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The TOYOTA Production System

oyota is renowned in business circles not for its business practices, but for the world-famous Toyota Produc-
tion System (Lean Manufacturing). Much of the concept was developed because of the characteristics of the
country in which the company was envisioned--Japan. Space was limited, raw materials were lacking, and the
real market was overseas. Founder Kiichiro Toyoda (name slightly amended for corporate use) was forced to
develop the most cost-efcient strategies in order to keep proftability competitive. Taiichi Ohno, principal
inventor of TPS, has been quoted as saying: Having no problems is the biggest problem of all.
From vision to frst model, Toyota can build a car nearly twice
as fast as the best U.S. auto manufacturer.
Practical Principles of Lean Manufacturing
Toyotas Market Performance
Two main principles govern the manufacturing side of TPS: Just-In-Time and Jidoka.
These men have been the principal forces behind either the
founding of TPS or continuous improvement of the system.
The System in Practice
Just-In-Time Production - A Steady Cycle
Jidoka
Lean Production Terminologies
The Supermen at Toyota
Eiji Toyoda, 1913-
CEO/Chairman
1957-1994
Kiichiro Toyoda, 1894-
1952
Toyota Founder
Taiichi Ohno, 1912-1990
Director/ Vice President
1954-1978
Katsuaki Watanabe, 1938-
President/CEO
2005-Present
Fujio Cho, 1937-
President/Chairman
1995-2005, 2006-Present
Katsuhari Nakagaya,1943-
Vice-Chairman
2004-Present
Despite a shaky U.S. economy, Toyota has seen total revenues
grow more by over 33% in the last four years. Market shares in
the U.S. have nearly doubled since 1996.
2004 2005 2006
Toyota
GM
Ford
2007
202
181
172
150
200
250
Total Revenues (in millions)
Sources: Wikipedia, Toyota Motor Co., Shmula.com
Toyotas plant in Georgetown, Kentucky., employs more than 800
workers and churns out nearly 100 cars per day..
The line has stopped here because of
a broken cutting tool.
* Just In Time (JIT): Production replacing components
only as used
* Jidoka: Autonomation - automation with intelligence
* Heijunka: Production smoothing
* Kaizen: Continuous Improvement
* Poka-yoke: Avoiding inadvertent error
* Kanban: Sign, Index Card
* Andon: Signboard
* Muri: Overburden
* Mura: Unevenness
* Muda: Waste
* Genchi Genbutsu: Seeing for oneself
* Manufacturing supermarket: where all components
are easily withdrawn
Just-In-Time Production is all about a
relationship between the assembly
plant and its suppliers.
Kanban Collection/
Data Processing Kanban Printing
Tuggers take items to trucks
Items taken to diferent
stations along assembly line
Kanban
revised at
each station
Assembly
Line
Andon
Parts are
retrieved as
per Kanban
order
Te principle of Jidoka requires the
production line to stop when something
goes wrong.

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Assembly Plant
Supplier
Supplier
A kanban is simply an order card.
1. To cut lead-time, cut out all the bits that don't add value.
2. Te line must stop if there is a problem.
3. Deal with defects only when they occur, and less staf will be needed.
4. Ask yourself "Why?" fve times.
5. Train people to follow rules and standards as if second nature.
6. Find where a part is made cheaply and use that price as a benchmark.
7. Develop people who can come up with unique ideas.
Transport
T
ERROR
ERROR
1 2
Something has
gone wrong at
station 1.
The operator
presses a button
on the andon, a
display board of
all stations.
All work stops,
and everyone
pitches in to
solve the
problem.
Three iterations of the Prius, Toyotas groundbreaking hybrid car. Despite Toyotas great success with
the original Prius in 2001, the company has continued to improve the car at a prodigious rate.