The Toyota Production System Toyota Motor Corporation Public Affairs Division Operations Management Consulting DivisionContents Foreword / v Introduction * Productivity / 2 * A Biographical Perspective / 5 * Putting the System to Work / 7 Part I Just-in-Time Production * Doing It All for the Customer / 12 * Leveled Production / 13 * Running a Pull System / 15 * Continuous-Flow Processing / 20 * Take Time / 22 * Multiskilled Operators / 23 Part I: Jidoka * Building Quality into the Production Processes / 26 Part Ill: Standardized Work and Kaizen # Standardized Work: the Basis for Kaizen / 32 * Kaizen: the Lifeblood of Standardized Work / 34 Part IV: The Continuing Evolution of the Toyota Production System © The System Is Alive / 36 * Case Study 1: North America / 37 * Case Study 2: Europe / 39 * Employee Satisfaction as the Key to Customer Satisfaction ( 41 * Hands Across the Sea / 42 * Beyond Manufacturing / 43 * Afterword / 44 iiiForeword The Toyota Production System. And the Earth Here is yet another printing of a booklet that we first issued in 1992 and revised extensively in 1995, The essential elements of the Toyota Production System are unchanging, and che content on the following pages is essentially unchanged from the material we issued in 1995. But we have provided the booklet with a new cover and with this new foreword to call attention to an important and often-oyerlooked aspect of our system: its role in safeguarding the environment. ‘Manufactarers in every industry have a big responsibility to fulfill in ensur- ing a sound environment for future generations. Along with preventing pollution and other overt damage to the environment, they need to conserve resources by casing material and encrgy efficiently. The Toyota Production System is a framework for conserving resources by eliminating waste. People who participate in the system learn to identify expenditures of material value for customers. In other words, they learn to recognize waste. They also lea ¢o take the initiative in developing measures for eliminating the waste and prevent ing its recurrence, effort, and time thar do nor generate As always, we hope this booklet will make Toyora a more familiar and understand able presence, especially in nations where we operate plants. We are eager to show our host communities that Toyota plants are opportunities for employees to master new skills and to exercise initiative. We want to show people how our production system makes work fulfilling—how it puts employees in charge of their worksites: how it encourages them to use their own creativity in devising herter ways to per form their work. We also want to show how suppliers benefit from participating in the Toyota Production System. To he sure, the system is a demanding regimen. But participating in the system has enabled suppliers worldwide to achieve dramatic improvements in productivity and quality. They have hecome more-competicive companies. And that has enabled them to win increased business with Toyota and with other automakers. In preparing this booklet, we have avoided a “how-to” approach. The booklet is not a manual. Rathes, i is an overview of the concepts that underlie our production system, It is a reminder that lasting gains in productivity and quality are possible whenever and wherever management and employees are united in a commitment to positive change. December 1998Introduction O Productivity OA Biographical Perspective O Putting the System to Work @ For Suppliers: Benefit or Burden? @ For Employees: Stimulating or Stressful?Productivity: It’s a matter of Life ana Death! 2 Introduction Companies that are more efficient than their competitors in providing customers with high-quality goods and services will thrive. Companies that are less efficient than their competitors will perish. OF course, all companies must provide customers with world-class quality. And they must provide prompt delivery and service. Customers won't accept anything less. The glabalization of markets means they don't have to accept anything less. The Toyota Production System is a framework of concepts and methods for enhancing corporate vitality. It enables companies to achieve continual gains in productivity while satisfying customers’ expectations for quality and prompt delivery, Eliminating waste (and thereby raising quality) Basically, the Toyota Production System provides for eliminating waste in the ways that companies employ human resources, equipment, and material. Managers and employees learn to question the need for every work-sequence motion, for every item of in-process stock, for every second that people, material, or machines spend idle. By eliminating waste in those and other categories, companies concentrate resources on making and delivering only what the customer wants, only when the customer wants it, and only in the amount the customer wants. Quality rises along with productivity when people learn to identify and elimi- nate waste. That is because a big part of eliminating waste consists of preventing defects. Defective products entail a grievous waste of human resources, equipment, and material, And measures for eliminating waste by preventing defects are a definitive feature of the Toyota Production System, By identifying waste and eradicating it, companies can reduce their costs. Managers formerly regarded costs asa “given” that was largely beyond their con- trol and prices as a variable that they could adjust to accommodate fluctuations in costs. But in the intensely competitive global markers of today, buyers—rather than sellers—are the arbiters of price. The only way for companies to survive and to secure profits is to keep their costs lower than the prices that customers are willing to pay for their products and services. Roots in Henry Ford's system The Toyota Production System evolved from the historic manufacturing system developed by Henry Ford. Among the distinguishing elements of Ford’s system, all ‘of which still ean be seen today in any modern automobile plant, were... ‘+ a conveyar belt that moved cars through the assembly process. In other words, the work came to the workers, rather than vice versa. + adivision of labor in which workers each handled only a single step in the assembly sequence. Early automobile plants were “craft” shops where individual workers would put together entire assemblies, such as engines, by themselves. Ford raised efficiency by breaking down the assembly sequence into simple, repeti- tive tasks and arraying those tasks along a production line.‘A The Toyota Production System provides for arranging all the processes from raw materials to finished products In 8 single, smooth fw: Employees and managers at Ccampanies thet employ the system learn to identify and eliminate any waste that ‘occurs in tha flow * an integrated supply chain for parts and materials. Ford kept each process in the production sequence supplied with all the parts and materials n process, He pioneered advances that reduced deviation in part dimensions and thereby ensured that parts would fit together properly ed in that But with some new twists Henry Ford's manufacturing system thus provided the historical and technological foundations for the Toyota Production System. But circumstances in Japan provided the opportunity for some crucial improvements on Ford’s system. To begin with, production volumes in postwar Japan were minuscule compared with auromotive output in the West. Those small production volumes did not allow Japanese automakers the luxury of using specialized equipment for each model. Nor did they allow for stocking huge inventories of parts. Automakers in Japan thus needed to develop flexible methods for adapting the same machines to different vehicle models. And they needed to find ways to ensure reliable supplies of needed parts and materials without maintaining big inventories4 Introduction ‘Another Japanese factor that prompted a variation on Ford's system was the situa- tion in labor-management relations. Severe recession buffeted Japan's rebuilding ‘effort in the early postwar years. Adverse economic conditions catalyzed an uly eycle of strikes and lockouts. Toyota experienced the same labor strife that was endemic in Japanese industry in the early 1950s. Ultimately, labor and management at Toyota came to an under- standing, Labor would cooperate with the drastic restructuring—including job cuts—that was necessary for the company’s survival. Management would guarantee lasting employment for the employees who remained. Together, they would refrain from increasing employment casually, even in good times; instead, they would try to find ways to accommodate upturns in demand with the smallest possible number of employees. Mutual trust between labor and management at Toyota has deepened over the years. Management has rewarded employees for productivity gains with improved compensation and working conditions. Employees have taken the initia- tive in activities for raising efficiency and otherwise enhancing the company’s competitiveness. ‘Trust has enabled management ro-delegate authority to the workplace. The peo- ple who run the Toyota Production System are che people on the line—the people who can see problems when and where they occur and who can act immediately to resolve those problems. Trust in the company encourages employees to acquire whatever skills are necessary to perform the work that needs to get done, By mastering a wide range of skills, they equip themselves ro help and fill in for each other as necessary. Employees also reinforce their job security by acquiring diverse skills. That's because the versatility of muliskilled employees allows for redeploying personnel flexibly in response to changes in demand. So, the Toyota Production System has inherited Henry Ford's practice of break- ing down work into simple steps and distributing those steps among employees along the line. But employees in the Toyota system are in charge of their own jobs. ‘Through their teams, they run their own worksites. They identify opportunities for making improvements and take the initiative in implementing those improvements in cooperation with management. And they share fully in the fruits of their own labor, Yet another element of Ford's system that remains crucial in the ‘Toyota Production System is the conveyor belt. Ar Toyota, Ford’s conveyor became a metaphor for the entire sequence of filling customer orders, The Toyota Production System itself is like @ vast conveyor that stares with customer ocders and culminates in deliveries of finished products, (In fact, the Toyota Production System can extend even beyond product deliveries. It can encompass such work as maintenance and repair activities See Part IV of this booklet, which begins on page 35, for a brief description of some recent developments in ways of implementing the system.) The Toyota Production System supports productivity gains by highlighting waste. It engenders quality gains by illuminating problems when and where they ‘occur and by providing for taking measures to resolve the problems and prevent their recurrence. Companies achieve continuing gains in productivity and quality to the extent they can devise smoother, simpler flows in their operations and train employees to analyze, resolve, and prevent problems.A Biographical perspective Production System: Sakichi Toyoda; his son, Kiichiro Toyoda; and | Three men figured especially prominently in creating the Toyota a production engineer by the name of Taiichi Ohno. Sakichi Toyoda was the inventor of automatic looms who founded the Toyota Group. He invented a loom in 1902 that would stop automatically if any of the threads snapped. His invention opened the way for automated loomworks where a single operator could handle dozens of looms. Sakichi’s invention reduced defects and raised yields, since a loom would not go on producing imperfect fabric and using up thread after a problem occurred. The principle of designing equipment to stop automatically and call attention to problems immediately is crucial to the Toyota Production System. It is evi- dent on every production line ar Toyota and at other companies that use the system, When the Toyota Group set up an automobile-manufacturing operation in the 1930s, Sakichi’s son Kiichiro headed the new venture. Kiichiro traveled to the United States to study Henry Ford’s system in operation. He returned with a strong grasp of Ford’s conveyor system and an even stronger determination to adapt that system to the small production volumes of the Japanese market. Kiichiro’s solution was to provide the different processes in the assembly sequence with only the kinds and quantities of items that they needed and only when they needed them. In his system, each process produced only the kinds and quantities of items that the next process in the sequence needed and only when ic needed them. Production and transport took place simultaneously and synchronously through- our the production sequ laid the groundwork for just-in-time production, and he gets credit for coining the term “just in time.” nco—inside and between all rhe processes. Kiichiro thus Sakichi Toyoda Kiichiro ToyodaTaiichi Ohno 6 Introduction The man who did the most to structure the Toyota Production System as an integrated framework was Taiichi Ohno. In the late 1940s, Ohno—who later became an executive vice president at Toyota—was in charge of a machining shop. He experimented with various ways of setting up the equipment to produce needed items in a timely manner. But he got a whole new perspective on just-in-time pro~ duction when he visited the United States in 1956 Ohno went co the United States to visit automobile plants, but his most impor tant U.S. discovery was the supermarket. Japan did not have many self-service stores yet, ancl Ohno was impressed. He marveled at the way customers chose exact- ly what they wanted and in the quantities that they wanted. Ohno admired the way the supermarkets supplied merchandise in a simple, efficent, and timely manner. In later years, Ohno often described his production system in terms of the American supermarket. Each production line arrayed its diverse ourput for the fol lowing line to choose from, like merchandise on supermarket shelves. Each line became the customer for the preceding line. And each line became a supermarket for the following line. The following line would come and choose the items it needed and only those items. And the preceding line would produce only the replacement items for the ones that the following line had selected. This format, then, was @ pull system, driven by the needs of the following lines. Ie contrasted with conventional push systems, which were driven by the output of pre- ceding lines. Ohno developed a number of tools for operating his production format ina systematic framework, The best known of those tools is the kanban system, which provides for conveying information in and between processes on instruction cards.Putting the System to work Companies around the world have demonstrated the value of the Toyota Production System in making automobiles and also in making other products. Some companies even have used the concepts of the system successfully in service sectors. The basic concepts of the Toyota Production Syst are unchanging, Bue companies implement those concepts differently. One of the great advantages of the Toyota Production System is its adaptability. Yet common threads are apparent in the expe- rience of companies that have implemented the concepts of the system successfully To benefit from the Toyota Production system, companies must satisfy three basie conditions: 1. Top management must make a strong and visible commitment to the system, must participate directly in implementing the system, and must instruct middle level managers to do likewise. must participate in the system. The companies must put in place a solid framework for cultivating capable ders and for providing employees with necessary practical skill The commitment by top management is especially crucial. Its a beacon for everyone in the company—a clear and compelling mandate for change The Toyeta Praduction System has pravad useful in raising pro ductivity and qualty in eertings ‘anound the woeld, That value is apparent at Toyota plants and a the plants of other compa- nies that have implemented the concepts of the system.For Suppliers: Benefit or Burden? 8 Introduction ‘Companies often dally with schemes for raising productivity and quality. But they rarely stick with demanding regimens unless they have to. Even inefficient companies can get by when business conditions are good. And all bur the most inefficient companies can muddle through modest economic downturns. Te usually takes a eompany-threatening crisis—a severe market slump, for exam- ple, or-a technological breakthrough by a competitor—to put the fear of God into management and employees, Only in crisis do people awaken readily to the need for fundamental change. ‘Once top executives recognize that corporate survival depends on fundamental change, they must lead that change themselves. They must venture into the work- place. They must let employees know what kind of change they envision and why. ‘And they must put middle management on notice that managers’ jobs will binge on active cooperation in promoting change. Next, executives must translate their commitment into an organizational frame- work. They should begin by establishing a task force under a capable leader to set tap a showease production line, That line becomes a staging area for disseminating the new production concepts throughout the company: members of the original task force supervise work in implementing the concepts on other production lines; they also lead teams that promote continuing improvements in the name of kaizen. ‘Companies also need to put in place organizations for trainings managers t0 operate and maintain their new production systems. The natural teachers are the people who have participated in the initial task force. They should impart theirDirect involvement by top management is a prerequisite for implementing the Tayata Production System successfully, skills to other managers and employees through classroom instruction and also through hands-on training sessions in the workplace The commitment by top management and the organizational framework for implementing the system help fulfill che second prerequisite for adopting the Toyota Production System: participation by all employees. Full participation is essential because the Toyota Production System works by establishing a smooth, continuous flow through the entire production sequence For example, streamlining work and elimi ‘ing inventories at one worksite mean little if work just piles up anew in the next stage of the production sequence, The Toyota Production System generates the greatest henefits for companies when they implement it throughout their production sequence. Those benefits become greater still when companies work together. Companies strengthen each other by developing smooth flows that extend all che upplie 3For Employees: ‘Stimulating or Stressful? 10 IntroductionJust-in-Time Production DO Doing It All for the Customer Ol Leveled Production O Running a Pull System O Continuous-Flow Processing O Takt Time O Multiskilled Operators @ An Unlikely Candidate for FameDoing it All for the Customer 12 Customers want the best possible products at the lowest possible prices. And they want them as soon as possible. The Toyota Production System provides for fulfilling customer demand efficiently and promptly by linking all production activity to sales in the marketplace. A core element of the Toyora Production System is the concept of arranging all the processes in the production sequence in a single, smooth flow. Basically, each process arrays items for the following process to withdraw and use when it needs them. Each process withdraws items from the preceding process only to make items to replace ones that the following process has withdrawn. Bach process makes addi- tional items only to replace items that the following process has withdrawn. ‘The final process in the chain, of course, is the dealer who sells cars to cus- tomers. Our assembly plants make vehicles only in response to actual dealer orders, Suppliers’ plants make parts and materials only in the kinds and quantities needed to replace items our vehicle plants have used ‘That is what we mean by “just-in-time” production: making only what is needed, only when it is needed, and only in the amount that is needed. Just-in-time production eliminates lots of kinds of waste. It eliminates the need for maintaining large inventories, which reduces financing costs and storage costs. It climinates the waste that occurs when changes in specifications or shifts in demand render stocks of old items worthless. It also eliminates the waste that occurs when defects go undetected in the manufacturing of large batches. Just-in-time production, though simple in principle, requires dedication and careful, hard work to implement properly. Once managers and employees have mas- tered the basic concept, they learn to devise various tools and techniques for putting that concept into practice. Notably, they learn to « distribute the production of different kinds of items evenly through the day and week to allocate work evenly and thereby use resources optimally (leveled production); « link each process organically to the preceding and following processes (pull system); ‘© make items literally one at a time wherever possible and emulate one-at-a-time processing in batch processing by reducing the size of barches (continuous-flow processing); and « establish a time frame for linking the pace of work in every process to the pace of sales in the marketplace (Gakt time! Part I: Justin-Time ProductionLeveled production: You won't be Happy without it ‘¥ Producing diferent made! variatione on the game lina Making an even mix of items ‘on a production line steadies the work load in all processes ‘and thereby uses resources caxsimally Just-in-time production can help companies achieve spectacular gains in productivity and in quality. But justin-time production is impossible unless companies distribute work evenly by leveling production, Let's take a look at how leveling works at Toyota. Our dealers provide us with information each month about the numbers and kinds of vehicles they expect to sell in the following month. We pass that information on to our vehicle plants and to our suppliers to give them a rough basis for production planning. The dealers provide us with information every 10 days about actual orders they have received. Based on that information, our plants and our suppliers draft detailed, 10-day production plans. Our dealers also provide us-with daily information about customer orders and requests, We can adjust our production plans up to three days before production to accommodate requests for changes in some specifications, such as body color Based on the daily production plan, we decide the exact sequence of items to produce at our plants. They distribute different specifications evenly ove the day. When you visit a Toyota vehicle plant, you see a variety of body types moving along the same assembly Line at the same time. We stagger the production of differ- ent body types evenly over the course of the day. We do that to make efficient use of the basic factors of production: our people and our equipment. For example, we could spend all morning producing one item, all afternoon pro: ducing another, and all evening on a third. That might seem efficient, sinee it would enable us to run larger batches without changing paints and tools and dies. But it ‘would distance the pattern of pro- duction from the pattern of sales in the marketplace. Worse, it would impose a dispropartionate burden on one team at a time in the preceding processes. Some teams would be idle while others were busy. And that would be an inefficient way to employ our resources. So, we distribute production evenly in the assembly processes. thar enables our suppliers to dis- tribute production evenly in their manufacturing processes. It there fore enables all of us to get by with 2 minimConventional batch production ‘concentrates work on diferent processes at different times. Leveled production distributes werk evenly among the staps in the production sequence at all umes, Preceding process Unleveled Production Preceding process 14 Part I: Justin-Time ProductionPull!!! (don't push) (Customer demand is the ‘dynamic thet drives the Toyota Pracluction Syetem. All activity in the system occurs in response to real demand, as eapressed by customer orders, ‘The systern thus contrasts wely corwantional, “push” systems, where processes make items regardless of ‘ectual end demand, The most important feature of the Toyota Production System is the way it links all production activity to real demand. Everything that hap- pens in the system happens only in the name of fulfiling actual orders from dealers. The system works that way because it is a pull system, in contrast with conventional “push” systems. In push systems, manufacturers produce goods and then try to find buyers for those products. Processes inside the manufacturers’ plants turn out batch after batch of items and pass them on, regardless of the pace of work in the following processes. Inevitably, a lot of time and effort ends up wasted in push systems. Plants turn out streams of products without regard for the needs and wants of their intended customers, Semifinished goods pile up between processes inside the plants and between parts makers and assembly manufacturers. We use @ tool called the kanban to operate our production system as a pull system. Kanban usually—though not always—are printed cards in clear plastic cases. Every item or box of items that flows through our production process carries its own kan- ban. Kanban come off of items that have been used or transported and go back to she preceding processes as orders for additional items. The kanban cards bear lettering and bar codes that identify the items, the loca- tions of the worksites where they are used, and the production line or supplier from which they come. We use two kinds 6f kanban at Toyota: parts withdrawal kanban and pro- duction instruction kanban, Withdrawal kanban are for communication between processes. Production instruction kanban are for communication inside processes. ‘Operators remove withdrawal kanban from parts and materials they have used. We take those kanban back to the preceding processes to withdraw additional items. Production instruction kanban come off of items that the following processes have withdrawn. They go back into their processes as instructions to make additional items to replace che ones that have been withdrawn, 45fan operator removes the kanban from a new box of itame whan he or che uses the first tem frorn the bos. ‘The operator deposits the kanban that he or she ramavas fram boxes of pacts in @ kenban mailbox nesrh, ‘The drivers thet: bring parts from the suppliers stop in at the sorting room after lunioading their trucks and pick up Kanban to take back to their plants. Back at the suppliers plents, the drivers deposit ‘the kant in collection hanes for subsequent sorting 2400-03070-00 as. as sms | 00025 16 Part I: Justin-Time Production ‘and takes them to a sorting room. Thare, an ‘automatic sorter plecas the kenban in separate boxes for the different suppliers. ‘Team leaders gather the contents of the kanban rmailbovas #t prescrived ‘imes—several tes a day— snd lage ther in calisction boxes. The Kanban postman picks the kanban up fram the collection boxes. 1A withdrawal kann goes conto a new box of parts in place of the production instruction kanban. The lstear ‘goes back into the plant 9s a production order for o tke quantity oF the seme part ‘Than, the supplier delivers the naw box of parts to the plent indicated on its kanban. Here ig @ withdrawal kanbon that we use with an outside supplier i inciootes the name of the supplier. the racening jes at our plant, the lacation in the plant where we will us the kam, the pert number: the part name, and the quart. This kenban also has 4 bar cade label to permit automatic invoicingKanban Flow: Example 2, Production Instruction Kanban: <4 Prociuction at the suppl pracaeds in aceordence that flaw back to th ‘manufacturing line sof finished parts at this Toyota supplier go inta @ reck to await pickup and delivery. Nowe the red errata, They Indicate which boxes ta pick yp frst when 1 in tne bax of the came kind of part are swatting delvery. Tha frstin, frstout system avoids the collection of dust end other prabiams thet can occur wtien items sit idle, Shipment orders, of course, are in the form of ‘withdrawal kanben, Those kanban go ante the boxes in place of the production Instruction kanban The production instruction kanban go back into the manufacturing line as production orders, 9 perators use at this supper ‘each comry their ov withdraval kanban for ordering adkitional materials from the suppliers’ supplier.Nearly every part and ascemily that: moves through tha Toyote Production System carries a kena. ‘We use various tools to run our production farmat 1s a pul system. Before operators at the worksite ‘abave usa up a polle-load of body panels, they push ‘button on on electric console (arrow, That lights & lamp on @ signboard on the other side of the plant. A ‘ori: operator (right photo) then gets 2 naw load of body panels from the stock arrayad by the preceding ‘process and delivers i to the assembly ine. 18 Pant f: Justin-Time ProductionAn Unlikely Candidate for Fame Tr homely kanban is an unlikely candidate for fame. Though its name means “signboard” in Japanese, the kanban is no marquee. Kanban at Toyota are usually no more than printed pieces of cardboard sandwiched between clear plastic covers. Yet those nondescript items have become the best-known element of the Toyots Production Systom, Some paople even think thet the kanban system is the Toyota Production System. ‘Actually, the kanban is @ tool that enables employees to operate the Toyata Production System by taking responsibility for managing their own jobs. Ervision an operator who removes kenban fram components before mounting them on vehicles. The operator sends the kanban back to the preceding process s orders for additional components to rapiace the ones he ar she hes used. That operator is shouldering an important part of the “management function” of ordering parts and managing inventory, Kanben help enforce an organic linkage between work in preceding processes and following processes. Employees maintain that linkage by handling the kenban praparly and by abiding by the established work procedures for their work. Every large assembly shop at Toyota has two or more kanben ‘stations, each of which processes about 10,000 kanban per shift ‘Suppliers affix identifying kanban to the items they deliver. And they receive orders via Kanban thet they remove from boxes at the stations on theie way out, The paperwork is minimal. The efficiency is maximal. ‘And the employees themselves are completaly in charge. 19Go with the Flow!!! (preferably one at a time) We talk about the Toyota Production System in terms of arranging work ina single, smaath flow. That means arranging work inside each process to flow smoothly from one step to the next. It means laying out plants so that work proceeds directly from one pracess to the next without any detours into storage. And it means devising logistics so that work moves smoothly and on schedule fram raw materials plants through machining plants to assembly plants and on to distributors, dealers, and customers. Ideally items should proceed one ata time through the production sequence. That ig the fastest way 10 translate raw material into finished products. It minimizes the amount of material in processing at all stages of production ‘One-at-a-time production is impractical, however, in work where we change dies, molds, or other tools to produce different items, as in forging, casting, stamp- ing, and molding. In those kinds of work, we need to design processes in ways that emulate continuous-flow production. ‘A good first step toward emulating one-at-a-time production in batch processing isto use the smallest possible batches. Since changing dies or molds is time-consuming, manufacturers traditionally have favored large batches in batch-processing work. Large batches, however, result in large inventories at the hhatch-processing machines and also in the preceding stages of the production sequence, “We can reduce inventories and inerease flexibility by using smaller batches. If ave need 1,000 units each of Parts A and B, we can produce them in four batches of 500 units rather than in two batches of 1,000 units. To do thar without compromis- ing efficiency, we must find ways to shorten the changeover time for the dies, molds, ‘or whatever. That is, we must ensure that the larger number of production runs does not greatly increase the aggregate time the machines are idle, Historically, advances in shortening changeover times have been an important dynamic of the Toyota Production System. Those advances are easy to achieve-once ‘operators in the workplace recognize the importance of speeding changeovers and reducing batch sizes. The trick is to analyze the changeover work systematically. 20. Part I; Justn-Time PraductionSeparately Positioned Processing Continuous-Flow Processing In the figure above, Operators A, B, and G perform succes: ‘ive steps in an assembly sequence. Work begins for each operator in the example at the right with recaiing a box of 100 samifinished assemblies from the preceding pracess. ‘They perform addtional work on each of the assemblies and then take thar 100 assamblias to the next operator. This approach entails inefficiencies of the flloning kinds: “Lach operator has 100 ams at a time, which results in ‘extremely ong load times. 2.We cannat belance the distribution af work ‘3.The lenge emount of items per operator means extra han- dling on the workbench. 4. Operator B discovers an improperly assembled work: piace, site cannat datermina exacty when or how the problem occurred, She knows anly that it happened some: ‘ume during the processing of 100 itams. 5. When production shifts to a diferent kind of assembly, ‘the operators must remove all the parts for the previous ‘assembly from the shelves to avoid mixing them with the ports for the new assembly. ‘We can evo the problems that occur inthe preceding ‘example by deploying the operators nex ta each char 8 continuous flaw (above) and by having each operetor handle cone sssorly ata tie. They perform their work on an aaaerm- by and hendt orto the nes operator before reaching for the next workpiece, This change, which requires no increase in the number of operators forthe same span of work yes the following Improvernents 4.The number of tems on the fine—irom raw mataria to ‘ished preduct—becomes the same as the number of ‘operators on the ine. 2.Whan Operator B ciscovers a detective tem, she and (parator A can determine the cause of the problem inne tlataly, since fs the kemm that Operator A has just hanced 2 Operetors need’: arrange end convey large numbers of garts on the workbench, 4 Differences in work loads between operators are readily apparent, and we oftan can find ways to reduce our men- power needs. '5:We can suitch production to eifferant tems without inter ‘uptng the production Nowe Hore is @ look at the siffarence in lead time between one-t atime procassing and convantional batch processing. This ‘example is of three consecutive processes, each of which requires one second to complete one item. Batch process ing enteils @ praduction lead time of 300 seconds. That's Large-Batch Production because the parts sit idle in the preceding processes ‘while work is under way on whole batches in the following processes. Continuous-low processing allows for completing 100 parts in 102 seconds—just, enough tine to run all 700. parts, one at a time, through the three processes in tur. Processing Parts One at a TimeTakt Time: the Pulse of the Toyota Production System ‘As we emphasize throughout this book, the Toyota Production System links all production activity to actual customer demand. The language of that linkage is tak time. Take is the German word for meter, as in musical meter. In our production system, takt is the pace of sales in the marketplace, We quantify takt in our plants as the quotient of daily working hours divided by the number of vehicle orders we need to fulfill each day. Here's how takt works. Let's assume a plant operates with two shifts a day of 460 minutes each, for a total of 920 minutes. If we need to fill orders for 400 vehi- cles per day, the take time will be about 2.3 minutes per vehicle. If an increase in sales volume raises the daily requirement to 500 vehicles, the takt time will shrink to 1.84 minutes We work out takt times for all the items that we use. If the takt time for some vehicle model is 2 minutes, the take time for the engine also will be 2 minutes. The take time for the 20 lock nuts used to mount the 4 wheels will be 6 seconds per nut (120 seconds/20 nuts = 6 seconds/nut). The take time on this assembly ine for eales is shart: On this assembly fine for aules, the takt time is relatively 9, we assign a large number of people to the line, and Jong; 80, we assign just a fev people to the ine, and each operator handles a narrow range of work teach operator handles a broad range of work. 22 Part I: Just-in-Time ProductionMultiskilled operators: responding flexibly to Real Demand Once we have determined a takt time, we determine the most efficient work flow and procedures, with due consideration to quality, safety, quantity, and cost. We allocate work to maintain = steady, optimal work load for each operator and each machine. We never accommo- date changes in takt times by making substantial changes in the daily work loads for individual operators. When the takt time for a production line becomes shorter and more demanding, we streamline the flow of work and add operators as necessary. When the takt time becomes longer, we assign fewer operators to the line Assigning more people to a line means that each operator handles a narrower range of work. Assigning fewer people means that each operator handles a broader range of work. ‘That flexibility in allocating work is possible because (1) people master a broad range of skills in the Toyota Production System and (2) we employ “multiprocess handling” instead of *multimachine handling.” ‘This multisklled operator han- des all the processes at a worksite by himself. Those processes transform @ rough ‘casting into a finished gear for a differential ascombly (lower hati, far right Rough casting (right) ‘and fished gear24 Pact. “Traditionally, manufacturers have assigned operators to multiple machines of the same kind, That is, @ lathe operator might process five items on five lathes and then pass them on to a milling machine operaror, who processes them on five milling machines. The items then might move on to drilling and to capping in the same manner. Multimachine handling entails long lead times and excessive handling. The irem thar the lathe operator processes on the first lathe, for example, sits idle tuntil the operator has finished processing the other items on the other four lathes. Overproduction occurs frequently, and feedback on quality problems is difficult to brain. In multiprocess handling, an operator handles different kinds of machines to keep work moving in a continuous flow. The operator might use a lathe, a milling machine, a drill, and then a tapping machine on cach item in sequence. “Multiskilled operators and multiprocess handling thus enable us to aecommo- date changes in takt times while maintaining short lead times with one-at-a-time production. In our example, we could accommodate an inerease in demand by assigning two operators, instead of one, to the four processes, The first operator ‘might narrow his or her scope of work to the lathe and milling machine, and the second operator would handle the drill and tapping machine. We would accommo- date.a subsequent decline in demand by turning all four processes back over to one operator Multimachine Handling Multiprocess Handling ewe tie) 4 Unfinished parts seo) 1 weet 2 @ @ @ @ Neste nti) 2 neces @ 6 @ @ seo ag) 8 swometeress! © @ @ @ @ Fristes raduas ten tnra 4 ‘one gen nese roca fue tine ‘One pren andes openness. Justin-Time ProductionPart Il Jidoka O Building Quality into the Production Processes @ What's in a Name—didokaBuilding Quality into the Production Processes A\big part of the Toyota Production System is traceable, as we have seen, to an automatic loom invented early in this century by Sakichi Toyoda. That loom was important because it stopped immediately whenever a thread snapped. The principle of stopping work immediately when problems occur and preventing the production of defective items is basic to the Toyota Production System. We call that principle jivioko. In the Toyota Production System, we design equipment to detect abnormalities and to stop automatically whenever they occur. And! we equip our operators with ‘means of stopping the production flow whenever they note anything suspicious. ‘That mechanical and human jidoka prevents defective items from progressing into subsequent stages of production, and it prevents the waste thar would result from producing a series of defective items. ‘Another advantage of jidoka is that it illuminates the eauses of problems by stopping the equipment exactly as itis when a problem first occurs and by calling attention to the problem immediately with a signal lamp or some other kind of indicator. The most fundamental effect of jidoka, though, is the way it changes the nature of line management: ic eliminates the need for an operator or operators to watch over each machine continuously—since machines stop automatically when abnormalities occur—and therefore opens the way to major gains in productivity. Jidoka thus is a humanistic approach to configuring the human-machine interface, It liberates operators from the tyranny of the machine and leaves them frce to concentrate on tasks that enable them to exercise skill and judgment. 26 Part Il: JidokaOperates in the Toyota Production Systam can stop the production line whanaver they note anything suspicinus. ‘Along the conveyor on this ascernbiy line, an operator (Photo a} has nated s part thet does not fit correctly He pulls on the ine-stop cord (Phiowo 6]. That ights the ‘andor lamp and suramans the operator's tearm leader to have a look (Photo c). The tine wil continue moving unl it reaches the next “ued postion’—the position where teach process an the line has completed one wark cycle When the team leader arrives, the operstor explains the problem. The tearm leader cistovare a feting that has slipped out of place end is able to resolve the problem (Phato of before the line reaches the fixed position, f the leader required mone time to resove the problem, the line would stop at the fed position We mark the fixed position clearly for work in each process. Operators in the proc ponsibilty for guaranteeing the quality of all werk up to that ine They and their equipment make sure no defective keris progress beyond that fine and into the next process. ‘When an operator signals 3 prablem by pulling ont the lne-stap cord, the line keeps moving until i raaches the fited position. That givas the tearn leader and opera: tor @ change to reaoke the problem before the line stops, CGperstors would be hestant to pull the linestop cord if pulling the cord stopped the line immadiataly: they might be subconsciously inclined to let minor imper fections pass rather than take responsibilty for stopping the line. Employees are more inclined to call ettendion to possible problems when they know that summoning help will it stop the line immediately, That rasuts in more rigorous quality control We algo have ancthar reason for keaping the fine ‘moving until reaches the fixed pasition: stopping the line in the middla of a work cycle would be sisruptiee. ‘Stopping the line at the fxed position ensures that al processes alang the Ine wil be between work oycies when the stopaage occurs. We thus avoid the errors ‘and qualty problems thet: happen all too easity when interruptions occur in the midst af workcostly refinish jacemert 28) Part I: JidokaBefore Kaizen After Kaizen This failsafe faeture praverts operators from accidentally Falieate tprcventirt: mounting a part: backwards | Work (in reverse} L_Woxk normal | Machine tind | Sendo Weider Failsafe features for preventing human 4 and mechanical error are valueble in jayplomraing the oka, prince of bl ing quality into the production processes. Here, 2 failsafe improvement prevents ‘| workpiece with a missing nut from progressing further in the production sequence, Every operator is an inspec: ton, responsible for the quality of his or her oem, work,What's in a Name— vidoka 30 Part Il: JidokaPart Ill Standardized Work and Kaizen O Standardized Work: the Basis for Kaizen O Kaizen: the Lifeblood of Standardized WorkStandardized Work: the basis for Kaizen Standard inpracess stock is tha amount of matarial that {s flowing through 8 process: \whven work is proceeding ‘smoothly. fis the minimum ‘amount of material needed to maintain a smooth flow of pro- duction without accumulating iventarios, Standardized work is a tool for maintaining productivity, quality, and safety at high levels. It provides @ consistent framework for perfor ing work at the designated takt time and for illuminating opportunities for making improvements in work procedures. ‘We use three elements in structuring standardized work: * takt time, ‘+ working sequence, and * standard in-process stock. ‘Takt time, as described earlier, is the pace of sales in the marketplace. The work: ing sequence is the series of steps that we determine is the best way to perform a task, Standard-in-process stock is the minimum number of workpieces that we need to have on hand in a process to maintain a smooth flow of work. Standardized work provides derailed, step-by-step guidelines for every job in the Toyota Production System. Team leaders determine the most efficient working sequence. With their team members, they make continuing improvements—kaizen— in that sequence. Kaizen thus begets new patterns of standardized work. 32. Part Ill: Standardized Work and Kaizen“The operator in the ser Photos 3b the right is abiding by carefully designed working sequence. Thet sequenc ‘appears in a standardized work chart at the worksite (botow Standardized Work Chart ] Work [from removal of amess | eserinton [Te atochent of auriram er oe. |fan [fev | nt] a 603 zes i ¢37||sze |] zy. |fev- |lov- [fey 5412 [4134s] eroPart Ill Standardized Work and Kaizen O Standardized Work: the Basis for Kaizen O Kaizen: the Lifeblood of Standardized WorkStandardized Work: the basis for Kaizen Standard inpracess stock is tha amount of matarial that {s flowing through 8 process: \whven work is proceeding ‘smoothly. fis the minimum ‘amount of material needed to maintain a smooth flow of pro- duction without accumulating iventarios, Standardized work is a tool for maintaining productivity, quality, and safety at high levels. It provides @ consistent framework for perfor ing work at the designated takt time and for illuminating opportunities for making improvements in work procedures. ‘We use three elements in structuring standardized work: * takt time, ‘+ working sequence, and * standard in-process stock. ‘Takt time, as described earlier, is the pace of sales in the marketplace. The work: ing sequence is the series of steps that we determine is the best way to perform a task, Standard-in-process stock is the minimum number of workpieces that we need to have on hand in a process to maintain a smooth flow of work. Standardized work provides derailed, step-by-step guidelines for every job in the Toyota Production System. Team leaders determine the most efficient working sequence. With their team members, they make continuing improvements—kaizen— in that sequence. Kaizen thus begets new patterns of standardized work. 32. Part Ill: Standardized Work and Kaizen“The operator in the ser Photos 3b the right is abiding by carefully designed working sequence. Thet sequenc ‘appears in a standardized work chart at the worksite (botow Standardized Work Chart ] Work [from removal of amess | eserinton [Te atochent of auriram er oe. |fan [fev | nt] a 603 zes i ¢37||sze |] zy. |fev- |lov- [fey 5412 [4134s] eroKaizen: the eblood of Standardized Work Kaizen furnishes the dynamism of continuing improvement and the very human motivation of encoura dividuals to take part in designing and managing their own jobs, Kaizen improvements in standardized work help maximize productivity at every worksite. Because standardized work involves following procedures consistently, any inherent problems in the working sequence surface repeatedly and conspicuously. Team lead- ers and their team members therefore can identify the problems easily, And they can rectify problems promptly, Similarly, monthly changes in production volumes require changes in the stan- dardized work. Team leaders and team members devise new standardized work procedures to accommodate monthly changes in production volumes, Kaizen activities include measures for improving equipment, as well as measures for improving work procedures. But work kaizen tends to be easier, faster, and less expensive than equipment kaizen, So, we usually start with work kaizen when we resolve a problein. If modifying the working sequence is insufficient to resolve a problem, we consider possible solutions through equipment kaizen. are trying t Abiding carefully by stander. ized work guidelines furnishes a basis for keizen, Here; the ‘operator we saw previously (page 33} and his team leader sscuss ways to improve the standardized work ot theie worksite 34 Bart Ill: Standardized Work and KaizenPart IV The Continuing Evolution of the Toyota Production System Ol The System Is Alive O Case Study #1: North America O Case Study #2: Europe O Employee Satisfaction as the Key to Customer Satisfaction O Hands Across the Sea O Beyond Manufacturing O AfterwordThe System Is Alive The basic goals of the Toyota Production System are eternal: customer satisfaction and corporate vitality. The scope of the Toyota Production System, however, is broadening steadily. The system is taking hold in nations around the world. And it is rendering service in industries besides automobiles and automotive parts. The tools and techniques of the Toyota Production System are changing, too, Technological acivances are spawning new means of processing information. Globalization, meanwhile, means that companies must manage parts supplies and product distribution over much greater distances than ever before. Similarly, companies are exploring ways to implement the system further “upstream” —in the processes that supply raw materials—and further downstream—in the realm of aftersales service. 36 Part IV: The Continuing Evolution of the Tayota Production SystemCase Study #1: North America We opened the Toyota Supplier Support Center in Kentucky in 1992 to work with companies that ask for help in adopting our production con- cepts. Toyota has benefited hugely from advances by such Americans as Henry Ford. And we wanted to repay some of that debt. Our local plants work with suppliers. But the Supplier Support Center lends a hand to companies whether or not they are doing business with Toyota It even assists manufacturers in industries besides automotive parts, Several companies that have worked with our Supplier Support Center have demon: strated the effectiveness of the Toyota Production System in an American setting, A good example is the automotive parts manufacturer Grand Haven Stamped Products ‘Company, in Michigan. That company makes floor mounted transmission control systems, hood and deck lid hinges, and clutch, brake, and accelerator pedals. Grand Haven, which has been in business since 1924, has approximately 350 employees and annual sales of about $72 million (1995). Its core competencies center on stamping, welding, and assembly. Grand Haven supplies parts to General Motors, Ford, Toyota, New United Motor Manufacturing Inc. (a joint venture between GM and Toyora), Honda, Mazda, Borg-Warner Automotive, New Venture Gear, Mitsubishi, Volkswagen, Mercedes-Benz, and Nissan, I began working with the Toyota Supplier Support Center in 1993. Luggage Arm Assembly Results of Implementing the Toyota Production System {first two years) Productivity Outaut/person 184% Overtime hours/week 100% Parsconel needs online 45% Inventory (on praduction lina) Work in process 93% Raw material -92% Finished goods 88% Floor space 60% Busy Customer complaints/morth 100%Like most companies that adopt the Toyota Production System, Grand Haven began in one segment of its opera tions. It set up a continuous-flow line in a cell for assembling luggage arms. The improvements in productivity and quality were immediate and dramatic, and they have continued. The next step was to extend the continuous-flow processing into the preceding process: stamping. Grand Haven’s Press Department traditionally had operated under the classic principles of mass production. The changeover times for the stamping machines were long. So, the depart ment processed large batches between die changeovers. The large batches resulted in big inventories. Stoppages occurred frequently in the following processes because of improper part mixes in the stampings. Grand Haven, with the assistance of engineers from the Toyora Supplier Support Center, discovered ways to short en the changeover times. Notably, it began doing a lot of the preparation and follow-up work for the changeovers “ “on-line.” The company formerly had stopped the stamping machines while bringing up and positioning the new dies for mounting, Ir had left the machines stopped while returning the old dies to their storage space. By revising its work procedures, Grand Haven was able to prepare the new dies while the stamping machines were still run instead of ning anid to restart the stamping machines before putting away the old dics. Grand Haven standardized the changeover work systematically and trained operators to follow the standardized format faithfully. That allowed for using small batches on a continuing basis. The company thus succeeded in producing only the amounts of items actually needed and thereby secured lasting gains in productivity. The company also streamlined its stamping work by implementing a signal kan- ban system. Planning and prioritizing the jobs for each stamping machine had been difficult and subject to chronic confusion, The kanban eliminated the confusion by linking the job sequence to the needs of the following processes. Productivity gains were just as dramatic in the stamping work as in the assembly work, And Grand Haven since has introduced just-in-time principles in several other cells. Those cells include processes for serving clients hesides Toyota, So, implement= ing the principles of the Toyota Production System has strengthened the company's overall competitiveness in developing business with diverse customers. Stamping Work Results of Implementing the Toyota Production System (first: two years} Dia changaovar Average time required 94% ‘Average monthly changovers wa00% Inventory “Bo Output HEN Grand Haven is strengthening its competitiveness further by helping its suppliers implement elements of just-in-time production. It is concentrating on setting up pull systems between its plant and its suppliers’ plants. 38 Part IV: The Continuing Evolution of the Toyota Production SystemCase Study #2: Europe Cantinuousfiow processing has eliminated a grest deal of inven- tory an Brose's production line for electric window requiatars, It also has eliminated a stop in the warehouse for the regula- tors on route to the Toyota U.K. plant: the assembly processes naw array @ varity of finished work for the Tayors plant to withdraw direct Drivers return fram the Toyota U.K. plant with kanban for varieties of parts that the plant has used. They withdraw bores of window regulators that correspond to the kanban indications, And the Brose plant rakes addkional window regulators to replace the ones that have been withdrawn, Our business with European manufacturers has expanded greatly since Wwe opened a vehicle plant and engine plant in the United Kingdom in 1992. That business has been an opportunity to introduce European ‘suppliers to the principles of the Toyota Production System. A good example of implementing the Toyota Production System in Europe is the window regulator line at the German manufacturer Brose’s U.K. plant. Regulators are the mechanisms—manual or electrie—for raising and lowering windows. Brose employs 3,100 people and operates six plants in Europe and Mexico. Its annual sales are about DM1,200 million (1995), The Brose plant in the United Kingdom makes seat latches and hinges and door systems as well as window regulators and other items. It supplies parts and assemblies to Ford, Jaguas, Honda, Rover, Mitsubishi, Peugeot, Renault, and Toyota, Engineers from Toyota Motor Manufacturing (UK) Led, worked with Brose to imple- ‘ment several improvements in a line that makes window regulators for Toyota’s U.K. vehicle plant, Most of those improvements resulted directly or indirectly from intro- ducing the concept of takt time, ‘Takt, as we have seen (page 22), is the pace of sales in the marketplace. Brose worked out the takt time for each step handled by each operator on the window regulator line. The takt time furnished a basis for standardizing the work in each step and for undertaking improvements. In addition, Brose converted the line to continuous-flow processing, Formerly, each operator had completed a whole box of items before passing them Before improvement Input Input Input Pe paducion rent Beinn 4a fate Red, " person Tete “- Inventory 9 People - hp After improvement production a ‘vig kanban a-5—g:. 1 person | iaea, 2 people z 394 Brose operators formerly on to the next operator. That resulted in large inventories between stages on the line performed diferent work in and obscured the causes of defects. Brose eliminated those inventories and improved the production sequence at vis concrete eehwae ati by having operators pass items on to the next operator one ata time nd Miribanchaa, By hSeGd The switch t0 one-at-a-time, continuous-flow processing focused attention on all the work together in a corr the layout of the line. Soldering machines, for example, had been on the opposite ‘tnuous fiw, the company —_side of the roam from the assembly line. That positioning necessitated long detours eliminated the inventory thet’ and extra inventories. Of course, it made continuous-flow processing all but impos- formerly accumulated Between sible, So, Brose integrated all the work and equipment in.a continuous line. That processes. It also has reduced Eivsonnal need onthe ine. simplified the work flow and shortened the lead times. Along with adopting continuous-flow processing between operators on the line, Brose reduced the size of the batches thar the line handled as a whole. An automated testing machine was the primary bottleneck. Changing over the machine to test window regulators for different model variations involved long stoppages per changeover. Brose therefore had opted for very large batches. ‘The Toyota engineers and their counterparts at Brose found ways to cur the changeover time for the testing machine some 90%. That allowed for a reduction of foursfifths in hatch size. In another improvement, the operators on the line gor rid of an automated machine for fastening motors onto the window regulators. The possible henefits of doing without the machine became apparent when Brose implemented the concept of standardized work. Along with using standardized work, the operators began conducting kaizen activities to improve the standardized work. They soon discov- ered that the bulky machine was a hindrance. ‘The operators and their supervisor tried a compact, manual mechanism for fas- tening the motors to the regulators. That mechanism proved just as fast and reliable as the automated machine had been. The operators and their supervisor made a fur- ther improvement by equipping the mechanism with a fail-safe feature for detecting missing parts. That increased reliability and reduced the occurrence oF defects. 49 Part IV: The Continuing Evolution of the Toyota Production SystemEmployee satisfaction as the key to Customer satisfaction Utimate responsibilty for raleing quelty and productiviy fies vith the people in the workslaee, tke these amplay 205 at 2 Toyota plant in China, ‘Success in implementing the ‘Toyote Production Systam hinges on earning their trust, securing their active partic pation, and providing them ‘with sufficione aks and unde ‘standing ta fulfil their rate ful Customer satisfaction is a reflection of employee satisfaction. In that sense, the Toyota Production System has been successful in earning customer satisfaction because it provides employees with fulfilling work Measures for enhancing employees? sense of job fulfillment are an important empha: sis in new ways we are implementing our production system. We have learned, for example, that work is more fulfilling when employees can take part in completing an entire product or assembly. Employees take more pride in their work when they can see their efforts take shape in a functional unit. Assigning a single small team to assemble a whole vehicle would be grossly inefficient. But we can arrange work so that teams can handle all the steps of assembling complete systems, And we have -gun making a special effort to arrange work that way when we build new production lines and when we reconfigure existing lines to make new vehicle models. For instance, we traditionally have installed electrical wiring a little hie at a time at very different stages in the vehicle assembly sequence. That also has been the case in installing exhaust systems and other important systems. Recently, we have begun entrating, the installa That heightens the sense of teamwork among the 20-or-0 group members at each worksite. It reinforces their sense of accomplishment by enabling them to com- plete a erucial and integrated part of each vehicle. con jon steps for such systems at single worksitesHands Across the Sea The Toyota Production System began as a framework for streamlining production and transport at plants that were a stone's throw from each other. Transport lead times were not much of a problem when the parts plant was next door to or just down the road from the vehi- cle assembly plant. But in recent years, Toyota has begun making large volumes of cars and trucks around the world. Plants outside Japan will be making more than 2 million Toyotas a year by 1998. So, Toyota has been developing techniques to manage long-distance logistics in a global context. It also has continued to refine its methods for managing long- distance logistics in Japan, The importance of those methods increased in the carly 1990s as Toyota opened its first vehicle plant outside Aichi Prefecture—on Kyushu-—and as it opened a large parts plant on the northern island of Hokkaido. We minimize lead times in long-distance logistics by implementing just-in-time principles rigorously. That is, we... + transport parts in frequent shipments of small lots and + employ mixed loads of various parts from diverse suppliers to use every cubic inch of space in containers, trucks, and ships. ‘Trucks make scheduled “milk runs” to pick up parts from multiple parts plants in the American Midwest, in Europe, in and around Toyota City, and in other regions around the world. They take the parts to collection depots for shipment by train or boat to distant plants. As far as the suppliers are concerned, global logistics are only a matter of getting parts onto their shipping docks on time. Frequent shipments of small lots help shorten lead times in the movement of parts and materials. But long-distance logistics also stretch out lead times in the circulation of kanban. We have trimmed those lead times by switching to electronic kanban and on-line communications links. That way, we can “return” a withdrawal kanban to the parts plant as soon as a vehicle plant uses a shipment of parts—even if the vehicle plant is on the other side of the world. This ship delvers parts and ‘materials on a justrvtime basis to Toyota's vehicle plant ion the southern Japanese island of Kyushu. Trucks pick up parts 3t suppliers and take ther to a callection depat in Toyots City, From there, trucks ‘carry mixed loads in large con- tainars to the Port of Nagoya for timely sea transport ta Kyushu. That system supports shart lead times in supplying the vehicle plant with the parts it neads when it needs them. Part IV: The Continuing Evolution of the Toyota Production SystemBeyond manufacturing YW The Toyota Production ‘System can eliminate invento- 7 in distribution work just as well as it daes in production, These photos show the ship- ping dock at a distribution Center for replacement part before and aftar introducing just in-time principles Some of our most dramatic gains in productivity over the next few years will occur outside che factory. They will happen in the ways we distribute replacement parts, in the ways our dealers pravide after- sales service, and in the ways we distribute vehicles. Dealers around the world tend to order parts in larger quantities than they require for immediate needs. They do that because they want to be suse of having parts on hand to service customers’ vehicles promptly. But that “safety cushion” translates into a huge volume of excess inventory around the world. w That is, we are persuading them to order parts only to replace items that they have actually used. We are winning over the dealers by guaranteeing delivery of needed parts within 24 hours. One way we are shortening lead times is by shifting to daily, from weekly, shipments at distribution centers, Another is by setting up on-line ‘communications links between the distribution centers and car dealers to process orders. In maintenance and repair business, vehicle service centers are raising efficiency by introducing principles of standardized work. People in vehicle care persuading dealers ro order replacement parts on a just-in-time basis and parts plants have beer analyzing work and refining procedures for years, Maintenance and repair shops, however, have heen less systematic in designing work, Now, we are working with some of those shops to analyze common service Procedures. We are helping develop standardized work procedures that result in faster service with fewer mistakes and omissions, Vehicle distribution also is becoming more efficient as we work with dealers 0 implement just-in-time principles more thoroughly. Larger dealerships have tend ed, for example, to pass orders on to us in batches, We are developing procedures for processing orders one vehicle ar 2 time. That will shorten lead times in translat= ing customer orders into deliveries of finished vehicles. 43