ITFT--Production,operations, management
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This document provides an overview of different production approaches, including mass production and the Toyota Production System (TPS). It describes how Henry Ford pioneered mass production with the Model T, using assembly lines to dramatically reduce costs. While successful, mass production resulted in inflexible production and quality issues when demand changed. The document then outlines how Toyota developed TPS, influenced by visits to American factories. TPS focuses on continuous improvement, minimizing waste, and producing only what is needed through a "pull" strategy linked to customer demand.
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ITFT--Production,operations, management
- 2. 2 OBJECTIVES Introduction to Production Function and Operations Management Mass Production Approach Toyota Production System (TPS) Approach Supply Chain Management
- 3. 3 PRODUCTION versus MANUFACTURING Production is a Broader Term that Spans both Manufacturing and Services Functions Production is the Application of Resources, People and Machinery, to Convert Inputs into Finished Goods and Services
- 4. 4 MASS PRODUCTION Mass Production: Makes Outputs available in Large Quantities at Lower Unit Costs than Individually- Crafted Items Characteristics of Mass Production Labor Specialization Mechanization Standardization
- 5. 5 ASSEMBLY LINES Assembly Line first Introduced by Eli Whitney (Cotton Gin Inventor) to build Muskets for the US Government In 1799 Used Ideas of Specialized Labor and Engineering Standards (Tolerances) to produce Assemblies from Parts in Repeatable Manner
- 6. 6 HENRY FORD Introduced Moving Assembly Line: Dramatically Reduced Manufacturing Costs While Delivering Consistent, Low-Priced Product Factory based on Chicago Meat Cutting Plants
- 7. 7 FORD MODEL “T” First Produced: October 1908 By 1927, 15,000,000 Produced Any Color so long as it’s Black…
- 8. 8 ASSEMBLY LINE BENEFITS Initially, took 14 hours to Assemble Model T - Mass Production reduced Time to 1 Hour and 33 Minutes Model T’s Price dropped from $1,000 in 1908 to $360 in 1916 Result was Ford becoming Dominant Automobile Manufacturer and Assembly Line Method as Dominant Production Approach
- 9. 9 FORD ASSEMBLY LINES Assembly Line pulled by Ropes Magneto Assembly
- 10. 10 MASS PRODUCTION MODEL “T” – Machine that Changed the World 1914: Ford produced 308,162 cars, more than all 299 other auto manufacturers combined 1927: Automobile Produced every 24 seconds Higher volumes → Lower cost → Lower Prices →Increased Sales → Higher Volumes
- 11. 11 MASS PRODUCTION “PUSH” Strategy – Driven by Inputs and Objectives Control of Raw Materials and Labor plus Profit Goals = Production Rate separate from Customer Demands and Preferences Performance measured by Budget Variances and Quantitative Results (Defects or Unit Costs per Day, Week or Month), not Quality Standards
- 12. 12 MASS PRODUCTION Low Product Variety; Small Orders Not Feasible Specialized Machinery and Centralized Manufacturing “Economies of Scale” – High-Speed Sequential Production Development Costs Spread Over Large Volume: Low Cost per Unit Produced Low-Skill/Low-Wage Work Force Large Advertising and Marketing Budgets
- 13. 13 FORD WORKING CONDITIONS Monotony of Assembly Line Work: 300% Turnover $2 per Day and a 9-Hour Shift Ford’s Response to Working Conditions Dilemma Increase Pay to $5 per Day and Reduce Shifts from 9 Hours to 8 Hours “The Chain System you have is a Slave Driver. My God, Mr. Ford! My Husband has come Home and Thrown Himself Down and won’t Eat his Supper, He’s so done out. Can’t it be Remedied? That $5-a-day is a Blessing; a Bigger One than you Know. But, Oh, They Earn It!” - Wife of Ford Assembly Line Worker
- 14. 14 MASS PRODUCTION Flaws of Mass Production Approach Production Levels cannot Stop or Slow: Defects resolved outside Production (Added Costs of Rework) Long Changeover Times limits Product Variety Erratic Finished Products Inventory Levels Incentives and 0% Financing
- 16. 16 TOYOTA’S ORIGINS 1902 Modification: Loom Stopped Automatically if Thread Broke or Spool Empty - Signal for Attention Result: No Waste from Defective Work and Lower Production Costs Toyoda Automated Loom Works
- 17. 17 TOYOTA’S ORIGINS During WWII, Toyoda became Toyota and manufactured Motorcycles and Delivery Trucks After WWII, Japanese Industry needed to re-build
- 18. 18 TOYOTA’S ORIGINS Found Mass Production Principles not Applicable: Scale of Japanese Markets Desire for Product Variety Unable to Afford Resources and Inventories 1956 – Taiichi Ohno went to US to study Ford’s Manufacturing Facilities
- 19. 19 TOYOTA’S ORIGINS Discovered Production and Operation Methods that Were Linked to Customer Actions: Inventories Replenished by Sales (“PULL” Strategy) Delivered Product Variety and Scale Minimized Waste Before returning to Japan, Ohno went to an American Grocery Store
- 20. 20 TOYOTA’S ORIGINS Toyota Exports its First Car: The Forgettable “Crown” Under-powered and Unstable at Freeway speeds, Production is stopped in 1959
- 21. 21 TOYOTA PRODUCTION SYSTEM In 1961, Toyota adopts “Systems Perspective” KAIZEN – Continuous Improvement Attitude that Minimizes Waste and Emphasizes High Quality Processes are analyzed to eliminate flaws rather than fixing defective products WASTE – Comprehensive View that includes Time, Resources and Materials Over-Production Time Spent Waiting Unnecessary Movements of Items
- 22. 22 TOYOTA PRODUCTION SYSTEM Waste is anything other than the minimum amount of equipment, materials, parts, space, and workers’ time which are absolutely essential to add value to the product. - Shoichiro Toyoda President, Toyota Motor Co.