Case: Toyota’s Kaizen Experience

By:
Rajesh A (1121502)
Rahul Pratap Singh (1121517)
Asim Dasgupta (1121522)
Sherin Thomas (1121547)
Jasmeet Hora (1121562)
 How Kaizen can be useful to organizations to improve
their operational efficiency and competitive advantages.
 How Kaizen can be useful to organizations to improve
their operational efficiency and competitive advantages.
• Kaizen is integration of many quality tools.

• Most important elements of Kaizen:-

– Improvement.
– Ongoing.

• Increasing efficiency through waste reduction:-

– Overproduction.
– Overprocessing.
– Unnecessary material movement.
– Unnecessary movement of people.
– Excess inventory.
– Defects.
– Idle Time.

• Ultimate objective:-
– Meet high quality expectations(TPS).
– Low cost(Kanban).
– On-time delivery(JIT).
 “Toyota people don’t believe in perfection only improvement.” Justify this
statement by explaining the role played by Kaizen in Toyota’s success.

• Toyota believes that:

“No process can ever be declared perfect but it can always be improved.”

• Toyota defined a process of continuous improvement in small

increments, without large capital investments that makes process more –
efficient, effective, under control and adaptable by help of 5S & 5WHY.’
.

• Every employee, regardless of position is treated equally. This is supported

by the 5S :
– SEIKO– Proper arrangement
– SEITON – Orderliness
– SEIKETSO –Proper cleanliness
– SEISO– Cleanup
– SHITSUKE – Discipline
• Seven types of wastes were identified:

• Kaizen as implemented by workers through Quality Circles and a

suggestion system.

• Set a target cost for each part and standard time for their production and
shop floors through Kaizen to meet the time and cost targets.

• Group leaders, chief leaders and engineers were responsible for

implementing Kaizen in the production phase and it was called ‘Organized
Kaizen.’
• Organized Kaizen features:-
– Budget constraints.
– If both cost and time constraints achieved, efforts needed improve
further.
– Kaizen to improve efficiency of least efficient groups.
– Cost councils to reduce cost with responsibility with production
staff(reduce workers in each unit).
– Engineers to verify problems in process
– Time cutting rule even for the most efficient teams.
– Around 90000 employee suggestions were implemented.

• ‘Try Teams’ were formed, ‘trying production’ of a new car before launch of
its mass production.

• If initially cost not met- workers were not used to the new system.
• Failed after 3 months- Kaizen activities were pursued to increase the
workers’ efficiency to achieve the target costs.

• If achieved both(referential cost and the standard time)- Kaizen was used
to reduce both further to increase productivity.

• Under Kaizen costing, costs were controlled through division of

responsibilities amongst:

– Group leaders: Reducing the time taken by the workers by improving their operating
process establish standard work and standard time and the line stop system
– Chief leaders: Reducing the standard time of their working unit by means of process
improvements for reducing the workers in their unit
– Engineers
• Team members treated the next person on the production line as a
customer, so did not pass a defective part to that person.

• If problem found- Line was stopped and the problem corrected before the
vehicle moved further down the production line.

• Each team member was a quality inspector and any time during the
production process, whoever spotted a problem could stop production by
pulling the ‘Andon cord’. Result:
– More than 90,000 employee suggestions were accepted each year
– Some individual team members gave more than 1,000 suggestions.

• Saved around 10 million yen as cost saving through quality initiatives in

1993, which increased to 107 million yen in 2001.
Modifications(On Improvement Philosophy)
• Plant sets own production efficiency.
• Best time marked in past as the standard time.
• Try teams gave considerations to women and aged workers.
• Reduced long working hours.
• Efficiencies for homogenous factories.
• 5 minutes buffer inventory.
• Improvement in wages
– Grade allowance and age allowance.
– Separete scales for white and blue collered staff.
 Do you agree that Toyota employed Kaizen for cost
reduction was imposed on the workforce, leading to
the labor crisis.
• The labor shortage was mainly due to:-
– Other high wage jobs.
– Shotage of young workforce.
– Aged people and women were increaing.

• Management sets target cost and standard times in design and production phase.
• Kaizen for “performing” and “non performing groups”
• “Cost Councils” fixes amount to be reduced in lobor cost terms.
• “Shojinka”- Reduction in work force.
• Try teams comprising of skilled workers measured time required for installing a
part.
• A

• Time cutting rule for groups placed at higher levels in production efficiency.
Thank
You