(The Company that invented Lean Production) 14 Management
Principles from the Worlds Greatest Manufacturer By: Jeffrey K.
Liker(Paperback,330p,ISBN 0-07-058747-7,Rs. 250) (Tata
McGraw-Hill)
The Toyota Way
Why to read this book ? Youll learn how Toyota creates an ideal
environment for implementing Lean techniques & tools by :
-Fostering an atmosphere of continuous improvement and learning
-Satisfying customers (and eliminating waste at the same time)
-Getting quality right the first time -Grooming leaders from within
rather than recruiting them from the outside -Teaching all
employees to become problem solver -Growing together with suppliers
and partners for mutual benefits
About Toyota Market capitalization over $ 105 billion; 2,40,000
employees 3rd Largest auto manufacturer in the world; behind GM
& Ford Global Vehicle sale of over 6 million per year in 170
countries Big Brands like Corolla, Camry, Lexus Annual Profit
margin: 8.3 times higher than industry average
Contents Development of Toyota Production System TPS (5-9)
Fundamentals of TPS (10-15) The Toyota Principles (16-19) What can
be learnt from Toyota (20-28) How to adopt TPS (29-32)
Development of Toyota Production System (TPS) Toyota customer
requirement was in small lots & different verities unlike Ford
& GM using mass production concepts These requirement is to be
met with same assembly line Toyota was having cash crunch and there
was no stable supply chain Toyota studied that mass production
concepts cannot be feasible in Japan. Ford & GM were facing
many issues due to same.
Lean Manufacturing or TPSTo be a lean manufacturer requires a
way of thinking that focuses on making the product flow through
value-adding processes without interruption (one piece flow), a
Pull system that cascades back from customer demand by replenishing
only what the next operation takes away at short intervals, and a
culture in which everyone is striving continuously to improve
Five Step process Defining Customer Value Defining the value
stream Making it Flow Pulling from the customer back Striving for
excellence
Pull System Same as Supermarket where replenishment depends on
consumption It means at shop floor, step 1 in a process should not
make parts until the next process (step 2) uses up its original
supply Small safety stock is kept to raise alarm This is same as we
get signal from fuel tank of our vehicle for re-fuelling This can
be termed as JIT or Single Piece flow
Toyota Production SystemBest Quality - Lowest Cost - Shortest
Lead Time Best Safety - High Morale (QCDSM) through shortening the
production flow by eliminating waste Just - in - TimeRight Part,
Right Amount, RightTime Take time planning Continous flow Pull
system Quick changeover Integrated logistics
People & TeamworkSelection Common goals Joint decision
making Cross-trained
Just - in - Time(In-station quality)Make Problem Visible
Automatic stops Andon Person-machine seperation Error proofing
In-station quality control Solve root cause of problems (5
Why's)
Continuous Improvement Waste ReductionGo & See 5 Why's Eyes
for w aste Problem solving
Leveled Production Stable and Standardized Processes Visual
Management Toyota Way Philosophy
The "4 P" model and where most companies areGenchi Genbutsu
Respect and
Where most "lean" companies areKaizen
Continual organizational learning through Kaizen Go see for
yourself to thoroughly understand the Problem situation (Genchi
Genbutsu) Solving (Continuous Make decisions slowly by consensus,
thoroughly Improvement and considering all options; implement
rapidly (Nemawashi).Learning)
Teamwork
People and Partners (Respect, Challenge, and Grow Them)
Grow leaders who live the philosophy Respect, develop, and
challenge your people and teams. Respect, challenge, and help your
suppliers Create process "flow" to surface problems Use pull
systems to avoid overproduction Level out the workload (Heijunka)
Stop when there is a quality problem ((jidoka) Standardize taks for
continuous improvement Use visual control so no problems are
hidden. Use only reliable, thoroughly tested technology Base
management decisions on a long-term philosophy, even at the expense
of short-term financial goals.
Process (Eliminate Waste)
Challenge
Philosophy (Long-Term Thinking)
Fundamentals of TPSThe basics of TPS refers to elimination of 3
M (ie Muda, Muri & Mura)
Muda-Non-value-added. The mostfamiliar M includes the eight
wastes. These are wasteful activities that lengthen lead times,
cause extra movement to get parts or tools, create excess
inventory, or result in any type of waiting.
Waste(Anything which is not adding any value or customer do not
want to pay for that) Overproduction. Producing items for which
there are no orders, which generates such wastes as overstaffing
and storage and transportation costs because of excess inventory.
Waiting (time on hand). Workers merely serving to watch an
automated machine or having to stand around waiting for the next
processing step, tool, supply, part, etc., or just plain having no
work because of stock outs, lot processing delays, equipment
downtime, and capacity bottlenecks. Unnecessary transport or
conveyance. Carrying work in process (WIP) long distances, creating
inefficient transport, or moving materials, parts, or finished
goods into or out of storage or between processes
Waste Over processing or incorrect processing. Taking unneeded
steps to process the parts. Inefficiently processing due to poor
tool and product design, causing unnecessary motion and producing
defects. Waste is generated when providing higherquality products
than is necessary Excess inventory. Excess raw material, WIP, or
finished goods causing longer lead times, obsolescence, damaged
goods, transportation and storage costs, and delay. Also, extra
inventory hides problems such as production imbalances, late
deliveries from suppliers, defects, equipment downtime, and long
setup times Unnecessary movement. Any wasted motion employees have
to perform during the course of their work, such as looking for,
reaching for, or stacking parts, tools, etc. Also, walking is
waste.
Waste Defects. Production of defective parts or correction.
Repair or rework, scrap, replacement production, and inspection
mean wasteful handling, time, and effort.
Unused employee creativity. Losing time, ideas, skills,
improvements, and learning opportunities by not engaging or
listening to your employees.
Fundamentals of TPS.
Mura-Unevenness.Unevenness results from an irregular production
schedule or fluctuating production volumes due to internal
problems, like downtime or missing parts or defects.
Fundamentals of TPS. Muri-Overburdening people or equipment.
This is in some respect onthe opposite end of the spectrum from
muda. Muri if pushing a machine or person beyond natural limits.
Overburdening people results in safety and quality problems.
Overburdening equipment causes breakdowns and defects
Toyota Principles Section I : Long-Term Philosophy Principle 1.
Base your management decisions on a long-term philosophy, even at
the expense of short-term financial goals. Section II: The Right
Process Will Produce the Right Results Principle 2. Create
continuous process flow to bring problems to the surface. Principle
3. Use pull systems to avoid overproduction. Principle 4. Level out
the workload (Work like the tortoise, not the hare.)
Toyota Principles Principle 5. Build a culture of stopping to
fix problems, to get quality right the first time. Principle 6.
Standardized tasks are the foundation for continuous improvement
and employee empowerment. Principle 7. Use visual control so no
problems are hidden. Principle 8. Use only reliable, thoroughly
tested technology that serves your people and processes.
Toyota Principles Section III: Add Value to the Organization by
Developing Your People and Partners Principle 9. Grow leaders who
thoroughly understand the work, live the philosophy, and teach it
to others. Principle 10. Develop exceptional people and teams who
follow your companys philosophy Principle 11. Respect your extended
network of partners and suppliers by challenging them and helping
them improve.
Toyota Principles Section IV: Continuously Solving Root Problems
Drives organizational Learning Principle 12. Go and see for
yourself to thoroughly understand the situation (genchi genbustu).
Principle 13. Make decisions slowly by consensus, thoroughly
considering all options; implement decisions rapidly (nemawashi).
Principle 14. Become a learning organization though relentless
reflection (hansei) and continuous improvement (kaizen).
What can be learnt from Toyota?
1. SimplicityAt Toyota they keep things simple and use very few
complex statistical tools. The quality specialists and team members
have just four key tools: Go and see. Analyze the situation. Use
one-piece flow and andon to surface problems. Ask Why five
times.
2. Clean It Up, Make It VisualWhen Americans were making
pilgrimages to Japanese plants in the 1970s and 80s, the first
reaction was invariably The factories were so clean you could eat
off of the floor. In Japan there are 5S programs that comprise a
series of activities for eliminating wastes that contribute to
errors, defects, and injuries in the workplace. Here are the five
Ss (seiri, seiton, seiso, seiketsu, and shitsuke, translated into
English): Sort Sort through items and keep only what is needed
while disposing of what is not. Straighten (orderliness) A place
for everything and everything in its place. Shine (cleanliness) The
cleaning process often acts as a form of inspection that exposes
abnormal and pre-failure conditions that could hurt quality or
cause machine failure. Standardize (create rules) - Develop systems
and procedures to maintain and monitor the first three Ss. Sustain
(self-discipline) Maintaining a stabilized workplace is an ongoing
process of continuous improvement.
3. Decision Making Thorough consideration in decision making
includes five major elements: Finding out what is really going on,
including go and see. Understanding underlying causes that explain
surface appearances asking Why? five times. Broadly considering
alternative solutions and developing a detailed rationale for the
preferred solution. Building consensus within the team, including
company employees and outside partners. Using very efficient
communication vehicles to share the decision and tracking
5-Why Investigation questionsLevel of Problem Corresponding
Level of Countermeasure
There is a puddle of oil on the shop floor Clean up the oil
Because the machine is leaking oil Because the gasket has
deteriorated Fix the machine Replace the gasket
Because we bought gaskets made of Change gasket specifications
inferior material Because we got a good deal (price) on Change
purchasing policies those gaskets Because the purchasing agent gets
Change the evaluation evaluated on short-term cost saving.
purchasing agents policy for
4. Achieving No-Compromise Objectives1 2 3 4 5 6 Great
high-speed handling / stability Fast and smooth ride Super quiet
Elegant styling Warm Great stability at high speed YET YET YET YET
YET YET A pleasant ride Low fuel consumption Light weight Great
aerodynamics Functional interior Great CD value (low friction)
Development of Lexus
5. Coercive vs. Enabling Employee EmpowermentCoercive Systems
and Procedures (Taylorism) Enabling Systems and Procedures (Toyota
Way) Focus on best practice methods: Systems focus on performance
standards so as information on performance standards is not to
highlight poor performance. much use without information on best
practices for achieving them. Standardize the systems to
gameplaying and monitoring costs. minimize Systems should allow
customization to different levels of skill/experience and should
guide flexible improvisation.
Systems should help people control their Systems should be
designed so as to keep own work: help them form mental models of
employees out of the control loop. the system by glass box design.
Systems are instructions to be followed, not Systems are best
practice templates to be challenged. improved.
6. Deeply Understanding and Reporting What You SeeAlways keep
the final target in mind Carefully plan for your final target Have
a clear purpose for meetings. Clearly assign tasks to yourself and
to others Think and speak based on verified, proven information and
data Go and confirm the facts for yourself You are responsible for
the information you are reporting to other. Take full advantage of
the wisdom and experiences of others to Send, gather or discuss
information Share your information with others in a timely manner
Always consider who will benefit from receiving the information.
Always report, inform and consult in a timely manner. Analyze and
understand shortcomings in your capabilities in a measurable way
Clarify the skills and knowledge that you need to further develop
yourself. Relentlessly strive to conduct kaizen activities Think
outside the box, or beyond common sense and standard rules. Always
be mindful of protecting your safety and health.
7. Themes of Leadership at ToyotaFocused on a long-term purpose
for Toyota as a value-added contributor to society. Never deviated
from the precepts of the Toyota Way DNA and lived and modeled
themselves around this for all to see. Worked their way up doing
the detailed work and continued to go to the Gemba-the actual place
where the real added-value work is done. See problems as
opportunities to train and coach their people. A common phrase
heard around Toyota is Before we build cars, we build people..
How to adopt TPS A Commitment from the Top to Build a Total
Culture from the Ground Up What do we know about a change of
the
culture? Start from the top Involve from the bottom up. Use
middle managers as change agents. It takes time to develop people
who really understand and live the philosophy.
13 Tips for Transitioning to a Lean Enterprise Start with action
in the technical system; follow quickly with cultural change. Learn
by doing first and training second. Start with value stream pilots
to demonstrate lean as a system and provide a go see model. Use
value stream mapping to develop future state visions and help lean
to see. Use kaizen workshops to teach and make rapid changes.
Organize around value streams.
13 Tips Make it mandatory. A crisis may prompt a lean movement,
but may not be necessary to turn a company around. Be opportunistic
in indentifying opportunities for big financial impacts. Realign
metrics with a value stream perspective. Build on your companys
roots to develop your own way. Hire or develop lean leaders and
develop a succession system. Use experts for teaching and getting
quick results.
Six Sigma, Lean Tools, and Lean Sigma: Just a Bunch of
Tools?Myth What TPS Is Not- A tangible recipe for success - A
management project or program - A set of tools for implementation -
A System for production floor only. - Implementable in a short-or
mid-term period -
Reality What TPS IsA consistent way of thinking A total
management philosophy Focus on total customer satisfaction An
environment of teamwork and improvement A never-ending search for a
better way Quality built in process Organized, disciplined
Workplace. Evolutionary