The project describes the production system adopted by toyota and the supply chain management they use for it.

1. Toyota Production System
Supply Chain Management Project
Submitted by:
Udit Jain (13DM206)
Sreevatsan Natrajan (13DM196)
Tarun Mangal (13DM204)
Shruti Mittal (13DM180)
Sonakshi Govil (13DM186)
Vanshika Gupta (13DM212)

2. Table of Contents
TOYOTA PRODUCTION SYSTEM..............................................................................................1
THE ORIGIN OF THE TOYOTA PRODUCTION SYSTEM..........................................................1
PILLARS OF TPS.........................................................................................................................2
Standardization .........................................................................................................................2
Just-in-Time...............................................................................................................................2
Kanban System..........................................................................................................................3
Jidoka........................................................................................................................................4
Kaizen.......................................................................................................................................4
TPS OBJECTIVES........................................................................................................................4
TOYOTA PRODUCTION SYSTEM (TPS) TERMINOLOGY........................................................5
ADVANTAGES OF TPS.............................................................................................................10
DISADVANTAGES....................................................................................................................10
High Cost of Implementation....................................................................................................11
Lack of Acceptance by Employees.............................................................................................11
Customer Dissatisfaction Problems...........................................................................................12
TPS-REASON OF SUCCESS FOR TOYOTA..............................................................................12
CONCLUSION...........................................................................................................................13

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TOYOTA PRODUCTIONSYSTEM
Toyota Motor Corporation's vehicle production system is a way of "making things" which is
also known as a "lean manufacturing system" or a "Just-in-Time (JIT) system. This
production control system has been established based on many years of continuous
improvements, to achieve the objective of "making the vehicles ordered by customers in the
quickest and most efficient way, and to deliver the vehicles as quickly as possible."It is the
practical expression of Toyota's people and customer-oriented philosophy.
TPS has three desired outcomes:
 To provide the customer with the highest quality vehicles, at lowest possible cost, in a timely
manner with the shortest possible lead times.
 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.
TPS strives for the absolute elimination of waste, overburden and unevenness in all areas to
allow members to work smoothly and efficiently.
THE ORIGIN OF THE TOYOTA PRODUCTIONSYSTEM
The TPS has evolved through many years of trial and error to improve efficiency based on the
Just-in-Time concept developed by Kiichiro Toyoda, the founder (and second president) of
Toyota Motor Corporation.
The automatic loom invented by Sakichi Toyoda not only automated work which used to be
performed manually but also built the capability to make judgments into the machine itself.
By eliminating both defective products and the associated wasteful practices, Sakichi
succeeded in tremendously improving both productivity and work efficiency.
Kiichiro Toyoda, who inherited this philosophy, set out to realize his belief that "the ideal
conditions for making things are created when machines, facilities, and people work together
to add value without generating any waste." He conceived methodologies and techniques for

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eliminating waste between operations, between both lines and processes. The result was the
Just-in-Time method.
By practicing the philosophies of "Daily Improvements" and "Good Thinking, Good
Products," the TPS has evolved into a world-renowned production system. Furthermore, all
Toyota production divisions are making improvements to the TPS day and night to ensure its
continued evolution.
Recently, the "Toyota spirit of making things" is referred to as the "Toyota Way." It has been
adopted not only by companies inside Japan and within the automotive industry, but in
production activities worldwide, and continues to evolve globally
PILLARS OF TPS
1. Standardization
2. Just in Time Manufacturing
3. Lean Kaizen
4. Jidoka or Autonomation
5. Total Productive Maintenance
Standardization
The foundations of TPS are built on one of the pillars of TPS- standardisation 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 activities.
Just-in-Time
"Just-in-Time" means making "only what is needed, when it is needed, and in the amount
needed." For example, to efficiently produce a large number of equipments, which can consist
of around 30,000 parts, it is necessary to create a detailed production plan that includes parts
procurement. Supplying "what is needed, when it is needed, and in the amount needed"

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according to this production plan can eliminate waste, inconsistencies, and unreasonable
requirements, resulting in improved productivity.
Kanban System
In the TPS (Toyota Production System), a unique production control method called the
"kanban system" plays an integral role. The kanban system has also been called the
"Supermarket method" because the idea behind it was borrowed from supermarkets. Such
mass merchandizing stores use product control cards upon which product-related information,
such as a product's name, code and storage location, are entered. Because Toyota employed
kanban signs for use in their production processes, the method came to be called the "kanban
system." At Toyota, when a process refers to a preceding process to retrieve parts, it uses a
kanban to communicate which parts have been used.
Two kinds of kanban (the production instruction kanban and the parts retrieval kanban) are
used for managing parts.

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Jidoka
The term jidoka used in the TPS (Toyota Production System) can be defined as "automation
with a human touch." The word jidoka traces its roots to the invention of the automatic loom
by Sakichi Toyoda..
The Toyota term "jido" is applied to a machine with a built-in device for making judgments,
whereas the regular Japanese term "jido" (automation) is simply applied to a machine that
moves on its own. Jidoka refers to "automation with a human touch," as opposed to a machine
that simply moves under the monitoring and supervision of an operator.
Since the loom stopped when a problem arose, no defective products were produced. This
meant that a single operator could be put in charge of numerous looms, resulting in a
tremendous improvement in productivity.
Kaizen
Muda (non-value added) exist everywhere related to people, material and facilities, or the
production set-up itself. Kaizen refers to the series of activities whereby instances of Muda
are eliminated one by one at minimal cost, by workers pooling their wisdom and increasing
efficiency in a timely manner. Kaizen activities typically emphasize manual work operations
rather than equipment. Also, Kaizen is not an activity to be performed by a specialist, but can
be – in fact should be – performed by all employees at each job site.
TPS OBJECTIVES
 Reduce cost by the elimination of waste- good products that are safer and lower in cost.
 Make it easier to obtain and guarantee good quality.
 Based on teamwork and respect for human life, create a workplace where all can fulfill
their potential.

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 Build a lean production system capable of responding immediately to changes in the
market.
TOYOTA PRODUCTIONSYSTEM (TPS)TERMINOLOGY
Andon
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.
Often in the form of an electrical board which lights up to show at a glance the current state
of work operations. Andon boards allow speedy corrective action to be taken by supervisors
when a problem arises.
Continuous Flow Processing
It is one of the three basic requirements of Just-In-Time. This means eliminating the
stagnation of work in and between processes and carrying out one-piece-at-a time production.
Cycle Time
It is the total amount of time required for a worker to complete one cycle of his entire job
process, including manual working time and walking time.
Fill-Up System
A system that modifies preceding production processes to keep a minimum inventory of
finished parts, and produce only enough to replace, or fill-up those parts withdrawn by the
following process.
Five “whys”
The so-called 5Ws and 1 H (who, what, where, when why and how) are used in analyzing
production processes. To search for the true cause of problems, instead of asking “why” once,
it is repeated five times.

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Hoshi Kanri
Goals (with targets) and means for achieving it to address business priorities and to move the
organization to a new level of performance; variable from year-to-year; could also be multi-
year; and is developed by executive management.
Jishuken
Management driven kaizen activity where management members identify areas in need of
continuous improvement and spread information through the organization to stimulate kaizen
activity.
Labor Savings
Partial replacement of manual labor by machines. The savings on labor; however, is not to the
extent of saving one unit of manpower.
Nemawashi
Preliminary work to involve other sections/departments in discussion to seek input,
information and/or support for a proposal or change (policy, etc.) that would affect them.Also
means to “prepare the soil.”
Muda (non-value added)
Muda (non-value added – usually translated as waste) refers to those elements of production
that add no value to the product and only raise costs:
1. Muda of Over-Production
2. Muda of Waiting
3. Muda of Conveyance
4. Muda in Processing
5. Muda in Inventory
6. Muda of Motion
7. Muda of Correction

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Multi-Process Handling
In Multi-Process Handling, one shop worker will move down a row of machines or
equipment arranged in the order of the flow of production processes and will perform all
necessary jobs within the Takt-Time.
Multi-Machine Handling
Multi-Machine Handling means that one shop worker will move along a group of machines
or pieces of equipment and operate them to perform multiple jobs by himself.Those machines
and equipment are grouped together because of the similarity of processes involved or
similarity of the machines used.
Multi-Skill Development
In order to conduct one-piece-at-a-time production and multi-process handling, a shop worker
must be able to perform many different jobs, operating diverse types of machinery and
equipment. To accomplish this
On-Line Set-Up
Of the many operations involved in set-up jobs, this refers to those operations which cannot
be carried out without stopping the line or machines.Such operations include the actual
changing of dies, cutting tools, jigs, etc.
Off-Line Set Up
Those parts of the set-up operation which can be done without stopping the line or machinery.
For example, the work of preparing and putting away dies, cutting tools and jigs.
Operational Availability
The time that a machine operates maintenance free as a percentage of the time during which it
is switched on. This is equivalent to the reliability of equipment and its maintenance.
The ideal condition is to have 100% operational availability during the time the machine is on
to fill a Kanban order.

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Operation Standards
It is the general name for standard procedure and conditions of all jobs. Operation standards
ensure that standardized work is carried out correctly at each jobsite. The information is
available at each jobsite on worksheets, based on diagrams, quality check standards, QC
process charts, safety standards, etc., and is aimed at achieving quality, quantity, cost and
safety targets. Examples include, operation instruction sheets, quality check sheets, work
standards sheets, etc.
Overflow Parts
These are parts that cannot fit on the racks along the production line or in other storage
locations. They end up on the floor or otherwise temporarily stored near by.
Pace Maker
This is a tool that informs the shop worker, foreman or supervisor whether work operations
are ahead of or behind schedule.
Pokayoke
It is also referred to as mistake proofing or error proofing. This refers to the low-cost, highly
reliable devices or innovations that either detect abnormal situations before they occur at a
production process; or once they occur, will stop the machines or equipment and prevent the
production of defective products.
Pull System
It is one of the three basic requirements of Just-In-Time. The pull system refers to the system
of manufacturing in which following production processes withdraw from proceeding
processes the parts they need, when they need them, in the exact needed amount.
Production Lead Time
This refers to the time it takes to provide one product from acceptance of order to shipment. It
is defined as follows: Production lead time = A + B + CA
A: from order reception to beginning of work
B: from beginning of work on raw materials to completing product (processing + non-

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processing time)
C: from completion of first to last piece of one unit of conveyance.
Set-Up Time
Set-Up time is divided into three elements as follows:
1. Off-Line Set-Up: time during which machine is not stopped
2. On-Line Set Up: time during which machine is stopped
3. Adjustment time: time after set-up is finished that machine is stopped to obtain necessary
quality levels or resolve problems.
Set-Up Time is the time it takes to change over from the production of one product to
another, from the instant that the processing of the last component of one type is finished, to
the production of the first good sample of the next type of component. It includes all the time
needed for changeover of the dies, cutting tools, etc..Set-Up Time = On-Line Set Up Time +
Adjustment Time
Takt Time
Takt-Time is the time which should be taken to produce a component or one vehicle. It is
calculated as follows: Takt Time = Total Daily Operating Time/Total Daily Production
Requirement*Daily total operating time is figure on the basis of all machinery operating at
100% efficiency during regular working hours.

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ADVANTAGES OF TPS
 The Toyota Production System empowers team members to optimise quality by constantly
improving processes and eliminating unnecessary waste in natural, human and corporate
resources.
 Toyota Production System influences every aspect of Toyota’s organisation and includes a
common set of values, knowledge and procedures.
 It entrusts employees with well-defined responsibilities in each production step and
encourages every team member to strive for overall improvement.
As a result, Toyota Production System delivers the following key benefits:
 Quality inherent in Toyota’s products
 Costs are kept to a minimum thanks to a good return on investment
 Delivery is on time, and to the expected standard, allowing Toyota’s customers to plan and
maintain their operations successfully
 Environmental concerns are shared by Toyota and its customers, from manufacturing
through to recycling at end-of-life
 Safety is Toyota’s constant concern – both for its employees and for those of its
customers.
DISADVANTAGES
Implementing thorough JIT procedures can involve a major overhaul of business systems -it
may be difficult and expensive to introduce.
JIT manufacturing also opens businesses to a number of risks, notably those associated with
the supply chain. With no stocks to fall back on, a minor disruption in supplies to the business
from just one supplier could force production to cease at very short notice.
A real business example: Toyota
Just-in-time manufacturing system is vulnerable to unexpected disruptions in supply chain. A
production line can quickly come to a halt if essential parts are unavailable. Toyota, the

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developer of JIT, found this out the hard way. One Saturday, a fire at Aisin Seiki Company’s
plant stopped the delivery of all break parts to Toyota. By Tuesday, Toyota had to close down
all of its Japanese assembly line. By the time the supply of break parts had been restored,
Toyota had lost an estimated $15 billion in sales.
Supply Problems
Because only a small amount of inventory is kept on hand, lean manufacturing depends
heavily on suppliers that can provide products for the manufacturing process dependably and
without interruption. Problems like employee strikes, transportation delays and quality errors
on the part of suppliers can create manufacturing holdups that can be fatal. Vendors may be
unable or unwilling to supply parts or products on a tighter schedule or in smaller amounts.
These needs can burden suppliers with unprofitable costs and create tensions that ultimately
affect the manufacturing process and can cause frequent changes of suppliers, or even
difficulties finding suppliers who can provide on the necessary schedule at all.
High Cost of Implementation
Implementing lean manufacturing often means completely dismantling previous physical
plant setups and systems. Training employees can be lengthy and acquiring managers
experienced in lean manufacturing process can add considerably to companies payroll
expenses. The purchase of machinery that increases efficiency, and the setup of smaller work
cells can add to long-term debt. Small and medium-sized businesses, in particular, may find
the cost of changeover to lean manufacturing processes prohibitive.
Lack of Acceptance by Employees
Lean manufacturing processes require a complete overhaul of manufacturing systems that
may cause stress and rejection by employees who prefer old ways of doing things. Moreover,
lean manufacturing requires constant employee input on quality control, which some
employees may feel disinclined or unqualified to do. Older employees may prefer previous
methods and can cause resistance among others in the work group. This is where good

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managers become crucial to the changeover to lean manufacturing. There may also be some
difficulty finding managers with sufficient leadership and persuasion skills to overcome this
resistance.
Customer Dissatisfaction Problems
Because lean manufacturing processes are so dependent on supplier efficiency, any disruption
in the supply chain--and therefore, on production--can be a problem that adversely affects
customers. Delivery delays can cause long-lasting marketing problems that can be difficult
to overcome.
Change in Mind set and style of functioning required
Some companies need to bring about an immense change in their mind set and syle of
functioning. This is sometimes very difficult and the initial problems created can be very bad
for business overall. For instance, companies need to have a very open style of
communication in order to put this into practice. Also, many employees think very
territorially and are unwilling to let go ‘their’ work areas.
TPS-REASONOF SUCCESS FOR TOYOTA
Toyota is known for its reliable cars among the general public, but it has also been known in
management and leadership circles for its unusual use of people. At Toyota, labour strife is
rare and people are an integral part of the quality process. Many credit Toyota’s success to
aspects of the Toyota Production System. It includes aspects of Jidoka, just-in-time
production, and kaizen, reducing both inventories and defects. The system is used worldwide,
and is one of the reasons for Toyota’s success.
Jidoka is not letting a defect go from one machine to the next, it adds the ability to detect
unacceptable quality during the process of production rather than waiting until the end, when

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it may be hidden. Jidoka both reduces costs and increases reliability.
Just-in-time production is the principle of having parts ready just as they are needed.
Engineering changes can take effect much more quickly, since stockpiles of parts do not need
to be cleared out; and problems with individual parts can be detected much more quickly
since they are used closer to the time they are made.
Toyota organized around team development and cellular manufacturing. Using people as
people, rather than ornery machines, also allowed for more flexibility than Ford's more
automated approach would allow. This was to make rapid changes easier, also helping quality
and increasing responsiveness to competitors.
CONCLUSION
Toyota Production system has always been one of the major reasons behind the success of the
company. It has helped the organization in many ways: automatic stoppage of the
manufacturing process in case of defects, Well- structured and effective relations with the
suppliers, good quality products, timely delivery to the customers etc. Though many
companies tried to copy the innovation made by the company but they failed to copy the
success of the system developed by the company. The reason to this is the failure to
understand and comprehend the system. Thus, it has led to an added advantage to the
company.