INVENTORY

MANAGEMENT
By-
Toyota Production System (TPS), Kanika Sehgal (10)
Just-in-Time (JIT), Nancy Yadav (12)
and Lean Manufacturing Prachi Arora (15)
TOYOTA MOTOR CORPORATION

Sakichi Toyoda, founder:

Toyota Motor Corporation:
Toyota Group of companies.
Japanese multinational
Toyota as a textile machine
Headquartered in Aichi, Japan
company

Kiichiro Toyoda, son of

Developed the concept of
Sakichi, Founder: Toyota
Just-in-Time.
Motor Corporation,1937

PS: Shingo Prize is the

highest manufacturing
excellence award in the U.S.
The prize is given both to
companies and individuals
who contribute to the
development of
manufacturing excellence.
WHY TOYOTA?
 HOUSE OF TOYOTA

Two Pillars:
Shortest lead time
To provide best Just In Time &
Lowest cost through elimination
quality Jidoka
of waste
(autonomation)
Attacks waste
• Anything not adding
value to the product

Exposes problems
and bottlenecks
caused by variability
• Deviation from optimum

Achieves
streamlined
production
• By reducing inventory
Waste (“muda”
in Japanese)

„anything other than the

— Shoichiro Toyoda
minimum amount of
equipment, materials, Founder, Toyota
parts, space, and worker‟s
time, which are absolutely
essential to add value to
the product.‟
 CONTINUOUS FLOW-ONE-PIECE FLOW, SINGLE-PIECE
FLOW, AND MAKE ONE, MOVE ONE.
Producing and Through a With each step
Or small batch making just what
moving one item series of steps is requested by
of items
at a time continuously the next step
CONTINUOUS FLOW PRODUCTION

Traditional Flow
Production Process
(stream of water)

Suppliers
Customers
Inventory (stagnant
Flow with JIT
ponds) Material
(water in
stream)
Suppliers

Customers
PUSH (“OLD STYLE” MRP / MATERIAL
REQUIREMENTS PLANNING SYSTEM)

• Push system: material is pushed into

downstream workstations regardless of whether
resources are available

Work WS 2 WS 3
Station 1
Material
Information (Production Schedule)
PULL (JIT) SYSTEM

•The production of items only as demanded for use

or to replace those taken for use.
•Pull system: material is pulled to a workstation just
as it is needed.

Work WS 2 WS 3
Station 1
Material
Information (via Kanban/Card)
MARKER
 TRIANGULAR KANBAN
Part # Part Description Location

KANBAN
Date Triggered Lot Size

Trigger (Reorder) Point

Tool #

Machine #

Authorizes Easy to add or

production from ‘Pulls’ material remove containers
May be a card, flag.
downstream through plant to change
operations production rate
SMALL VERSUS LARGE LOTS
JIT produces same amount
in same time if setup times
JIT Small Lots are lowered

A A B B B C A A B B B C

Time
Small lots also increase flexibility to meet
customer demands
Large-Lot Approach

A A A A B B B B B B C C

Time
CYCLE TIMES
Working time per day = 480 minutes
Daily requirements: A = 40 units; B = 40 units; C = 10 units
The system cycle time = 480/(40+40+10) = 5.33 min/unit

Product Requirements Cycle Time

A 40 480 4012
B 40 480 4012
C 10 48010 48
REDUCING LOT SIZES INCREASES THE NUMBER OF
LOTS-TO LOWER INVENTORY,
REDUCE LOT SIZES

Customer Lot size = 5

orders 10 Lot 1 Lot 2

Lot size = 2
Lot 1 Lot 2 Lot 3 Lot 4 Lot 5
 KAIZEN
Change for better = continuous improvement

Kaizen workshop or
Kaizen event:
A group of Kaizen
activity, commonly lasting
five days, in which a
team identifies and
implements a significant
improvement in a
process, e.g., creating a
manufacturing cell.
5S: OF KAIZEN/LEAN MANUFACTURING
 5 STEPS OF LEAN PRODUCTION SYSTEM
Step 1:Specify Value
Define value from the perspective of the final customer..

Step 2: Value Stream Mapping.

the problem-solving task, the information management task, and the physical transformation
task. Identify and categorize waste and eliminate it.

Step 3: Create Continuous Flow

Make the remaining steps in the value stream flow. Eliminate functional barriers and develop
a product-focused organization that dramatically improves lead-time.

Step 4: Create Pull Production

Let the customer pull products as needed.

Step 5: Perfection
There is no end to the process of reducing effort, time, space, cost, and mistakes. It‟s a
chain process.
ATTRIBUTES OF LEAN MANUFACTURING

use JIT to build systems to help

employees product a reduce space
eliminate perfect part every requirements
inventory time

develop close eliminate all but

relationships with educate suppliers value-added
suppliers activities

reduce the apply Total

develop the number of job Productive
workforce classes and build Maintenance
worker flexibility (TPM)
JIDOKA TECHNIQUES
 Poka-yoke (mistake or error proofing)

 A form of device for building-in quality at each production

process.

 This device may take many shapes and designs.

 Typical types of Pokayoke are sensors, proximity switches,

stencils, light guards and alignment pins.

 Simple circuitry is usually used to operate these electrical

error proof devices as they should be of low cost and
simple design.

 Goal: Finding defects before they occur = Zero Defects

 Statistical Quality Control (SQC): Finding defects after they

occur
 Value Stream Mapping
• A visual tool for identifying all activities of the planning,
What? and manufacturing process to identify waste.

• Provides a tool to visualize what is otherwise usually

Why? invisible.

• The leaders of each product family need to have a

Who? primary role in developing the maps for their own area.

•
When? Develop a current-state map before improvements are
made so that the efforts and benefits can be quantified.

Where? • On the shop floor, not from your office. You need the real
information, not opinion or old data.

How? • Next page

VALUE STREAM MAP SYMBOLS
Spot weld

Finished
goods
Process Vendor Data box Inventory

Push Supermarket: Physical pull Shipment

the location of a
predetermined
standard inventory
 COMPARISON OF
MRP (MATERIAL REQUIREMENTS PLANNING), JIT

MRP JIT
Loading of operations Checked by capacity Controlled by kanban
requirements system
Planning afterward
Batch sizes One week or more Small as possible

Importance of data Critical Unnecessary

accuracy
Speed of scheduled Slow Very fast
development
Flexibility Lowest Highest
Cost Highest Lowest
Goals Meet demand Meet demand
Have doable plan Eliminate waste
Planning focus Master schedule Final assembly schedule
Production basis Plan Need
REFERENCES

 http://www.toyota.com/
 http://www.toyota-global.com/

 http://scm.ncsu.edu/scm-articles/article/cash-to-
cash-toyota-inventory-management-and-heijunka
 http://team2toyota.blogspot.in/2010/02/toyotas-
inventory-management.html
 http://en.wikipedia.org/wiki/Toyota

 www.wisegeek.org/what-is-a-just-in-time-
inventory.html
THANK YOU !