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Presented By- 
Akshay Jain 
Pratik Agrawal 
DSIMS 1
“Toyota’s focus on JIT is a continual problem-solving process (not an 
inventory reduction plan) illustrates why the automaker is a JIT leader not 
only in its industry but all of industry.” 
“Toyota is the benchmark in manufacturing and product development” 
- General Motors Officials 
DSIMS 2
SOME BEST-PRACTICES / 
MANAGEMENT CONCEPTS 
From Western World – 
• Out-Sourcing 3PL & 4PL 
• ERP 
• Six Sigma 
• Customer Delight 
• Postponement 
• VMI 
• CPFR 
• SCOR Model 
From Japan – 
• SMED – Quick Changeover 
• Single Piece Flow 
• Employee Empowerment 
• JIT / Kanban 
• 5-S principles 
• TPM, 
• TQM 
• Poka Yoke System 
• Jidoka
Manufacturing Management Guru’s
History 
• Starts with Sakichi Toyoda who grew up in 
predominantly farming community in late 1800s. 
Weaving was a major industry promoted by the 
Japanese government. 
• By 1894, Sakichi began to make manual looms that 
were cheaper but of better quality (more features and 
less failures). 
• Sakichi Toyoda, the founder of the Toyoda group of 
companies, started Toyoda as a textile machine 
company with Japan’s first automated loom. 
• Started working on his own to develop power-driven 
loom. This approach of learning and doing yourself 
became integral part of TPS (genchi genbutsu). 
DSIMS 5
• 1902 Modification: Loom Stopped 
Automatically if Thread Broke or 
Spool Empty Signal for Attention. 
• Among his inventions was a special 
mechanism to automatically stop a 
loom whenever a thread broke – 
building in quality as you produce 
the material (Jidoka or poka-yoke). 
• Result: No Waste from Defective 
Work and Lower Production Costs 
Toyoda Automated Loom Works 
DSIMS 6
• The “mistake-proof” loom became Toyoda’s most 
popular model and in 1929, his son Kichiro, 
negotiated the sale of patent rights to Platt Brothers 
of England for £100,000. 
• In 1930, these funds were used to start building the 
Toyota Motor Corp. 
• The company was founded by Kiichiro Toyoda as a 
spin-off from his father's company Toyota Industries 
to create automobiles. 
• Headquarters of Toyota are located in its home 
country in Toyota, Aichi 
• Kichiro’s contribution to the Toyota philosophy – JIT 
Kiichiro Toyoda, 
1894-1952 
Toyota Founder 
DSIMS 7
• Not much laterWWII started. 
• During WWII, Toyoda became Toyota and 
manufactured Motorcycles and Delivery Trucks 
• AfterWWII, Japanese Industry needed to re-build 
• Post-WWII, rampant inflation meant getting paid 
by customers was very difficult. Cash-flow 
problems lead to pay cuts. 
• When situation worsened, 1600 workers were 
asked to “retire voluntarily.” and closed two 
facilities . 
• The resultant work stoppages and public 
demonstrations by workers led to resignation of 
Kichiro. Eiji Toyoda took over as president. 
• Eiji’s main contribution – leadership towards 
development of the TPS. 
Eiji Toyoda 
1957-1994 
CEO/Chairman 
DSIMS 8
• Eiji hired Taiichi Ohno as the plant manager and 
asked him to improve Toyota’s manufacturing 
process so that it equals the productivity of Ford. 
• 1956 – Taiichi Ohno went to US to study Ford’s 
Manufacturing Facilities 
• Found Mass Production Principles not Applicable: 
• Scale of Japanese Markets 
• Desire for Product Variety 
• Unable to Afford Resources and Inventories 
• Before returning to Japan, Ohno went to an 
American Grocery Store 
• Discovered Production and Operation Methods that 
• Were Linked to Customer Actions: Inventories 
Replenished by Sales (“PULL” Strategy) 
• Delivered Product Variety and Scale 
• MinimizedWaste 
Taiichi Ohno 
1954-1978 
Director/ Vice President 
DSIMS 9
• “Pull” system was implemented by Kanban cards. 
• Taiichi Ohno benchmarked the competition by visiting 
Ford and studied Henry Ford’s “book.” 
• Impressed with Ford’s philosophy of eliminating waste. 
Ford itself didn’t seem to practice it. 
• Ohno also took ideas from Deming when he was 
lecturing in Japan about quality and productivity. 
• He was THE main developer of Toyota Production 
System (TPS). 
• Toyota Exports its First Car: The Forgettable “Crown” 
1957 to USA. 
DSIMS 10
• Toyota Production System (TPS) drew wide attention from the industrial 
community because Toyota was a profitable car company in Japan during 
and after the oil embargo in 1970s. 
• Outside Japan, dissemination began in earnest with the creation of the 
Toyota-General Motors joint venture-NUMMI (New United Motor 
Manufacturing Inc.) in California in 1984. 
• Widespread recognition of TPS as the model production system grew 
rapidly with the publication in 1990 of The Machine That Changed the 
World: The Story of Lean Production, the result of five years of research 
led by the Massachusetts Institute of Technology (MIT). 
• The MIT researchers found that TPS was so much more effective and 
efficient than traditional, mass production that it represented a completely 
new paradigm and coined the term lean production to indicate this radically 
different approach to production. 
• The term was coined by John Krafcik, a research assistant at MIT with the 
International Motor Vehicle Program in the late 1980s. He then worked for 
General Motors and now is a Vice President of Hyundai, U.S. 
DSIMS 11
Toyota Production System 
“Identify activities that add value to raw material, and get rid of everything 
else.” 
In short TPS is the following: 
• Make what the customer needs, when it is needed, in the right amount 
• Minimize inventories 
• Separate machine work from human work and fully utilize the capacity of 
both 
• Build quality into the process and prevent errors from happening 
• Reduce lead-times to allow for rapid, flexible scheduling 
• Produce a high mix of low volume products efficiently 
DSIMS 12
The Toyota Way 
“4P” model 
 Philosophy (Long-term thinking) 
 Process (eliminate waste) Kaizen 
 People and partners (Respect, 
Challenge them to achieve more, 
Grow leaders) 
 Problem-solving (Continuous 
improvement and learning) Genchi 
genbutsu 
DSIMS 13
14 Toyota-Way Principles 
Section I – Long-term philosophy 
 Principle 1: Base your management decisions on a long-term philosophy, even at the 
expense of short-term financial goals. 
Section II – The Right processes will produce the right results 
 Principle 2: Create continuous process flow to bring problem to the surface. 
 Principle 3: Use “pull” system to avoid overproduction. 
 Principle 4: Level out the workload (heijunka). (work like a tortoise not the hare.) 
 Principle 5: Build the culture of stopping to fix problems to get quality right the first 
time. 
DSIMS 14
14 Toyota-Way Principles 
 Principle 6: Standardize 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. 
Section III – Add value to the organization by developing your people and partners 
 Principle 9: Grow leaders who thoroughly understand the work, live the 
philosophy, and teach it to others. 
 Principle 10: Develop exceptional people and teams who follow your 
company’s philosophy. 
DSIMS 15
14 Toyota-Way Principles 
 Principle 11: Respect your extended network of partners and suppliers by 
challenging them and helping them improve. 
Section IV – Continuously solving root problem drives organizational learning 
 Principle 12: Go and see for yourself to thoroughly understand the situation 
(genchi genbutsu). 
 Principle 13: Make decisions slowly by consensus, thoroughly considering 
all options, implement decisions rapidly. 
 Principle 14: Become a learning organization through relentless reflection 
(hensei) and continuous improvement (kaizen). 
So we see that the JIT, Lean, 5S etc. are just tools that enable quality and 
productivity. TPS is much more than that! 
DSIMS 16
The TPS house diagram 
Two main pillars: 
1. JIT (the most visible and highly 
publicized characteristics of TPS) 
2. Jidoka (never letting a defect pass 
to the next station; and freeing 
people from machines) 
Base: 
1. Heijunka – (Leveling out 
production schedule for both 
volume and variety) 
2. Kaizen (Change for better = 
continuous improvement) 
3. Standard Work (When manpower, 
equipment, and materials are used 
in the most efficient combination) 
DSIMS 17
The TPS house diagram 
• JIT means removing, as much as possible, the inventory used to buffer 
operations against problem that may arise in production. 
• The ideal one-piece flow is to make one unit at the rate of customer 
demand or takt (German for meter). 
• Using smaller buffer means quality defects become immediately visible. 
• This will reinforce Jidoka which can halt the production (Andon). 
• The production line restarts once workers resolve the problem. 
• Less inventory and the Andon forces urgency among the workers. 
DSIMS 18
The TPS house diagram 
• If the same problem happens repeatedly the management realizes the 
critical situation and invests in Total Productive Maintenance, where 
everyone learns how to clean, inspect and maintain equipment. 
• In traditional system, if the machine is down, the urgency is missing 
because the maintenance department is scheduled to fix it while 
production continues through the depletion of inventory. 
• People are the center of the house because only through continuous 
improvement can the operation ever attain the system stability. 
• People must be trained to see waste and solve problem at the root 
cause by repeatedly asking why the problem really occurs. 
DSIMS 19
Eliminating Waste (Muda) 
• First question the TPS asks is “What does the customer want from this 
process?” (both internal as well as external customers). This defines 
value. 
• Through the customer’s eyes, we can then observe the process and 
separate the value-added steps from the non-value added steps. 
• This can be applied to any process – manufacturing, or a service. 
DSIMS 20
Eliminating Waste 
• First step in removing non-value added steps from a process is to map 
the process. Map the value stream following the actual path taken by 
the part in the plant. 
• Walk the full path yourself (genchi genbutsu). 
• One can draw the path on a layout and calculate the time and distances 
traveled (spaghetti diagram). 
• Traditional cost saving focuses on value-added items and try to 
improve those. 
• TPS focuses on the entire value stream to eliminate the non-value 
adding items. 
DSIMS 21
DSIMS 22
Types of waste 
 Overproduction: Producing items for which there are no orders, 
which generates wastes such as overstaffing, storage and transportation 
costs because of excess inventory. 
 Waiting: Workers having to stand around waiting for the next 
processing step, tool, part etc. Or no work because of stock-outs, lot 
processing delays, equipment downtime, and capacity bottlenecks. 
 Unnecessary transport: Carrying WIP long distances, creating 
inefficient transport, or moving parts in and out of storage facility. 
Walking is a waste. 
 Over-processing or incorrect processing: Taking unneeded steps to 
process the parts. Inefficient processing due to poor tools and product 
design, causing unnecessary motion and producing defects. Waste 
generated when providing higher-quality products than is necessary. 
DSIMS 23
Types of waste 
 Excess inventory: Excess raw material, WIP or finished goods causing 
longer lead times, obsolescence, damaged goods. Extra inventory hides 
problems such as production imbalances, late deliveries from 
suppliers, defects, equipment downtime, and long set-ups. 
 Defects: Production of defective parts or correction. Repair or rework, 
scrap, replacement production, and inspection mean wasteful handling, 
time and efforts. 
 Unused employee creativity: Losing ideas, skills, improvements, and 
learning opportunities by not engaging or listening to your employees. 
DSIMS 24
5 S’s 
• 5 S’s is simple to begin and gives good benefits. 
• Each individual in an organization is asked to get rid of overburdening 
items. 
• Red tag attack : A red tag attack is the strategy of a group of people 
going through the plant and putting red tags on everything that has not 
been used within the last 30 days. The items that people feel are 
necessary to "hold on to" must be justified to their superior, or the item 
is taken out of the plant! 
DSIMS 25
5 S 
5 S: Important part of Kaizen/Lean Manufacturing 
The 5 S stand for: 
 Seiri - keep only what is absolutely necessary, get rid of things that you 
don't need, i.e. simplify or sort. 
 Seiton - create a location for everything, i.e. organize 
or straighten. 
 Seiso - clean everything and keep it clean, i.e. cleanliness or sweep. 
 Seiketsu - implement Seiri, Seiton and Seiso plant wide, i.e. standardize. 
 Shitsuke - assure that everyone continues to follow the rules of 5S, i.e. 
stick to it or self discipline. 
5S in the US: Sort, Straighten, Sweep, Standardize, Self Disciple 
DSIMS 27
5 S in a Factory 
Factory tour: Toyota vs. others. 
DSIMS 28
5 S in Office 
Before 5 S 
After 5 S 
DSIMS 29
Life Without 5S 
Life With 5S 
JIT - BACKGROUND AND HISTORY 
 Initially, JIT was used as a method for reducing inventories in Toyota's 
shipyards, but later it evolved into a Japanese management philosophy 
 First developed and perfected within the Toyota manufacturing plants by 
DSIMS 32 
Taiichi Ohno 
 JIT would only be successful if every individual within the organization 
was involved and committed to it 
 JIT has the capacity to strengthen the organization’s competitiveness 
 Aimed at avoiding waste, reducing inventories and increasing production 
efficiency
JUST-IN-TIME PRODUCTION SYSTEM 
DSIMS 33 
What it is 
 Management philosophy 
 'Pull' System through the plant 
What it does 
 Attacks waste (time, inventory, 
 scrap) 
 Exposes problems and 
bottlenecks 
 Achieves streamlined production 
What it requires 
 Employee participation 
 Industrial engineering/basics 
 Continuing improvement 
 Total quality control 
 Small lot sizes 
What it assumes 
 Stable environment
THE KANBAN 
 Essential component of Toyota's JIT concept. 
 Japanese referred to Kanban as a simple parts-movement system that 
depended on cards and boxes/containers to take parts from one 
workstation to another on a production line. 
 Ohno had developed the idea in 1956 from the super markets in the US. 
 Kanban developed into a sophisticated information system. 
 Ensured production in required quantities at the right time. 
 A chain process in which orders flowed from one process to another, the 
production or delivery of components was 'pulled' to the production line. 
DSIMS 34
Kanban at Toyota 
DSIMS 35
DSIMS 36
Jidoka 
• Jidoka is a method to detect defects when they occur and automatically 
stop production so an employee can fix the problem before the defect 
continues downstream. 
• Jidoka is also referred to as autonomation – equipment endowed with 
human intelligence to stop itself when it has a problem. 
• In-station quality is much more effective and less costly than inspecting 
and repairing quality problem after the fact. 
• Lean manufacturing dramatically increases the importance of building 
things right the first time. 
• With very low levels of inventory, there is little buffer to fall back on in 
case there is quality problem. 
DSIMS 37
Andon System 
• When the equipment shuts down because of a quality 
problem, flags or light, usually with accompanying 
music, signal that help is needed to solve the problem. 
• This signaling system is called the Andon system. 
• At Toyota, the Andon is called a “fixed-position line 
stop system.” 
• When a workstation in the assembly line signals a 
problem, the production line is not stopped 
immediately. 
• The manufacturing team has until the product moves to 
the next workstation to respond and address the 
problem, before the Andon turns red and stops the 
assembly line. 
DSIMS 38
Andon System 
DSIMS 39
Andon System 
• If the problem is small enough that can be solved in the lead-time 
between two workstation, 100% quality is achieved 
without stopping the line. 
• If the problem is complex, the team leader can conclude that 
the line should stop. 
• In TPS, the workstation detects the defects by using 
countermeasures and error-proofing (poka-yoke). 
• Applications of Andon system to service organizations like 
call-center are obvious! 
DSIMS 40
The Five Steps of Lean Production/TPS 
Implementation 
Step 1: Specify Value 
Define value from the perspective of the final customer. Express value in 
terms of a specific product, which meets the customer's needs at a specific 
price and at a specific time. 
Step 2: Value Stream Mapping. 
Identify the value stream, the set of all specific actions required to bring a 
specific product through the three critical management tasks of any 
business: the problem-solving task, the information management task, and 
the physical transformation task. Create a map of the Current State and the 
Future State of the value stream. Identify and categorize waste in the 
Current State, and eliminate it. 
DSIMS 41
The Five Steps of Lean Production/TPS 
Implementation 
DSIMS 42 
Step 3: Create Continuous Flow 
Make the remaining steps in the value stream flow. Eliminate functional 
barriers and develop a product-focused organization that dramatically 
improves lead-time. 
Step 4: Create Pull Production 
Let the customer pull products as needed. 
Step 5: Perfection 
There is no end to the process of reducing effort, time, space, cost, and 
mistakes. Return to the first step and begin the next lean transformation, 
offering a product which is ever more nearly what the customer wants.
Traditional process improvement vs. 
TPS 
• Traditional approach focuses on identifying local efficiencies. “Go to 
the equipment, the value-added processes, and improve uptime, or 
make the cycle faster, or replace the person with automated 
equipment.” 
• In TPS, large number of non-value-added steps are squeezed out. 
• One way to achieve this is through cell formation (cellular 
manufacturing), which should ideally result in one-piece flow of 
products or services. 
DSIMS 43
One Piece Flow Production Cell 
15 
• First good Computer ready in 3 minutes 
• 10 completed in 12 minutes 
• Only 2 sub-assemblies in process at a time 
• Only 2 minutes to discover a defect in the testing 
department. 
• Only 2 parts assembled may have the same defect if it 
occurred in the base department
Benefits of One-Piece Flow 
• Builds in quality – Every operator is an inspector and works to fix problems 
in station before passing them on. If defects do get passed on, they are 
detected quickly and problem can be immediately diagnosed and corrected. 
• Creates flexibility – If shorter lead times, more flexibility to respond and 
make what customer really wants. Pushes for set-up time reduction. 
• Creates higher productivity – Every easy to spot the busy or idle station and 
easier to calculate the value-added work. 
• Frees up floor space – Because of inventory storage reduction. 
• Improves safety – Smaller batches means simpler transportation system and 
less accidents because of forklifts. 
• Improves morale – People do high percentage value-added work and can see 
the results of their work faster. 
• Reduces cost of inventory – Obvious! 
45
One Piece Flow 
Batch Single Piece Flow 
Catches Defects too Late 
• How many more do you have? 
•Where are they in the process? 
•What is the root cause? 
Catches Defects Immediately 
• You only have one 
• You know where it occurred 
• Resolve the root cause immediately 
The Next Process is the Customer … Never Send Defects !
Continuous Flow Production 
Traditional Flow 
Flow with JIT 
Customers 
Suppliers 
Customers 
Suppliers 
Production Process (stream of 
water) 
Inventory (stagnant ponds) 
Material 
(water in stream) 
DSIMS 47
Ford vs. Toyota 
• Ford’s mass production system was designed to make huge quantities of 
DSIMS 48 
limited number of models. 
• Toyota needed a system to make low volumes of different models using 
the same assembly line. 
• Ford had cash and a large market. 
• Toyota needed to turn cash around quickly. 
• Toyota didn’t have the resources for huge volumes of inventory and 
economies of scale and afforded by Ford’s mass production system.
Ford vs. Toyota 
• The mass production system was focused on short-term costs. 
• “Make bigger machines and through economies of scale drive down 
cost.” 
• “Automate to replace people if it can be justified in terms of cost.” 
• Then the business world got the quality religion from Deming, Juran, 
Ishikawa and other quality gurus. 
DSIMS 49
Ford vs. Toyota 
• Combining these Toyota developed the TPS which focused on speed in the 
supply chain: 
• “Shortening lead time by eliminating waste in each step of a process leads 
to best quality and lowest cost, while improving safety and morale.” 
• Toyota system demonstrates that focusing on quality actually reduced cost 
more than focusing only on cost. 
DSIMS 50
THE TOYOTA WAY 
The Lessons and 
Secrets of Toyota way 
It creates bonds among individual and patterns such that they 
“move to fit together just right, working together” towards a common 
goal. 
Creating a WHOLE much greater and stronger than the SUM of 
the individuals 
DSIMS 51
Companies who have implemented 5 S: 
o Toyota 
o Bosch 
o Mahindra & Mahindra 
o Suzuki 
o The list is endless …
Companies currently using JIT 
DSIMS 53 
o Harley Davidson 
o Toyota Motor Company 
o General Motors 
o Ford Motor Company 
o Manufacturing Magic 
o Hawthorne Management Consulting 
o Strategy Manufacturing Inc.
Reference 
• Book:- The Toyota Way 
• Wikipedia, Toyota Motor Co., Shmula.com 
• http://www.toyota-global.com/ 
Videos 
• https://www.youtube.com/watch?v=kce2L23yLcw 
• https://www.youtube.com/watch?v=T5zcCk-uF3g 
• https://www.youtube.com/watch?v=UEJHpE86MJo 
• https://www.youtube.com/watch?v=Qvbly2i5dB4 
DSIMS 54
Quizz…… 
1. What automobile company did the lean production philosophy 
DSIMS 55 
originate from? 
a. Volkswagon 
b. Toyota 
2. What is Taiichi Ohno's claim to fame? 
a. He's considered the father of the Toyota Production System. 
b. He's considered the father of agile production.
3. Product and finances are two of the flows of supply chain management 
-- what's the third? 
a. waste 
b. information 
4. Which comes first in the Toyota mission statement? 
a. Velocity 
b. Quality 
c. Profit 
d. cost reduction
5. What is the objective of the Toyota Production System and Lean 
Manufacturing? 
a. to reduce cost 
b. to improve profit 
c. to eliminate everything that does not add value for the customer 
d. to optimize capital investment 
6. JIT is a philosophy of 
a. re-engineering for breakthrough. 
b. push production. 
c. variability increase. 
d. waste reduction.
DSIMS 58

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Toyota production system

  • 1. Presented By- Akshay Jain Pratik Agrawal DSIMS 1
  • 2. “Toyota’s focus on JIT is a continual problem-solving process (not an inventory reduction plan) illustrates why the automaker is a JIT leader not only in its industry but all of industry.” “Toyota is the benchmark in manufacturing and product development” - General Motors Officials DSIMS 2
  • 3. SOME BEST-PRACTICES / MANAGEMENT CONCEPTS From Western World – • Out-Sourcing 3PL & 4PL • ERP • Six Sigma • Customer Delight • Postponement • VMI • CPFR • SCOR Model From Japan – • SMED – Quick Changeover • Single Piece Flow • Employee Empowerment • JIT / Kanban • 5-S principles • TPM, • TQM • Poka Yoke System • Jidoka
  • 5. History • Starts with Sakichi Toyoda who grew up in predominantly farming community in late 1800s. Weaving was a major industry promoted by the Japanese government. • By 1894, Sakichi began to make manual looms that were cheaper but of better quality (more features and less failures). • Sakichi Toyoda, the founder of the Toyoda group of companies, started Toyoda as a textile machine company with Japan’s first automated loom. • Started working on his own to develop power-driven loom. This approach of learning and doing yourself became integral part of TPS (genchi genbutsu). DSIMS 5
  • 6. • 1902 Modification: Loom Stopped Automatically if Thread Broke or Spool Empty Signal for Attention. • Among his inventions was a special mechanism to automatically stop a loom whenever a thread broke – building in quality as you produce the material (Jidoka or poka-yoke). • Result: No Waste from Defective Work and Lower Production Costs Toyoda Automated Loom Works DSIMS 6
  • 7. • The “mistake-proof” loom became Toyoda’s most popular model and in 1929, his son Kichiro, negotiated the sale of patent rights to Platt Brothers of England for £100,000. • In 1930, these funds were used to start building the Toyota Motor Corp. • The company was founded by Kiichiro Toyoda as a spin-off from his father's company Toyota Industries to create automobiles. • Headquarters of Toyota are located in its home country in Toyota, Aichi • Kichiro’s contribution to the Toyota philosophy – JIT Kiichiro Toyoda, 1894-1952 Toyota Founder DSIMS 7
  • 8. • Not much laterWWII started. • During WWII, Toyoda became Toyota and manufactured Motorcycles and Delivery Trucks • AfterWWII, Japanese Industry needed to re-build • Post-WWII, rampant inflation meant getting paid by customers was very difficult. Cash-flow problems lead to pay cuts. • When situation worsened, 1600 workers were asked to “retire voluntarily.” and closed two facilities . • The resultant work stoppages and public demonstrations by workers led to resignation of Kichiro. Eiji Toyoda took over as president. • Eiji’s main contribution – leadership towards development of the TPS. Eiji Toyoda 1957-1994 CEO/Chairman DSIMS 8
  • 9. • Eiji hired Taiichi Ohno as the plant manager and asked him to improve Toyota’s manufacturing process so that it equals the productivity of Ford. • 1956 – Taiichi Ohno went to US to study Ford’s Manufacturing Facilities • Found Mass Production Principles not Applicable: • Scale of Japanese Markets • Desire for Product Variety • Unable to Afford Resources and Inventories • Before returning to Japan, Ohno went to an American Grocery Store • Discovered Production and Operation Methods that • Were Linked to Customer Actions: Inventories Replenished by Sales (“PULL” Strategy) • Delivered Product Variety and Scale • MinimizedWaste Taiichi Ohno 1954-1978 Director/ Vice President DSIMS 9
  • 10. • “Pull” system was implemented by Kanban cards. • Taiichi Ohno benchmarked the competition by visiting Ford and studied Henry Ford’s “book.” • Impressed with Ford’s philosophy of eliminating waste. Ford itself didn’t seem to practice it. • Ohno also took ideas from Deming when he was lecturing in Japan about quality and productivity. • He was THE main developer of Toyota Production System (TPS). • Toyota Exports its First Car: The Forgettable “Crown” 1957 to USA. DSIMS 10
  • 11. • Toyota Production System (TPS) drew wide attention from the industrial community because Toyota was a profitable car company in Japan during and after the oil embargo in 1970s. • Outside Japan, dissemination began in earnest with the creation of the Toyota-General Motors joint venture-NUMMI (New United Motor Manufacturing Inc.) in California in 1984. • Widespread recognition of TPS as the model production system grew rapidly with the publication in 1990 of The Machine That Changed the World: The Story of Lean Production, the result of five years of research led by the Massachusetts Institute of Technology (MIT). • The MIT researchers found that TPS was so much more effective and efficient than traditional, mass production that it represented a completely new paradigm and coined the term lean production to indicate this radically different approach to production. • The term was coined by John Krafcik, a research assistant at MIT with the International Motor Vehicle Program in the late 1980s. He then worked for General Motors and now is a Vice President of Hyundai, U.S. DSIMS 11
  • 12. Toyota Production System “Identify activities that add value to raw material, and get rid of everything else.” In short TPS is the following: • Make what the customer needs, when it is needed, in the right amount • Minimize inventories • Separate machine work from human work and fully utilize the capacity of both • Build quality into the process and prevent errors from happening • Reduce lead-times to allow for rapid, flexible scheduling • Produce a high mix of low volume products efficiently DSIMS 12
  • 13. The Toyota Way “4P” model  Philosophy (Long-term thinking)  Process (eliminate waste) Kaizen  People and partners (Respect, Challenge them to achieve more, Grow leaders)  Problem-solving (Continuous improvement and learning) Genchi genbutsu DSIMS 13
  • 14. 14 Toyota-Way Principles Section I – Long-term philosophy  Principle 1: Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. Section II – The Right processes will produce the right results  Principle 2: Create continuous process flow to bring problem to the surface.  Principle 3: Use “pull” system to avoid overproduction.  Principle 4: Level out the workload (heijunka). (work like a tortoise not the hare.)  Principle 5: Build the culture of stopping to fix problems to get quality right the first time. DSIMS 14
  • 15. 14 Toyota-Way Principles  Principle 6: Standardize 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. Section III – Add value to the organization by developing your people and partners  Principle 9: Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.  Principle 10: Develop exceptional people and teams who follow your company’s philosophy. DSIMS 15
  • 16. 14 Toyota-Way Principles  Principle 11: Respect your extended network of partners and suppliers by challenging them and helping them improve. Section IV – Continuously solving root problem drives organizational learning  Principle 12: Go and see for yourself to thoroughly understand the situation (genchi genbutsu).  Principle 13: Make decisions slowly by consensus, thoroughly considering all options, implement decisions rapidly.  Principle 14: Become a learning organization through relentless reflection (hensei) and continuous improvement (kaizen). So we see that the JIT, Lean, 5S etc. are just tools that enable quality and productivity. TPS is much more than that! DSIMS 16
  • 17. The TPS house diagram Two main pillars: 1. JIT (the most visible and highly publicized characteristics of TPS) 2. Jidoka (never letting a defect pass to the next station; and freeing people from machines) Base: 1. Heijunka – (Leveling out production schedule for both volume and variety) 2. Kaizen (Change for better = continuous improvement) 3. Standard Work (When manpower, equipment, and materials are used in the most efficient combination) DSIMS 17
  • 18. The TPS house diagram • JIT means removing, as much as possible, the inventory used to buffer operations against problem that may arise in production. • The ideal one-piece flow is to make one unit at the rate of customer demand or takt (German for meter). • Using smaller buffer means quality defects become immediately visible. • This will reinforce Jidoka which can halt the production (Andon). • The production line restarts once workers resolve the problem. • Less inventory and the Andon forces urgency among the workers. DSIMS 18
  • 19. The TPS house diagram • If the same problem happens repeatedly the management realizes the critical situation and invests in Total Productive Maintenance, where everyone learns how to clean, inspect and maintain equipment. • In traditional system, if the machine is down, the urgency is missing because the maintenance department is scheduled to fix it while production continues through the depletion of inventory. • People are the center of the house because only through continuous improvement can the operation ever attain the system stability. • People must be trained to see waste and solve problem at the root cause by repeatedly asking why the problem really occurs. DSIMS 19
  • 20. Eliminating Waste (Muda) • First question the TPS asks is “What does the customer want from this process?” (both internal as well as external customers). This defines value. • Through the customer’s eyes, we can then observe the process and separate the value-added steps from the non-value added steps. • This can be applied to any process – manufacturing, or a service. DSIMS 20
  • 21. Eliminating Waste • First step in removing non-value added steps from a process is to map the process. Map the value stream following the actual path taken by the part in the plant. • Walk the full path yourself (genchi genbutsu). • One can draw the path on a layout and calculate the time and distances traveled (spaghetti diagram). • Traditional cost saving focuses on value-added items and try to improve those. • TPS focuses on the entire value stream to eliminate the non-value adding items. DSIMS 21
  • 23. Types of waste  Overproduction: Producing items for which there are no orders, which generates wastes such as overstaffing, storage and transportation costs because of excess inventory.  Waiting: Workers having to stand around waiting for the next processing step, tool, part etc. Or no work because of stock-outs, lot processing delays, equipment downtime, and capacity bottlenecks.  Unnecessary transport: Carrying WIP long distances, creating inefficient transport, or moving parts in and out of storage facility. Walking is a waste.  Over-processing or incorrect processing: Taking unneeded steps to process the parts. Inefficient processing due to poor tools and product design, causing unnecessary motion and producing defects. Waste generated when providing higher-quality products than is necessary. DSIMS 23
  • 24. Types of waste  Excess inventory: Excess raw material, WIP or finished goods causing longer lead times, obsolescence, damaged goods. Extra inventory hides problems such as production imbalances, late deliveries from suppliers, defects, equipment downtime, and long set-ups.  Defects: Production of defective parts or correction. Repair or rework, scrap, replacement production, and inspection mean wasteful handling, time and efforts.  Unused employee creativity: Losing ideas, skills, improvements, and learning opportunities by not engaging or listening to your employees. DSIMS 24
  • 25. 5 S’s • 5 S’s is simple to begin and gives good benefits. • Each individual in an organization is asked to get rid of overburdening items. • Red tag attack : A red tag attack is the strategy of a group of people going through the plant and putting red tags on everything that has not been used within the last 30 days. The items that people feel are necessary to "hold on to" must be justified to their superior, or the item is taken out of the plant! DSIMS 25
  • 26.
  • 27. 5 S 5 S: Important part of Kaizen/Lean Manufacturing The 5 S stand for:  Seiri - keep only what is absolutely necessary, get rid of things that you don't need, i.e. simplify or sort.  Seiton - create a location for everything, i.e. organize or straighten.  Seiso - clean everything and keep it clean, i.e. cleanliness or sweep.  Seiketsu - implement Seiri, Seiton and Seiso plant wide, i.e. standardize.  Shitsuke - assure that everyone continues to follow the rules of 5S, i.e. stick to it or self discipline. 5S in the US: Sort, Straighten, Sweep, Standardize, Self Disciple DSIMS 27
  • 28. 5 S in a Factory Factory tour: Toyota vs. others. DSIMS 28
  • 29. 5 S in Office Before 5 S After 5 S DSIMS 29
  • 32. JIT - BACKGROUND AND HISTORY  Initially, JIT was used as a method for reducing inventories in Toyota's shipyards, but later it evolved into a Japanese management philosophy  First developed and perfected within the Toyota manufacturing plants by DSIMS 32 Taiichi Ohno  JIT would only be successful if every individual within the organization was involved and committed to it  JIT has the capacity to strengthen the organization’s competitiveness  Aimed at avoiding waste, reducing inventories and increasing production efficiency
  • 33. JUST-IN-TIME PRODUCTION SYSTEM DSIMS 33 What it is  Management philosophy  'Pull' System through the plant What it does  Attacks waste (time, inventory,  scrap)  Exposes problems and bottlenecks  Achieves streamlined production What it requires  Employee participation  Industrial engineering/basics  Continuing improvement  Total quality control  Small lot sizes What it assumes  Stable environment
  • 34. THE KANBAN  Essential component of Toyota's JIT concept.  Japanese referred to Kanban as a simple parts-movement system that depended on cards and boxes/containers to take parts from one workstation to another on a production line.  Ohno had developed the idea in 1956 from the super markets in the US.  Kanban developed into a sophisticated information system.  Ensured production in required quantities at the right time.  A chain process in which orders flowed from one process to another, the production or delivery of components was 'pulled' to the production line. DSIMS 34
  • 35. Kanban at Toyota DSIMS 35
  • 37. Jidoka • Jidoka is a method to detect defects when they occur and automatically stop production so an employee can fix the problem before the defect continues downstream. • Jidoka is also referred to as autonomation – equipment endowed with human intelligence to stop itself when it has a problem. • In-station quality is much more effective and less costly than inspecting and repairing quality problem after the fact. • Lean manufacturing dramatically increases the importance of building things right the first time. • With very low levels of inventory, there is little buffer to fall back on in case there is quality problem. DSIMS 37
  • 38. Andon System • When the equipment shuts down because of a quality problem, flags or light, usually with accompanying music, signal that help is needed to solve the problem. • This signaling system is called the Andon system. • At Toyota, the Andon is called a “fixed-position line stop system.” • When a workstation in the assembly line signals a problem, the production line is not stopped immediately. • The manufacturing team has until the product moves to the next workstation to respond and address the problem, before the Andon turns red and stops the assembly line. DSIMS 38
  • 40. Andon System • If the problem is small enough that can be solved in the lead-time between two workstation, 100% quality is achieved without stopping the line. • If the problem is complex, the team leader can conclude that the line should stop. • In TPS, the workstation detects the defects by using countermeasures and error-proofing (poka-yoke). • Applications of Andon system to service organizations like call-center are obvious! DSIMS 40
  • 41. The Five Steps of Lean Production/TPS Implementation Step 1: Specify Value Define value from the perspective of the final customer. Express value in terms of a specific product, which meets the customer's needs at a specific price and at a specific time. Step 2: Value Stream Mapping. Identify the value stream, the set of all specific actions required to bring a specific product through the three critical management tasks of any business: the problem-solving task, the information management task, and the physical transformation task. Create a map of the Current State and the Future State of the value stream. Identify and categorize waste in the Current State, and eliminate it. DSIMS 41
  • 42. The Five Steps of Lean Production/TPS Implementation DSIMS 42 Step 3: Create Continuous Flow Make the remaining steps in the value stream flow. Eliminate functional barriers and develop a product-focused organization that dramatically improves lead-time. Step 4: Create Pull Production Let the customer pull products as needed. Step 5: Perfection There is no end to the process of reducing effort, time, space, cost, and mistakes. Return to the first step and begin the next lean transformation, offering a product which is ever more nearly what the customer wants.
  • 43. Traditional process improvement vs. TPS • Traditional approach focuses on identifying local efficiencies. “Go to the equipment, the value-added processes, and improve uptime, or make the cycle faster, or replace the person with automated equipment.” • In TPS, large number of non-value-added steps are squeezed out. • One way to achieve this is through cell formation (cellular manufacturing), which should ideally result in one-piece flow of products or services. DSIMS 43
  • 44. One Piece Flow Production Cell 15 • First good Computer ready in 3 minutes • 10 completed in 12 minutes • Only 2 sub-assemblies in process at a time • Only 2 minutes to discover a defect in the testing department. • Only 2 parts assembled may have the same defect if it occurred in the base department
  • 45. Benefits of One-Piece Flow • Builds in quality – Every operator is an inspector and works to fix problems in station before passing them on. If defects do get passed on, they are detected quickly and problem can be immediately diagnosed and corrected. • Creates flexibility – If shorter lead times, more flexibility to respond and make what customer really wants. Pushes for set-up time reduction. • Creates higher productivity – Every easy to spot the busy or idle station and easier to calculate the value-added work. • Frees up floor space – Because of inventory storage reduction. • Improves safety – Smaller batches means simpler transportation system and less accidents because of forklifts. • Improves morale – People do high percentage value-added work and can see the results of their work faster. • Reduces cost of inventory – Obvious! 45
  • 46. One Piece Flow Batch Single Piece Flow Catches Defects too Late • How many more do you have? •Where are they in the process? •What is the root cause? Catches Defects Immediately • You only have one • You know where it occurred • Resolve the root cause immediately The Next Process is the Customer … Never Send Defects !
  • 47. Continuous Flow Production Traditional Flow Flow with JIT Customers Suppliers Customers Suppliers Production Process (stream of water) Inventory (stagnant ponds) Material (water in stream) DSIMS 47
  • 48. Ford vs. Toyota • Ford’s mass production system was designed to make huge quantities of DSIMS 48 limited number of models. • Toyota needed a system to make low volumes of different models using the same assembly line. • Ford had cash and a large market. • Toyota needed to turn cash around quickly. • Toyota didn’t have the resources for huge volumes of inventory and economies of scale and afforded by Ford’s mass production system.
  • 49. Ford vs. Toyota • The mass production system was focused on short-term costs. • “Make bigger machines and through economies of scale drive down cost.” • “Automate to replace people if it can be justified in terms of cost.” • Then the business world got the quality religion from Deming, Juran, Ishikawa and other quality gurus. DSIMS 49
  • 50. Ford vs. Toyota • Combining these Toyota developed the TPS which focused on speed in the supply chain: • “Shortening lead time by eliminating waste in each step of a process leads to best quality and lowest cost, while improving safety and morale.” • Toyota system demonstrates that focusing on quality actually reduced cost more than focusing only on cost. DSIMS 50
  • 51. THE TOYOTA WAY The Lessons and Secrets of Toyota way It creates bonds among individual and patterns such that they “move to fit together just right, working together” towards a common goal. Creating a WHOLE much greater and stronger than the SUM of the individuals DSIMS 51
  • 52. Companies who have implemented 5 S: o Toyota o Bosch o Mahindra & Mahindra o Suzuki o The list is endless …
  • 53. Companies currently using JIT DSIMS 53 o Harley Davidson o Toyota Motor Company o General Motors o Ford Motor Company o Manufacturing Magic o Hawthorne Management Consulting o Strategy Manufacturing Inc.
  • 54. Reference • Book:- The Toyota Way • Wikipedia, Toyota Motor Co., Shmula.com • http://www.toyota-global.com/ Videos • https://www.youtube.com/watch?v=kce2L23yLcw • https://www.youtube.com/watch?v=T5zcCk-uF3g • https://www.youtube.com/watch?v=UEJHpE86MJo • https://www.youtube.com/watch?v=Qvbly2i5dB4 DSIMS 54
  • 55. Quizz…… 1. What automobile company did the lean production philosophy DSIMS 55 originate from? a. Volkswagon b. Toyota 2. What is Taiichi Ohno's claim to fame? a. He's considered the father of the Toyota Production System. b. He's considered the father of agile production.
  • 56. 3. Product and finances are two of the flows of supply chain management -- what's the third? a. waste b. information 4. Which comes first in the Toyota mission statement? a. Velocity b. Quality c. Profit d. cost reduction
  • 57. 5. What is the objective of the Toyota Production System and Lean Manufacturing? a. to reduce cost b. to improve profit c. to eliminate everything that does not add value for the customer d. to optimize capital investment 6. JIT is a philosophy of a. re-engineering for breakthrough. b. push production. c. variability increase. d. waste reduction.