Toyota Production System Edited from various sources by Malcolm Macpherson Friday, May 23, 2008 The Toyota Production System (TPS) combines philosophy and practice to form an integrated socio-technical system, organising manufacturing and logistics, including interaction with suppliers and customers. The system is a precursor of the more generic Lean manufacturing Taiichi Ohno, Shigeo Shingo and Eiji Toyoda developed the system between 1948 and 1975. Originally called Just In Time Production, it builds on the approach created by the founder of Toyota, Sakichi Toyoda, his son Kiichiro Toyoda, and the engineer Taiichi Ohno, and draws on the work of W. Edwards Deming and Henry Ford. In the United States to observe the assembly line and mass production that had made Ford rich, the Toyota leaders were unimpressed, but while shopping in a supermarket they observed the simple idea of an automatic drink resupplier; when the customer wants a drink, he takes one, and another replaces it. The main goals of the TPS are to design out overburden (muri), inconsistency (mura) and eliminate waste (muda), by designing a process capable of delivering the required results smoothly; by designing out 'mura' and ensuring that the process can flex without stress or 'muri' since this generates 'muda'. There are 7 kinds of waste targeted in the TPS: 1. over-production 2. motion (of operator or machine) 3. waiting (of operator or machine) 4. conveyance 5. processing itself 6. inventory (raw material) 7. correction (rework and scrap) The elimination of waste has come to dominate the thinking of many when they look at the effects of the TPS because it is the most familiar of the three. In the TPS many initiatives are triggered by Mura or Muri reduction which drives out Muda without specific focus on its reduction. Toyota was able to greatly reduce lead time and cost using the TPS, while improving quality, to become one of the ten largest companies in the world, as profitable as all the other car companies combined and the largest car manufacturer in 2007. The success of TPS has lead to much copying, although mostly unsuccessfully. Origins and philosophies behind the Toyota Production System Toyota has long been recognized as a leader in automotive manufacturing and production. It may be surprising that Toyota received their inspiration for part of their production system in the United States, but not from its automotive production process. This occurred when a delegation from Toyota visited the United States to study its commercial enterprises. They first visited several Ford Motor Company automotive plants in Michigan, but despite Ford being the industry leader at that time, found many of the methods in use to be not very effective. They were mainly appalled by the large amounts of inventory on site and by how the amount of work being performed in various departments within the factory was uneven on most days. However, on their visit to a Piggly Wiggly, an American supermarket, the delegation was inspired by how the supermarket only reordered and restocked goods once they’d been bought by customers. Toyota applied the lesson from Piggly Wiggly by reducing the amount of inventory they would hold only to a level needed for a small period of time, and then subsequently reorder – a Just in Time (JIT) system. While low inventory levels are a key outcome of the Toyota Production System, an important element of the philosophy is to work intelligently and eliminate waste so that inventory is not needed. Many American businesses, having observed Toyota's factories, set out to attack high inventory levels directly without understanding what made these reductions possible. The act of imitating without understanding the underlying concept or motivation may have led to the failure of those projects. The underlying principles, called "The Toyota Way" are outlined as follows The right process will produce the right results 1. Create continuous process flow to bring problems to the surface 2. Use pull, to avoid overproduction 3. Level out the workload (Work like the tortoise, not the hare) 4. Build a culture of stopping to fix problems, to get quality right the first time 5. Standardized tasks are the foundation for continuous improvement and employee empowerment 6. Use visual control so no problems are hidden 7. Use only reliable, thoroughly tested technology that serves your people and processes. Add value to the organisation by developing your people and partners 1. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others 2. Develop exceptional people and teams who follow your company's philosophy 3. Respect your extended network of partners and suppliers by challenging them and helping them improve. Continuously solving root problems drives organizational learning 1. Go and see for yourself to thoroughly understand the situation 2. Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly 3. Become a learning organization through relentless reflection and continuous improvement (Kaizen) The Toyota production system has been compared to squeezing water from a dry towel. What this means is that it is a system for thorough waste elimination. Here, waste refers to anything which does not advance the process, everything that does not increase added value. Many people settle for eliminating the waste that everyone recognises as waste. But much remains that simply has not yet been recognised as waste or that people are willing to tolerate. People had resigned themselves to certain problems, had become hostage to routine and abandoned the practice of problem-solving. This going back to basics, exposing the real significance of problems and then making fundamental improvements, can be witnessed throughout the Toyota Production System. Commonly used terminology in TPS: Just In Time (JIT) Jidoka (English: Autonomation - automation with human intelligence) Heijunka (English: Production Smoothing) Kaizen (English: Continuous Improvement) Poka-yoke (English: fail-safeing - to avoid (yokeru) inadvertent errors (poka)) Kanban (English: Sign, Index Card) Andon (English: Signboard) Muri (English: Overburden) Mura (English: Unevenness) Muda (English: Waste) Genchi Genbutsu (English: Go and see for yourself) Manufacturing supermarket where all components are available to be withdrawn by a process The 14 principles of the Toyota Way Toyota began to be recognized in the 1980s for the quality of its vehicles and its responsiveness to customers. The various Toyota and Lexus models are consistently ranked higher than other car makes in owner satisfaction surveys. For example, in 2004, seven of the fourteen highest ranked cars by owners in the annual Consumer Reports survey were Toyota or Lexus models. This pattern has been consistent for many years. According to Jeffrey Liker, a University of Michigan professor of industrial engineering, it is the way Toyotas are engineered and manufactured that makes them successful. Liker and other observers believe that the basis of Toyota's success stems from the business philosophy that underlies its production system. The 14 Principles The Toyota Way has been called a system designed to provide the tools for people to continually improve their work. The 14 principles of The Toyota Way are organized in four sections: 1) Long-Term Philosophy, 2) The Right Process Will Produce the Right Results, 3) Add Value to the Organization by Developing Your People, and 4) Continuously Solving Root Problems Drives Organizational Learning. The principles are set out and briefly described below: 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. People need purpose to find motivation and establish goals. Section II The Right Process Will Produce the Right Results Principle 2 Create a continuous process flow to bring problems to the surface. Work processes are redesigned to eliminate waste (muda) through the process of continuous improvement — kaizen. The seven types of muda are: 1. Overproduction 2. Waiting 3. Unnecessary transport 4. Overprocessing 5. Excess inventory 6. Unnecessary movement 7. Defects Principle 3 Use "pull" systems to avoid overproduction A method where a process signals its predecessor that more material is needed. The pull system produces only the required material after the subsequent operation signals a need for it. This process is necessary to reduce overproduction Principle 4 Level out the workload (heijunka). (Work like the tortoise, not the hare) This helps achieve the goal of minimizing waste (muda), not overburdening people or the equipment (muri), and not creating uneven production levels (mura). Principle 5 Build a culture of stopping to fix problems, to get quality right the first time Quality takes precedence (Jidoka). Any employee in the Toyota Production System has the authority to stop the process to signal a quality issue. Principle 6 Standardized tasks and processes are the foundation for continuous improvement and employee empowerment Although Toyota has a bureaucratic system, the way that it is implemented allows for continuous improvement (kaizen) from the people affected by that system It empowers the employee to aid in the growth and improvement of the company. Principle 7 Use visual control so no problems are hidden Included in this principle is the 5S Program - steps that are used to make all work spaces efficient and productive, help people share work stations, reduce time looking for needed tools and improve the work environment Sort: Sort out unneeded items Straighten: Have a place for everything Shine: Keep the area clean Standardize: Create rules and standard operating procedures Sustain: Maintain the system and continue to improve it Principle 8 Use only reliable, thoroughly tested technology that serves your people and processes Technology is pulled by manufacturing, not pushed to manufacturing Section III Add Value to the Organization by Developing Your People Principle 9 Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others Without constant attention, the principles will fade. The principles have to be engrained, it must be the way one thinks. Employees must be educated and trained: they have to maintain a learning organization Principle 10 Develop exceptional people and teams who follow your company's philosophy Teams should consist of 4-5 people and numerous management tiers. Success is based on the team, not the individual. Principle 11 Respect your extended network of partners and suppliers by challenging them and helping them improve Toyota treats suppliers much like they treat their employees, challenging them to do better and helping them to achieve it. Toyota provides cross functional teams to help suppliers discover and fix problems so that they can become a stronger, better supplier. Section IV Continuously Solving Root Problems Drives Organizational Learning Principle 12 Go and see for yourself to thoroughly understand the situation (Genchi Genbutsu) Toyota managers are expected to "go-and-see" operations. Without experiencing the situation firsthand, managers will not have an understanding of how it can be improved. Furthermore, managers use Tadashi Yamashima's (President, Toyota Technical Center (TCC)) ten management principles as a guideline: 1. Always keep the final target in mind 2. Clearly assign tasks to yourself and others 3. Think and speak on verified, proven information and data 4. Take full advantage of the wisdom and experiences of others to send, gather or discuss information 5. Share information with others in a timely fashion 6. Always report, inform and consult in a timely manner 7. Analyze and understand shortcomings in your capabilities in a measurable way 8. Relentlessly strive to conduct kaizen activities 9. Think "outside the box," or beyond common sense and standard rules 10. Always be mindful of protecting your safety and health Principle 13 Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly (nemawashi) The following are decision parameters: 1. Find what is really going on (go-and-see) to test 2. Determine the underlying cause 3. Consider a broad range of alternatives 4. Build consensus on the resolution 5. Use efficient communication tools Principle 14 Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen) The process of becoming a learning organization involves criticizing every aspect of what one does. The general problem solving technique to determine the root cause of a problem includes: 1. Initial problem perception 2. Clarify the problem 3. Locate area/point of cause 4. Investigate root cause (5 whys) 5. Countermeasure 6. Evaluate 7. Standardize Translating the principles There is a question of uptake of the principles now that Toyota has production operations in many different countries around the world. As a New York Times article notes, while the corporate culture may have been easily disseminated by word of mouth when Toyota manufacturing was only in Japan, with worldwide production, many different cultures must be taken into account. Concepts such as mutual ownership of problems, or genchi genbutsu, (solving problems at the source instead of behind desks), and the kaizen mind, (an unending sense of crisis behind the company’s constant drive to improve), may be unfamiliar to North Americans and people of other cultures. A recent increase in vehicle recalls may be due, in part, to a failure by Toyota to spread its obsession for craftsmanship among its growing ranks of overseas factory workers and managers. Toyota is attempting to address these needs by establishing training institutes in the United States and in Thailand. References Strategos-International. Toyota Production System and Lean Manufacturing Theory of Constraints, Eliyahu Goldratt, North River Press, 1990, p 26 Theory of Constraints, Eliyahu Goldratt, North River Press, 1990, p 30 A study of the Toyota Production System, Shigeo Shingo, Productivity Press, 1989, p236 Emiliani, B., with Stec, D., Grasso, L. and Stodder, J. (2007), Better Thinking, Better Results: Case Study and Analysis of an Enterprise-Wide Lean Transformation, second edition, The CLBM, LLC Kensington, Conn., ISBN 978-0-9722591-2-5 Jeffrey Liker (2003), The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer, First edition, McGraw-Hill, ISBN 0-07-139231-9. Yasuhiro Monden (1998), Toyota Production System, An Integrated Approach to Just-In-Time, Third edition, Norcross, GA: Engineering & Management Press, ISBN 0-412-83930-X Ohno, Taiichi (1995), Toyota Production System: Beyond Large-scale Production, Productivity Press Inc., ISBN 0-915299-14-3 Shingo, Shigeo (1989) A Study of the Toyota Production System from an Industrial Engineering Viewpoint (Produce What Is Needed, When It's Needed), Productivity Press, ISBN 0-915299-17-8. (This refers to the English version; the Japanese version was published in 1981, but the ISBN is unknown) Spear, Steven, and Bowen, H. Kent (September 1999), "Decoding the DNA of the Toyota Production System," Harvard Business Review Womack, James P. and Jones, Daniel T. 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