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SUBMITTED TO SUBMITTED BY Resp. Sushant Mittal Sir Ishan Ghosh Faculty PGDM Sem - 4 IPM MEERUT IPM MEERUT
Toyota was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a department of Toyota Industries, it created its first product, the Type A engine, and, in 1936, its first passenger car, the Toyota AA. Toyota Motor Corporation group companies are Toyota (including the Scion brand), Lexus, Daihatsu and Hino Motors, along with several "non-automotive" companies. TMC is part of the Toyota Group, one of the largest conglomerates in the world. Originally TQM started as TPM "Total Productive Maintenance". It was invented by Toyota. After the world war the United States and Great Britain occupied Japan with around half a million troops and other personnel and ran the country as a military dictatorship. One of the civilians General MacArthur summoned to Japan to help run the conquered nation was a statistician named William Edwards Deming. Deming had a number of interesting ideas about improving manufacturing processes and his combination of fussy mathematics with personal pride and workmanship meshed well with the Japanese mentality. The Japanese developed a huge respect for Deming and today he is greatly revered there.


In some cases they would just throw the machine away and order a new one from America. ✔ The new way required the men to document not only how the machine operated. ✔ First of all. Workers started taking apart their machines to learn about them and document their findings.Large Japanese industrial concerns tried to use the kinds of strategic thinking Deming taught in their operations. Toyota discovered the dominant cause of product defects was wear in the machines that made the parts. At that time Toyota. but its entire maintenance history and how it worked internally. The most important of these efforts are what took place at Toyota in the late 1960s. INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . ✔ The next step was to require workers to keep special notebooks documenting their machine. They succeeded phenomenally at this and by 1980 were producing the highest quality automobiles in the world. a truck manufacturer. Instead of hoarding mechanical knowledge in a few absentee engineers every worker started to have this kind of expertise. they stopped moving workers around as much and assigned workers to have responsibility over individual machines. These systemic problems like this be fixed by: ✔ To solve the problems Toyota completely changed the way it operated its plants. The problem was that workers followed the basic American practice which was to operate a machine until it broke and only then call in an engineer to fix the machine. Another complication was that workers tended to move from machine to machine and often confusion resulted. They called their new methods "Total Productive Maintenance" or TPM. decided to begin producing passenger cars and they made a determined effort to appraise and improve their methods at a fundamental level. In turn this wear was caused by the accumulation of dirt and chips (metal shavings). Before this was done machines were more or less black boxes to the workers. This resulted in defective parts as the machine wore down and lack of productivity while the machine was waiting to be fixed or replaced.

With this kind of success other Japanese and even American manufacturers became interested in their methods.✔ The next step was to tackle the dirt. Because they now actually had started to learn how the machines worked internally this was possible. ✔ Then they started regularly taking apart their machines to clean them. In some cases these procedures led Toyota to actually redesign and modify parts inside their tooling to improve it. Since dirt was responsible for the wear that was causing defects it would be eliminated. They started on the outside by creating sweeping and cleaning regimens. ✔ The results of these efforts are well-known: not only did Toyota start making the highest quality cars in the world but by 1980 they dominated the import market. Today Toyota is the most profitable car manufacturer in the world by a large margin. Finally they put their expertise to work and started designing special guards and covers to keep dirt and chips out of machines permanently. For example. ✔ In the new way they would immediately stop any machine that was vibrating and take apart the machine to discover the cause. In the 1965 Toyota's factories looked like American factories: chips and dirt everywhere. they are assigned this responsibility. like Americans. They would change that. Toyota Production System (TPS) • Quality at the Source: To eliminate product defects. The worker (not an engineer) would then attempt to fix the problem. Since workers are at the best position to discover a defect and to immediately fix it. ✔ The last step in the equation was systematic preventative maintenance. any worker can halt the entire line by pulling a cord called Jidoka INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . Part of their documentation efforts was to carefully study any irregularity in machine operation. if a machine began to vibrate in the old days they would ignore it until the machine broke. they must be discovered and corrected as soon as possible. If a defect cannot be readily fixed.

• Quality Control Circles (QCCs) To involve employees in productivity and efficiency improvement activities. product. One such employee participation program is quality control circles. QC circles are a small but important part of Toyota Quality Management. INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . QC-circle activities are usually directed towards improvements in the workplace. They focus on such areas as: • cost • safety • productivity In general QC circles are aimed improving the company’s constitution via small group activities. a team-based environment must be developed in which they can participate actively in improving their process. or service performance.


INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . continuous improvement.Toyota’s flavor of TQM always exhibited a pattern of focusing on customers. and participation of a large segment of the employee participation.

Toyota managed to slash setup times from months to hours and sometimes even minutes. Reduced Setup Times: All setup practices are wasteful because they add no value and they tie up labor and equipment. INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT .7 Principles of Toyota Production Systemr 1. and training workers to do their own setups. using carts. By organizing procedures.

the machine detects the problem on its own and stops. larger inventories.2. resulting in higher productivity. Since workers are at the best position to discover a defect and to immediately fix it. Small-Lot Production: Producing things in large batches results in huge setup costs. improve the performance of equipment. preventing defective products from being produced. extended lead times. 4. Equipment Maintenance: Toyota operators are assigned primary responsibility for basic maintenance since they are in the best position to defect signs of malfunctions. and train workers in maintenance. Each team has a leader who also works as one of them on the line. Because Toyota has found the way to make setups short and inexpensive. 5. Maintenance specialists diagnose and fix only complex problems. Quality at the Source: To eliminate product defects. and larger defect costs. Since a machine automatically stops when processing is completed or when a problem arises and is communicated via the "andon" (problem display board). It also means that. should a quality / equipment problem arise. Jidoka means that a machine safely stops when the normal processing is completed. 3. they must be discovered and corrected as soon as possible. high capital cost of high-speed dedicated machinery. As a result. only products satisfying quality standards will be passed on to the following processes on the production line. while continuous improvements lead to greater processing capacity. If a defect cannot be readily fixed. any worker can halt the entire line by pulling a cord (called Jidoka). This means that each operator can be in charge of many machines. Employee Involvement and Empowerment: Toyota organized their workers by forming team and gave them the responsibility and training to do many specialized tasks. Teams are also given responsibility for housekeeping and minor equipment repair. as well as easily identify the problem's cause to prevent its recurrence. INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . operators can confidently continue performing work at another machine. it became possible for them to economically produce a variety of things in small quantities. they are assigned this responsibility.

The Kamban scheme coordinates the flow of small containers of materials between stages. Suppliers are trained in ways to reduce setup times. This is where the term Just-in-Time (JIT) originated. machine breakdowns etc. Pull Production: To reduce inventory holding costs and lead times. and take responsibility to deliver their best possible parts INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . as integral elements of Toyota Production System (TPS). defects. 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. 7. inventories.6.. Supplier Involvement: Toyota treats its suppliers as partners.

The 4 Sections and the 14 principles of the Toyota Way: I.Toyota Culture and Management Philosophy The Toyota Way is not the Toyota Production System (TPS). also known as lean manufacturing. which allows the TPS to function so effectively. Base the management decisions on a long-term philosophy. The Toyota Way consists of the foundational principles of the Toyota culture. The Main Ideas of the Toyota Way ➢ To base management decisions on a "philosophical sense of purpose" ➢ To think long term ➢ To have a process for solving problems ➢ To add value to the organization by developing its people ➢ To recognize that continuously solving root problems drives organizational learning. even at the expense of short-term financial goals INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . Having a long-term philosophy that drives a long-term approach to building a learning organization 1. TPS is the most systematic and highly developed example of what the principles of the Toyota Way can accomplish. The 14 Principles of the Toyota Way is a management philosophy used by the Toyota corporation that includes TPS.

Build a culture of stopping to fix problems. Respect your extended network of partners and suppliers by challenging them and helping them improve INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . thoroughly tested technology that serves your people and processes III. (Work like the tortoise. Add value to the organization by developing its people and partners 9. Create a continuous process flow to bring problems to the surface 3. Standardized tasks and processes are the foundation for continuous improvement and employee empowerment Kaizen Mindset 7. Use "pull" systems to avoid overproduction Lean Enterprise: 13 Tips 4. and teach it to others Kaizen Strategy: 7 Conditions for Successful Implementation 10. Use visual control so no problems are hidden 8. Level out the workload (heijunka). The right process will produce the right results 2. not the hare) 5. to get quality right the first time 6. Use only reliable.II. Grow leaders who thoroughly understand the work. live the philosophy. Develop exceptional people and teams who follow your company's philosophy 11.

Make decisions slowly by consensus.IV. Become a learning organization through relentless reflection (hansei) and continuous improvement (Кaizen). implement decisions rapidly (Nemawashi). INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . 13. 14. Go and see for yourself to thoroughly understand the situation (Genchi Genbutsu). thoroughly considering all options. Continuously solving root problems to drive organizational learning 12.

president of D'Addario." At D'Addario. Kaizen literally means in Japanese. the first session was a keynote from Rick Drumm. a manufacturer of music accessories. His topic was "Using Lean Practices to Open New Opportunities. "small improvements." INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT .Using Kaizen: Toyota's Lean Business Practices At CEDIA Management Conference this morning. known as kaizen. they have adopted the Toyota style of lean and efficient business management.

➢ The third type is transportation. ➢ The sixth waste is processing or effort that doesn't add value to the customer or improve the product. ➢ The fourth type of waste is storage. storage (since you have to store the extra product you made while you wait for it to sell). etc. ➢ The fifth is defects which is work with errors.waiting (the customer waits while you make what he/she really needs). process.). etc. which is literally motion that does not add value. ➢ The second type of waste is waiting which is idle time when one person or part of your business is waiting for another (person. or JIT . It doesn't add value and you can't charge a customer for it.Drumm identified seven types of waste that business managers should be on the lookout for: ➢ The first is waste of motion. ➢ The final type of waste is overproduction or producing more product than the customer needs. item. which is movement of products that don't add value. This leads to all other types of waste .Toyota's Manufacturing Technique INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . Just in Time.

and its associated costs. GM today employs about 266. Saturn. has been the annual global industry sales leader for 77 years. Founded in 1908. Holden. or Kan ban that tell production processes to make the next part. Cadillac. GM's OnStar subsidiary is the industry leader in vehicle safety.37 million GM cars and trucks were sold globally under the following brands: Buick. Kan ban are usually simple visual signals such as the presence or absence of a part on a shelf. GMC. is the world's largest automaker. Pontiac. HUMMER. JIT causes dramatic improvements in a manufacturing organization's return on investment.000 people around the world. nearly 9. quality. security and information services. The process is driven by a series of signals. Opel. Dyadem is a leader in Quality and Risk Lifecycle Management.Just in Time or JIT is a set of techniques to improve the return on investment of a business by reducing in-process inventory. Saab. Stature will allow GM to leverage a common DFMEA and INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . ORIGIN OF TOTAL QUALITY MANAGEMENT OF GENERAL MOTORS General Motors Corp. In 2007. GM Daewoo. Chevrolet. and efficiency. Vauxhall and Wuling. GM manufactures its cars and trucks in 35 countries. QUALITY MANAGEMENT IN GENERAL MOTORS GM has selected Dyadem's Stature platform to manage quality across its engineering and manufacturing divisions globally. With global headquarters in Detroit.

Global manufacturing models require a Quality solution that ensures communication and knowledge sharing across departments. carrying the inventory. waiting for parts. There are three basic stages of what JIT is and how JIT works. divisions and geographies. all at a reasonable rate of time. where the required value added through the manufacturing operations occurred. General Motor's Saturn division began as an experiment in the lean manufacturing process during a time when the American automotive industry's competing with INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . and inspection are referred to as non-valued added activities. The zero inventories concept called for the transportation of materials from the outside vendors directly to the work-in-process area. Dyadem understands that quality needs to be managed at an enterprise level. Under the JIT concept activities such as moving parts. The Stature QLM solution helps companies dramatically improve quality by proactively improving designs based on lessons learned and reducing the communication gap between departments and organizations. JUST IN TIME APPROACH IN GENERAL MOTORS In the early 1980's a new concept. In reality. material handling. (2) Production planning. allowing better visibility into quality and the incorporation of updates made in manufacturing back into design. stocking. Organizations claim that they are using JIT when they are at any of these stages. Stature enables GM to conduct quality planning via a Webbased platform that uses a common library across all divisions and all regions. inventory tracking. these are not three separate stages but rather a migration path from using JIT simply as a shop-floor-control tool (Kanban) to the installation of a factory wide global management philosophy. and (3) Global management philosophy. followed by the shipping of the finished products out of the door. and the risks of damage and obsolescence. This "zero inventories" concept would save companies the costs of inspection. known as “zero inventories" was introduced to the American manufacturing industry. machine setup. Dyadem has an excellent intuitive. The concept now formally termed just-intime (JIT) inventory has evolved into a corporate philosophy that seeks to do the process right the first time and to eliminate any non-value added activities.PFMEA framework. Inefficiencies in production cause non-value added activities. These stages are termed: (1) Kanban.

or the first sheet metal stamped. resulting in a overall corporate recovery that continues today. The Saturn production facility endeavoured to carry no more than 24 production hours worth of parts at any given time. technology. GM set out to prove to consumers and the automotive industry that labor. This lowered inventory carrying costs dramatically. or even weather events which slowed transportation time. ✔ ✔ ✔ INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . There’s lots of knowledge work going on at General Motors (GM) these days. As a result the per unit cost of manufacturing a typical GM car or truck financially hampered the company in an increasingly competitive consumer market. JIT processes were implemented across the GM enterprise. Unlike other GM lines. the Saturn division was envisioned from a true business process perspective . or only one part of the practice of KM. but introduced another potential production glitch .parts unavailability due to shipping delays. and process innovation could be leveraged to create a vehicle on par with their Asian competitors. The standards were based on input from various manufacturing sectors. and studies were conducted to develop manufacturing process best practices and optimum inventory levels to account for unforeseen supply chain delays. in less time. strikes at vendor plants. A key component of the process was the concept of Just in Time Production (JIT). incompatible with. Less warehousing and handling costs.✔ Japanese quality and innovation. Multiple functional areas. there was much that wasn't working in GM's standard approach to building cars. applied in targeted and innovative ways to improve already accepted business practices – some of them believed by KM thought leaders to be contrary to. In the 1980's. a manufacturing process was developed for producing a car of consistent quality. would help in driving down the completed per-unit costs dramatically.before the first automobile was designed. regardless of the brand line. combined with faster inventory turns in the parts supply chain and modular manufacturing. The company-wide initiative based on any of a growing number of knowledge management (KM) formulas for facilitating tacit knowledge sharing across the enterprise.

not sharing. which most recently concluded with the consolidation of car engineering groups from five to two (car and truck) and finally to one. Everything GM did from the early 1980s to the end of the century set the stage for the consolidation of company-wide engineering knowledge (although it was not the purpose at the time). • Putting knowledge to work.Best Practices database in parallel with another team’s catalogue of engineering-solution activity. a technique for capturing tacit knowledge. GM therefore began a series of North American product-engineering reorganisations. and. easy place for knowledge to get lost. After all. And because of the lack of an organised knowledge transfer process (tacit to explicit). ➢ Doing it his way: The problem was handed to GM technical fellow Steven Wieneke who has developed processes for documenting product knowledge in a Technical Memory . • Converting tacit knowledge to explicit. GM research uncovered six systemic issues. He was expected to do it using Best Practices and he did – but with a good measure of KM built in. • Back to tacit again.000 employees that manufactures cars and trucks in 33 countries. While working on a new business model starting in early 2000. engineers worldwide were lacking access to hidden knowledge of common interest across the company’s product engineers. Wieneke did not have to start from scratch. GM had plenty of tacit knowledge but not enough explicit. GM use best practices & Knowledge management in 4 ways: • Knowledge sharing.GM’s product engineers subtly mixing KM with best practices (BP). GM is a company with 327. For example. The lack of a comprehensive set of documented product engineering solutions was identified as part of one of the six. INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . GM recognised that its autonomous structure of product-engineering organisations across the globe had created a culture of knowledge hoarding.

Closed-loop learning: GM in April. mentoring. the lessons-learnt process was replaced with a visible learning process called closed-loop learning. 2004. In 2002. Outcome of this initiative: INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . Prior to 2000. a product best practice is knowledge about design features that control the desired outcome. Closed-loop learning ensures that valued lessons and learning. 3. Technical excellence (individual know-how) 2. Intellectual property (best practices and other written technical resources).” Activity metrics: The BP knowledge base was up and running by 2001 with 687 best practices by the end of that year. The limited scope additionally allowed a group of peers to review agree and technically approve the BP in a timely manner.522. some 300 two-hour coaching sessions were held to provide instructions on what best practices at GM are and are not. During the first six months. developing or manufacturing a vehicle. By 2006. the annual number jumped to 2. SMREs were trouble shooting. developing and refining new product technologies.➢ Responsible engineers: In the late 1990s. In a nutshell. These technical reviews would prove to be the most timeconsuming aspect of the process. while working on other assignments. Technical exchanges (key meetings focused on information and knowledge). the figure had increased to 4. They are inserted into three categories of intellectual capital: ➢ ➢ 1. The focus remained on the authors and continued additions to the database with the metric being the number of best practices approved. engineering executives identified subjectmatter responsible engineers (SMREs) – 200 from car and truck engineering with experience in the various aspects of designing. “Limiting the scope allowed the SMRE to write a best practice over the course of 40 hours.063.

Responsible for the Outbound Segment carrier selection. Creating a design that meets the customers’ requirements and needs. Small Package and ocean/air freight direct to Dealers and Wholesale Distributors in the United States and those located outside of the non-contiguous 48 United States with a annual budget of $250million. Structural cost has been reduced. customization. Six Sigma: Use of Six Sigma in GM systematic quality program provides its businesses with the tools to improve the capability of their business processes. Addressing the variation effect of both the design and uncontrolled factors (like environment or manufacturing) on the design function and performance. Time to market has been accelerated. implementation scheduling and continuous improvement planning on all transportation lanes servicing the GM cross dock and dealer network. Accountable for Supplier Ship Direct truckload consolidation utilizing the GM cross INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT .” Design for Six Sigma helps GM in: ➢ 1.• • • • Product quality has dramatically improved. LTL. 3. Making the design insensitive to variation and balancing interactions to ensure the customers get what they want every time. service performance. savings generation initiatives. 2. 4. TL. The engineering culture is progressing from hoarding to sharing knowledge and from reinventing to adopting and adapting what is already known. Understanding what the customer wants. GM CONTINUOUS IMPROVEMENT GM Outbound transportation network to include Dedicated Delivery Service routes.

and innovative and popular products and the employees of these plants deserve kudos for teamwork. INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . ➢ GM's original top-down control and decentralization model. and GM's quality was not deemed to be as good as its competitors.dock network for integration into the Dedicated Delivery route network that services GM dealers daily. TECHNOLOGY IMPROVE EFFICIENCY OF GM GM is operating in a highly competitive environment. as well as it being a vertically integrated corporation. The North American auto industry in terms of financial performance and market growth right now. production processes. these examples are sporadic and at the plant level. service expansion. engineering planning and continuous improvement planning. impressive levels of quality.S. Provide staffing. GM shows outstanding process improvement. the company's auto sales have declined from about 60 percent of the U. hampered its ability to compete. cost cutting and quality improvement. Since the 1970s. It seems they have too much of everything that is costly and not enough of everything that sells cars. ➢ GM's competitors could obtain parts at lower prices from outside vendors. ➢ GM's bureaucracy. General Motors Corp filled with smart. and outdated information systems were causing the corporation to spend more time and money than its competitors to produce a car. productive people has imploded. GM could not update its selection and style as fast as its competitors.

and more customer-focused by eliminating supply." ➢ GM hoped its new strategy would enable the company to become smarter. GM is transforming itself into a customer-focused business and offering its customers many electronic services and vehicles. provides online services. faster. GM wants to "intensively weave Internet technology into all of its business processes. INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . builds vehicles to order.➢ GM is using information technology to offer innovative products and services. ➢ GM has developed its e-business capabilities and now sells vehicles online. in the face of stiff competition. leaner. GENERAL MOTOR VALUE CHAIN According to Michael Porter value chain is the chain of activities for a company that operates in a specific industry. So. ➢ GM is "intensively weaving Internet technology into all of its business processes." ➢ GM realized that its top-down control and decentralized execution model was fast becoming an impediment to the corporation's success. and streamlined its internal processes. as well as develop its e-business.

INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT . GM gain marginal value for that product or service. ➢ GM believes that to form a successful product for an organization it is important to add value in each activity that the product. ➢ To form a successful product it is important to add value in each activity that the product goes through during the life cycle. If these activities run efficiently the company gains competitive advantage on the product or service.➢ For gaining the competitive advantages. ➢ And thus. GM follows the chain and focus on the organization activities will add more value to the product and services than the sum of added cost of these activities.

➢ For this case the customers should transact the product or services willingly and provide return on value to the organization.➢ The best possible value can be achieved in the product development process by adding value in each stage. For that it needs all. or a combination of. value chain activities and a proper synchronization among all the related activities. ➢ GM see to it that it contains all the required functional departments to perform these activities and a proper communication approach is to synchronize the activities of these functional units efficiently. INSTITUTE OF PRODUCTIVITY AND MANAGEMENT MEERUT .