• The company was founded by Kiichiro Toyoda in 1937 as a spinoff from
his father’s company Toyota Industries to create automobiles. Three
years earlier, in 1934, while still a department of Toyota Industries , it
created its first product, the Type A engine, and, in 1936, its first
passenger car, the Toyota AA. Toyota Motor Corporation group
companies are Toyota (including the Scion brand), Lexus, Daihatsu and
Hino Motors, along with several "non-automotive" companies. TMC is
part of the Toyota Group, one of the largest conglomerates in the
• It is abbreviated TMC, is a multinational automaker headquartered in
Toyota, Aichi, Japan. In 2010, Toyota employed 300,734 people
worldwide, and was the second largest automobile manufacturer in
2010 by production. Toyota is the ninth largest company in the world
by revenue . In July 2012 the company reported that it had
manufactured its 200 millionth vehicle.
• The company was founded in 1937 by Kiichiro Toyoda
as a spin-off from his father's company Toyota
Industries to create automobiles.
• The Toyota Motor Corporation was founded or
established on 28 August 1937 when Toyoda Automatic
Loom created a new division devoted to the production
of automobiles under the direction of the founder's
son, Kiichiro Toyoda.
• The world headquarters of Toyota are located in its
home country in Toyota, Aichi,
• Toyota is considered luckier than Toyoda in Japan,
where eight is regarded as a lucky number, and eight is
the number of strokes it takes to write Toyota in
• To solve the problem of waste, Lean Manufacturing
has several 'tools' at its disposal. These include
continuous process improvement (kaizen), the "5
Whys" and mistake-proofing. In this way it can be
seen as taking a very similar approach to other
• There is a second approach to Lean Manufacturing
which is promoted by Toyota in which the focus is
upon implementing the 'flow' or smoothness of work
through the system and not upon 'waste reduction'
per se. Techniques to improve flow include
production leveling, "pull" production (by means of
kanban) and the Heijunka box.
Total Production System
• The practical expression of Toyota's people
and customer-oriented philosophy is known
as the Toyota Production System (TPS). This is
not a rigid company-imposed procedure but a
set of principles that have been proven in dayto-day practice over many years. Many of
these ideas have been adopted and imitated
all over the world.
GOALS OF TPS
Main goals of TPS :
1 - To design out overburden (Muri)
2 - Smooth Production (Mura)
3 - Eliminate Waste
• This production control system has been
established based on many years of continuous
improvements, with the objective of "making the
vehicles ordered by customers in the quickest and
most efficient way, in order to deliver the vehicles
as quickly as possible."
TPS has three desired
• To provide the customer with the highest
quality vehicles, at lowest possible cost, in a
timely manner with the shortest possible lead
• To provide members with work satisfaction,
job security and fair treatment.
• It gives the company flexibility to respond to
the market, achieve profit through cost
reduction activities and long-term prosperity.
Total Productive Maintenance
A main pillar of the Toyota Production System
(TPS) is Total Productive Maintenance (TPM).
The essential strategy is to eliminate the
potential of a problem. That is, eliminate a
problem before it occurs.
1. Maximizes equipment effectiveness.
2. Establishes a through system of preventative
maintenance (PM) for the equipment`s entire life span.
3. Implemented by various departments (engineering,
4. Involves every single employee- from top management to
workers on the floor.
5. Based on the promotion of productive maintenance
through workforce motivation management via
autonomous small group activities.
The Goal of Total Productive
• To achieve overall equipment effectiveness, TPM
works to eliminate the six big losses that are
formidable obstacles to equipment effectiveness:
1. Equipment failure - from breakdowns
2. Setup and adjustment - from exchange of die in
injection molding machines, etc.
3. Idling and minor stoppages - due to the abnormal
operation of sensors, blockage of work, etc.
4. Reduced speed - due to discrepancies between
designed and actual speed of equipment.
5. Process defects - due to scraps and quality defects to
6. Reduced yield - from machine start-up to production
JUST IN TIME
• In short, the just-in-time inventory system is all about
having “the right material, at the right time, at the
right place, and in the exact amount” but its
implications are broad for the implementors.
• It is perhaps not widely known that the 'just in time'
approach to production that has now gained almost
universal acceptance in world manufacturing was
actually pioneered by Toyota. In fact, a Toyota
engineer coined the term itself.
• Essentially, 'just in time' manufacturing consists of
allowing the entire production process to be
regulated by the natural laws of supply and demand.
• Customer demand stimulates production of a
vehicle. In turn the production of the vehicle
stimulates production and delivery of the necessary
parts and so on.
• The result is that the right parts and materials are
manufactured and provided in the exact amount
needed - and when and where they are needed.
• There are 7 waste.
The Seven waste
• Overproduction: Producing more than the demand for
customers resulting in unnecessary inventory, handling,
paperwork, and warehouse space.
• Waiting Time: Operators and machines waiting for
parts or work to arrive from suppliers or other
• Transportation: Double or triple movement of
materials due to poor layouts, lack of coordination and
• Processing: Poor design or inadequate maintenance or
processes requiring additional labour or machine time.
• Inventory: Excess inventory due to large lot
sizes, obsolete items, poor forecasts or
improper production planning.
• Motion: Wasted movements of people or
extra walking to get materials.
• Defects: Use of materials, labour and capacity
for production of defects, sorting our bad
parts or warranty costs with customers.
Inventory Control Techniques
• Just in Time (JIT) Inventory Control is a management
strategy that originated in Post World War II Japan and
met with remarkable success. JIT aims to eliminate waste
and cut costs through inventory reduction, continuous
improvement of product quality, and process efficiency.
• Just In Time is a management strategy based on planned
elimination of all waste and continuous improvement of
productivity. Just in Time (JIT) Inventory Control aims at
elimination of wastes related to stocking and usage of
raw materials and finished inventory.
The Origin Of Kanban
• In the 1950s, Ohno visited Detroit to learn
about auto making from the U.S.
• He was not impressed.
• He visited a supermarket, which they did not
have in Japan, and observed the way they
restocked the shelves.
• He used that method as the basis for Kanban.
• Kanban literally meaning “signboard" or “billboard," is a
concept related to lean and just in time (JIT) production.
According to its creator, Taiichi Ohno , Kanban is one means
through which JIT is achieved.
• Kanban is not an inventory control system; it is a scheduling
system that helps determine what to produce, when to
produce it, and how much to produce.
• The need to maintain a high rate of improvement led
Toyota to devise the Kanban system. Kanban became an
effective tool to support the running of the production
system as a whole. In addition, it proved to be an excellent
way for promoting improvements because reducing the
number of Kanban in circulation highlighted problem areas.
• The Kanban system uses simple cards or
signals to strictly control production
• The basic idea is that no station is permitted
to produce more than is immediately required
by the succeeding station
• This simple idea prevents the buildup of
• No computer is required!
• Limiting surplus capacity of preceding shops. Since
an automotive industry consists of multistage
processes, generally the demand for the item(the
part) becomes progressively more erratic the further
the process point.
The reasons to have employed Kanban
System instead. of computerized
system are as follows:
• Reduction of cost processing information. It calls for huge
cost to implement a system that provides production
schedule to all the processes and suppliers as well as its
alterations and adjustments by real time control.
• Rapid and precise acquisition of facts. Using Kanban
itself, managers of workshops may perceive such
continuously changing facts as production capacity,
operating rate, and man power without help of a
computer. Hence, data of schedules corresponding to the
change are accurate, which urge workshops to found
responsibility systems and to promote activities for
• Kaizen is the heart of the Toyota Production System.
• Like all mass-production systems, the Toyota process
requires that all tasks, both human and mechanical, be
very precisely defined and standardised to ensure
maximum quality, eliminate waste and improve
• Toyota Members have a responsibility not only to follow
closely these standardised work guidelines but also to
seek their continual improvement. This is simply
common sense - since it is clear that inherent
inefficiencies or problems in any procedure will always be
most apparent to those closest to the process.
• TPS strives for the absolute elimination of waste,
overburden and unevenness in all areas to allow
members to work smoothly and efficiently. The
foundations of TPS are built on standardization to
ensure a safe method of operation and a
consistent approach to quality. Toyota members
seek to continually improve their standard
processes and procedures in order to ensure
maximum quality, improve efficiency and
eliminate waste. This is known as kaizen and is
applied to every sphere of the company's
VALUE CHAIN ANALYSIS
• The value chain is a systematic approach to
examining the development of competitive
advantage. It was created by M. E. Porter in his book,
Competitive Advantage (1980).The chain consists of a
series of activities that create and build value. They
culminate in the total value delivered by an
organization. The organization is split into 'primary
activities' and 'support activities.
Toyota forecasts strong comeback
• Toyota is forecasting record sales for 2012 as it rebounds from two
natural disasters that disrupted its supply chain and production and
halved its profits this year.
• The Japanese carmaker said that it expected its worldwide sales of
Toyota and Lexus premium-brand vehicles to rise 20 per cent to
8.48m next year, from 7.05m in 2011.
• This would surpass its previous sales record of 8.43m vehicles set in
• Toyota said that the forecast did not take into account incentives for
lower-emission cars recently approved by Japan’s cabinet. The tally
does not include vehicles made by its Daihatsu and Hino
• Toyota said that it expected its global sales to increase a further 6
per cent in 2013 to 8.95m.