The Toyota Production System
14 Management Principles
High Quality & Low Cost
From the book “The Toyota Way”, by Jeffrey Liker
COST VS
DEFECTS

Summary of Assembly Plant Characteristics, Volume Producers, 1989
(Average for Plants in Each Region)
Ja pa ne s e Ja pa ne s e in Ame r ica n in All Eur ope
in Ja pan Nor th Am e r ica Nor th Am e r ica
Pe rf ormanc e:
Prod ucvitity (hours /Ve h.) 16 .8 21 .2 25 .1 36 .2
Quality (a ssembly
de fe cts/1 00 v ehic les ) 60 65 82 .3 97
La yout:
Spac e (sq. ft ./veh icle/yr) 5.7 9.1 7.8 7.8
Siz e of Rep air A rea (a s %
of as sembly spa ce) 4.1 4.9 12 .9 14 .4
In vent ories (d ays fo r 8
sa mple pa rts) 0.2 1.6 2.9 2
Work Force :
% of W ork Force in Te ams 69 .3 71 .3 17 .3 0.6
Job Rot atio n (0 = none ,
4 = f re quen t) 3 2.7 0.9 1.9
Sugg estions /Emplo yee 61 .6 1.4 0.4 0.4
Number o f Job Clas ses 11 .9 8.7 67 .1 14 .8
Trainin g of Ne w Produ ctio n
Workers (ho urs) 38 0.3 37 0 46 .4 17 3.3
A bsen teeism 5 4.8 11 .7 12 .1
A utomation:
Weldin g (% of d irect steps ) 86 .2 85 76 .2 76 .6
Pa inting(% o f direc t step s) 54 .6 40 .7 33 .6 38 .2
A ssembly(% of d irect steps ) 1.7 1.1 1.2 3.1
Sourc e: IM P Wo rld A sse m ly Plan t Survey , 198 9, an d J. D. Po w er In itial Qua lit y Survery , 198 9
V b

3 Major Mfg Systems: from 1800 to 2000
Machine tools, specialized machine tools, Taylorism, SPC, CNC, CAD/CAM
1800 1900 2000
Mass Production Toyota Production
Interchangeable Parts
at Ford System
at U.S. Armories
How do you get such performance?
1. Jeffery K. Liker‟s “THE TOYOTA WAY”
2. J T. Black‟s 10 Steps
3. Womack & Jones “Lean Thinking”
3

Key Elements for New Mfg Systems
Element/ Need of Work Enabling Leader Resources
System Society Force Technology
Motivation
Interchange- Military “Yankee Machine Roswell U.S.
able Parts Ingenuity” Tools, Lee/ Govt
Division of John
Labor Hall
Mass Trans- $5/day Moving Henry Earnings
Production portation Immigrant Assembly Ford
Line,etc
Toyota Post War Jobs, CNC, Taiichi Japanese
Production Security Integration Ohno Banks
System of Labor
4

History of LEAN Manufacturing
1900 194 1980 200
0 0

What is the secret of Toyota‟s success?
• It is the result of operational excellence, with tools like
Just-in-Time, kaizen, one-piece flow, Jidoka & Heijunka.
• These tools helped spawn “lean production” revolution.
• Toyota‟s success in implementing these tools stem from
mgmt commitment to invest in its people & its ability to
cultivate a culture of continuous
improvement, leadership, motivation, team spirit etc.
• Mr. J K Liker, in his book “The Toyota Way”, has
formulated Toyota practices in 14 principles, which is
divided into 4 categories, all starting with “P”.
• Toyota Production System is Toyota‟s unique approach to
manufacturing, which is the basis for “Lean production” &
6
Six Sigma movements.

―4P‖ model of the Toyota Way …….
Toyota’s
Terms
•Continual organizational Learning through Kaizen
• Go see for yourself to thoroughly Understand the Situation (Genchi Genbutsu )
Problem Solving • Make decisions slowly by Consensus, thoroughly considering all options;
(Continuous Improvement Implement Rapidly
& Learning)
•Grow Leaders who live the Philosophy
People & Partners • Respect, develop, and challenge your People and Teams
(Respect, Challenge • Respect, challenge and help your Suppliers
& Grow Them))
•Create process “flow” to surface problems
• Use pull systems to avoid over production
• Level out the workload (Heijunka)
Process • Stop when there is a quality problem (Jidoka)
(Eliminate Waste) • Standardize tasks for continuous improvement
• Use Visual Control so no problems are hidden
• Use only reliable, thoroughly tested technology.
Philosophy •Base management decisions on a Long-term
(Long-Term Thinking) philosophy, even at the expense of short-term
financial goals

Toyota Production System
• Quality, Cost, Delivery
– Shorten Production Flow by Eliminating Waste
• Just In Time
– The Right Part at the Right Time in the Right Amount
– Continuous Flow
– Pull Systems
– Level Production
• Built-In Quality
– Error Proofing – Poka Yoke
– Visual Controls
• Operational Stability
– Standardized Work
– Robust Products & Processes
– Total Productive Maintenance
8 – Supplier Involvement

―The Toyota system is not opposed to the Ford
system. Rather, it is a progressive
enhancement—a system geared to the Japanese
market that mass produces in small lots with
minimum stocks.‖
Long-term Philosophy
Shigeo Shingo
The Right Process will produce
the Right Results
Add Value to the Organization
by Developing your People
and Partners
Continuously Solving Root
Problems Drives Organizational
Learning
The Toyota Way can be briefly summarized through two pillars
that support it : “Continuous Improvement” and “Respect for
People”.

Management’s critical role would be to motivate and engage large numbers
of people to work together toward a common goal.
“Defining and explaining what the goal is, sharing a path to achieving
it, motivating the people to take the journey with you, and assisting them by
removing obstacles --- those are management’s reason for being.”
They “designed-in quality” and “built-in quality” at every step of the
process, and they did it with remarkably few labor hours.
There was a sense of partnership between Toyota and its suppliers … the top tier
suppliers were all integrally part of the product development process.
“The key to Toyota Way and what makes Toyota stand out is not any of the
individual elements … But what is important is having all the elements
together as a system. It must be practiced everyday in a very consistent
manner --- not in spurts” … … … Fujio Cho, President Toyota Motor Company.
Its success is derived from balancing the role of people in an organizational
culture that expects and values their continuous improvements, with a
technical system focused on high-value-added “flow”.

―4 P‖ Model of the Toyota Way
 Continual organizational learning through Kaizen
 Go see for yourself to thoroughly understand the situation.
Problem (Genchi Genbutsu)
 Make decisions slowly by consensus, thoroughly
Solving considering all options; implement rapidly (Nemawashi)
(Continuous
Improvement and Learning)  Grow leaders who live the philosophy
 Respect, develop and challenge your people
and teams
 Respect, challenge, and help your suppliers
People and Partners
Create process ―flow‖ to surface problems
(Respect, Challenge and Grow Them)  Level out the workload (Heijunka)
 Stop when there is a quality problem (Jidoka)
 Use pull systems to avoid overproduction
 Standardize tasks for continuous
Adding Value to improvement
 Use visual control so no problems are hidden
Process Customers &
Society  Use only reliable, thoroughly tested
(Eliminate Waste) technology
 Base management decisions on a
Philosophy long-term philosophy, even at the
expense of short-term financial
(Long-term Thinking) goals

Principles of Toyota way
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 (heijunka). Work like the
tortoise, not the hare.
 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.
13

Section III : Add value to the organization by developing 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
company’s philosophy.
 Principle 11—Respect your extended network of partners and
suppliers by challenging them and helping them improve.
Section IV : Continuously solving root problem drives
 Principle 12—Go and see for yourself to thoroughly understand the
situation .
 Principle 13—Make decisions slowly by consensus, thoroughly
considering all options, implement decisions rapidly.
 Principle 14—Become a learning organization through relentless
reflection (hansei) and continuous improvement.
14

Principle 1
• Base your management decisions on a long-term
philosophy, even at the expense of short-term financial
goals.
―The most important factors for success are patience, a focus on
long term rather than short-term results, reinvestment in
people, product, and plant, and an unforgiving commitment to
quality.‖

1. Toyota‟s Starting Point in Business – “To Generate Value for the
Customer, Society and the Economy”.
• A Mission Greater than Earning a Paycheck: “Do the Right Thing for the
Company, its Employees, the Customer, and Society a Whole”.
2. Do the Right Thing for the Customer.
3. Building Trust with Employees.
4. Do not Let Business Decisions Undermine Trust and Mutual Respect.
5. Use Self-Reliance to Decide Your Own Fate.
6. Toyota‟s Mission Statement & Guiding Principle: TMMNA
1. As an American Company, contribute to the economic growth of the
community and the United States.
2. As an Independent Company, contribute to the stability and well being of
team members.
3. As a Toyota Group Company, contribute to the overall growth of Toyota by
adding value to our customers.

GUIDING PRINCIPLES AT TOYOTA
1. Honor the language & spirit of the law of every nation & undertake open
& fair corporate activities to be a good corporate citizen of the world.
2. Respect the culture and customs of every nation and contribute to
economic and social development through corporate activities in the
communities.
3. Dedicate ourselves to providing clean and safe products to enhance the
quality of life everywhere through all our activities.
4. Create & develop advanced technologies and provide outstanding
products & services that fulfill the needs of customers worldwide.
5. Foster a culture that enhances individual creativity & teamwork
value, while honoring mutual trust & respect between labor &
management.
6. Pursue growth in harmony with the global community through
innovative management.
7. Work with business partners in research and creation to achieve
stable, long-term growth and mutual

Main Features: JIT & Respect-for-Human
Developed by Mr. Taiichi Ohno, vice-president of Toyota Motor
Company, under whom, it got deeply rooted.
There are 2 major features of this system:
First, just-in-time production, ―only required products, at right
time, in right quantity‖ are manufactured, & the stock on hand is
held to a minimum. Which means ―reduction of cost through
elimination of waste‖. Any resource surplus than minimum
required only raises the cost.
Second, ―respect-for-human‖. Build a system, which allows the
workers to display their full capabilities through active
participation in running & improving their own shops. Treat
them with consideration.

Making most of Japanese characteristics
The most distinctive feature of Japan is the lack of natural resources & raw
materials, hence huge import including food. Toyota recognized that, to
overcome this, Japan should produce better quality goods at lower cost.
The second distinctive feature is Japanese traits which include:
(1) group consciousness, sense of equality & diligence born from a long history of
a homogeneous race;
(2) high ability by higher education thru‘ desire to improve;
(3) centering their daily living around work.
Such traits were reflected in enterprises also. Customs such as,
(1) lifetime employment system,
(2) labor unions by companies,
(3) little discrimination between shop workers & white-collar staff, &
(4) chances to workers for promotion to managerial positions.
The second thing Toyota recognized is to make use of Japanese advantages,
industries should promote their workers to display their capabilities to the
utmost.

RESPECT FOR PEOPLE
 Kiichiro Toyoda, began the culture of respect for people
and of building trust between labor and
management, company and suppliers, and within the
company of Toyota itself.
 Started building a framework of mutual trust between
labor and management.
 Toyota associates in all areas of operation must continue
to work together ―like a strong chain,‖ to nurture this
culture of cooperation which helps Toyota, benefit
people and society.

CULTURAL VALUES & OTHER
PHILOSPHIES
 Having long-term philosophy
that
drives a long-term approach to
building a learning
organization
 The right process will produce
the right results
 Add value to the organization by
developing its people and
partners

Value Addition
 For Ohno, eliminating non-value-added waste meant: identify
activities that added value to raw material, & get rid of everything
else.
 TPS starts with the customer, by asking, ―What value are we adding
from the customer‘s perspective?‖. Because what adds value in any
process is the physical transformation of that product into something
the customer wants.
 Value - A capability provided to a customer at the right time at an
appropriate price, as defined by the customer. Features of the
product or service, availability, cost and performance are
dimensions of value.
 Waste - Any activity that consumes resources but creates no value.
If we are not adding value, then we are adding cost.
 Typically 95% of Total Lead Time is Non-Value Added!!! Value added 5%
22

Value Stream
 Start examining the production process from the
customer‘s perspective & ask, ―What does the customer
(external & internal) want from this process?‖
 It defines value. Thru‘ customer‘s eyes, separate the value
added steps from non-value-added steps.
 Toyota has identified 7 major wastes in production:
1. Over-production
2. Waiting
3. Unnecessary transport /conveyance
4. Over-processing or incorrect processing
5. Excess Inventory
6. Defects
7. Unnecessary Movement
23
8. Unused employee creativity (added by the writer)

ELIMINATION OF WASTE
―Waste‖ as defined by Toyota‟s president, Fujio
Cho, is “anything other than the minimum amount
of equipment, materials, parts, and workers
(working time) which are absolutely essential to
production”
“Reduction of Waste”
Reducing Waste in all aspects of your operations
is key to maintaining the edge needed to compete
in the global economy. The Toyota Production
System teaches that waste, “muda” is one of the
evils that should be avoided.

SEVEN ELEMENTS OF
WASTE
1. Overproduction
2. Waiting
3. Conveyance
4. Inventory
5. Motion
6. Over-
processing
7. Defect

REDUCTION OF WASTE
 Reduce Setup Times
All setup practices are wasteful because they
add no value and they tie up labor and equipment.
By organizing procedures, using carts, and
training workers
 Small-Lot Production
Producing things in large batches results in huge
setup costs, high capital cost of inventories.
Because Toyota has found the way to make
setups short and inexpensive
 Employee Involvement and Empowerment
Toyota organized their workers by forming teams
and gave them the responsibility and training to do

Muda - how to see it?
1. Over-production: In mass production system, existence of
inventory is appreciated as a means to absorb troubles &
fluctuations in demand.
But, Toyota sees the stock as a collection of troubles & the result of
„over-production‟, the worst waste that raises the production cost,
for which the customer is not willing to pay.
It is the worst waste as it hides unbalance What should flow
between the workers & the processes,  Material in a factory
troubles in processes, workers‟ idle time,  guest in a restaurant
surplus workers & excessive equipment
 document in an office
capacity.
In maintenance, it can be likened to Is it stopping? Muda!
overhauling an assembly, which do not Is it retracting?Muda!
have age-related failure mode. Is it piling up? Muda!
Reprocessing? Muda!

2. Waiting
Having to wait for the next process, supply, parts etc or having no
work due to stock-out, connectivity, capacity bottlenecks or processing
delays.
Maintenance-related waiting includes the waiting for maintenance
personnel to perform a service. Waiting for tools, parts, documents &
any others also is wasteful.
3. Over-processing or incorrect processing
Unneeded processing stages or inefficient processing due to any
reason. Waste is also generated when providing higher quality
products than is necessary.
4. Unnecessary Transport or Conveyance
Carrying WIP long distances, creating inefficient transport, or moving
materials, parts or FG into or out of storages.
―Walking around" of maintenance people for tools & spare parts stored
a long way from the job will cause excess transportation. 28

5. Excess inventory
Excess RM, WIP or FG causing longer lead times, delay,
obsolescence & storage cost. It hides problems like imbalance,
late deliveries from suppliers, defects, equipment downtime &
long setup times.
6. Unnecessary motion/movement
Any wasted motion the employees have to make during the
course of their work.
7. Defects / Rejects
Production of defective parts & their correction. Rejection,
replacement production & then inspection is wasteful.
8. Unutilized employee creativity
Losing time, ideas, skills, improvement & learning
29
opportunities by not engaging or listening to the employees.

―4 P‖ Model of the Toyota Way
Problem  Continual organizational learning through Kaizen
 Go see for yourself to thoroughly understand the situation.
Solving (Genchi Genbutsu)
(Continuous  Make decisions slowly by consensus, thoroughly
considering all options; implement rapidly (Nemawashi)
Improvement and Learning)
Eliminate Wastethrough Flow the philosophy
 Grow leaders who live
People and Partners Standardization and teams your people
&
Respect, develop and challenge
 Respect, challenge, and help your suppliers
(Respect, Challenge and Grow Them)
Create process ―flow‖ to surface problems
 Level out the workload (Heijunka)
 Stop when there is a quality problem (Jidoka)
 Use pull systems to avoid overproduction
Process  Standardize tasks for continuous
(Eliminate Waste) improvement
 Use visual control so no problems are hidden
 Use only reliable, thoroughly tested
technology
 Base management decisions on
Philosophy a long-term philosophy, even
at the expense of short-term
(Long-term Thinking) financial goals

Lean Manufacturing
is a manufacturing philosophy which shortens the time
between the customer order and the product build /
shipment by eliminating sources of waste.
Business as Usual
CUSTOMER Waste PRODUCT
ORDER BUILT & SHIPPED
Time
Lean Manufacturing
CUSTOMER PRODUCT
ORDER BUILT & SHIPPED
Waste
Time (Shorter)

Wa iting
Product Lead Time
C ast ing
T ra n s po rtat ion S ta ging
M ac hin ing
In ve n to ry
A sse m b ly
S ta ging
T ime
R aw F inis h ed
M a te rial P a rts
= V alu e Value Added Time is only a very small
Ad de d Ti m e percentage of the Lead time.
Traditional Cost Savings focused on only
= N o n -V al u e
Value Added Items.
Ad de d Ti m e
(W AS T E )  LEAN FOCUSES ON NON-VALUE
ADDING ITEMS.

Value Stream
Lean thinking focuses on the value stream to eliminate non-value-
adding items.
Value stream of a process shall be mapped following the circuitous
path of material on a layout & calculate the time & distance traveled
(―spaghetti diagram‖). It is best to walk the actual path to get the full
experience.
Traditional approach of process improvement focuses only on value-
adding items – ―Go to the processes, improve uptime & cycle time, &
replace the person with an automate.‖
As Value added time is only a small % of total time, such
improvement have little impact on overall value stream. Huge
improvement comes by reducing non-value added steps only.
33

Value Stream Perspective
Get away from isolated perspective / improvements
Process 1 Process 2 Process 3
Kaizen Kaizen
Kaizen

Before Lean: Organization By Machine Type With Convoluted Flow
LATHE LATHE LATHE
LATHE
PART F LOW
50 0pcs .
MILL MILL MILL
MILL MILL
75 0pcs .
GRINDER GRINDER
GRINDER
25 0pcs .
DRILL
DRILL DRILL
No Organization and No Control

After Lean: U-Shaped One-Piece Flow
Cell
Organization and Control
Build to
Takt Time!

TPS Cell
In lean manufacturing, the time
of value added steps are
reduced & non-value-added
steps are squeezed out.
A cell consists of a close
arrangement of workstations in
a processing sequence with
one-piece flow at a rate of
customer demand with the least
amount of delay & waiting.
Ultimate goal of lean
manufacturing is to apply the
ideal of one-piece flow to all
business operations. It
eliminates most of the waste.
37

Current Value Stream Map
38

Future Value Stream Map
39

The Toyota Production System …….
Best Quality – Lowest Cost – Shortest lead Time –
Best Safety – High Morale
People & Teamwork
• Selection
•Common Goals
• Ringi Decision-making Jidoka
Just-in-Time • Cross-Trained (In-station Quality)
Right Part, Right Amount, Make Problems Visible
Right Time
Continuous • Automatic Stops
• Takt Time Planning Improvement • Andon
• Continuous Flow • Person-Machine separation
• Pull System • Error-proofing
• Quick Changeover • In-station Quality Control
• Integrated Logistics
Waste Reduction • Solve Root Cause of Problems
• Genchi Genbutsu (5 Why‟s)
• 5 Why‟s
• Eyes for Waste
• Problem Solving
Leveled Production (Heijunka)
Stable & Standardized Process
Visual Management
Toyota Way Philosophy

“TPS House” Diagram
Starts with the goals of best quality, lowest cost & shortest lead
time – the roof.
Two outer pillars – Just-in-time & Jidoka.
Jidoka means ―NEVER pass along defective item‖ & freeing
people from machines – automation with a human touch
―Autonomation‖.
In the foundation lies ‗stable & standardized processes‘ &
Heijunka, which means leveling out the production schedule in
both volume & variety.
JIT means removing the inventory used to buffer operations
against problems that may arise in production.
Toyota often presents this house with the goals of QCDSM –
41
quality, cost, delivery, safety & morale.

“TPS House” Diagram
 The ideal of one-piece flow is to make one unit at a time at
the rate of customer demand (Takt).
 Using smaller buffers (removing the ―safety net‖) will make
problems like quality defects visible immediately
reinforcing Jidoka, which halts the production process.
 At the foundation is stability. In lean production, when a mc
is down, other mcs will also stop, thus creating urgency to
fix it. Investing in TPM may provide stability required to
obviate such stoppages.
 In the center of the system are people, because thru‘
continuous improvement only such stability can be attained.
People are trained to ‗see‘ waste & solve problems at the
42 root by asking why repeatedly.

Some Basics Concepts of TPS
1. Smooth Flow and Produce to Takt Time
2. Produce to Order
3. Make problems ―evident‖ & rectify it as they occur
4. Integrate Worker Skills Two Examples
1. Takt Time
Tools & Techniques 2. Pull Systems
• Andon – Visual control device in a production area that alerts
workers to defects, equipment abnormalities, or any other problems
using signals such as lights, alarm etc.
It is possible to follow only a select few Toyota principles & use a
variety of tools. Result – short term jump on performance
measures, which is not sustainable.
43

Toyota Way is more than Tools & Techniques
It is a set of tools provided to people for continuous improvement. It is a culture of
depending upon people to reduce inventory, identify problems & rectify them
thru‘ teamwork. A tool that facilitates this teamwork is 5S.
Toyota‘s second basic concept - to make the best use of Japan‘s labor environment -
emphasizes following points:
1. elimination of waste movements by workers;
2. consideration for workers‘ safety; &
3. self-display of capabilities, entrusting greater responsibility & authority.
1) Elimination of waste movement by workers:
a) waste of over-production b) material handling between the equipment &
processes c) worker‘s waiting time.
As only quantities required by the subsequent process is produced, workers will be
idle if the equipment & workers are tied. To prevent it, various steps have been
taken, e.g.
i. Free workers from equipment thru‘ automation
ii. assign a worker to multiple equipments

Full utilization of workers’ capabilities
iii. concentration of workers‘ zones at the automatic lines &
iv. make lines that do not require supervisor.
2) Unsafe operations: Operations involving danger & injurious to health,
operations requiring hard physical labor & monotonous repetitive operations are
mechanized, automated & unmanned. Jidoka is also effective as a measure for
safety.
3) Self-display of workers’ ability: All Toyota workers have a right to stop the
line they are working, even in a long final assembly line, if any abnormality
comes up. It is not a conveyer that operates men, but it is men that operate a
conveyer.
The workers are informed of the priority order & the status. authority of job
dispatching & overtime is delegated to the foreman. authority & responsibility
to improve the shops is delegated to the workers.
Employees are entitled to make an improvement on the waste he has found.
all shops are kept in the state of no surplus so that if there is any trouble, the line will
stop & understood by anyone. It is called ―visual control‖, thru‘ which all
workers are involved in eliminating waste.

Principle 2
• Create a continuous process flow to bring problems to
the surface.
“Flow” means “when customer places an order, this triggers
the process of obtaining raw materials needed just for that
customer‟s order. The raw material then flow immediately to
supplier plants, where workers immediately fill the order with
components, which flow immediately to a plant, where
workers assemble the order, and then the completed order
flows immediately to the customer.”
BENEFITS OF ONE-PIECE FLOW
4. Frees up Floor Space
1. Builds-In Quality
5. Improves Safety
2. Creates Real Flexibility
6. Improves Morale
3. Creates Higher Productivity
7. Reduces Cost of Inventory

1. Most Business Processes are 90% Waste & 10% Value-Added
Work.
• Create continuous Flow wherever applicable in Core Manufacturing & Service
Processes.
2. 8 Non-Value-Adding Wastes;
1. Overproduction
2. Waiting
3. Unnecessary Transport
4. Over processing
5. Excess in Inventory
6. Unnecessary Movement
7. Defects
8. Unused Employee Creativity
3. Other Sources of Wastes:
• Muri - No Value-Added beyond Capability, Overburden
• Mura - Unevenness
4. The Heart of One-Piece Flow – Takt Time (Rhythm in German) – The rate of
Customer Demand - Setting the pace of production and alert workers whenever
they are getting ahead or behind.

One piece production & conveyance
Each process produce only one piece, convey one at a time, & have
only one piece in stock between the equipment /processes.
No process is allowed to produce extra amount & have surplus stock.
All the shops are withheld from lot production & lot conveyance.
It is the best place to start a lean journey for any company.
Reduction in conversion time will lead to the best quality, lowest
cost & shortest delivery time.
A lean expression is that lowering the ―water level‖ of inventory
exposes problems (like rocks in water) & we need to deal with
the problems or sink.

Why Focus on Flow?
―If some problem occurs in one-piece-flow
manufacturing then the whole production line stops. In
this sense it is a very bad system of manufacturing.
But when production stops everyone is forced to solve
the problem immediately. So team members have to
think, and through thinking team members grow and
become better team members and people.‖

Lean Tools to Support Flow
 5S-Visual Workplace
 Total Productive Maintenance
 Quick Changeover
 Standardized Work
 Quality Methods

One piece production & conveyance
Traditional processes have the capacity to hide enormous
inefficiencies unnoticed by anyone. People just assume that
a particular process takes days or weeks to complete. They
do not realize that a lean process might accomplish the same
thing in matter of minutes or hours.
The buzz word is ‗Flow‘. Using small lots, having processes
closely together & moving the materials thru‘ processes w/o
interruption is better than producing in large batches &
having them sit & wait.
In mass production concept, similar machines & similarly
skilled people are grouped together in departments for two
reasons basically; economies of scale & flexibility.

The concept advocates getting most production at the
lowest cost, hence bigger machine running 100% flat-out to
get greatest utilization is recommended. Having biggest
equipment will build up WIP, the most fundamental waste
of overproduction.
As the product pass thru’ various value stream situated in
different departments, the waste of transport, waiting &
overproduction is inevitable.
Lets take a hypothetical case of computer manufacturing.
Say, department 1 makes CPU, department 2 makes
monitors & assembles with CPU. Department 3 does the
testing. To optimize the material handling cost, material
handling department has decided that it will move the
batch of 10 computers at a time. Each department takes 1
hour to work upon per unit.
52

Not considering the handling time, it will take 30 hours to
make & ship one batch of computer, & it will take 21 hours
to ship the first computer, even though value-added time is
only 3 hours. In lean system, the ideal batch size is always 1.
Initially, Toyota operated on mass production principle. But
Toyota could not compete with Ford‘s volume & economies
of scale. Then Toyota decided to optimize on material flow
& lead time; i.e. reduce batch size, blow up departments &
create work cells grouped by product, rather than process.
If we revisit the previous example of computer making, take
an equipment to make CPU & monitor each & 1 test
stand, put them next to each other & not have any inventory
in-between.
53

The result is 12 hours to make 10 computers against 30 hours in
batch flow process.
First computer ready in 3 hrs (85% reduction in lead time)
 10 completed in 12 hours (60% reduction)
 Only 2 sub-assemblies in process at a time (90% redn.)
The flow eliminated overproduction & inventory. We think that
increasing the speed of a process means poor quality. But, it is
just the opposite.
In the previous example, say one computer is defective. In
batch process, by the time it fails to turn on in the test
stage, there are at least 21 in process which may also have the
same problem, & the problem is discovered after 21 hours only.
If it is continuous flow cell, the problem is discovered in 2 hours &
there are 2 units in WIP.
54

Work Balancing / TAKT Time
In manufacturing operation, one ‗extra efficient‘ particular department
can build up WIP downstream & hide problems, making mess of
everything.
Hence, when a one-piece flow cell is set, to determine the speed or
capacity of the cell, ‘Takt time‘ is required.
• Work balancing maximizes operator efficiency by matching work
content to TAKT time
• TAKT time is the rate of customers demand. Available time includes
all shifts & excludes all non-productive time (e.g. lunch, clean-up etc).
TAKT time is calculated as: Available work time per day
Customer demand per day
Automobile Assembly Line; Available time = 7.5 hr X 3 shifts = 22.5
hrs or 1350 minutes per day. Demand = 1600 cars per day. Takt Time
= 51 sec
55

Benefits of One-piece Flow
1. Built-in quality: Even if defects gets passed on, it will be
detected very quickly.
2. Creates Real Flexibility: Flexibility is attained due to
shortened lead time. Completing one style & changing to another
style quickly is the best kind of flexibility.
3. High Productivity: In mass production system, productivity is
measured by utilization of people & equipment, & not in terms of
value added work & no. of people required to do this work.
But, productivity lost due to over-production, moving it to
storage, tracking down defective items & rectifying it is not
accounted. In one-piece flow, non-value added work is very
less, & hence easy to calculate the no. of people to reach a certain
production rate. When TSSC change a mass-producing supplier to
a TPS style, they always achieve at lest 100% improvement in
56
productivity.

Benefits of One-piece Flow
4. Frees up Floor Space: Floor space is wasted in storing WIP in
mass production style, which will be freed when a cell is set.
5. Improves Safety: Transformation to TPS will improve safety
naturally, because one-piece flow means very small batch of
material will be moved; hence no fork-lifts, lifting & moving
smaller containers etc.
6. Improves morale: In one-piece flow system, people do much more
value added work & see the immediate result of their work, which
gives them a sense of accomplishments & job satisfaction.
7. Reduced cost of inventory: Capital invested in inventory sitting on
the floor is freed up in addition to carrying & storage cost.
57

Organization by machine type
Lathe Lathe Lathe
A traditional machine shop
organized by machine group
type is depicted here. The tool
No organization – no control
used to chart the path of
Mill Mill Mill Mill
material is “Spaghetti diagram”.
The product is moving every where
Grinder Grinder
without any coordination. Now, the
equipment are organized in a U -
shaped lean cell as per the flow of
Drill Drill Drill material along with paths of two people
working in the cell.
What if demand is reduced? Reduce the no. of people. What if
demand increase? Increase the no. of people. People need to
be multi-skilled to work across.

People generally make 2 mistakes. First, after
Lathe
establishing a lean cell, they batch product at each Mill
stage with no sense of Takt time. It looks like a cell,
but works like batch process & hence it is a case of
fake flow. Second, backtracking when the company Mill
realizes that there is a cost to create flow, e.g.
Lathe
•Addition of dedicated equipment to a cell instead Drill
of centralized one.
Mill
•Integration of process currently being outsourced.
Toyota‘s focus is always on creating a true one-piece flow system that
is waste free. It links disjointed operations, enhancing team
work, quick feedback on quality creating pressure to solve problems &
grow.
Toyota is willing to risk shutting down production in order to surface
problems & solve them.

13 12 11 10 9 8 Modular
Cycle time - 170s
C 7 Manufacturing
Operators - 3 B • XXX = Opn done mainly;
A 6 • XX = Opn done partially;
1 2 3 4 5 • X = Opn done possibly;
Opn # 1 2 3 4 5 6 7 8 9 10 11 12 13
Cycle 30 70 60 40 95 5 40 30 5 10 15 20 80
time
A xxx xxx xxx xx
B x xxx xxx xxx xxx x
C xx xxx xxx xxx xxx
The modular mfg concept in the apparel Industry appeared with
the name “Toyota Sewing System" (TSS) where a seam system
is presented with the philosophy of JIT, developed by a member
of the Toyota group.
60

13 12 11 10 9 8 Balancing of a Chain
C 7
Cycle time - 135s
A B 6 Operators - 4
1 2 3 4 5
Opn # 1 2 3 4 5 6 7 8 9 10 11 12 13
Cycle 30 70 60 40 95 5 40 30 5 10 15 20 80
time
A xxx xxx xxx x
B xx xxx xxx x
C xx xxx xxx xxx xxx xxx xx
D x xxx xxx
Group of 5 to 17 Operators execute a measurable task. The
operators inter change in the whole group, & the incentive is
61
based on the production of the team of first quality products.

13 12 11 10 9 8 Cycle time - 100s
7 Operators - 5
B C 6
A
1 2 3 4 5
Opn # 1 2 3 4 5 6 7 8 9 10 11 12 13
Cycle 30 70 60 40 95 5 40 30 5 10 15 20 80
time
A xxx xxx x
B xx xxx xxx x
C xx xxx xxx x
D xx xxx xxx xxx xxx xxx x
E xx xxx xxx
62

63

Principle 3
• Use “pull” systems to avoid overproduction.
1. The Principle – Customer Pull & Replenishment:
• The Toyota Way is not about Managing Inventory, it is
about Eliminating It.
• Toyota Production System (TPS) is not a Zero-Inventory
System. It relies on “Stores” of Materials that are
replenished using “Pull” Systems.

Just-in-time
 JIT is a philosophy of continuous
improvement in which non-value-adding
activities (or wastes) are identified and
removed for the purposes of:
 Reducing Cost
 Improving Quality
 Improving Performance
 Improving Delivery
 Adding Flexibility
 Increase innovativeness

1. ―Kanban‖ – means a signal of some kind. Kanban System
is used for managing and ensuring the flow and Production
of materials in a just-in-time production system.
2. Kanban System – Remarkable, Simple, Effective & Highly
Visual.
3. Toyota‘s Kanban System: When pure flow system is not
possible – process too far apart, cycle times vary a great
deal.
4. Kanban is an organized system of Inventory Buffers.
5. ―The challenge is to develop a learning organization that
will find ways to reduce the number of Kanban and

Pull System
In mass production system, sales forecasting is done. Based on
anticipated customer demand, MRP is done & production schedule is
drawn. In the shop floor material moves by push system.
In TPS, “pull” is the ideal state of JIT production, giving the customer
what, when & how much he or she wants. Purest form of pull is one-
piece flow. If we take a customer order for single unit & make it for just
that order, it is the leanest imaginable system; i.e. 100% on demand
with zero inventory.
Actual customer demand drives the manufacturing process.
A system of cascading production & delivery instructions from
downstream to upstream, in which nothing is produced by the
upstream until the downstream signals a need.
The rate of production for each product is equal to the rate of
customer consumption.
Thru’ lead time reduction, customers get exactly what & when it is
wanted.

Simplified Pull System
Downstream processes withdraw what they need when they need it.
Empties + Empties + withdrawal
production kanban kanban
A
B
C
D
E
PULL
F
Customer Plant
New product G
H
Needed
Components + kanban
Supplier Plant
Preceding processes replenish what is taken away.

Push and Pull Systems
Machines
1 2 3 4
Parts Orders
70

Push Systems –
Order arrives at the front of the system and is produced in the
economical order quantity.
Q. How long did it take for the order to go through the system?
Time = 0
Time = 1
Time = 2
Time = 3
71 Time = 4

PUSH SYSTEM Information flow
Customer
WIP WIP FG
Supplier Raw Process Process Process
Matl A B C
Part Flow
Execution - Parts completed to schedule without any downstream
considerations
Replenishment - Based on projected demand (forecasts)
Shop Floor Control - System, transactions, paperwork
Problems - Hidden
Reaction to changes & problems - Through rescheduling
Linkage - Operations are NOT physically linked
72

PULL SYSTEM Kanban
Information flow Locations
Customer
Raw Process Process Process
Supplier
Matl A B C FG
Part Flow
Execution - Parts produced upstream as signaled by downstream
operation
Replenishment - Based on consumption
Shop Floor Control - Automatic & visible
Problems - Exposed & creates urgency
Reaction to changes & problems – Immediate, on-line & visible
Linkage - Operations ARE physically linked
Make/ Engineer to Order Shops operate by PULL as nothing is
produced until an order from the customer is received
73

Pull Systems-
The order arrives at the end of the line and is “pulled” out of the system. WIP between
the machines allows quick completion.
Pros and Cons;
Pull can fill small orders quickly, but must keep inventory
for all part types. Design can help here but not in all cases.
Comparison of delivery time
If the process time per part is ―t‖, and the batch size is ―n‖, it
takes ―Nnt‖ time to process a batch through ―N‖ steps. To
deliver one part it takes;
―Nnt‖ time from a push system plus setup & transportation
delays, & ―t‖ for a pull system.
74

Kanban
Information flow Locations
Supplier Raw Process Process Process
Matl A B C FG
Customer
Part Flow Pull scheduling
Push scheduling
• traditional approach • coordinated production
• ―move the job on • driven by demand (pulled thru
when finished‖ system)
• problems - creates • use of visual triggers (prodn /
excessive inventory conveyance Kanbans)
75

Pull Production
• Actual customer demand drives the manufacturing process.
• a system of cascading production & delivery instructions from
downstream to upstream, in which nothing is produced by the
upstream until the downstream signals a need.
• The rate of production for each product is equal to the rate of
customer consumption.
• Through lead time reduction & correct specification, let customers
get exactly what & when it is wanted.
For the short term: Smooth pull loops to reduce inventory
For the near term: Make-to-order with rapid response time
For the long term: Diagnostics & prognostics in a stable relationship to
take out the surprises for consumers & producers
76

Advantages of the pull systems
 continuous (synchronous) flow
 single piece flow capabilities
 observable problems
(if stopped = problem)
 sensitive to state of the factory
(if no part = problem)
 possible cooperative problem solving
77

Kanban
Where one-piece flow is not possible because processes are far apart
or the operation cycle time vary a great deal, then the next best choice
is Kanban System.
―Flow where you can, pull where you must‖.
Authorizes production from downstream operations based on physical
consumption.
KANBAN is a Japanese word for card, ticket or sign and is a tool for
managing the flow and the production of materials in a Toyota style
pull production system.
• Used often with fixed-size containers
• Kanban quantities are a function of lead-time & consumption rate
(for the item being replenished)
Min. Qty = demand during lead-time + safety stock
78 container quantity

Kanban
To inform all processes about ―timing & quantity required‖, Toyota adopted a
reverse method of ―the downstream process pulling the parts from the upstream
process‖.
As only the final assembly line knows the timing & quantity of parts, it asks
upstream processes for necessary parts with timeline. By connecting all supply
chain, the company is engaged in just-in-time production.
A Kanban corresponds to a bin of parts. The rule is that a bin can not move unless a
kanban is traveling with it.
Send back an empty bin & a Kanban – it is a signal to refill it with specific number
of parts or send back a card with detail of part & its location.
(1) These come in two kinds, first, ‗conveyance Kanban‘, that is carried when going
from one process to the preceding process. Second, ‗production Kanban‘ is used to
order production by the subsequent process. These 2 Kanbans are always attached to
the containers holding parts.
(2) When a container is used, conveyance Kanban is removed from the container &
taken to the stock point of the preceding process to pick up this part & then attached
to the container holding this part.
79

Kanban System
(3) ‗production Kanban‘ attached to the container is removed
& becomes a dispatch information for the process. They
produce the part ASAP.
(4) Thus, activities of the final assembly line are connected
to the preceding processes in a chain like manner.
Kanban is an organized system of inventory buffers; &
inventory is a waste whether it is a push system or pull
system.
The challenge is to find a way to reduce the number of
Kanban & thereby reduce the inventory buffer. So kanban is
something you strive to get rid of & not to be proud of.
TPS unleashes creativity & continuous improvement, & it

http://www.toyota.co.jp/en/vision/production_system/video.ht

Principle 4
• Level out the workload (heijunka). (Work like the
tortoise, not the hare.)
1. In the application of TPS, the first thing that must be done would
be to even out or level the production. This is primarily the
responsibility of Production Control or Production Management.
Toyota found out that it can create the leanest operation and
ultimately give customers better service and better quality by
leveling out the production schedule and not always build to
order.
A small inventory of finished goods is often necessary to protect
a supplier‘s level production schedule from being jerked around b
sudden spikes in demand.

2. Comparison between unleveled & leveled schedules of
production:
Unleveled Schedule Disadvantages Leveled Schedule Advantages
1. Flexibility to make what the customers want, when they
1. Customers usually do not buy products predictably. want it.
2. There is risk of unsold goods. 2. Reduced risk of unsold goods.
3. The use of resources is unbalanced. 3. Balanced use of labor and machines.
4. Placing an uneven demand on upstream processes. 4. Smoothed demand on upstream processes and plant
suppliers.
BATCH PROCESSING MIXED-MODEL PROCESSING
Economies of Scale foe Each Individual Piece of Equipment Leveling Customer Demand to a Predictable Sequence
KEY FEATURE MIXED-MODEL PROCESSING
Large Batches of Product before Changeover Elimination of Set-up Time for Changeover
3. To achieve the lean benefits of continuous flow, leveling the workload is
important. Eliminating Muda (Wastes) is only 1/3rd of achieving flow.
Eliminating Muri (Overburden) and Mura (Unevenness) are equally
important.
4. Heijunka (Leveling Workload) focuses on Muri and Mura – by leveling
product volume and mix i.e. leveling the demand on people, equipment, and

Leveling of production
If the quantity to be pulled by downstream process
varies, the process will either have to maintain peak
capacity or hold excess inventory.
Toyota has found it can create the leanest operation & give
customers better service & quality by leveling out the
production schedule & not always build to order.
To enable JIT, level the production at the final assembly
line.
(1) Final assembly lines are mixed product lines. Daily
production is averaged from monthly schedule classified by
types, & dividing by the number of working days.

Leveling of production
(2) For production sequence, cycle time of each product type is
calculated, & to maintain their own cycle time, different type vehicles
follow each other. All processes practicing subsequent process
withdrawal, one-piece production & conveyance are also leveled.
Secondly, produce only what is sold, adjusting its production level
according to the change in market. Toyota revises the monthly
schedule to reduce the shock of market fluctuation. When this
production system is compared with the traditional one, the former
system can operate with smaller production changes with less
equipment capacity and more stable number of workers.
Focusing only on the 8 wastes (Muda) can actually hurt the
productivity of the people and the overall system. So, 2 other M‘s are
also important to make lean work. Toyota document refer to the
―elimination of Muda, Muri & Mura‖.

Muri - Physical Strain
 Bend to work? Muri!
 Large batch? Muri
 Avoidable movements? Muri!
 Do not reduce walking by making big
batches
 Standing at work is healthier & more
efficient than sitting
Muri – Over-burdening/stressing people or equipment.
Pushing a machine or person beyond capability/ limits.
Overburdening people will cause safety or quality problems.
Overburdening an equipment will make the equipment unreliable.
92

Mura – Inconsistencies/ Unevenness
 Happens only sometimes? Mura!
 Happens to only some people? Mura!
 Happens only some places? Mura!
 Use diagnostic method like Kepner-
Tregoe
Ohno wrote in 1988:
The slower but consistent tortoise causes less waste & is much more
desirable than the speedy hare that races ahead, then stops & doze.
TPS can be realized only when all the workers become tortoises.
Mura is the resultant of other 2 Ms. Variation in Muda
workload in a production system is common. It
results from irregular schedule or fluctuating volume
Muri
due to internal problems, like downtime, defects or Mura
missing parts.
93

Leveling of production
Mura can cause Muda also. It means having equipment & people for
the highest level of production – even if the average requirement are
much lower.
Say, we have irregular schedule & unbalanced process. We start
eliminating Muda & reduce inventory. Then we do work balance &
reduce people. Then we eliminate wasted motion & let the system run
on its own.
What we will see is equipment & people are overburdened during
peak demand causing jerk in the system. The flow will become erratic,
equipment fail frequently & so on, then we conclude ―lean system
does not work here‖.
Focusing on Muda is the most common approach to implement Lean.
But stabilizing the system & creating evenness – a true balanced flow
of work is equally important. It is Toyota concept of heijunka, leveling
out the work schedule.

Leveling of production
Heijunka is perhaps the most counter-intuitive principle of Toyota.
Achieving heijunka is fundamental to eliminate Mura, which is
fundamental to eliminate Muri & Muda.
Having starts & stops, over-utilize then underutilize, is a problem
because it does not lend itself to quality, productivity, standardization
of work & continuous improvement.
Heijunka means leveling
out the production Mon A A A A A
schedule in volume &
variety both – take total Tue A A A A A
volume of orders in a
period & level them out so Wed A A C/O B B B
the same quantity &
Thu B B B B B B
product mix are being
produced each day. C C C C
Fri B C/O

A A A C Leveling of production
B B
Monday to Friday
The figure depicts unleveled schedule for 3 product type, namely A, B
& C. A is the big seller, so it is made early in the week till
Wednesday. Then there is a changeover to B till Friday morning,
when changeover to C is done. The problems with this schedule
are:
a) Customer Demand: If there is a sudden increase in demand of C in
the beginning of the week, then it is in trouble.
b) It will cause increase in inventory.
c) Requirement of labor across the week will be different.
d) It will cause uneven demand to upstream processes & suppliers.
In batch process, the goal is to achieve economies of scale for each
equipment, so large batch of product A will be built before C/O.

Leveling of production
In batch process, changeover is considered wasteful. In
Toyota, this changeover time was greatly reduced (hours to
minutes) by SMED approach, which enabled them to build
the product in any order they want; which helped to
overcome all the problems discussed above.
Shigeo Shingo studied C/O process of large stamping press
in Toyota & discovered most of the work fall into 2
categories; either a muda or ―external setup‖, activities
which can be done offline like getting die & tools,
preheating die etc. A Mazda supplier has won a prize for
setting up of several hundred ton press dies in 52 seconds.
Over the years, changeover has become a sport in Japan.

Principle 5
• Build a culture of stopping to fix problems, to get quality
right the first time.
―Mr. Ohno used to say that no problem
discovered when stopping the line should wait
longer than tomorrow morning to be fixed.
Because when making a car every minute we
know we will have the same problem again
tomorrow.‖
-Fujio Cho, President, Toyota Motor Corporation
Quality should be built-in … require a method for
detecting defects when they occur and automatically stop
production so an employee can fix the problem before
the defect continues downstream.

1. In-station quality (preventing problems from being passed down the
line) is much more effective and less costly than inspecting and
repairing quality problems after the fact.
2. When equipment shuts down, flags or lights, usually with
accompanying alarm, are used to signal that help is needed to solve
quality problem. This signaling system is called Andon.
3. The Andon – is a ―fixed position line stop system‖:
• When the Andon Button is pushed or Andon Cord is pulled, light
will light up but the line will continue moving.
• The Team Leader has until the vehicle moves to the next work
station zone to respond! before the Andon turn Red and the line
segment automatically stops.
• Team Leaders must be trained in carefully trained in standardized
procedures on how to respond to Andon calls.

5. The closer to one-piece flow, the quicker quality problems
will surface to be addressed:
• Using countermeasures and Error-proofing (Poka-Yoke) to fix
problems.
• Keep Quality Control simple and involve Team Members:
• Four (4) Key Tools:
• Go and See
• Analyze the situation
• Use one-piece flow and andon to surface problems
• Ask ―Why‖ 5 Times
6. Building-in Quality is a Principle, not a Technology
issue:
• The Andon System should be effective only when the operators
followed standardized work, the Kanban System was reliably
pulling materials to the work-station, workplace discipline was

1 2 3 4 5 6 7
8 9 10 11 12 13 14
STOP BUTTON
(STOP THE L I E AUTHOR I Y )
N T STOP BUTTON
(STOP THE L I E AUTHOR I Y )
N T
5
4 Abnormality
Station 5
Team Leader

Jidoka
 Jidoka means “automation with a human touch”
 Jidoka, in the production context means not allowing
defective parts to go from one work station to the next. It
specifically refers to machines or the production line itself
being able to stop automatically in abnormal conditions (for
example, when a machine breaks down or when defective
parts are produced). This Automation allows machines to run
autonomously, as they will stop when a problem occurs.
 Jidoka is also used when individual people encounter a
problem at their work station. They are responsible for
correcting the problem - if they cannot, they should stop the
line rather than let the defective part do.

PRINCIPLES
 Jidoka prevents the production of defective
products, eliminates overproduction and focuses attention on
understanding the problem and ensuring that it never recurs. It
is a quality control process that applies the following four
principles:
1. Detect the abnormality.
2. Stop.
3. Fix or correct the immediate condition.
4. Investigate the root cause and install a countermeasure.

A Closer Look at Jidoka - Concept

Purpose & Implementation
 The purpose of automation is that it makes
possible the rapid or immediate
address, identification and correction of
mistakes that occur in a process. Automation
relieves the worker of the need to continuously
judge whether the operation of the machine is
normal; their efforts are now only engaged when
there is a problem alerted by the machine.

 For instance rather than waiting until the end of a
production line to inspect a finished product,
automation may be employed at early steps in the
process to reduce the amount of work that is added
to a defective product.
 A worker who is self-inspecting their own work, or
source-inspecting the work produced immediately
before their work station is encouraged to stop the
 Once the line is stopped a supervisor or person
line when a defect is found.
designated to help correct problems gives
immediate attention to the problem the worker or
machine has discovered. To complete Jidoka, not
only is the defect corrected in the product where
discovered, but the process is evaluated and
changed to remove the possibility of making the

Andon  A tool of visual
management, originating
from the Japanese for
"Lamp". Lights placed on
machines or on production
lines to indicate operation
status. Commonly color-
coded are:
- Green: normal operations
- Yellow: changeover or
planned maintenance
- Red: abnormal, machine
down
Often combined an audible

Andon Display Board
When a problem arises and is
communicated via the "andon
- problem display board (A
type of visual control that
displays the current state of
work i.e., abnormal
conditions, work instructions,
and job progress information.
It is one of the main tools of
Jidoka) operators can
confidently continue
performing work at another
machine, as well as easily
identify the problem cause
and prevent its recurrence.

Build-in Quality
Quality should be built in – need a method to detect defects when they
occur & stop the line to fix the problem thereby avoid the defect to
cascade downstream.
Alex Warren, Vice President, Toyota Corporation wrote:
―In case of machines, we build devices into them, which detect
abnormalities and stop the machine. In case of humans, we give them
power to push button – called ―andon‖ which bring our entire
assembly line to halt.‖
Jidoka, the second pillar of TPS, is referred to as autonomation –
equipment endowed with human intelligence to stop itself when it has
a problem & triggers a light signal for help, called andon.
109

Build-in Quality
In mass production system, the last thing mgmt would permit is halt a
production line. When defective components are found, they are
simply labeled & set aside for rectification at some other time & by
another department. The mantra is ―produce large quantities at all
costs & fix the problems later.‖
In-station quality (Never pass along the defective item) is much more
effective & less costly than the conventional system. Toyota learned
long ago that solving quality problems at the source saves time &
money downstream.
By continually surfacing problems & solving them as they occur,
waste is eliminated which causes productivity to soar.
At Toyota, they keep things very simple & use only 4 key tools:
Go & see, Analyze the situation, Ask ―why?‖ five times, & Use one-
piece flow & andon to surface problems.
110

Build-in Quality
In survey report released in 2003, no. of defects in Toyota vehicle per
100 vehicle was 25. But in the vehicles of US & European make, it
ranged between 50 – 70, in spite of the fact that they use tools like
ISO-9000 & Six-Sigma.
What matters most when improving quality is enabling the process &
the people. We need to reinforce the principle constantly that quality is
everyone‘s responsibility throughout the organization. Quality for the
customer drives our value proposition, because adding value to our
customers is what keeps us in business.
GM copied andon system in their Nummi Plant, but the team leaders
spent a good amount of their time in the back room smoking cigarettes
& playing cards. What good is pushing the andon button if nobody is
around to respond?
111

Build-in Quality
The point is implementing andon is not the same as buying
technology. Andon works only when you teach your
employee the importance of surfacing the problems so they
are solved. For that, we need to have a problem-solving
process in place which people follow, otherwise it is futile.
Americans tend to think buying new technology will solve
problems, but Toyota prefers to first use people & processes
to solve problems, then support people by technology.
The Toyota Way is to build into the culture the philosophy
of stopping or slowing down to get quality right the first
time to enhance productivity in the long run.
112

Principle 6
• Standardized tasks and processes are the foundation for
continuous improvement and employee empowerment.
1. Standardized Work consists of three elements:
• Takt Time – Time required to complete one job at the pace of customer
demand.
• The sequence of doing things of sequence of processes.
• How much inventory or stock on hand the individual worker needs to have in
order to accomplish the standard work.
2. The Principle: Standardization is the basis for Continuous Improvement
and Quality:
• It is impossible to improve any process until it is standardized (Re: Imai –
Kaizen).
• The Standard Work Chart is posted outwards at the Shop floor – For Team
Leaders & Group Leaders to audit the work.
• Enable those doing the work to design and build in quality by writing the
standardized task procedures themselves.

3. Enabling Systems are simply the Best Practice Methods, designed and
improved upon with the participation of the workforce. The standards
actually help people control their own work. The worker is the most
valuable asset … an analyst and problem solver.
• Focus best practice methods: information on performance standards is not
much use without information on best practices on achieving them.
• System should allow customization to different level of skill/experience and
should guide flexible improvisation.
• Systems should help people control their own work: help them form mental
models of the system.
• Systems are best practice templates to be improved.
4. Standardizing Work for a New Product Launch:
• Develop a “Pilot Team” in the early planning stages: workers
representing all major areas of the factory are brought together full-time
to an office area where as a team they help plan launch the vehicle.
They work hand-in-hand with engineering and develop the initial
standardized work used when the product is first launched. Then it is
turned over to the production team to improve.

5. Coercive vs. Enabling Design of systems and Standards:
Coercive Systems and Procedures Enabling Systems and Procedures
• System focus on performance standards so as to • Focus on best practice methods: information on
highlight poor performance. performance standards is not mush use without information
on best practices for achieving them.
• Standardize the systems to minimize game-playing
• Systems should allow customization to different levels of
and monitoring costs.
skill/experience and should guide flexible improvisation.
• Systems should be designed so as to keep • Systems should help people control their own work: help
employees out of the control loop. them form mental models of the systems by „glass-box”
design.
• Systems are instructions to be followed, not
challenged. • Systems are best practice templates to be improved.
SOCIAL STRUCTURE
6. Coercive vs. Enabling Bureaucracies: Coercive Bureaucracy Enabling Bureaucracy
TECHNICAL STRUCTURE
Bureaucracy
• Rigid rule enforcement • Empowered employees
High
• Extensive written rules • Rules and procedures
& procedures as enabling tools
• Hierarchy Controls • Hierarchy supports
organizational learning
Autocratic Organic
Bureaucracy
• Top down control • Empowered employees
Low
• Minimum written rules • Minimum rules and
and procedures •procedures
• Hierarchy controls • Little hierarchy
Coercive Enabling

Standardized Work
 Principle 6—standardized tasks are the foundation for continuous
improvement and employee empowerment.
Standardizing tasks became a ―science‖ when mass production
replaced the craft form of production, much of which is based on the
principles of industrial engineering first set forth by Frederick
Taylor, the ―father of scientific management.‖
Standardized work in Toyota is much broader than list of steps. Fujio
Cho describes as, ―Our standardized work consists of 3 elements –
Takt time, sequences of processes & inventory the individual worker
needs to have to accomplish the work.‖
Standardized work consists of 3 elements:
– Takt time
Matches the time to produce a part or finished product with the rate of
sales. It is the basis for determining workforce size & work allocation.
116

Standardized Work
– Standard in-process inventory
The minimum number of parts, including units in
machines, required to keep a cell or process moving.
– Standard work sequence
The order in which a worker performs tasks for various processes.
One must standardize, and thus stabilize the process, before
continuous improvement is done. It is impossible to improve any
process until it is standardized.
Standardized work is also a key to build in quality. Toyota believes
that the only way to ensure ‗zero defect‘ is ―thru‘ standardized work‖.
Whenever a defect is discovered, the first question asked is ―Was
standardized work followed?‖ If the worker is following the
standardized work & the defects still occur, then the standards need to
117 modified.
be

Standardized Work
Taylor‘s scientific management viewed workers as machines who need
to be made efficient. Taylor achieved tremendous productivity gains,
but it created rigid bureaucracies in which only managers are supposed
to do the thinking & workers to follow it blindly.‖ Modern
organizations try to be ―organic,‖
means focused on
Coercive Enabling
effectiveness empowering
bureaucracy
Coercive
their employees & adaptable Enabling
Bureaucracy
High
Bureaucracy
to change. Paul Adler • rigid rules • rules enable tools
• hierarchy controls
studied Toyota‘s • employee-
Tech. Structure
• extensive written
empowered
organizational practices, at rules & procedures
bureaucracy
NUMMI plant & found that Organic
Autocratic
• employee
Low
it had all the characteristics • min. rules
Empowered
• hierarchy controls -
of ‗organic‘ as well as Top-down
• little hierarchy
Taylorism. • min rules
118
Social Structure

Standardized Work
He realized that there are not only two types of organizations—
bureaucratic vs. organic—but at least four.
The rules & procedures are technical structure of an organization. But
the social structure can be either ―coercive‖ or ―enabling‖. When we
plot technical vs. social structure, we get 4 types of organization & 2
types of bureaucracy. Toyota at NUMMI was practicing ―enabling
bureaucracy.‖
The difference between Taylorism & the Toyota Way is: Toyota Way
preaches that the worker is the most valuable resource—an analyst &
problem solver. From this perspective, Toyota‘s bureaucratic system
becomes the basis for flexibility & innovation. Adler called this
―democratic Taylorism.‖
Capturing knowledge is easy, difficult part is getting people to use the
standards & contribute to improve it. Toyota spent years working with
people to instill in them the importance of using & improving
119
standards.

Bumper Trimming Job Breakdown Sheet
J O B B R EA K D O W N SH EET P h il Tu re k To d d C h a m b e rs
DA TE : 7 /2 0 /2 0 0 6 Te a m L e a d e r S u p e rviso r
AREA : B u mp e r m o ld in g JO B : R e a r b u m p e r m o ld in g o p e ra to r - Trim m in g W R ITTE N B Y : P h il Tu re k
K E YPO IN TS
MAJO R S AFE TY : In ju ry a vo id a n ce , e rg o n o m ics, d a n g e r p o in ts
Q UA LITY : De fe ct a vo id a n ce , ch e ck p o in ts, sta n d a rd s R EAS ON S FOR K EY POIN TS
STEPS TE CH N IQ UE : E fficie n t m o ve m e n t, sp e cia l m e th o d
C O S T: P ro p e r u se o f ma te ria ls
S te p # 1 1 . H o ld fla sh stra ig h t u p a n d tig h t 1 . M a ke s trim min g e a sie r
2 . Trim a wa y fro m b o d y a n d a rm 2 . P re ve n ts in ju ry- cu ts
Trim fla sh b a ll o n le ft sid e 3 . B la d e flu sh with to p su rfa ce 3 . V isib le su rfa ce , fla sh lin e 1 m m m a x.
S te p # 2 1 . S ta rt o n trim lin e - 1 m m va ria tio n 1 . V isib le su rfa ce - q u a lity sp e c.
2 . B la d e m u st b e p e rp in d icu la r 2 . A n g le d cu t n o t a cce p ta b le
Trim le ft sid e co re fla sh 3 . Fo llo w trim lin e - 1 mm va ria tio n 3 . V isib le su rfa ce - q u a lity sp e c.
4 . C u rvin g mo tio n wh ile trim m in g 4 . Te ch n iq u e to m a ke trim m in g e a sie r
S te p # 3 1 . H o ld g a te u p h o rizo n ta lly 1 . P re ve n ts twistin g o f b u m p e r d u rin g cu t
2 . R e st b la d e o n b u m p e r e d g e h o rizo n ta lly 2 . H e lp s m a ke cu t h o rizo n ta l a n d stra ig h t
Trim g a te fla sh 3 . A n g le kn ife h a n d le b a ck (b la d e is h o rizo n ta l) 3 . C u t is e a sie r
4 . O n e co n tin u o u s mo ve m e n t 4 . S to p p in g will ca u se a ja g g e d cu t
S te p # 4 1 . H o ld fla sh stra ig h t u p a n d tig h t 1 . M a ke s trim min g e a sie r
2 . Trim a wa y fro m b o d y a n d a rm 2 . P re ve n ts in ju ry- cu ts
Trim fla sh b a ll o n rig h t sid e 3 . B la d e flu sh with to p su rfa ce 3 . V isib le su rfa ce , fla sh lin e 1 m m m a x.
S te p # 5 1 . S ta rt o n trim lin e - 1 m m va ria tio n 1 . V isib le su rfa ce - q u a lity sp e c.
2 . B la d e m u st b e p e rp in d icu la r 2 . A n g le d cu t n o t a cce p ta b le
Trim rig h t sid e co re fla sh 3 . Fo llo w trim lin e - 1 mm va ria tio n 3 . V isib le su rfa ce - q u a lity sp e c.
4 . C u rvin g mo tio n wh ile trim m in g 4 . Te ch n iq u e to m a ke trim m in g e a sie r
L E A N AS S O CIAT E S , IN C. w ww .le a n a sso cia te s.co m

Auditing Standardized Work

Principle 7
• Use visual control so no problems are hidden.
1. The Principle - Clean It Up, Make Visual:
• 5 S Programs that comprise a series of activities for eliminating wastes that
contribute to errors, defects, and injuries in the workplace.
• The 5 S‟s are – Seiri (Sort) , Seiton (Straighten) , Seiso (Shine), Seiketsu
(Standardize) and Shitsuke (Sustain):
• Seiri – Arrange - Sort through items and keep only what is needed
while disposing what is not.
• Seiton – Orderliness – a place for everything and everything in its
place.
• Seiso – Cleanliness – the cleaning process acts as a form of inspection
that exposes abnormal and pre-failure conditions that could hurt quality
or cause machine failure.
• Seiketsu – Create rules – Develop systems and procedures to maintain
and monitor the first 3 S‟s (Seiri, Seiton & Seiso).
• Shitsuke – Self discipline – Maintaining a stabilized workplace is an
ongoing process of continuous improvement.

1. Visual Control systems are about Improving Value Added Flow: Visual
Control means -
• Any communication device used in the work environment that tells at a
glance how work should be done and whether it is deviating from standard.
• Refers to the design of just-in-time information of all types to ensure fast and
proper execution of operations and processes.
• Integrated into the process of the value-added work, being able to look at
the process, piece of equipment, inventory, or information or at worker
performing a job and immediately see the standard being used to perform
the task and if there is a deviation from the standard.
• Visual management charts must allow for communication and sharing.
2. Keeping It Visual Through Technology and Human Systems:
• The best visual indicators are right at the work site, where they can jump out
at you and clearly indicate by sound, sight, and feel the standard and any
deviation from the standard.
• A well developed visual control system increases productivity, reduces
defects and mistakes, helps meet deadlines, facilitates communication,
improves safety, lowers costs, and generally gives the workers more control
over their environment.

Visual Control
The Donnelly Mirrors was so disorganized that no one could see much
of anything except waste. One day a Ford Taurus disappeared,
which was in the factory for trial fitting of prototype mirrors. They
even filed a police report. Months later, it was found at the back
surrounded by inventory.
When Americans visited Japanese plants in ‘80s, the first reaction was
invariably ―The factories were so clean.‖ In Japan there are ―5S
programs‖ that comprise a series of activities for eliminating
wastes that contribute to errors, defects, & injuries in the
workplace. The five S‘s (seiri, seiton, seiso, seiketsu & shitsuke)
translated in English are:
1. Sort—Sort through items and keep only what is needed while
disposing of what is not.
124

Visual Control
2. Straighten (orderliness)—―A place for everything and everything
in its place.‖
3. Shine (cleanliness)— The cleaning process often acts as a form of
inspection that exposes abnormal & pre-failure conditions that
could affect quality or cause machine failure.
4. Standardize (create rules)—Develop systems and procedures to
maintain and monitor the first three S‘s.
5. Sustain (self-discipline)—Maintaining a stabilized workplace is an
ongoing process of continuous improvement.
In mass production, without 5S, wastes accumulate over the period
covering up problems, until the hidden problems jump up & create
a fire-fighting crisis; managers would spend their time putting out
one fire to the next. In short, crisis management becomes the
125 accepted mentality of the day.

Visual Control
Lean systems use 5S to support a smooth flow to takt time. 5S also
helps to make problems visible & control a lean system visually.
Visual control is a communication device that tells us at a glance how
work should be done & other critical information; e.g. traffic
signals & signage. The visual aspect means being able to look at a
process, equipment, inventory, or a worker doing a job & see the
standard & if there is any deviation.
a popular 5S activity is to create shadow tool boards. A ―shadow‖ of
each tool is painted on the board in the place that tool should be
hung. Similarly, having visible indicators of min. & max. levels for
inventory will help to see if inventory is being managed
appropriately. Well-designed charts & graphs that are kept up
every day can visually control projects in offices.
126

Visual Control
Principle 7 of the Toyota Way is to use visual control to improve flow.
Deviations from the standard is deviations to takt time. Most lean
tools are visual controls to facilitate flow; e.g. kanban, one-piece-
flow cell, andon & standardized work.
A cell will immediately reveal extra pieces of WIP. The andon cord
signals a deviation from standard operating conditions. Standard
task clarify the best method for achieving flow, any deviations
indicate a problem. In short, Toyota uses a visual control system to
create a transparent & waste-free environment.
A well-developed visual control system increases productivity, reduces
defects and mistakes, helps meet deadlines, facilitates
communication, improves safety, lowers costs & gives the workers
more control over their environment.
127

What is a Visual Workplace?
When anyone can walk into
a workplace and visually
understand the current
situation.
4

Principle 8
• Use only reliable, thoroughly tested technology that
serves your people and processes.
1. The Principle – Adoption of New Technology must Support
your People, Process and Values:
• New technology is introduced only after it is proven through direct
experimentation with the involvement of a broad cross-section of
people:
• Analyze the impact it may have on existing processes.
• Analyze to see if it conflicts with Toyota‟s philosophies and
operating principles – (1) Valuing People over Technology (2)
Using consensus Decision Making (3) Operational focus on
Waste Elimination.
• The Technology must be highly visual and intuitive.

1. People Do the Work, Computers Move the Information:
• IT- Tool to support the People and Processes.
• Inventory is generally a symptom of poorly controlled processes.
• Ultimately, manufacturing is about making things!
2. IT in Toyota‟s Product Development Process:
• A collaborative vehicle development using digital engineering.
• Taking a finely tuned development process, based on exceptionally
well trained engineers and excellent technical leadership, and
surgically inserted information technologies to enhance it.
• Testing and Visualization done up front in the design process,
thereby avoiding this downstream rework.
• Maintaining the collaborative design process and the strong value
placed on visualization of the actual situation f the design process.

The Role of Technology – Adapting it Appropriately:
• Example:
• Flexible Body Shops – Major Innovation that allowed
multiple car bodies to b made in the same shop.
• Using “Blue Sky System” or “Global Body Line” – The
Car Body held in place by robots that can be
programmed for each car body. The bodies rides on “ski
lift”. The system has a programmable fixturing device
that holds the parts together from the inside out & takes
about ½ the space.
• 50% fewer processes to weld the body, 70% less
investment to change over the line for a new vehicle,
75% less time to go from launch to meeting quality
targets.
The acid test for new technology – lean, simple, and
speedy.

―4 P‖ Model of the Toyota Way
Problem The heart & soul of
 Continual organizational learning through Kaizen
 Go see for yourself to thoroughly understand the situation.
Solving The Toyota Way (Genchi Genbutsu)
(Continuous  Make decisions slowly by consensus, thoroughly
considering all options; implement rapidly (Nemawashi)
Improvement and Learning)
 Grow leaders who live the philosophy

People and Partners Respect, develop and challenge your people
and teams
(Respect, Challenge and Grow Them)  Respect, challenge, and help your suppliers
 Create process ―flow‖ to surface problems
 Level out the workload (Heijunka)
 Stop when there is a quality problem (Jidoka)

Process 
Use pull systems to avoid overproduction
Standardize tasks for continuous
(Eliminate Waste) improvement
 Use visual control so no problems are hidden
 Use only reliable, thoroughly tested
technology
 Base management decisions on
Philosophy a long-term philosophy, even
at the expense of short-term
(Long-term Thinking) financial goals

People and Partners
Respect, Challenge, and Grow Them:
9. Grow leaders who thoroughly understand the work, live
the philosophy, and teach it to others
10. Develop exceptional people and teams who follow your
company’s philosophy
11. Respect your extended network of partners and
suppliers by challenging them and helping them improve

Principle 9
• Grow leaders who thoroughly understand the work, live
the philosophy, and teach it to others.
1. The Principle – Growing Your Leaders Rather than Purchasing Them:
• Leaders must live and thoroughly understand the Toyota Culture day by day.
• The Critical element of the culture is Genchi Genbutsu (deeply observing
the actual situation in detail).
• Leaders must demonstrate this ability and understand how work gets one at
a shop floor level.
2. Toyota uses the “constancy of purpose” throughout the
organization, which lays the groundwork for consistent and positive
leadership as well as an environment for learning.
• We build cars not Intellectuals!
• Quality First, Safety First. Extra Effort. Extra Caring.
3. Toyota Leader's View of the Toyota Production System:

Principle 9
TECHNICAL MANAGEMENT
• True North
• Stability
• Tools to focus
• JIT PEOPLE management attention
• Jidoka Long-Term Asset  Learned Skills • Go and See
• Problem-solving
• Kaizen Machinery Depreciates  Loses Value
• Presentation skills
People Appreciate  Continue to Grow
• Heijunka • Project Management
PHILOSOPHICAL • Supportive Culture
• Customer First
• People are most important Asset
• Kaizen
• Go and See  Focus on Floor
• Give feedback to team members and earn
respect
• Efficiency Thinking
• True (vs. Apparent) Condition
• Total (vs. Individual) team involvement

Power train Engineering Division
4. The Chief Engineer: Critical Link to Innovation,
Chassis Engineering Division
Leadership and Customer Satisfaction:
Cost Management Division
Program Planning Division
Body Engineering Division
Vehicle Evaluation and
Engineering Division
• Example Toyota‟s Product Development Matrix
Organization:
• Vehicle Centers 1,2 & 3 each focus on a family of
products.
• The functional group within each center, are
technical specialty groups with their own GM.
• The GM controls the engineers by assigning them Center 1
projects, generating their performance evaluations
etc..
Component and System Development
• The CE (Chief Engineer) controls the vehicle
program and is responsible for the results.
• The CE has to depend on all the functional groups
to supply the people and get the work done.
Center 2
5. CE – “Heavyweight Project Manager”:
Even though perceived as having
“Responsibility without Authority”, the
CE is:
• Blessed by Top Executives Center 3
• Controlling the Vehicle Program
• Leading the Program
• Having Proved that he is an exceptional engineer
• Being the critical link between engineering and
customer satisfaction
Functional
Center Head Chief Engineer
General Manager
TOYOTA’S PRODUCT DEVELOPMENT MATRIX ORGANIZATION

6. The Common Themes of Leadership at Toyota:
• Primary Leadership Role is as Builders of a Learning Organization:
• Common Traits:
• Focused on Long-term Purpose as a Value-Added Contributor to Society.
• Never deviated from the Precepts of the Toyota Way DNA and lived and modeled
their themselves around this for all to see.
• Worked their way up doing the Detailed Work and continued to Go and See the
Gemba.
• Saw Problems as Opportunities to train and coach their people.
TOYOTA LEADERS
(Development)
Builder of Learning
Bottom-up
Group Facilitator Organizations
The Leaders’ real challenge is having
“You are Empowered” “Here is Our Purpose
the long-term vision of knowing what to and Direction,
I will Guide and Coach”
do, the knowledge of how to do it, and
the ability to develop people so they Task
(Directives)
Top-Down Bureaucratic
Master
can understand and do their job Manager
“Here is what to do and how
excellently. “Follow the Rules”
– Do It!”
General In-Depth
Management Understanding
Expertise Of Work

Principle 10
• Develop exceptional people and teams who
follow your company’s philosophy.
The Principle – Developing Excellent Individual
Work While Promoting Effective Team Work:
• Excellent balance between Individual Wok and Group
Work, and between Individual Excellence and Team
Effectiveness.
• The capabilities and characteristics of individual matter.
• Until Individuals understand the Toyota Way and TPS,
they not in position to be empowered.

1. Building culture by using a three(3)-stage
process to select the best associates:
• Stage One – One year to do the hiring.
• Stage Two – Randomly select a subset to attend a
job fair (opportunities for informal meetings and
assessments).
• Third Stage – Random sample of those who
passed the job-fair for Interviews.
• Finally – after background check, drug test, and
physical exam, finalists offered a job.
• N.B. Randomness was to ensure fairness and
diversity.

Ramping up gradually and systematically,
four(4)-phase implementation process ~ 1
months period:
• Phase One – Facility operated at very low
volume level to get job duties and
responsibilities right.
• Phase Two – Best suppliers to ship low
volume parts to the operation.
• Phase Three – Smaller suppliers were
added that were not as sophisticated in their
manufacturing and logistics systems.

Developing Teams at Toyota – Groups have to
develop over time::
• Stage 1 – Orientation – Group needs strong
direction from the leader and must understand the
basic mission, rules of engagement, and tools the
members will use.
• Stage 2 – Dissatisfaction – Continue to need
strong direction (structure) from the leader but also
need a lot of social support to get through the
tough social dynamics.
• Stage 3 – Integration – Group starts to develop
clearer picture of the roles of various team
members and begins to exert control over team
processes. (Learn about roles, goals, norms, and
team structure)

Principle 10 … Develop Exceptional People and Teams who Follow Your Company’s Philosophy
The TOYOTA ORGANIZATION (Assembly Operation), Roles and Responsibilities:
Team Size PTMSB
Team Member Working Group
5~8 Associate
Team Leader
3~4 Associate Leader/
Line Keeper
Group Leader
5~8 Supervisor
Assistant Manager Executive
4 - 10
Head Of Department
Manager
TEAM MEMBER TEAM LEADER GROUP LEADER
(Associate) (Associate Leader/Line keeper) (Supervisor)
• Manpower Vacation / Scheduling
• Monthly Production Planning
• Administrative: Policy, Attendance, Corrective
Actions
• Hoshin Planning (Policy Deployment)
• Process Start-up and Control • Team Morale
• Meet Production Goals • Confirm Routine Quality and Team Leader
• Perform Work to Current Standard (SOP) • Respond to Andon call by Team Member Checks
• Maintain 5S in their Work Area •Confirm Quality – Routine Checks • Shift-to-shift Coordination
• Perform Routine Minor Maintenance • Process Trials (Change in process)
• Cover Absenteeism
• Team Member Development & Cross Training
• Look for Continuous Improvement • Training and Cross Training
• Report/Track Daily Production Results
Opportunities • Work Orders for Quick Maintenance • Cost Reduction Activities
• Support Problem Solving Small Group • Insure Standardized Work is Followed •Process Improvement Projects
• Facilitate Small Group Activities • Coordinate Major Maintenance
Activities
• On-Going Continuous Improvement Projects • Coordinate Support form Outside Groups
• Insure Parts/Materials are Supplied to Process • Coordinate Work with Upstream &
Downstream Processes
• Group Safety Performance
• Help Cover Team Leader Absence
• Coordinate Activities around Major Model
Changes

One-Piece Flow Demands Team Work!
x
x
x
x x
Station B
Traditional Western
Team x
x x
x
x x
x x
x x
x
Station A Station C x
Need
help? Need
help?
X
Toyota Way Team
Workcell

Typical Toyota Organization to support Continuous Improvement
Team Size
Team Member
{5-8}
Kaizen
Team Leader
{3-4}
Group Leader
{5-8}
Asst. Manager
{ 4 - 10 }
Manager

How Do we Develop People?
Research in occupational training shows that
individuals retain about:
• 10 % of what they read
• 20 % of what they hear
• 30% of what they see
• 50% of what they hear and use
• 70% of what they say
• 90% of what they say and do

 Job Instruction Training is designed to teach
people how to do a particular job by:
 Hearing (what to do)
 Seeing (how it is done)
 Using (what was learned)
 Saying (what was learned)
 Doing (the task)
 REPEATEDLY !!

T h e Fo ur S te p s of T JI
S tep 4 : F O L L O W U P S te p 1 : P R E P A R E
WORKER
A c tion P la n
M ajor Steps
K ey Poin ts
C he c k
R eason s Do
S tep 3 : T R Y O U T S te p 2 : P R E S E N T
P E R FO R M AN C E O P E R A T IO N

Roles and Responsibilities
Gene ra l M anage r and V P Leve l
C o n ce n tra te o n Bus in ess P lann in g
an d P o li cy Im pr o v em en t. T oo ls:
H o sh in P lann in g & TBP
Ma n ager Level
Focus on S hop Floor and
S yste m s Im pro v em ent.
Tools: V isu al F ac to ry & TBPT
TBP
Tea m Lea d er a nd G roup Lea d er
Mana g e S tandardized Wor k, Process
Im pro v em ent and De velop Proble m
S ol v in g Sk ills . Tools: FMD S , TBP & OJD
Tea m Me m b er
Focus on Funda m ental Sk ills & S tandardized Wor k
Tools: Sk il ls Trainin g , Job I nstruction , S tand ardized Wor k
and 5 -S

Toyota Way Principles in 4P Model
The dynamics of
The Toyota Way
Problem  Continual organizational learning through Kaizen
 Go see for yourself to thoroughly understand the situation.
Solving (Genchi Genbutsu)
(Continuous  Make decisions slowly by consensus, thoroughly
considering all options; implement rapidly (Nemawashi)
Improvement and Learning)
 Grow leaders who live the philosophy
 Respect, develop and challenge your people
People and Partners and teams
 Respect, challenge, and help your suppliers
(Respect, Challenge and Grow Them)
 Create process ―flow‖ to surface problems
 Level out the workload (Heijunka)
 Stop when there is a quality problem (Jidoka)

Process 
Use pull systems to avoid overproduction
Standardize tasks for continuous
(Eliminate Waste) improvement
 Use visual control so no problems are hidden
 Use only reliable, thoroughly tested
technology
 Base management decisions on
Philosophy a long-term philosophy, even
(Long-term Thinking) at the expense of short-term
financial goals

Principle 11
• Respect your extended network of partners & suppliers
by challenging them and helping them improve.
The Principle: Find Solid Partners and Grow Together to
Mutual Benefit in the Long-Term:
• Serious investment in building a network of highly capable suppliers
integrated into Toyota‟s extended lean enterprise i.e. grow the
business together and mutually benefit in the long-term.
• Supplier development includes a series of aggressive targets and
challenges to meet those stretch targets, e.g. innovation,
engineering, manufacturing and overall reliability. Break down
barriers among functions so everyone is working toward a common
goal.

Toyota‟s Approach in Logistic Partnership:
• Cross-Docking (“Break-Bulk” Facilities): An extension of the assembly
line – part of the value system that gets parts just-in-time from suppliers
onto vehicles and finally to customers – i.e. one-flow system.
• Flow-through facility, associates involved in continuous
improvement, visual indicators and mistake proofing utilized to
build quality & reliability, truck drivers have defined roles in picking
& delivering within tight time windows including making quality
checks.
• Partner – Transfreight – Cross-docking needs for Toyota:
• Achieved JIT deliveries despite great distances in North America.
• Costs of Transportation went down considerably.
• Saves money on returnable containers.
• Transfreight continually improving & reducing costs.

Partnering with Suppliers While Maintaining Internal Capability:
• Toyota outsource 70% of the components of the vehicle, but still want
to maintain internal competency even in components it outsources i.e.
Concept of Self Reliance.
• Toyota will learn with suppliers, but will never transfer all the core
knowledge and responsibility in any key ara to suppliers.
• Once Toyota had that internal expertise, they could selectively
outsource.
• E.g. IGBT (Insulated Gate Bipolar Transistor) for Toyota Prius
Hybrid Engine.
• E.g. Joint Venture with Matsushita - Panasonic EV Energy, develop
Battery Technology.
• E.g. Set up its own Electronics Plant instead of relying on Denso
(used to be part of Toyota).

4. Working with Suppliers for Mutual Learning of TPS:
• Toyota works with highly capable suppliers that are following TPS
or an equivalent system:
• Toyota needs its suppliers to be as capable as its own plants at
building and delivering high quality components JIT.
• Toyota cannot cuts costs unless suppliers cut costs.
• Methodology - “Learning by Doing” , Real Projects on the shop
floor, Jishuken – Voluntary Study Groups.
5. Saving “Sick” Suppliers Through TPS:
• Toyota nurses them out of their „sickness‟ in a very holistic way.
• Developing a system of evaluating and classifying suppliers e.g.:
(1) Supplier will close down (2) Supplier will shut-down Toyota
Assembly Plant ………………. (5) Exemplary TPS Supplier.
• Toyota develop a supplier improvement committee (SIC = SICK).

6. Developing an Extended Learning Enterprise Means
Enabling Others:
• Until relationship has stabilized to the point where the business
relationship is fair, processes are stable, and expectations are
clear, it is impossible to get to the higher levels of enabling systems
and truly learning together as an enterprise.
Next Level Learning
Of Improvement
Enterprise
Enabling
System
Clear Expectations
Stability
Stable, Reliable Processes
Fair & Honorable Business Relations
SUPPLY CHAIN NEED OF HIERARCHY

Typical Improvement Opportunities Available

Improvement Approaches of Typical Companies

Toyota Leverages Opportunities at all Levels

Most common mistake
 Jumping from “problem” to “solution” without clear
understanding and analysis
PROBLEM
SOLUTION

Principle 12
• Go and see for yourself to thoroughly understand the
situation (genchi genbutsu).
1. Genchi Genbutsu – Distinguishes the Toyota Way from other
management approaches:
• You cannot be sure you really understand any parts of the business
problem unless you go and see for yourself firsthand.
• Tables and Numbers may measure results, but they do not reveal the
details of the actual process being followed everyday.
2. The Principle: Deeply Understanding and Reporting What You See:
• Genchi – means the actual location; Genbutsu – means the actual material
or products.
• Genchi Genbutsu – means „going to the place to see the actual situation
for understanding‟.
• Requires skill to analyze and understand the current situation.
• Collecting Data and Analysis will tell you if your Common Sense is Right!

―Observe the production floor without
preconceptions and with a blank mind. Repeat
―why‖ five times to every matter.‖
-Taiichi Ohno
Ohno Circle – Watch and Think For Yourself –
• The power of deep observation, „what you are
seeing, to question, to analyze, and to evaluate’.
• “Data is of course important in manufacturing, but I
place the greatest emphasis on facts” … Taiichi
Ohno
• Think and speak based on Personally Verified Data.

5. Leaders are Not Excused from Genchi Genbutsu:
• “How can you expect to do your job without getting your hands dirty!” …
Kiichiro Toyoda
6. Hourensu – Rapid Genbutsu for Executives:
• Hou (Hou Koku - to report), Ren (Ren Raku -to give updates
periodically) and Sou (Sou Dan - to consult/advise).
• To have subordinates to learn how to communicate efficiently give
reports on key events that happens during the day.

10 Management Principles (Yamashita):
1. Always keep the final target in mind.
• Carefully plan for your final target.
• Have a clear purpose for meetings.
2. Clearly assign tasks to yourselves and others.
3. Think and speak based on verified, proven information and
data.
Genchi
• Go and confirm the facts for yourself. Genbutsu
• You are responsible for the information you are
reporting to others.
4. Take full advantage of the wisdom & experiences of others
to send, gather or discus information.

10 Management Principles (Yamashita):
5. Share your information with others in a timely manner
• Always consider who will benefit from receiving the
information.
6. Always report, inform and consult (Hou/Reng/Sou) in a
timely manner.
7. Analyze and understand shortcomings in your capabilities
in a measurable way.
• Clarify the skills and knowledge that you need to further
develop yourself.
8. Relentlessly strive to conduct kaizen activities.
9. Think “outside the box” or beyond common sense and
standard rules.
10. Always be mindful of protecting your safety and health.

Principle 13
• Make decisions slowly by consensus, thoroughly
considering all options; implement decisions
rapidly (nemawashi).
Toyota stands out as the preeminent analyst of strategy
and tactics. Nothing is assumed. Everything is verified.
The goal is getting it right‖.

1. The Principle: Thorough Consideration in Decision Making:
• How you arrive at the decision is just as important as the quality of the
decision.
• Toyota‟s Secret to flawless implementation of new initiatives is
careful, upfront planning. Underlying the entire process of
planning, problem solving, and decision making is careful attention to
every detail.
• Thorough consideration in decision making includes 5 major elements:
1. Finding out what is really going on, including Genchi Genbutsu.
2. Understanding underlying causes that explain surface appearances
– asking “Why” 5 Times.
3. Broadly considering alternative solutions and developing a detailed
rationale for the preferred solution.
4. Building consensus within the team, including Toyota employees
and outside partners.
5. Using very efficient communication vehicles to d one through
four, preferably one side of one sheet of paper.
2. Broadly Consider Alternative Solutions with a Set-Based Approach:
• “Set-based Concurrent Engineering” – Toyota Engineers and Managers

Getting on the Same Page through Nemawashi:
• Process of “Nemawashi” – Make decisions slowly by
consensus, thoroughly considering all options; implements rapidly.
• Example: Broad circulation of ideas works in the early stages of
product development. Each design is meticulously analyzed and
countermeasures are developed through study drawings. The
completed study-drawing phase put together in a binder called the
K4 (Kozokeikaku – the study drawings that collectively address the
structure and integration of the vehicle).
• Uncovers the facts that if not considered could lead to a great deal
of pain and backtracking further down the road.
• Gets all the parties on board and supporting the decision so any
resistance is worked-out before implementing anything.
• Achieves a great deal of learning up front even before anything is
even planned or implemented.

TITLE
Grasp Background
The (Existing Value, Expectation, Policy,
4. Alternative Toyota Decision Situation Goal or Plan)
Making Methods:
Current Situation
(Analysis of Need and Contributing
Conditions)
Recommendations
PLAN (cost/Benefits)
Implementation
DO (Details of the Plan)
CHECK Follow-up
Preferred
& (Expected Results – When, How
Group they will be checked)
Consensus,
ACT
With Full
Group
Authority PLAN-DO-CHECK-ACT
Consensus,
Seek Group Management in the proposal process
Level of Involvement
Input, then Approval
Decide and
Seek Individual
Announce
Input, then
Fallback
Decide and
Decide Announce Fallback
&
Announce
Time
• Decision making is highly situational
• Philosophy is to seek maximum involvement for each situation.

5. Communicate visually on one piece of paper to arrive at
decisions.
1. CURRENT SITUATION 4. PLAN
2. PROPOSAL 5. IMPLEMENTATION
6. CONTROLS
3. ANALYSIS
7. TIMELINE
Pre-requisites to an efficient meeting
1. Clear objectives prior to the meeting.
2. The right people at the meeting.
3. Prepared participants.
4. Effective use of visual aids.
5. Separate information sharing from problem solving.
6. The meeting starts and ends on time.

Principle 14
• Become a learning organization through relentless
reflection (hansei) and continuous improvement
(kaizen).
A Learning Organization as a place where people
continually expand their capacity to create the results they
truly desire, where new and expansive patterns of thinking
are nurtured, where collective aspiration is set free, and
where people are continually learning how to learn
together.

The Principle: Identify Root Causes & Develop
Countermeasures:
• Process-oriented and invests long term in systems of
people, technology, and processes that work together to achieve
high customer value.
• Systems are work processes & appropriate procedures to
accomplish a task with the minimum amount of time & effort.
• The Right Process will Produce the Right Results – continuous
improvement (Kaizen) can only occur only after a process is stable
and standardized.
• To be a learning organization, it is necessary to have stability of
personnel, slow promotion, and very careful succession systems to
protect the organizational knowledge base.
• The Core of Kaizen – is an attitude of self-reflection and even self-
criticism, a burning desire to improve.
• The greatest sign of strength is when an individual can openly
address things that did not go right, take responsibility, and propose
countermeasures to prevent these things from happening again.

Getting to the Root Cause by Asking Five (5) Times:
• Most Problems do not call for complex statistical analysis, but instead
require painstaking, detailed problem solving.
• Toyota does not have a Six Sigma Program.
• True problem solving requires “identifying” root-cause rather than
source, the root-cause hidden behind the source.
• To keep asking until the root cause(s) are determined.
Hansei: Responsibility, Self Reflection, and Organizational
Learning:
• Hansei is a mindset, an attitude.
• Hansei and Kaizen go hand in hand.
• Hansei is the incubator for change – overcoming areas of
weaknesses, with sincerity.
• Obligatory opportunity to improve NOT “Obligatory Negative”.

“Practical Problem Solving” in Seven Steps
1. Initial Problem Perception
(large, Vague, Complicated Problem)
2. Clarify the Problem
The ―Real‖ Problem
Grasp the 3. Locate Area/Point
of Cause
Situation
POC Basic Cause and Effect
Why? Investigation
Direct Cause
Why?
Cause
Why?
Cause Why? Cause
4. Five (5) Why? Investigation
Investigation Why? Cause Of Root Cause
Cause
Root Cause
5. Countermeasure
6. Evaluate
7. Standardize

4. Process vs. Results Orientation – The Role of Metrics::
There are at least three (3) types of measures at Toyota:
1. Global Performance Measures – How is the Company Doing?
• Uses Financial, Quality and Safety Measures.
2. Operational Performance Measures – How is the Plant or
Department Doing?
• Painstakingly track progress on key metrics and compare with
aggressive targets.
• The metrics tend be specific to a process.
3. Stretch Improvement Metrics – How he Business Unit or Work
Group Doing?
• Sets stretch goals for the Corporation and translated to
business units etc.
• Tracking at the work group and project level.
• The measures are very particular to what the teams are trying
to accomplish.

5. Hoshin Kanri – Policy Deployment - Directing and Motivating
Organizational Learning:
• The Key to Organizational Learning is to Align Objectives of all
Employees toward Common Goals.
• Simply setting Specific, Measurable, Challenging Goals and then
measuring progress is highly motivating.
Target for Organization
POLICY DEPLOYMENT PROCESS (HOSHIN KANRI)
Time
Quality
Cost High Level Plan
Innovation
Improvement?
EXECUTIVE STAFF Who? Method? Plan - Do
Target? Time?
Work plan by item
MANAGER/SUPERVISOR Action
Measurement Check
Countermeasure Improvement?
WORK TEAM Method? Result?
C/Measure?
Target & Time?
ALL 3 LEVELS

Womack Jones and Roos
 Automation?
 Yes, but….
 DFM?
 Probably
 Standardized Production?
 No!
 Lean Characteristics?
 Integration of Tasks
 Identification and removal of defects
175

What is a lean enterprise?
In the book ―Lean Thinking‖, Womack & Jones define lean
manufacturing as a 5 step process: defining customer
value, defining the value stream, making it ―flow‖,
―pulling from the customer back, & striving for
excellence.
• Lean means eliminating the waste from processes.
• Lean production is expanding capacity, reducing costs &
shortening time between order & ship date.
• Lean is about understanding what is important to the
customer.
 Lean is a journey, the journey never ends.
176Toyota estimates it is only 50% waste-free.


What is a lean enterprise?
In 1996, Toyota Supplier Support Center (TSSC) agreed to
work with a sensor manufacturing US company, which was
already regarded as lean company, had won Shingo prize
& was a tour site for other companies.
In 9 months, the achievement was:
• 93% reduction in production lead time (12 days to 6.5 hrs)
• 83% reduction in WIP inventory (9 to 1.5 hrs)
• 91% reduction in FG inventory (30500 to 2890 units)
• 50% reduction in overtime (10 to 5 hrs/person/week)
• 83% improvement in productivity (2.4 to 4.5 pcs/man-hr)
Toyota discovered that: when we shorten lead time & make
productions lines flexible, we get higher quality, better customer
responsiveness, better productivity & better utilization of
177
equipment & space.

Thinking Lean
Management philosophy of continuous improvement & problem
solving by driving inventory out of the system.
Goal: Achieve the minimal level of resources to add the
necessary value in the production system.
Lean is about developing principles suitable for our organization
& diligently practicing them to achieve high performance
that continues to add value to customers.
1. Specify value: defined by the ultimate customer
2. Identify the value stream: expose the waste
3. Create flow: reduce batch size and WIP
4. Let the customer pull product thru‟ the value stream
– make only what the customer has ordered
5. Seek perfection
178
– continuously improve quality & eliminate waste

Progress Toward Lean
It is a progress toward fast, flexible processes that give customers
what they want, when they want it, at the highest quality &
affordable cost.
 Smaller lot sizes
 Increased capacity / throughput
 Higher inventory turns
 Better utilization of floor space
 Improved workplace organization
 Improved quality: reduced scrap / re-work
 Reduced inventories: RM, WIP, FG, Spare parts
 Reduced lead times
 Improved participation & morale
179Set-Up Reductions, Work Standardization


Lean vs. Traditional Manufacturing
• Less no. of equipment & people
• Less factory space for the same output
• Less WIP
• Customer Schedule Attainment
• Less defects
• High Operational Availability
• Leveled, Sequenced Production
• Less production lead time
• Functioning Supplier Partnership
• Strong Production Control Function
180

Objectives Principles
• Produce only the • Create flow production
products the customer • one piece flow
wants • machines in order of
• Produce products only at processes
the rate that the • small and inexpensive
customer wants them
equipment
• Produce with perfect • U cell layout, counter
quality
clockwise
• Produce with minimum • multi-process handling
lead time
workers
• Produce products with • easy moving/standing
only those features the
customer wants operations
181 • std operations defined

7) Improve Product Design 1) Design Flow Process
-Std product configuration -Link operations
-Standardize & reduce no. -Balance capacities
2) Total Quality Control
of parts -Re-layout for flow
-Worker responsibility
-Process design with -Reduce lot size
product design -Measure: SQC
-Reduce setup/changeover
-Quality expectations time -Enforce compliance
-Fail-safe methods
-Automatic inspection
6) Reduce Inventory
–Stores Solve Problems 3) Stabilize Schedule
–Transit -Root Cause -Level schedule
-Conveyors
-Team approach -Underutilize capacity
-Establish freeze
windows
Measure
5) Work with Vendors
Performance
-Reduce lead times
-Track trends 4) Kanban Pull
-Frequent deliveries
-Demand pull
-Project usage
-Backflush
requirements How to accomplish -Reduce lot sizes
-Quality expectations
182 JIT production

―No Problem‖ is problem
 Problems are opportunities to learn
 Hiding problems undermines the
system
Learning from the Toyota
Way

Characteristics of Effective Lean
Transformation
 Top Down Directive that this is the new way.
 Bottom-up involvement in concrete projects with
clear results.
 Develop internal experts through learning by doing.
 Expert sensei to guide the process and teach.
 Learning philosophy: every project, activity, is a
chance to learn.
 Start with value stream transformation projects.
 Build on successes to transform broader
organization and culture over time---YEARS!

Why is this hard to do?
 Traditional organizations in fire fighting
mode
 No clear vision of the future state
 culture change is hard
 Organizational change is disruptive
 Management has to change its role from
managing from the office to deeply
understanding processes!

Lean is…
“A long journey that needs commitment,
patience, long-term thinking, positive
mindset and attitude, and continuous
improvement which are merged together as
operational excellence and as a strategic
weapon.”
Let’s start the journey and Do our Best!

Cost Vs Automation
Ref. “Machine that Changed the World” Womack, Jones and Roos
187

J T. Black‟s 10 Steps
Ref; JT. Black “Factory with a Future” 1991
1. Form cells
2. Reduce setup
3. Integrate quality control
4. Integrate preventive maintenance
5. Level and balance
6. Link cells – KANBAN
7. Reduce WIP
8. Build vendor programs
9. Automate
10. Computerize
188

Demand Flow Technology‟s 9 Points
1. Product Synchronization
2. Mixed Model Process Maps
3. Sequence of Events
4. Demand at Capacity
5. Operational Cycle Time
6. Total Product Cycle Time
7. Line Balancing
8. Kanbans
9. Operational Method Sheets
189

Current Value Stream Map
190

Future Value Stream Map
191

Manufacturing System Design
Decomposition (MSDD)
ROI
Sales Costs Investments
resolving problems
quality predictable output delay reduction
192
Lower level actions

J. T. Black: 1
1. Form Cells
Sequential
operations, deco
uple operator
from
machine, parts
in
families, single
piece flow within
cell
193

J. T. Black: 2 - 4
2. Reduce Setup
Externalize setup to reduce down-time during
changeover, increases flexibility
3. Integrate quality control
Check part quality at cell, poke-yoke, stop
production when parts are bad
4. Integrate preventive maintenance
worker maintains machine, runs slower
194

Standardized Fixtures
195

J. T. Black: 5 - 8
5. Level and balance
Produce to Takt time, reduce batch sizes, smooth
production flow
6. Link cells- Kanban
Create “pull” system – “Supermarket” System
7. Reduce WIP
Make system reliable, build in mechanisms to self
correct
8. Build Vendor program
Propagate low WIP policy to your vendors, reduce
vendors, make on-time performance part of
expectation
196

Manufacturing System Design Decomposition
(MSDD)
ROI
Sales Costs Investments
resolving problems
quality predictable output delay reduction
197
Lower level actions

Example from Cochran – Minimize production disruptions

The Toyota Production System
1. Historical View
2. Performance measures
3. Elements of TPS
4. Six Eras of Manufacturing
Practice
5. Difficulties with
Implementation
199

6 Eras of Mfg Practice, Ken
McKay
1. Pioneering
2. Systemization
3. Technology and Process
4. Internal Efficiency
5. Customer Service
6. Systems Level Re-
engineering
200

Ken McKay: 1 - 3
1. Pioneering - sellers market, competition is not by
manufacturing large margins emphasize throughput not
efficiency
2. Systemization - firm grows and system gets complex gross
inefficiency becomes apparent, competition begins to make
its presence felt. Need for standard operating procedures,
demand still high, inventory used to buffer against
instabilities.
3. Technology and Process – competition is increasing, sales
are softening, manufacturing is still in early maturity and
competition is limited to firms in similar situation. Focus
shifts from increasing production rate to increasing the
amount of product per unit time.
201

Ken McKay: 4 - 6
4. Internal Efficiency - competition “cherry pickers” enter the
market they don’t offer all of the options and parts service
but focus on the 20% which yields 80% of the revenue
stream. Internal plant is put into order, problems are
pushed outside to suppliers, best in class, bench marking
identifies the silver bullet. Still using inventory to cushion
production support variety, and maintain functional
features.
5. Customer Service - talk to the customer, identify core
competency, outsource, be responsive, reduce lead
time, eliminate feature creep, focused factory etc.
6. System Level Re-engineering - firms have addressed
the internal system and factory – no more to squeeze out –
look to improving indirect and overhead, era of “mass”
customization,202supply chain development.

The Toyota Production System
1. Historical View
2. Performance measures
3. Elements of TPS
4. Six Eras of Manufacturing Practice
5. Difficulties with Implementation
203

TPS Implementation
 Physical (mc placement, standard work etc) part
 Work practices and people issues
 Supply-chain part
 Corporate Strategy
Work practices and people issues
Failed TPS attempts; GM Linden NJ, GM-Suzuki, Ontario
Canada. Successes GM NUMMI, Saturn. see MacCoby art
“Innovative” Work Practices Ref; C. Ichniowski, T. Kochan et
al “What Works at Work: Overview and Assessment”,
Industrial Relations Vol 35 No.3 (July 1996)
204

Examples of “Innovative” Work Practices
 Work Teams
 Gain Sharing
 Flexible Job Assignments
 Employment Security
 Improved Communications
205

“What Works : Overview & Assessment”,
 Conclusion 1; “Bundling”
Innovative human resource management practices
can improve business productivity, primarily through
the use of systems of related work practices
designed to enhance worker participation and
flexibility in the design of work and decentralization
of managerial tasks and responsibilities.
 Conclusion 2; “Impact”
New Systems of participatory work practices have
large economically important effects on the
performance of the businesses that adopt the new
practices. 206

“What Works : Overview & Assessment”,
 Conclusion 3; “Partial Implementation”
A majority of contemporary U.S. businesses now have
adopted some forms of innovative work practices aimed at
enhancing employee participation such as work teams,
contingent pay-for-performance compensation, or flexible
assignment of multi-skilled employees. Only a small
percentage of businesses, however, have adopted a full
system of innovative work practices composed of an
extensive set of these work practice innovations.
207

“What Works : Overview & Assessment”,
 Conclusion 4; “Barriers to Implementation”
Companies face many obstacles when changing to a system
of innovative practices, including:
• the abandonment of organization change initiatives after
limited policy changes have little effect on performance,
• fund needed to make new work practices effective,
• long histories of labor-management conflict & mistrust,
• resistance of people who may not fare as well under the
newer practices, &
• lack of a supportive institutional & public policy environment.
208

Barriers to Implementation
 Early abandonment
 Costs
 History of conflict and distrust
 Resistance of supervisors
 Lack of supportive infrastructure
209

Summary
 High quality and low cost ( and originally low volumes)
 Relationship to previous systems (see McKay paper),
yet new,………. in fact revolutionary
 Many elements
 Overall, see ”The Machine that Changed the World”
 Cells, next time
 People, see Maccoby Article
 “Autonomation” automation with a human touch
 Worker as problem solver
 TRUST
210