Toyota Production System

Toyota Production System

In a wordTPS is to “produce what you need, only as much as you need, when you need”

にほんごのがっこうJapanese Language Institute Japanese Culture & Management Training Institute


Toyota Production System got the world’s attention

In 1973, during the oil crises, all the Japanese companies find its profit had gone, except Toyota.

During the 1980’s and 1990’s, Japanese has got the world’s attention on “Quality product” and “efficiency”.

Quality product at lower cost.Even among the Japanese Toyota is different.Now, Toyota is the 10th biggest company in the world,

Fortune – 500 list.

にほんごのがっこう

Japanese Language Institute Japanese Culture & Management Training Institute

Toyota Motors, Japan• Toyota Motors developed the TPS after the

WW II. After WW II, Toyota faced with different business condition than Ford and GM.

• Toyota’s critical discovery.

Comparisons between Toyota Production System

and Frederick Taylor’s Scientific Management Principles

Toyota Production System• The basic of TPS is absolute

‘elimination of waste’.• Cost reduction – by

removing waste.• TPS has little to do with

running labor and equipment, TPS focus on converting raw materials into a saleable product.

• Realism is the basic of TPS.

Scientific Management Principles

• Taylor also aiming for the elimination of waste.

• Cost reduction – by increasing production.

• Tried to eliminate the waste motion of Human.

• Employees can be trained in “one best way of doing things” (Scientifically best way of doing things).

Comparisons between Toyota Production System

and Frederick Taylor’s Scientific Management Principles

• Japanese problem: How to cut cost “while producing small number (lot size is small) of many cars.

Scientific Management Principles• American approach: Cut

cost “by mass producing fewer types of cars”

Toyota Production System

TPS Basics1. Muda (むだ ) – Eliminating waste2. One piece flow & Pull system3. Standardization & Continuous improvement (かいざん )4. Quality from the beginning – 5. Kanban (Just in Time) means ‘Producing only what is

needed, when it is needed & amount needed’.


Some fundamental truth

• TPS is “Toyota’s DNA”. Don’t to try to copy it as it is and try to implement it in India.

• Operational excellence is the strategic weapon in TPS.

• Focus on Eliminating waste and Productivity of the Human resources rather than cutting cost.

• TPS should be backed by a strong Management Philosophy.


Some fundamental truth

• TPS starts with the customers and ends with the customers.

• TPS is a process. If you want the TPS process to implement and grow, the corporate philosophy or corporate culture has to support.


TPS BASIC

1. MUDA

MUDA(Anything that does not add value to the

customers)

• HUMAN RESOURCES (India specific) & Unused employee creativity.

• Defects – (Defective goods & services)• Overproduction – Produce goods without orders & store.• Waiting. No work because of stock outs, lot processing

delay, equipment down time, Capacity bottle neck.• Waste in transportation.• Waste in over processing.


TIME LINE

• Order -------------------------------------- Cash• (Reduce the time line by removing non-

value added waste)

Waste in a value system

• “Spaghetti Diagram”• Exercise – Each participant draw the “Value

stream” of the company diagram.• List each of your activity in the organization

and see how it is adding value to the customer or product.

MUDA

•Unnecessary transport or conveyance.•Over processing.•Excess inventory.•Unnecessary Movement. Any waste motion by employees. Walking is also waste !!!

Japan & India

• Japanese consider “overproduction” is the fundamental waste.

• In India, “human resource” is the fundamental waste.

Identifying waste in your organization

• This is most difficult part and also most important part.

• An “activity” that is not adding value to the “materials” or “Customer” is considered waste.

• Excises – List the wasteful activities in the organization.

• How come a Japanese or German or an American is more productive than an Indian?

• Present work capacity = work + waste.


• Whatever the improvement to reduce the waste, COST REDUCTION must be the goal.

• There is no magic solution to remove the waste. A Total Management system is needed that develop.

• 1. Human ability to the full extend ( to best enhanced creativity) 2. Utilize facilities and machines well.


• The story of “rowing the boat”.• It is a group effort, Every one has to row with

same power and speed.• It is law of nature.

The key to implement TPS

• TO implement TPS is your business, there must be a total understanding of waste. Unless all the sources of waste are detected and crushed, Success will always be just a dream.

Out of NEED

• TPS born in Toyota Motors, Japan out of Need.• Out of Need, The two pillars of TPS was born –

Just-in-time (Kanban) and Automation (Automation with Human touch).

• The Need of the Indian industry now is “Utilization of Human resources”. We got many of the Management Concepts wrong.

MASS PRODUCTION IS NOT CHEAPER !!First Misconception

Mass production is cheap.The truth is

Mass Production is not cheaper.

“LIMITED VOLUME” PRODUCTION

• We only make what we will sell. We do not make what we will not sell.

• “Lean production” (reduced volume) does not refer to lowering the Production volume, but rather the volume company must reduce to stay fit.

• One important area we should continuously to reduce is “Change over time”.

Misconception about work

• All motion is “not work”.• Workers have the misconception they are

working just because they are using their labor, even though they are getting work done.

• In India, work is only half and rest is half.• In India, the best performer need not survive in

the organization. You need a special survival skill.

5S

• 1. Seiri – means ‘Organization’ or ‘Sorting’.• 2. Seiton – means ‘Arranging items so that

they are ready when you want them’.• 3. Seisou – means ‘Cleaning’ or ‘Sweeping’.• 4. Seiketsu – means ‘Clean’.• 5. Shitsuke – means ‘Discipline’.

TPS BASIC

2. ONE PIECE FLOW

Structure of a mass production company

• Group similar machines and similar skilled workers together and create a departments – Accounts Dept, Customer service dept, Electrical dept, Human resources dept, machining dept, Welding dept, …etc.

• One department has to wait for the other dept to complete the work.

• Departmental barriers are there.

Problems with mass production.

• Mass production suits well only, we can sell what ever we can produce. Today’s market this is not possible.

• Customers don’t have choice and variety.• Mass production cause inventories.• Mass production cause ‘quality problems’.

Lean structure

• Work cells. All the workers are placed in the ‘work cell’ and the work will done sequentially.

• Create “U” shaped cell left to right.• Customer’s orders flows – Sales Dept – Main

Assembly Line (or some times dispatch) – sub-assembly line and “Upward stream”.

A Simple tool to remove waste

5S5S is a series of activities for eliminating waste that contribute to errors, defects and injuries

in the work place.

One piece flow

• One piece flow is judge the efficiency of the flow in “order-to-build”.

• The efficiency of one piece flow. 10 candles experiments.

• Production will be in tune with customers order.• 100% quality. No defect product will go to the

next process.• Reduced inventory.

One comforting thing about Mass Production.

• One process is not linked to other process.• If you link the operation together in a ‘one

piece flow’, if a piece of equipment fails, the entire operation goes down. So every body has to get into act to make the flow. You have to confront the problems immediately. You swim or sink together as ‘unit’.

‘Takt ‘TimeThe heart beat of one-piece flow.

• Takt is a German word for rhythm or meter. • Takt time is the rate at which the customer is

buying the company product.• Therefore, Takt time is the time at which the

company has to make a product.• TAKT TIME = Total Operation Time Total Production requirement• Takt time for each operation is different.

The concept of COST in TPS

• Usually, the component ‘Cost’ exist for calculation.

• In TPS the component ‘Cost’ exists only to be reduced.

• The Mathematical formulas will not apply in business.

Price – Cost = Profit Profit = Price – Cost Price = Cost + profit

Cost reduction in TPS.

• Don’t reduce No. of employees. It is wrong starting point.

• If the workers feels that their job is at stake. The future improvement process will not take place.

• Find ways “how to increase production with less employee”.

1. The work improvement. 2. The equipment improvement.

TPS Basic

The Pull System

The Pull System

• Difference between ‘Push System’ and ‘Pull System’.

• Pull system is to avoid overproduction. TPS is not about managing inventories; it is about eliminating inventories.

• The purest form of pull system is ‘one piece flow’.

• Some ‘necessary inventories’ are desirable.

The pull System

• The starting point in the final assembly line or sometimes, still down dispatch section !

• The “lower stream operation” pull what they need and when they need from the “up stream operation”.

• In most of the company the operation has to be ‘reverse back’.

TPS Basic

Kanban(Just-in-Time)

Think About !

• Use Common sense while using ‘one piece flow’ and pull system.

• When spares or parts are coming from longer distance. Keep inventories. Uncertainties are always there. Keep inventories for 1- 3 hours in parts room. But avoid warehouse.

• Raw materials are not inventories.

Kanban

• Kanban (Just-in-time) and Jidoka are the two Pillars of TPS.

• Concept of kanban.• Do not be strict about “Just-in-time”. • TPS is the production system but kanban is the

way it is managed. Without Kanban TPS is not possible.

The 6 Golden Rules of Kanban

• Rule # 1. The ‘later process’ goes to the ‘earlier process’ to pick-up products.

• Rule # 2. The earlier process produce only the amount withdrawn by the later process.

• Rule # 3. Kanban prohibits picking up or producing goods without a kanban.

• Rule # 4. Kanban to attached to the goods.• Rule # 5. 100% defect free products. Do not send

anything defective to the subsequent process.• Rule # 6. Reduce the No. of kanban.

TPS Basic

JIDOKA(Automation with human touch)

(Quality from the beginning)

JIDOKA

• JIDOKA history.• The machine has to stop automatically, if 1. The machine runs abnormally. 2. The machine produce defective products.This is called Automation with Human touch.• No defective product should go the next process.

Quality is in built in the process.,• TPS encourage the workers to stop the machine,

then only learning and improvement is possible.

Quality Paradox

• It is OK to run the machine or production line less than 100% of the time. But ensure ‘Quality’.

• Solve quality problems at the source. It saves time and money.

Simple ways to Quality

• Go and see for yourself, where the action is taking place (Gemba).

• Analysis the situation.• And ask “why” five times. WHY ? WHY ? WHY ? WHY ? WHY ?

TPS BASIC

HEIJUNKA(Level out the work load)

Heijunka

• Heijuka is one of the “most important concept to understand.

• ‘Level out the production scheduled’ is absolutely an essential condition for the Kanban to work.

• Muri – Overburdening the people and overburdening the equipment.

• Mura - Unevenness

Heijunka

• Interestingly many companies will focus only on ‘muda’ to implement TPS, But MURI and MURA is also very important.

• The fundamental of heijuka is to eliminate MURA.

TPS Basic

kaizenStandardization & Continuous

improvement.

kaizen

Standardization.Standardization of work.

Standardization of work

• Standardization become a science at the time of Taylor’s concept.

• Because of standardization of job, don’t be slaves of Numbers, quality will take the beating.

• Misconception about standardization : Scientifically find the one best way of doing things and freezing it.

• It is impossible to improve any process until it is standardized. One must standardize, stabilize the process before continuous improvement can be made.

Standardized work & quality

• Standardized work is a must for quality product.

Kaizen

• Kaizen is the most important Japanese management concept and key to Japanese success.

• Kaizen means improvement. Continuous and small , small improvement.

• The FIRST condition for kaizen mind set is to “challenge everything”.

• If the employees gives an idea, without any prejudice the management should try it.

• “Respect for the people”. The organization should have respect for the people, then only new ideas will come up.

• If any organization did not use the energy and creativity of the people, It is the “biggest waste of all ”.

Types of Kaizen

1. Manual Work Kaizen2. Equipment Kaizen

3. Process Kaizen

Manual Work Kaizen

• First do Manual work kaizen.• After improving the work, if the machine is not

supporting, then improve the machine.• Or go for the right machine.• Multi-machine handling is one important

Manual work kaizen. This is important in TPS.

Equipment Kaizen & Process kaizen

• If you don’t do Kaizen in work first, and go for the latest equipment. It is less use.

• Process kaizen may make a big improvement by reversing the process sequence.

Practice TPS ever day

• TPS is a long term process, it takes years to implement in an organization.

• The best way to implement TPS is “Implement and practice all the TPS tools together. It must be practiced every day in a very consistent manner, in a concrete way on the shop floor”.

END

Toyota Production System

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