Hi Jon Michael & Konrad
    Thanks for the Preparation Bank explanation, Jon your blogs are always interesting . There are cases where the use of long careful planning followed by quick introduction is the ideal method and cases when Fire Culture (ready aim fire) is more appropriate. Ricoh are encouraging the use of both ways to enhance flexibility of action.
    I thought the saying re planning goes like this. “Failing to plan is a planning to fail”.
    Best Regards
    Chris

  4. Jon Miller

    November 10, 2006 - 9:28 am

    Good point Chris.
    I failed to point out that the 9 months of planning by Toyota would not be all plan-plan-plan-plan but rather plan-do-check-act (PDCA) through pilots and “ready, fire, aim” type of activities.
    The strong culture of short cycle improvements and corrective actions as well as checks in the planning process could all count as deposits in the Bank of Preparation.
    Jon

  5. Michael Schaffner

    November 11, 2006 - 3:51 pm

    Just a note to clarify my comment on “Ready, Fire, Aim” as Jon points out in his comments of 11/10 this approach can be a useful learning experience when it is employed in a trial phase or experiment. These types of situations are great learning opportunities and give us a chance to adjust before full implementation.
    The danger of “Ready, Fire, Aim” is when is use not as an experiment but in the full-scale implementation. This can easily lead to the situation of 9 months of implementation followed by a year (or more) of debugging. As a colleague of mine once said. “For some reason we don’t have time to do it right but he have time to do it over.”