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Student Id: M1003126

Student Status: MBA 2nd semester LSBF Manchester Campus University Of Wales


London School of Business & Finance

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TABLE OF CONTENT S.NO 1 TOPICS Introduction to Porter s Value Chain Pg. No 3

Lean Production
y Definition

Seven Principles of Toyota Production System

Corporate Culture

The Five Ss

The Focus Of Toyota production System

Toyota And Waste Elimination

Recommendation Kaizen Concept References



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Porter Value Chain:

The Porters value chain or value chain analysis, is a principle from business management that was first time put forward by Michael Porter in 1985 in his book, Competitive Advantage: Creating and Sustaining Superior Performance. A value chain includes a chain of activities. In operation process Products pass through all these activities of the chain in order and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities. The concept of the value chain should not be mixed with the costs occurring throughout the activities. As an example of the difference, a diamond cutter can be used. The cutting activity may have a low cost, but the activities adds too much of the value to the end product, since a rough diamond is significantly less valuable than a cut diamond.
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The value chain arrange the generic valueadding activities of an organization in an ordre. The primary activities include: inbound logistics, operations (production), outbound logistics, marketing and sales (demand), and services (maintenance). The support activities include: administrative infrastructure management, human resource management, information technology, and procurement. The costs and value drivers are identified for each value activity. The value-chain concept is not for an individual organization, it exceed and cross the limits of an individual organization. It can apply to whole supply chains and distribution networks. The delivery of products and services mix to the end customer will mobilize different economic factors, each managing its own value chain. Porter terms this larger interconnected system of value chains the value system. A value system includes the value chains of a firms supplier (and their suppliers all the way back), the firm itself, the firm distribution channels, and
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the firms buyers (and presumably extended to the buyers of their products, and so on).

Lean production:
Engineer Taiichi Ohno developed a concept originally for manufacturing of automobiles in Toyota Company after World War II. It is also known as the Toyota Production System or just-in-time production. His concept was mainly based on eliminating waste and empowering workers, reduced inventory and improved productivity. Definition: Lean production is an assembly-line methodology which is about doing more with less: less time, inventory, space, labour, and money. "Lean manufacturing", shorthand for a commitment to eliminating waste, simplifying procedures and speeding up production. Lean Manufacturing (also known as the Toyota Production System) is the systematic elimination of waste
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overproduction, waiting, transportation, inventory, motion, and over-processing, defective units and the implementation of the concepts of continuous flow and customer pull. Instead of maintaining resources in anticipation for future manufacturing, the management of Toyota built a good relationship with suppliers. By use of multi-skilled employees, Toyota was able to flatten their management structure and focus resources in a flexible manner. Because the company was able make changes quickly, they were often able to respond faster to market demands than their competitors could.

Seven Principles of Toyota Production System:

1. Reduced Setup Times:
All practices held in Toyota are wasteful because they add no value and they tie up labour and equipment. By organizing procedures, Toyota managed to slash setup times from months to hours and sometimes even minutes. 2. Small-Lot Production:
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Producing things in large amount results in huge setup costs, larger inventories, extended lead times, and larger defect costs. Because Toyota has make setups short and inexpensive, it became possible for them to economically produce a variety of things in small quantities. 3. Employee involvement and empowerment: Toyota organized their workers by forming teams and gave them the responsibility and training to do many specialized tasks. Teams are also given responsibility for housekeeping and minor equipment repair. Each team has a leader who also works as one of them on the line. 4. Quality at the source: To eliminate product defects, they must be discovered and corrected as soon as possible. Since workers are at the best position to discover a defect and to immediately fix it, they are assigned this responsibility. If a defect cannot be readily fixed, any worker can halt the entire line by pulling a cord (called Jidoka). 5. Equipment maintenance:
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Toyota operators are assigned primary responsibility for basic maintenance since they are in the best position to defect signs of bad operation. Maintenance specialists diagnose and fix only complex problems, improve the performance of equipment, and train workers in maintenance.

6. Pull Production: To reduce inventory holding costs and lead times, Toyota developed the pull production method wherein the quantity of work performed at each stage of the process is dictated solely by demand for materials from the immediate next stage. This is where the term Just-in-Time (JIT) originated. 7. Supplier Involvement: Toyota treats its suppliers as partners, as integral elements of Toyota Production System (TPS). Suppliers are trained in ways to reduce setup times, inventories;
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defects, machine breakdowns etc., and take responsibility to deliver their best possible parts.

Corporate Culture:
The fundamental reason for Toyota's success in the global marketplace lies in its corporate philosophy the set of rules and attitudes that govern the use of its resources. Toyota have successfully penetrated global markets and established a world-wide presence by increase its productivity. The company's rule to both product development and distribution is very consumer-friendly and market-driven. Toyota's philosophy of empowering its workers is the centerpiece of a human resources management system that fosters creativity, continuous improvement, and innovation by encouraging employee participation and that likewise engenders high levels of employee loyalty. Knowing that a workplace with high morale and job satisfaction is more likely to produce reliable, high-quality products at affordable prices, Toyota have
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institutionalized many successful workforce practices. Toyota has done so not only in its own plants but also in supplier plants that was experiencing problems.1 Although many car manufacturers have earned a reputation for building highquality cars, they have been unable to overcome Toyota's advantages in human resource management, supplier networks and distribution systems in the highly competitive car market. Much of Toyota's success in the world markets is attributed directly to the synergistic performance of its policies in human resources management and supply-chain networks.

The Five Ss:

The Five Ss includes the five dimensions of workplace optimization: Seiri (Sort), Seiton (Set in order), Seiso (Shine), Seiketsu (Standardize), and Shitsuke (Sustain). Like many concepts of keizen and lean manufacturing, the 5S can be interpreted narrowly or broadly, depending on circumstances of their use.
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The 5S Program defines the steps that are used to make all work spaces efficient and productive, help people share work stations, reduce time looking for needed tools and improve the work environment.

Phases of Ss:
There are 5 primary phases of 5S: sorting, straightening, systematic cleaning, standardizing, and sustaining. Additionally, there is an additional phase, safety, which is sometimes included. Sorting (Seiri): Eliminate all unnecessary tools, parts, instructions. Go through all tools, materials, etc., in the plant and work area. Keep only essential items. Everything else is stored or discarded. Straightening or Setting in Order (Seiton): There should be a place for everything and everything should be in its place. The place for each item should be clearly labelled or demarcated. Items should be arranged in a manner that promotes efficient work flow. Workers should not have to repetitively bend to access materials. Seiton is one of the features that distinguish 5S from "standardized cleanup".

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Shining or Sweeping or Cleanliness / Systematic Cleaning (Seiso): Keep the workplace tidy and organized. At the end of each shift, clean the work area and be sure everything is restored to its place. A key point is that maintaining cleanliness should be part of the daily work not an occasional activity initiated when things get too messy. Standardizing (Seiketsu): Work practices should be consistent and standardized. Everyone should know exactly what his or her responsibilities are for related to the first 3 S's. Sustaining the discipline (Shitsuke): Maintain and review standards. Once the previous 4 S's have been established, they become the new way to operate. Maintain focus on this new way and do not allow a gradual decline back to the old ways. When an issue arises such as a suggested improvement,, a new way of working, a new tool or a new output requirement, review the first 4 S's and make changes as appropriate. The Focus of Toyota Production System:

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Real TPS is not just about flow or pull production. TPS in Toyota is primarily concerned with making a profit, and satisfying the customer with the highest possible quality at the lowest cost in the shortest lead-time, while developing the talents and skills of its workforce through improvement routines and problem solving disciplines. This stated aim is mixed in with the twin production principles of Just in Time (make and deliver the right part, in the right amount, at the right time), and Jidoka (build in quality at the process), as well as the notion of continuous improvement by standardization and elimination of waste in all operations to improve quality, cost, productivity, lead-time, safety, morale and other metrics as needed.

2. Discuss and recommend how waste is/can be managed along your chosen organisations Value chain? Toyota and Waste Elimination:

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Wastes (muda) are the activities and results to be eliminated. While the elimination of waste may seem like a clear subject in such environmental concepts as cleaner production, it is noticeable that waste is often very conservatively identified. In Lean Manufacturing, waste is any activity that consumes time, resources, or space but does not add any value to the product or service. Lean manufacturing is, in its most basic form, the systematic elimination of 7 wastes overproduction, waiting, transportation, inventory, motion, over-processing, defective units and the implementation of the concepts of continuous flow and customer pull. The waste is key to establishing distinctions between value-adding activity, waste and non-value-adding work. Non-value adding work is waste that must be done under the present work conditions. One key is to measure, or estimate, the size of these wastes, to demonstrate the effect of the changes achieved and therefore the movement toward the goal. The "flow" (or smoothness) based approach aims to achieve Just-In-Time (JIT), by removing the variation caused by work
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scheduling and thereby provide a driver, rationale or target and priorities for implementation, using a variety of techniques.

The three broad types of waste:

The elimination of waste is the goal of Lean. Toyota defined three broad types of waste: muri, mura and muda. Muri is all the unreasonable work that management imposes on workers and machines because of poor organization, such as carrying heavy weights, moving things around, dangerous tasks, even working significantly faster than usual. It is pushing a person or a machine beyond its natural limits. This may simply be asking a greater level of performance from a process than it can handle without taking shortcuts and informally modifying decision criteria. Muri also includes bad working conditions, and it will often push a resource to work harder than its natural limits. Unreasonable work is almost always a cause of multiple variations.

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Mura is the variation and inconsistency in quality and volume in both products and human conditions. Muda is the Japanese word for waste. It specifies it specifies any human activity, which absorbs resources, but does not directly add customer value. These nonvalue-adding activities and results overproduction, waiting, transportation, inventory, motion, over-processing, defective units are to be eliminated.

3. Evaluate the impact that your recommendation will have on your organisations resources, And justify how your recommendation will ensure increased competitiveness, long term Sustainability and corporate social responsibility?

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Ans: Recommendation and Toyota Production System

1. Begin action in the technical system and then follow quickly with cultural change. 2. Learn by doing first and training second. 3. Start with value to demonstrate lean as a system and provide a "go see model". 4. Use value stream mapping to develop future state visions and help "learn to see". 5. Use Kaizen workshops to teach and make rapid changes. 6. 7. Organize over value streams. Make it mandatory.

8. A crisis may prompt a lean movement, but may not be necessary to turn the company around. 9. Be opportunistic in identifying opportunities for big financial impacts. 10. Realign metrics with value streams perspective. 11. Build on your company's roots to develop your own way.
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12. Hire or develop lean leaders and develop a succession system. 13. Use experts for teaching and getting quick results.

Kaizen Concept:
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Everything can and should be improved. Not a single day should go by without some kind of improvement being made somewhere in the company. Don't just criticize, suggest an improvement. Think beyond assumptions. working, try it work even questions. common sense. Challenge Even if something is to find the ways to make better. Ask searching

Customer-driven strategy for improvement any management activity should eventually lead to increased customer satisfaction. Imagine the ideal customer experience and strive to provide it. Quality first, not profit first an enterprise can prosper only if customers who purchase its products or services are satisfied.
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Recognize that any corporation has problems and establish a corporate culture where everyone can freely admit these problems and suggest improvement. Think of how to improve it instead of why it can't be improved. See problem solving as cross-functional collaborative and systemic approach. Emphasis on process establish a way of thinking oriented at improving processes, and a management system that supports and acknowledges people's process-oriented efforts for improvement.

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Barnett H, Operations management, Macmillan, London, 1996 Constable C. and New C., Operations Management - a Systems Approach, Wiley, 1976 Currie, Work Study, Naylor J, Operations Management, Pitman, 1996 Rose M, Industrial Behaviour, Penguin, 1978 Hill T, Production/Operations Management, Prentice Hall, 1991 Shingo S, Non-stock Production - the Shingo System for Continous Improvement, Productivity Press, 1988 Slack, Chambers, Harland, Harrison, Johnson, Operations Management, Pitman, 1995. Ohno, Taiichi (February 1988). Toyota Production System: Beyond Large-Scale Production . Waldner, Jean-Baptiste (September 1992). Principles of ComputerIntegrated Manufacturing. John Wiley & Sons. Louis, Raymond (2006) Custom Kanban: Designing the System to meet the Needs of Your Environment.
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