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Good morning. We teach you about systems thinking and how Toyota used it to build an empire. When faced with limited resources and fierce competition, Toyota didn't see obstacles — they saw an opportunity to reinvent manufacturing itself.

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Today’s Briefing

• Story: Lean Lessons from Toyota's Playbook 📗

• Insight: A Swamp-Crosser's Manifesto 🐊

• Action: How to Declare a War on Waste 🗑️

STORY

Lean Lessons from Toyota's Playbook 📗

The Big Idea: Toyota revolutionized manufacturing with lean production systems and continuous improvement.

Why it Matters: This approach transformed not just the auto industry, but influenced efficient business practices across sectors globally.

It's 1950. Toyota's got a vision that's about to turn the world of auto manufacturing on its head. But there's a few problems in their way:

• They're a small Japanese company in a market dominated by American giants

• They've got major competitors: General Motors, Ford, and Chrysler

• Their resources are as limited as a vegan's menu options at a steakhouse

Do they try to match the Americans' mass production? No! Toyota refuses to be a passive bystander in the global auto industry. They recognize that trying to beat the Americans at their own game is like bringing a knife to a gunfight, and that waiting for conditions to improve is a one-way ticket to Bankruptsville.

Instead, they take matters into their own hands and decide to forge their own path. They develop the Toyota Production System (TPS), a lean manufacturing approach that would become the golden goose laying efficiency-shaped eggs for their empire.

By implementing TPS, Toyota had the industry by the lug nuts. They could eliminate waste, improve quality, and boost efficiency without having to answer to any budget-slashing, corner-cutting bean counters.

Then came the Just-in-Time (JIT) production, a manufacturing juggernaut that dominated the efficiency ratings. Mastering lean manufacturing was like having a license to print yen. Cost savings and quality improvements poured in, making Toyota highly competitive in the market.

But Toyota no-need-for-introductions didn't stop there. They expanded their lean philosophy to encompass a wide range of business practices, including...

• Jidoka (automation with a human touch)

• Kaizen (continuous improvement)

• Genchi Genbutsu (go and see for yourself)

By focusing on efficiency and maintaining a culture of continuous improvement, they continued to build their reputation and cement their status as one of the most successful and influential automakers in the world.

Moreover, their lean approach allowed Toyota to have greater flexibility and adaptability, ensuring that they remained competitive in changing market conditions, like a chameleon that always changes to "profitable."

Toyota (market cap $278 billion) paid it forward by inspiring other manufacturers like Honda (market cap $52 billion) who then influenced companies across industries, including Amazon (market cap $2 trillion).

Key takeaway: Implement lean principles for continuous improvement and success.

Go Deeper: Bookmark Toyota’s Production System Keywords right here.

INSIGHT

A Swamp-Crosser's Manifesto: Stay the Course 🐊

The swamp represents a company's strategic goal, while the alligators symbolize various obstacles, distractions, and challenges encountered along the way.

1. Prioritization: Toyota recognized that competing directly with American giants wasn't feasible. Instead, they prioritized developing their own efficient production system.

2. Efficiency of effort: By creating the Toyota Production System (TPS), they concentrated their energy on lean manufacturing, which directly contributed to their goal of increased efficiency and quality.

3. Avoiding unnecessary conflicts: Rather than confronting American automakers head-on, Toyota circumvented the challenge by creating a unique approach to manufacturing.

4. Maintaining perspective: Toyota didn't lose sight of their bigger picture - becoming a global automotive leader - even when faced with resource limitations and fierce competition.

5. Strategic problem-solving: They addressed issues like resource constraints by developing Just-in-Time (JIT) production, which directly improved their manufacturing process.

6. Resilience: Despite being a small Japanese company in a market dominated by American giants, Toyota stayed committed to their path of lean manufacturing and continuous improvement.

7. Time management: Instead of wasting time trying to match American mass production techniques, Toyota invested in developing their own systems like Jidoka, Kaizen, and Genchi Genbutsu.

By focusing on crossing their own milestones rather than fighting every "alligator," Toyota transformed not just their company, but the entire global manufacturing landscape.

Likewise, you too can declare on unnecessary battles…

ACTION

How to Declare a War on Waste 🗑️

Toyota's lean manufacturing strategy emphasizes targeting key areas of waste that can make a significant impact on your business efficiency.

Step 1: Identify your Waste 100 list: Pinpoint 100 processes, activities, or areas in your business where waste could be lurking. This could include overproduction, waiting time, unnecessary transportation, over-processing, excess inventory, unnecessary movement, and defects.

Step 2: Research and analyze. Study each item on your Waste 100 list in depth. Engage authentically with the people involved in these processes. Look for opportunities to observe the waste in action through "Gemba Walks" or process mapping sessions.

Step 3: Make a memorable impact. When you've identified a waste hotspot, approach it with respect for the current process. Offer a unique solution or improvement idea related to the specific waste. Focus on collaborative problem-solving, not pointing fingers.

Step 4: Implement and iterate. Continue engaging with the process and offer support where appropriate. Build trust and credibility by following through on improvements. Aim to provide measurable value and cultivate a culture of continuous improvement.

Remember, in the war on waste, every battle won adds up to a leaner, meaner, more competitive company. So gear up, rally your troops, and get ready to blitzkrieg the hell out of inefficiency.

One Funny Thing 🤣 

Bite-Sized Reads 📚

[Read] Gemba is "now adapted in management terminology to mean the ‘workplace.’ In manufacturing, it usually refers to the shop floor."

[Read] Amazon “built one of the world’s most efficient warehouses by embracing chaos.”

[Forum] “When you shake off that urge to fight every alligator and lift your sights to the other side, that's when you can start making real progress.”

We want to hear from you 👇️ 

Publisher: Jordan Belfort

Editors in Chief: Brock Swinson and Davis Richardson

DISCLAIMER: None of this is financial advice. This newsletter is strictly for educational purposes and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.