2. •The Toyota Production System can be defined as a specialized production system built on the idea of acquiring the radical
elimination of all types of waste by implementing the most effective methods is what is referred as the Toyota Production System or
just as the TPS.
What is Toyota Production System (TPS)?
•The Toyota Production System (TPS) was developed based on two primary concepts:
•Jidoka - It can be closely explained as the automation with human maneuvering, as when a problem arises, the machine stops all of a
sudden, and thus defective products are not being produced at the first place.
•Just-in-Time - The Just-in-Time concept, in which every single process makes only what is required for the subsequent process in a
continuous flow.
3. Toyota Motor Corporation's vehicle production system is a method of producing products, which is also known as a "Lean
Production," or "Just-in-Time (JIT) production system". This production system was established after many years of continuous
working on challenges that leads to continuous improvements, with the fundamental notion of manufacturing the
automobiles required by customers in the earliest and most effective manner, so as to furnish the automobiles as smoothly as
possible. Founded on the fundamental ideas of Jidoka and Just-in-Time, TPS can effectively and smoothly produce vehicles of
top-notch quality, the needed one at a time, that comprehensively complies the customer requirements.
TPS and its way of working to cost reduction are the results of aggressive internal strength (gain through years of struggle) and
singular advantages for Toyota. The initiatives and developments gained through the implementation of TPS is the benchmark
for industries and even the modern day Toyota Corporation.
The Concept of JIT
5. •Origins of TPS
•The roots of TPS origins are so old when even the Toyota company was not an automobile manufacturer. Some breakthrough was provided
through the set-up of automatic looms that continued in Toyota Motor corporation with further advancements such as JIT and Monozukuri.
•The Toyota Production System (TPS), which is founded on the idea of the total elimination of all waste with the application
of systematic methods, has the historical roots tracing back to automatic loom developed by Sakichi Toyoda.
•The automatic loom inventor Sakichi Toyoda not only transformed work through automation that needs to be performed manually, but also
incorporated the capacity to make conclusions by the machine itself. By eradicating the production of defective products in the first place and
the related waste-oriented works, Sakichi triumphs in quickly enhancing both work efficiency and productivity.
•Historical Roots of TPS
•Improving efficiency through JIT
•TPS has improved through many efforts and trials that lasted for years over years. TPS is focused on enhancing efficiency and was founded
on the Just-in-Time philosophy proposed by Kiichiro Toyoda, the founder of Toyota Motor Corporation.
•Kiichiro Toyoda, who assumed this idea, started to discern his basic belief that the ideal conditions or circumstances for manufacturing things
are established when facilities, machines, and people work together to add value without generating any waste.
•
•He came up with different methodologies and techniques for eradicating waste between normal operations, and those between both the
6. •The Toyota Way - Monozukuri
•TPS has grown on the surface with similar noble ideas like continuous improvement, Good Thinking, Value-based Products. Many experts
are of the view that Toyota is still advancing on the TPS way and making it even better through continuous evolution.
•
•The TPS spirit of monozukuri (producing things) is also known as the "Toyota Way." It has been imitated not only by companies in Japan or
no only within the automotive industry, but in manufacturing activities worldwide, and persists to enhance globally.
7. •What is Toyota Production System (TPS)?
•TPS Champions
TPS Champions are those individuals who have contributed in some way or another in developing the TPS methodology.
The four big champions are discussed in the tabs below.
1) Sakichi Toyoda was born in 1867 and lived till 1930. In the year 1896, under Sakichi Toyoda leadership; the
Toyoda Power Loom was enhanced with a function of automated stopping on the basis of weft breakage in the
fabric.
The first automatic loom with a non-stop shuttle-change motion in the world is known as the Type-G Toyoda
Automatic Loom. It was developed in the year 1924.
2) Kiichiro Toyoda was born in the year 1894 and lived till 1952.
Kiichiro utilizes his expertise of presenting one piece flow production method using a chain conveyor into the
assembly line of a textile plant. This project was completed in the year 1927.
Kiichiro Toyoda also imitated this method into the body production line at Toyota Motor Co., Ltd.'s Koromo Plant. The
Koromo plant is known today as the Honsha Plant. This project was completed in the year 1938.
8. 3) Eiji Toyoda was born in the year 1913 and lived till 2013. Eiji Toyoda ensures better work
productivity thorough the application of Jidoka and the Just-in-Time method. Eiji Toyoda improved
workers' productivity by allowing them to focus on value and by that time Toyota began to realize
the Toyota Production System, which empower Toyota to play advance with different companies in
Europe and the U.S.
4) Taiichi Ohno was born in the year 1912 and died in the year 1990.
Eiji Toyoda supported Taiichi Ohno and helped him to establish the Toyota Production System, and
construct the foundation for the Toyota way of "making things" by, for instance, developing the
fundamental framework for the Just-in-Time method.
9. Just in Time (JIT)
•The TPS fundamental idea is JIT. It means to produce only the items which are needed, and provide it when it is needed, and in the right
quantity needed (No more extra inventory).
•Making quality products effectively with the the total elimination of inconsistencies, waste and non-value requirements in the Production
line (known also in Japanese as Muda, Mura, Muri).
•So as to comply an order from a customer as early as possible, the vehicle is cleanly built within the earliest possible interval of time by
implementing the following:
•When an automobile order is triggered, manufacturing instructions must be allocated to commence the vehicle production in the
production line as soon as possible.
•The production assembly line must be stocked with the minimum needed number of all mandatory parts so that any type of ordered
vehicle can be manufactured.
•The assembly line must substitute the parts utilized by acquisition of the same quantity of parts from the parts-manufacturing processes
preceding that specific process (this approach is similar to the concept and use of Kanban systems).
•The preceding processes must be stocked with minimum required numbers of all kinds of parts and manufacture only the required
numbers of parts that were utilized by the subsequent process.
10. •Some Glimpse from the History
•The course does not focus to endorse Toyota and bench marking it as a world class company. The course only endorses the Toyota
Production System as a great way of dealing with company's operations and the principles, and basic foundations behind it, acknowledging
the due role of Toyota in developing such a system of excellence.
1) TPS is close to Lean Operations
The Toyota production system is very much closely related to the philosophy of the Lean manufacturing principles. Many concepts of TPS
such as the continuous improvement, Just-in-Time well matches to that of Lean manufacturing concepts.
2) The Challenge of Ford
11. The First Car
The first car was manufactured in the late 19th century by two Germans, named as Daimler and Benz. Other car manufacturers followed the
new spectrum of car manufacturing. However, automobiles were produced in job shops at incredibly small scale. The production of the cars
were very non productive, and vehicles were truly very expensive, thus they were merely affordable to the top-notch upper class.
The Role of Ford
Ford was influenced by the ideas propagated by management system consultant Mr. Frederick Winslow Taylor on improving industrial
efficiency. Ford also started with the idea of a manufacturing assembly line which is a moving line rather than the workers moving around
one big vehicle, on the contrary vehicles as a full unit should be going forward through the process.
The Model of Ford and Economies of Scale
Some sources articulate that Sir Henry Ford was reflected with this idea of assembly line during a visit to a French slaughterhouse. However
Ford did not like customization. He looked to avoid setups, and focusing on low variety to have his enormous machines busy. As a result;
Ford expanded very quickly. Ford was manufacturing millions of vehicles around the world before World War II. The model of Ford was
structured around economies of scale. This lean down the learning curve, and therefore vehicles became economical to the middle class.
This permits Ford to swamp the market with great numbers of his cars, further minimizing his marginal costs.
12. 3)The Status of Toyota and the Response
The Toyota
The company Toyota began as a produced of automated looms. They shifted into automobile production just before the World War II. The
tragic incidents of world war affected the Japanese economy extremely wrecked. The United States, subsequent of the war, tried to assist the
Japanese economy.The U.S. worked to re-industrialize Japan, along with the incorporation an automotive industry.
Replicating the Ford's Model in Japan and the Backlash
As an endeavor of industrializing Japan, U.S. shifted its machines, intellectual knowledge, and management from Detroit to Japan. The
objective was to imitate the extremely successful Ford model in Japan. The challenge, on the contrary, was is it did not function very well. Due
to war affected Japan, the Japanese economy within that time had the cumulative market demand merely a couple of thousands of
automobiles compared with the production volume in the US which was about a hundred times bigger than Japan. This absence of adequate
scale made the Ford production system miserably failed in Japan.
The Toyota's Realization
The failure of the Ford's model in Japan lead the Toyota managers to realize that they had to bring forward with their own production model.
However the Toyota Production System was not born in a weekend party or in some nice soothing conference hotel. It was the result of years
and years of hard work led by Toyota and the the continuous efforts focused on problem-solving.
13. 4) The Toyota Production System
•The Toyota Production System was structured around the notion of waste eradication. The shortage of resources pressurized the Toyota
professionals to reflect smartly on how to utilize the resources effectively. They also focused the role of entertaining the demand. The
absence of having a local demand in Japan at that time really pushed the Japanese to keep them away going with scale economies. On the
other hand, they have to present a model of flexibility that will permit them to entertain small niche markets with adequate profitability.
14. The Fundamental Concepts of TPS
•Some of the fundamental concepts of the TPS are Heijunka, Jidoka, flexiblity, workers' involvement and OEE frame work.
a) Inventory and Heijunka
The most dangerous part of waste is holding huge inventory. Now, how does the TPS handles inventory? Inventory gets evaded by
harmonizing production flow with the actual market demand. Heijunka refers to the mixed production model. TPS embodied factories focuses
flexibility, and many of the TPS lines are capable to adapt swiftly from manufacturing one type of car to another. This empowers them to
manufacture precisely the type of cars needed by the market, instead of manufacturing vehicles that are easy to manufacture as per the
existing setup of the plant.
Another effort for inventory minimization is modifying the production rate to the consumer demand. Consumer demand triggers attack time,
attack time triggers the staffing needs, and that dictates a capacity for the plant in the given period of time, which averts piling up high
inventory. Pull systems get effective utilizing Kanban cards or other production model based on a make-to-order approach. This basic and
simple one piece flow is the central focus of the Toyota Production System.
15. b) Jidoka
In TPS; A quality culture is structured around the philosophy of Jidoka. The philosophy of Jidoka works on three
principles:
• Detect
• Stop
• Alert
Jidoka is applied to machines, or also one can utilize the Andon Cord to allow assembly line workers to put a stop
on the line. Lets not forget the relationship between quality and high inventory; high inventory hides defects, and
hurdles the efforts for process improvement.
The Toyota Production System is made on the principles of standardization, flexibility, and worker involvement.
c) Flexiblity
Flexibility is applied, through the use of Takt time, adjusting the Cycle time accordingly and
then Standardization, which manages the staffing level. The tasks are standardized to sustain the variability
of processing time low and again to minimize buffers.
In Lean, Takt time is the rate at which a demanded product needs to be produced so as to fulfill customer
demand.
16. d) Workers' Involvement and Reducing Operator Variance
The philosophy of Quartile Analysis is to avert high variance from operator to operator, thus resulting in consistent performance. And
ultimately, and maybe most significantly, the Toyota Production System is structured on managing the people part.
One fundamental component within the foundation of the Toyota production system is Kaizen, and the problem-solving of full time workers
utilizing tools such as the Ishikawa diagram.
e) OEE Framework
The OEE framework is one of the important concepts in Lean and also in the TPS. It exhibited the fact that from the available time of a
machine or a human worker, a big chunk of time is wasted, and only small little time is utilized in value-added activities. It means by
minimizing the waste, companies can have a lot more work completed with minimized resources. Variability displayed professionals that
oftentimes one has to hold huge capacity since customers don't want to wait. Through increased capacity, sadly, most of the time means
idle time. This reminded professionals regarding the tension between buffering and suffering. Also, variability signifies poor quality as well.
And so whenever one see variability, companies have encountered a problem in their operations.
Fulfilling supply with demand is always difficult. Companies either have customers waiting for the products, or the products waiting for the
customers. The more companies can do to streamline supply with demand, the better operations companies are going to run.
17. •Fundamental Terminological Concepts of TPS
Some of the fundamental terms under the theme of TPS and Lean are:
1. Andon is transliterated from Japanese work "行灯", and the concepts means a large lighted board utilized in manufacturing
facilities to alert and signify floor supervisors to examine a problem at a particular station. Literally it means a Lantern.
2. Gemba is transliterated from Japanese term "現場"and it means on site in English. Gemba signifies the importance of actual workplace,
also known as the place where the real work is done.
The philosophy of Gemba focuses on managers, TPS champions to get involved at the real work site to inculcate improvements
3. Genchi Genbutsu is transliterated from the Japanese words "現地現物" and in English it means go and see for
yourself. Literally it also means local products, it also signifies the importance of visiting the Gemba and getting observation
from direct observation.
4. Hansei is transliterated from the Japanese terms "反省". Literally it means remorse, but it refers to Self-reflection. It s a
central concept in TPS culture, meaning to confess one's own error and to undertake continuous improvement.
5. Heijunka is the Japanese transliteration of the Japanese term "平準化". Literally it means production smoothing.
When applied properly, Heijunka gracefully and without hurry empowers organizations to meet demand while minimizing wastes in
manufacturing and interpersonal processes.
18. •Fundamental Terminological Concept of TPS (Part 2)
1. Jidoka is transliterated from Japanese terms "自働化", and in English it means Autonomation which is the automation with human
intelligence and human touch.
2. Jasutointaimu is transliterated from Japanese words "ジャストインタイム " and it means Just-in-Time (JIT).
Just-in-time manufacturing is a methodology focused significantly at minimizing times within the production system including the response
times from suppliers till the end customers.
3. Kaizen is transliterated from Japanese words "改善" and in English it means Continuous Improvement.
It is a complete philosophy to implement in organizations for improvements continuously and most importantly to create a culture of
continuous improvement.
4. Kanban is transliterated from Kapanese words "看板", and literally means sign board. However it is also a complete
philosophy to implement.
5. Production supermarket imitates the concept of a supermarket to manufacturing houses where all components are accessible to be
consumed by the next level process.
•Jidoka - It can be closely explained as the automation with human maneuvering, as when a problem arises, the machine stops all of a
sudden, and thus defective products are not being produced at the first place.
•Just-in-Time - The Just-in-Time concept, in which every single process makes only what is required for the subsequent process in a
continuous flow.
19. •The Three Ms of Waste
The three Ms of waste are important in Lean as well as in TPS organizations, because these three are the enemies of Lean manufacturing:
Muda
The term Muda is transliterated from Japanese words "無駄", and it literally means waste.
The spectrum of Muda encompasses following different types of wastes:
• Transportation
• Inventory
• Motion
• Waiting
• Over processing
• Overproduction
• Defects
Elimination of the above seven types of waste can empower companies minimize expenses, improve employee engagement and
customer satisfaction, and enhance profits.
Mura
Mura is transliterated from Japanese word "ムラ", and it literally means village but in TPS on Lean it means Unevenness. Mura signifies
unevenness, non-uniformity, and irregularity.
It can be signifies by a truck carrying 4 tons in one shift and 2 tons in the another shift.
Muri
Muri is transliterated from Japanese words "無理" and literally it means over burden.
Overburdening machines or workers by mandating them to operate at an increased or quicker pace with increased force and effort for an
extended time span than the design of equipment and suitable workforce management permits.
20. Other Terms Related to TPS
Other terms related to TPS are:
1) Nemawashi is transliterated from the Japanese word "根回し" and in English it means negotiation, laying the groundwork, making
consensus etc.
Nemawashi is the beginning milestone in the decision making process. It is dissemination of information about the decisions that will be taken
soon, as as to engulf all employees in the process. During the Nemawashi, the organization is gathering for the opinion of the employees
about the possible decision. Effective application of Nemawashi permits modifications to be implemented with the involvement of all parties.
2) Obeya is transliterated from the Japanese word "大部屋" and in English, it means Large room while in TPS its signifies as a managers'
meeting room.
The objective is to enhance collaboration, cohesion and rate of problem solving efforts. It is a management concept, Obeya refers to a
large room that is shared by Leads or People who collaborates as a team. They discuss on the work, collaborate face to face and places
information related to the work on the walls for every individual to see.
3) Poka-yoke is transliterated from the Japanese word "ポカヨケ" and in English it means bulletproofing or to prevent "yokeru" inadvertent
errors.
A Poka-yoke in TPS helps an equipment operator prevent mistakes in the first place. Its objective is to remove product defects by avoiding,
correcting, or consuming attention to errors as they unfold.
•The 5S Terms realted to TPS
The 5S is an important house-keeping methodology not only in Lean but also for TPS.
21. •The TPS Model is a collection of principles and culture that defines the Toyota Motor Corporation's strategic approach and the depth
of Toyota production system. Toyota initially compiled its values, philosophy and manufacturing models in 2001, naming it "The Toyota
Way 2001". It comprises of principles in two main areas which were continuous improvement and the second is related to respect for
people.
•The four notable themes under which principles are distributed are listed as:
•Long-Term Philosophy for company opting TPS
•The Correct Process will Produce the Right Outcomes
•Incorporate Value in the Company by Developing its People
•Continuously Addressing and Solving Root Problems Results in Organizational Learning
Long-Term Philosophy for Company opting to implement the TPS Model
Construct company's management decisions on a long-term philosophy, even at the sacrifice of short-term financial goals.
The first theme concerning the long-term philosophy comprises of only one principle which is the first TPS principles. People need objective
to look for motivation and develop objectives and goals. The first principle focuses on managing the organization with a long-view instead
focusing on short-term advantages. It exhibits a belief system that individuals require objectives to look for motivation and develop their
goals.
22. The second principles revolves around creating a continuous process flow so as to sought problems to the surface so every body notice
that and efforts are done to resolve it.
Work processes are re-engineered to eradicate Muda i.e. waste with the continuous improvement cycle i.e. Kaizen. The seven different
types of Muda are already discussed in terms and definition which is the Topic 2, and Module 1 of this course.
23. The Correct Process will Produce the Right Outcomes (Part-1)
The second theme comprises of number of different principles which are discussed as under:
The third principles talks about another pain point which is the extra excess production. Therefore companies are advised to use "pull"
systems to avoid overproduction.
A pull system is a system where a process triggers its predecessor that more units are required. The pull system manufactures merely the
needed material after the next process signals a requirement for it. This type of process is fundamental to minimize overproduction.
The fourth principle focuses on leveling out the workload which is also known as heijunka in Japanese. The TPS experts idealizes this
saying "Work like the tortoise, not the hare".
This empowers to acquire the objective of reducing Muda i.e. waste, also avoids overburdening staff or the machines i.e. Muri, and not
making uneven Production levels which is Mura.
The fifth Principle of TPS focuses on the fact that things should be done in the right manner, the first time. Due to this principle, one makes a
culture of stopping every time a problem is seen in order to fix it, so as to acquire quality right from the first time. This empowers organizations
to remove the culture of hiding problems and let it go, which makes the situation even more terrible.
Any worker in the Toyota Production System has the power and privilege to stop the process to trigger a quality issue until it is resolved.
24. The Right Process Will Produce the Right Results (Part- 2)
The sixth Principle encompasses the phenomenon of standardized tasks and processes after every Kaizen, which are the basis of
continuous improvement and employee empowerment.
Toyota has somehow a bureaucratic system, but however the way that TPS is implemented permits for continuous improvement (Kaizen)
from the people influenced by that system. It energies the workers to help in the expansion and enhancement of the company.
The seventh principle work on the usage of visual control so no problems remain hidden or undiscovered.
This is also achieved through the Lean 5S Program, the 5S helps workplace to empower productive housekeeping of the stations, enabling
visuals identifying the useful locations of work-items etc. Learn about the Lean 5S Program step by step in the free online course offered by
Alison on "
The eighth principles emphasizes on the usage of mere reliable, safety and tested technology that helps organization's people and
processes. The principles also says that technology is needed by manufacturing facility, not pushed to manufacturing.
25. Incorporate Value in the Company by Developing its People
The third theme is related to the Incorporation of Values in the Company by Developing its People. Its has got three principles:
The 9th Principle is related to the third theme and is focused on empowering leaders' growth and in this way company also grow. The leaders
are those people who comprehensively comprehend the work, live by the company's philosophy, and become its message bearers by
teaching the company's culture to others.
This signifies the fact that devoid of constant focus, the principles will evaporate. The principles have to be induced in the people and their
thinking. Therefore Employees must be continuously educated and trained: one has to build a learning organization through leaders who have
certain prerequisites as discussed.
The tenth principle is about developing exceptional exemplary people and recognized teams who follow TPS ideas and the company's
philosophy. Teams should comprise of four to five people and can be built from different management tiers. One needs to remember the
important thing here i.e. success is founded on the team, and not merely an individual.
Suppliers, Contractors and others in the company's network are also considered as a family. Therefore the TPS eleventh principles is related to
respecting company's network of partners, suppliers and contractors both by challenging them and assisting them to improve.
TPS manages suppliers as they usually treat their own employees, asking them to do even better and empowering them to acquire the success.
With the TPS concept; company should provide cross functional teams to empower suppliers learn, study and solve their problems so that they
26. Continuously Addressing and Solving Root Problems Leads to Organizational Learning
The last theme is related to continuously addressing and solving root problems which leads to organizational learning. Three of its principles
are:
The twelfth Principle revolves around the notion to go and check to understand the current state for yourself which is also known as "Genchi
Genbutsu".
TPS managers are needed to "go-and-see" operations themselves. Without knowing the current state firsthand, managers will not have a
comprehension of how it can be enhanced. Also, managers utilize Tadashi Yamashima's (President, Toyota Technical Center (TTC)) ten
management principles as a help material for "Genchi Genbutsu":
• Must keep the ultimate target and objective in mind.
• Specifically allocate tasks to oneself and others.
• Ponder and discuss on verified, reliable, proven information not on feelings.
• Capitalize benefit of the experiences and wisdom of other fellows to send, collect or explain information.
• Disseminate information with others in a timely manner.
• Must report, intimate and consult in a timely fashion.
• Assess and comprehend shortcomings in one's capabilities in a rational way.
• Persistently make efforts to implement Kaizen activities.
• Reflect "outside the box," or standard rules of solving a problem.
• Must be thoughtful of safeguarding one's safety and health.
27. The thirteenth Principle is about Nemawashi. It is to take decisions very slowly with the help of negotiation and consensus,
comprehensively considering all alternatives; apply the decisions taken through this slow-process rapidly.
The following are decision helping units:
• Discover what is really happening (Go and see) to test yourself
• Identifying the hidden cause
• Reflect with a broad choice of alternatives
• Negotiate to have consensus on the resolution from all stakeholders
• Utilize effective communication tool
The fourteenth Principle is related to Hansei and Kaizen. The principles says to become a learning organization with the help of
persistent reflection (Hansei) and Continuous Improvement (Kaizen).
The process of transforming one's organization into a learning organization comprises of questioning every aspect and every manner of the work
or process. The usual problem solving technique to identify the root cause of a problem incorporates following:
• Start from the Raw Perception of Problem
• Clarify and specify the Problem on the basis of facts and not Perceptions
• Pin point the area, location and point of cause that results in the problem
• Study the root cause (the can involve 5 whys) for that problem
• Take the Countermeasure for the Root Cause
• Evaluate and Assess the Effectiveness of Countermeasures
• If Measures are effective, then Standardize
28. The TPS House and the Toyota Way Model
The TPS House is the illustration of these concepts working as the foundations and pillars in building a structure of the TPS house.
29. 10 Decisions Related to Operations Management
Operations management (OM) of Toyota comprises the ten decisions for smooth and efficient operations. With the global spectrum of its
automobile business and manufacturing units around the world, Toyota utilizes a wide range of strategies for the ten decisions of operations
management, incorporating regional and country's automotive market challenges. Toyota is an example of successful operations
management at a global scale. These ten areas signifies the diverse segments of the business that require strategic approaches. Toyota also
triumphs in focusing productivity in all of the ten strategic decisions of operations management.
Design of Goods and Services
Toyota encounters this strategic decision area of operations management with the help of quality and technological advancement. The
organization utilizes its Research and Developments (R&Ds) investments to confirm improved characteristics, and functionalities in its
products. Toyota also incorporates dealership individual requirements in designing and developing services related to After-Sales.
Quality Management System
•Quality is one of the key factors and important consideration in TPS i.e. Toyota Production System. Toyota ensures quality through TPS.
Quality management is considered the part of its Operations Management.
•Apart from Toyota way of ensuring Quality with TPS, ISO has also developed international standard i.e. ISO 9001 as a guideline and
auditable document for maintaining effective quality management system. Companies can also take advantage from the ISO 9001
requirements on Quality Management System.
30. 10 Decisions for Operations Management (Continued...)
For this strategic decision area of operations management, Toyota uses lean manufacturing, which is also embodied in TPS. The
company emphasizes waste minimization to maximize process efficiency and capacity utilization. Thus, Toyota supports business
efficiency and cost-effectiveness in its process and capacity design.
Toyota uses global, regional and localization strategies. For example, the company has localized manufacturing plants in the United States,
China and Thailand, as well as official dealerships in all markets except Mongolia and some countries in the Middle East and Africa. Thus,
Toyota addresses this location strategy decision through a mixed set of strategies.
Layout design in Toyota’s manufacturing plants highlights the application of lean manufacturing principles. In this strategic decision area of
operations management, the company aims for maximum efficiency of workflow. On the other hand, Toyota dealership layout design satisfies the
company’s standards but also includes decisions from the dealers.
31. 10 Decisions for Toyota's Operations Management (Continued...)
Job Design and Human Resources (HR) is one of the important areas of operations management in Toyota. The firm focuses recognition and
respect for all people, and this is embedded in the HR function and policies. Additionally, Toyota has got training programs founded on TPS to
help implement and maintain lean manufacturing practices.
The company utilizes lean manufacturing for supply chain management. In this important decision point of operations management, the
organization utilizes automation systems for real-time reflections and adjustments in supply chain stream. In this method, the company reduces
the bullwhip impact in the stream of its supply chain.
The bullwhip effect on the supply chain appears when increase in consumer demand forces the companies in a supply chain to acquire more
goods from the precedent supplier to comply with the new demand and it is a domino effect and leaves the supply chain producing a lot more
that what was actually needed. The bullwhip effect normally goes up through the supply chain, beginning from the retailer, then the wholesaler,
then the distributor, and to the manufacturers and finally to the the raw materials supplier.
Toyota manages the minimum inventory levels with the help of just-in-time inventory technique. The purpose is to decrease inventory size and
its related expense. This inventory management methodology is also a part of the Toyota Production System (TPS).
32. 10 Decisions for Operations Management (Continued...)
Toyota adheres with the lean manufacturing concepts in the scheduling part for its operations. The organization's objective for this strategic zone
is to reduce the operating costs. Cost-minimization is achieved through human resource management, materials management and resources
scheduling that alters as per the market conditions.
With years over years of work, Toyota instituted a network of strategically installed facilities to empower its global business. The organization
moreover has a global human resource network that empowers business flexibility and resilience. The company by managing maintenance as
one of the important operation management areas, utilizes the concept reach to make sure optimized and steady productivity.
Operation's Management: Productivity
Toyota’s Operations Management utilizes measurements related to productivity or criteria on the part of business under consideration. For
example, some of these simple productivity measures as defined by Toyota are:
•Manufacturing Plant Productivity: Number of Product Units per Time
•Company's Dealership Productivity: Revenues per dealership
•Supply-Chain Productivity: Number of batch cycles per time
33. Toyota's Important Areas of Operation's Management
The organization utilizes its Research and Developments (R&Ds) investments to confirm improved characteristics, and functionalities in its
products.
Toyota ensures quality through TPS. Quality management is considered the part of its Operations Management.
The company emphasizes waste minimization to maximize process efficiency and capacity utilization.
Toyota uses global, regional and localization strategies. For example, the company has localized manufacturing plants in the United States,
China and Thailand, as well as official dealerships in all markets except Mongolia and some countries in the Middle East and Africa.
Layout Design is one of the Toyota's Operations Management strategy. In this strategic decision area of operations management, the
company aims for maximum efficiency of workflow through Lean.
The company utilizes lean manufacturing for supply chain management. In this important decision point of operations management, the
organization utilizes automation systems for real-time reflections and adjustments in supply chain stream. In this method, the company reduces
The firm focuses recognition and respect for all people, and this is embedded in the HR function and policies. Additionally, Toyota has got the
training programs founded on TPS to make sure lean manufacturing practice are well absorbed by company's culture.
34. Toyota manages the minimum inventory levels with the help of just-in-time inventory technique. The purpose is to decrease inventory size and its
related expense. This inventory management methodology is also a part of the Toyota Production System (TPS).
Toyota adheres with the lean manufacturing concepts in the scheduling part for its operations.
The company by managing maintenance as one of the important operation management areas, utilizes the concept of reach to make sure
optimized and steady productivity.
