The Toyota Production System

High Quality and Low Cost

COST VS DEFECTS

Readings; James Womack, Daniel T. Jones and Daniel Roos, The Machine that Changed the World, 1990, Ch 3 and 4 Kenneth N. McKay, The Evolution of Manufacturing ControlWhat Has Been, What Will Be Working Paper 03 2001 Michael McCoby, Is There a Best Way to Build a Car? HBR Nov-Dec 1997

Consumer Reports

Gains of imports

The Toyota Production System

Historical View Performance measures Elements of TPS Difficulties with Implementation Eras of Manufacturing Practice Six

Three Major Mfg Systems from 1800 to 2000

Machine tools, specialized machine tools, Taylorism, SPC, CNC, CAD/CAM

1800 Interchangeable Parts at U.S. Armories

1900 Mass Production at Ford

2000 Toyota Production System

Key Elements for New Mfg Systems

Element/ System Need of Society Work Force Motivation Yankee Ingenuity Enabling Technology Machine Tools, Division of Labor Moving Assembly Line,etc CNC, Integration of Labor Leader
Resources

Interchange- Military able Parts

Roswell U.S. Lee/ Govt John Hall Henry Ford Taiichi Ohno Earnings

Mass Production Toyota Production System

Transportation

$5/day Immigrant

Post War Jobs, Security

Japanese Banks

Q. By what method did these new systems come about? A. Trial and Error

History of the Development of the Toyota Production System ref; Taiichi Ohno
1945 1975

The Toyota Production System

Historical View Performance measures Elements of TPS Difficulties with Implementation Eras of Manufacturing Practice Six

Summary of Assembly Plant Characteristics, Volume Producers, 1989 (Average for Plants in Each Region)
Japanese in Performance: Producvitity (hours/Veh.) Quality (assembly defects/100 vehicles) Layout: Space (sq.ft./vehicle/yr) Size of Repair Area (as % of assembly space) Inventories(days for 8 sample parts) Work Force: % of Work Force in Teams Job Rotation (0 = none, 4 = frequent) Suggestions/Employee Number of Job Classes Training of New Production Workers (hours) Absenteeism Automation: Welding (% of direct steps) Painting(% of direct steps) Assembly(% of direct steps) Japan 16.8 60 Japanese North in American in North America 36.2 97 All Europe America

21.2 65

25.1 82.3

5.7 4.1 0.2

9.1 4.9 1.6

7.8 12.9 2.9

7.8 14.4 2

69.3 3 61.6 11.9 380.3 5

71.3 2.7 1.4 8.7 370 4.8

17.3 0.9 0.4 67.1 46.4 11.7

0.6 1.9 0.4 14.8 173.3 12.1

86.2 54.6 1.7

85 40.7 1.1

76.2 33.6 1.2

76.6 38.2 3.1

Source: IMVP World Assembly Plant Survey, 1989, and J. D. Power Initial Quality Survery, 1989

Cost Vs Defects
Ref. Machine that Changed the World Womack, Jones and Roos

Cost Vs Automation
Ref. Machine that Changed the World Womack, Jones and Roos

The Toyota Production System

Historical View Performance measures Elements of TPS Difficulties with Implementation Eras of Manufacturing Practice Six

How do you get this kind of performance?

Womack, Jones and Roos T. Blacks 10 Steps J Demand Flow Technologys 9 Points

Womack Jones and Roos

New Technology?
No silver bullet Yes, but integrated with system Not in the usual dont stop the line sense Integration of Tasks (opposite of deskilling) Identification and removal of defects (stop the line!) kaizen institutionalizing change

Automation? Standardized Production? Lean Characteristics?

J T. Blacks 10 Steps
Ref; JT. Black Factory with a Future 1991

1. Form cells 2. Reduce setup 3. Integrate quality control 4. Integrate preventive maintenance 5. Level and balance 6. Link cells KANBAN 7. Reduce WIP 8. Build vendor programs 9. Automate 10. Computerize

Demand Flow Technologys 9 Points

1. Product Synchronization 2. Mixed Model Process Maps 3. Sequence of Events 4. Demand at Capacity 5. Operational Cycle Time 6. Total Product Cycle Time 7. Line Balancing 8. Kanbans 9. Operational Method Sheets

Current Value Stream Map

Future Value Stream Map

J T. Black 1, 2
1. Form Cells Sequential operations, decouple operator from machine, parts in families, single piece flow within cell 2. Reduce Setup Externalize setup to reduce down-time during changeover, increases flexibility

Toyota Cell, one part is produced for every trip around the cell

TPS Cell

J T. Black

Standardized Fixtures

J T. Black 3, 4
3. Integrate quality control Check part quality at cell, poke-yoke, stop production when parts are bad 4. Integrate preventive maintenance worker maintains machine , runs slower

J T. Black 5, 6
5. Level and balance Produce to Takt time, reduce batch sizes, smooth production flow 6. Link cells- Kanban Create pull system Supermarket System

Balancing and Leveling

Balanced line: each process has the same cycle time. Match process time to assemble time, match production rate to rate of demand (Takt time) Leveled Line: each product is produced in the needed distribution. The process must be flexible to do this.

J T. Black 7, 8
7. Reduce WIP Make system reliable, build in mechanisms to self correct 8. Build Vendor program Propagate low WIP policy to your vendors, reduce vendors, make ontime performance part of expectation

Some Basics Concepts of TPS

Smooth Flow and Produce to Takt Time Produce to Order Make system observable and correct problems as they occur Integrate Worker Skills Institutionalize change

Two Examples; Time Takt Systems Pull

Takt Time: demand time interval

Available Time Takt Time = Product Demand

Calculate Takt Time per month, day, year etc. Available time includes all shifts, and excludes all nonproductive time (e.g. lunch, clean-up etc). Product demand includes overproduction for low yields etc.

Takt Time
Automobile Assembly Line; Available time = 7.5 hr X 3
shifts = 22.5 hrs or 1350 minutes per day. Demand = 1600 cars per day. Takt Time = 51 sec

Aircraft Engine Assembly Line; 500 engines per year.

2 shifts X 7 hrs => 14 hrs/day X 250 day/year = 3500hrs.

Takt time = 7 hrs.

Engines shipped over a 3 month period at aircraft engine factory B

12

month 1

month 2

month 3

engines shipped per week

10

0
7-Jun 15-Jun 23-Jun 30-Jun 7-Jul 15-Jul

Weeks

24-Jul

31-Jul

7-Aug

15-Aug

24-Aug

31-Aug

Factory B

Engines shipped over a 3 month period at aircraft engine factory C

7

shipped engines

0
may june

weeks

july

august

Factory C

On-time performance of engine plants

100%

80%

delivered

late late on time on time on time

60%

engines

40%

20%

0%

Push and Pull Systems

Machines

Parts

Orders

Push Systems
Order (from centralized decision process) arrives at the front of the system and is produced in batches of size B. Q. How long does it take to get one part out of the system?

1 Time = 0 Time = T1

..

Time = T2 Time = T3 Time = TN

Push Systems
1
Time = 0

3 .. N

Comment; Of course, this part can come from inventory in a much shorter time, but the point is that the push system is not very responsive.

Time = TN

If the process time per part is t at each of N processes, and the batch size is B, it takes time TN = NBt to get one part through the system.

Pull SystemsThe order arrives at the end of the line and is pulled out of the system. WIP between the machines allows quick completion.

Q.How long does it take to pull out one part? A.The time to finish the last opetration t.

Comparison between Push and Pull Systems

Push system characteristics: Central decision making, local optimization of equipment utilization leads to large batches, large inventories and a sluggish system. Pull system characteristics: Local decision making, emphasis on smooth flow, cooperative problem solving.

See HP Video

HP Video

Dots

Tacks

Tape

Pack

Inventory in the system = L Time in the system = W Littles Law L = W

HP Video Results
Push system (6) Space WIP = L Cycle time = W Rework Units WIP Quality Problem Production Rate =L/W 2 Tables 30 3:17 26 Hidden 0.15 Pull (3) 2 Tables 12 1:40 10 Visible 0.12 Pull (1) 1 Table 4 0:19 3 Visible 0.21

Graphical Interpretation
250 200 150 100 50 0 0 2 4 6
Inventory, L Time in System, W

Number or Time [s]

Batch Size "B"

L = W L k1B W k2B

= L / W = k1 / k2

So what are the advantages of the pull systems?

quick response low inventories observable problems
(if stopped = problem)

sensitive to state of the factory

(if no part = problem)

possible cooperative problem solving

The Toyota Production System

Historical View Performance measures Elements of TPS Difficulties with Implementation Eras of Manufacturing Practice Six

TPS Implementation
Physical part (machine placement, standard work etc) Work practices and people issues Supply-chain part Corporate Strategy (trust, job security)

Work practices and people issues

Failed TPS attempts; GM Linden NJ, CAMI, GM-Suzuki, Ontario Canada. Successes GM NUMMI, Saturn. Toyota Georgetown, KY
See MacCoby article Other Ref: Just Another Car Factory Rinehart, Huxley and Robertson, Farewell to the Factory, Milkman

Work practices and people issues

Innovative Work Practices Ref; C. Ichniowski, T. Kochan et al What Works at Work: Overview and Assessment, Industrial Relations Vol 35 No.3 (July 1996)

Examples of Innovative Work Practices

Work Teams Gain Sharing Flexible Job Assignments Employment Security Improved Communications

What Works at Work: Overview and Assessment,

Conclusion 1; Bundling Innovative human resource management practices can improve business productivity, primarily through the use of systems of related work practices designed to enhance worker participation and flexibility in the design of work and decentralization of managerial tasks and responsibilities.

What Works at Work: Overview and Assessment,

Conclusion 2; Impact New Systems of participatory work practices have large economically important effects on the performance of the businesses that adopt the new practices.

What Works at Work: Overview and Assessment,

Conclusion 3; Partial Implementation
A majority of contemporary U.S. businesses now have adopted some forms of innovative work practices aimed at enhancing employee participation such as work teams, contingent pay-for-performance compensation, or flexible assignment of multiskilled employees. Only a small percentage of businesses, however, have adopted a full system of innovative work practices composed of an extensive set of these work practice innovations.

What Works at Work: Overview and Assessment,

Conclusion 4; Barriers to Implementation
The diffusion of new workplace innovations is limited, especially among older U.S. businesses. Firms face a number of obstacles when changing from a system of traditional work practices to a system of innovative practices, including: the abandonment of organization change initiatives after limited policy changes have little effect on performance, the costs of other organizational practices that are needed to make new work practices effective, long histories of labor-management conflict and mistrust, resistance of supervisors and other workers who might not fare as well under the newer practices, and the lack of a supportive institutional and public policy environment.

Barriers to Implementation
Early abandonment Costs (training, commitment, benefits..) History of conflict and distrust Resistance of supervisors Lack of supportive infrastructure

The Toyota Production System

Historical View Performance measures Elements of TPS Difficulties with Implementation Eras of Manufacturing Practice Six

Six Eras of Manufacturing Practice, Ken McKay

Pioneering Systemization Technology and Process Internal Efficiency Customer Service Systems Level Re-engineering

Ken McKay 1, 2
1. Pioneering - sellers market, competition is not by manufacturing, large margins emphasize throughput not efficiency
2. Systemization - firm grows and system gets complex, gross inefficiency becomes apparent, competition begins to make its presence felt. Need for standard operating procedures, demand still high, inventory used to buffer against instabilities.

Ken McKay 3, 4
3. Technology and Process competition is increasing, sales are softening, manufacturing is still in early maturity and competition is limited to firms in similar situation. Product options grow. Mfg focus shifts to efficiency. 4. Internal Efficiency competition cherry pickers enter the market they dont offer all of the options and parts service but focus on the 20% which yields 80% of the revenue stream. Internal plant is put into order, problems are pushed outside to suppliers, best in class, bench marking identifies the silver bullet. Still using inventory to cushion production support variety, and maintain functional features.

Ken McKay- 5, 6
5. Customer Service talk to the customer, identify core competency, outsource, be responsive, reduce lead time, eliminate feature creep, focused factory etc.
6. System Level Reengineering firms have addressed the internal system and factory no more to squeeze out look to improving indirect and overhead, supply chain development.

Toyota Summary
High quality and low cost Relationship to previous systems (see McKay paper), yet new,. in fact revolutionary Many elements
Overall, see The Machine that Changed the World Cells, next time People, see Maccoby Article

Summary .. continued
Autonomation automation with a human touch Worker as problem solver TRUST