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(Paperback,330p,ISBN 0-07-058747-7,Rs. 250) (Tata McGraw-Hill)
The Toyota Way
Why to read this book ?
• You’ll learn how Toyota creates an ideal environment for implementing Lean techniques & tools by : -Fostering an atmosphere of continuous improvement and learning -Satisfying customers (and eliminating waste at the same time) -Getting quality right the first time -Grooming leaders from within rather than recruiting them from the outside -Teaching all employees to become problem solver -Growing together with suppliers and partners for mutual benefits
• Market capitalization over $ 105 billion; 2,40,000 employees • 3rd Largest auto manufacturer in the world; behind GM & Ford • Global Vehicle sale of over 6 million per year in 170 countries • Big Brands like Corolla, Camry, Lexus • Annual Profit margin: 8.3 times higher than industry average
• Development of Toyota Production System “TPS” (5-9) • Fundamentals of TPS (10-15) • The Toyota Principles (16-19) • What can be learnt from Toyota (20-28) • How to adopt TPS (29-32)
Development of Toyota Production System (TPS)
• Toyota customer requirement was in small lots & different verities unlike Ford & GM using ‘mass production’ concepts • These requirement is to be met with same assembly line • Toyota was having cash crunch and there was no stable supply chain • Toyota studied that ‘mass production’ concepts cannot be feasible in Japan. Ford & GM were facing many issues due to same.
Lean Manufacturing or TPS
To be a lean manufacturer requires a way of thinking that focuses on making the product flow through value-adding processes without interruption (one piece flow), a ‘Pull’ system that cascades back from customer demand by replenishing only what the next operation takes away at short intervals, and a culture in which everyone is striving continuously to improve
Five Step process
• • • • • Defining Customer Value Defining the value stream Making it ‘Flow’ ‘Pulling’ from the customer back Striving for excellence
• Same as ‘Supermarket’ where replenishment depends on consumption • It means at shop floor, step 1 in a process should not make parts until the next process (step 2) uses up its original supply • Small safety stock is kept to raise alarm • This is same as we get signal from fuel tank of our vehicle for re-fuelling • This can be termed as ‘JIT’ or ‘Single Piece’ flow
Toyota Production System
Best Quality - Lowest Cost - Shortest Lead Time Best Safety - High Morale (QCDSM) through shortening the production flow by eliminating waste Just - in - Time
Right Part, Right Amount, RightTime Take time planning Continous flow Pull system Quick changeover Integrated logistics
People & Teamwork
Selection Common goals Joint decision making Cross-trained
Just - in - Time
Make Problem Visible Automatic stops Andon Person-machine seperation Error proofing In-station quality control Solve root cause of problems (5 Why's)
Continuous Improvement Waste Reduction
Go & See 5 Why's Eyes for w aste Problem solving
Leveled Production Stable and Standardized Processes Visual Management Toyota Way Philosophy
The "4 P" model and where most companies are
Where most "lean" companies are
Continual organizational learning through Kaizen Go see for yourself to thoroughly understand the Problem situation (Genchi Genbutsu) Solving (Continuous Make decisions slowly by consensus, thoroughly Improvement and considering all options; implement rapidly (Nemawashi).
People and Partners (Respect, Challenge, and Grow Them)
Grow leaders who live the philosophy Respect, develop, and challenge your people and teams. Respect, challenge, and help your suppliers Create process "flow" to surface problems Use pull systems to avoid overproduction Level out the workload (Heijunka) Stop when there is a quality problem ((jidoka) Standardize taks for continuous improvement Use visual control so no problems are hidden. Use only reliable, thoroughly tested technology Base management decisions on a long-term philosophy, even at the expense of short-term financial goals.
Process (Eliminate Waste)
Philosophy (Long-Term Thinking)
Fundamentals of TPS
The basics of TPS refers to elimination of 3 M (ie Muda, Muri & Mura)
• Muda-Non-value-added. The most
familiar M includes the eight wastes. These are wasteful activities that lengthen lead times, cause extra movement to get parts or tools, create excess inventory, or result in any type of waiting.
(Anything which is not adding any value or customer do not want to pay for that) • Overproduction. Producing items for which there are no orders, which generates such wastes as overstaffing and storage and transportation costs because of excess inventory. Waiting (time on hand). Workers merely serving to watch an automated machine or having to stand around waiting for the next processing step, tool, supply, part, etc., or just plain having no work because of stock outs, lot processing delays, equipment downtime, and capacity bottlenecks. Unnecessary transport or conveyance. Carrying work in process (WIP) long distances, creating inefficient transport, or moving materials, parts, or finished goods into or out of storage or between processes
• Over processing or incorrect processing. Taking unneeded steps to process the parts. Inefficiently processing due to poor tool and product design, causing unnecessary motion and producing defects. Waste is generated when providing higherquality products than is necessary Excess inventory. Excess raw material, WIP, or finished goods causing longer lead times, obsolescence, damaged goods, transportation and storage costs, and delay. Also, extra inventory hides problems such as production imbalances, late deliveries from suppliers, defects, equipment downtime, and long setup times Unnecessary movement. Any wasted motion employees have to perform during the course of their work, such as looking for, reaching for, or stacking parts, tools, etc. Also, walking is waste.
• Defects. Production of defective parts or correction. Repair or rework, scrap, replacement production, and inspection mean wasteful handling, time, and effort.
Unused employee creativity. Losing time, ideas, skills, improvements, and learning opportunities by not engaging or listening to your employees.
Fundamentals of TPS….
Unevenness results from an irregular production schedule or fluctuating production volumes due to internal problems, like downtime or missing parts or defects.
Fundamentals of TPS….
• Muri-Overburdening people or equipment. This is in some respect on
the opposite end of the spectrum from muda. Muri if pushing a machine or person beyond natural limits. Overburdening people results in safety and quality problems. Overburdening equipment causes breakdowns and defects
• Section I : Long-Term Philosophy • Principle 1. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. • Section II: The Right Process Will Produce the Right Results • Principle 2. Create continuous process flow to bring problems to the surface. • Principle 3. Use “pull” systems to avoid overproduction. • Principle 4. Level out the workload (Work like the tortoise, not the hare.)
• Principle 5. Build a culture of stopping to fix problems, to get quality right the first time. • Principle 6. Standardized tasks are the foundation for continuous improvement and employee empowerment. • Principle 7. Use visual control so no problems are hidden. • Principle 8. Use only reliable, thoroughly tested technology that serves your people and processes.
• Section III: Add Value to the Organization by Developing Your People and Partners • Principle 9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. • Principle 10. Develop exceptional people and teams who follow your company’s philosophy • Principle 11. Respect your extended network of partners and suppliers by challenging them and helping them improve.
• Section IV: Continuously Solving Root Problems Drives organizational Learning • Principle 12. Go and see for yourself to thoroughly understand the situation (genchi genbustu). • Principle 13. Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly (nemawashi). • Principle 14. Become a learning organization though relentless reflection (hansei) and continuous improvement (kaizen).
What can be learnt from Toyota?
At Toyota they keep things simple and use very few complex statistical tools. The quality specialists and team members have just four key tools: Go and see. Analyze the situation. Use one-piece flow and andon to surface problems. Ask “Why” five times.
• • • •
2. Clean It Up, Make It Visual
When Americans were making pilgrimages to Japanese plants in the 1970s and ‘80s, the first reaction was invariably “The factories were so clean you could eat off of the floor. In Japan there are “5S programs” that comprise a series of activities for eliminating wastes that contribute to errors, defects, and injuries in the workplace. Here are the five S’s (seiri, seiton, seiso, seiketsu, and shitsuke, translated into English): Sort – Sort through items and keep only what is needed while disposing of what is not. Straighten (orderliness) – “A place for everything and everything in its place.” Shine (cleanliness) – The cleaning process often acts as a form of inspection that exposes abnormal and pre-failure conditions that could hurt quality or cause machine failure. Standardize (create rules) - Develop systems and procedures to maintain and monitor the first three S’s. Sustain (self-discipline) – Maintaining a stabilized workplace is an ongoing process of continuous improvement.
• • • • •
3. Decision Making
• • • • • Thorough consideration in decision making includes five major elements: Finding out what is really going on, including go and see. Understanding underlying causes that explain surface appearances – asking “Why?” five times. Broadly considering alternative solutions and developing a detailed rationale for the preferred solution. Building consensus within the team, including company employees and outside partners. Using very efficient communication vehicles to share the decision and tracking
“5-Why” Investigation questions
Level of Problem Corresponding Level of Countermeasure
There is a puddle of oil on the shop floor Clean up the oil Because the machine is leaking oil Because the gasket has deteriorated Fix the machine Replace the gasket
Because we bought gaskets made of Change gasket specifications inferior material Because we got a good deal (price) on Change purchasing policies those gaskets Because the purchasing agent gets Change the evaluation evaluated on short-term cost saving. purchasing agents policy for
4. Achieving No-Compromise Objectives
1 2 3 4 5 6 Great high-speed handling / stability Fast and smooth ride Super quiet Elegant styling Warm Great stability at high speed YET YET YET YET YET YET A pleasant ride Low fuel consumption Light weight Great aerodynamics Functional interior Great CD value (low friction)
Development of Lexus
5. Coercive vs. Enabling Employee Empowerment
Coercive Systems and Procedures (Taylorism) Enabling Systems and Procedures (Toyota Way) Focus on best practice methods: Systems focus on performance standards so as information on performance standards is not to highlight poor performance. much use without information on best practices for achieving them. Standardize the systems to gameplaying and monitoring costs. minimize Systems should allow customization to different levels of skill/experience and should guide flexible improvisation.
Systems should help people control their Systems should be designed so as to keep own work: help them form mental models of employees out of the control loop. the system by “glass box” design. Systems are instructions to be followed, not Systems are best practice templates to be challenged. improved.
6. Deeply Understanding and Reporting What You See
Always keep the final target in mind Carefully plan for your final target Have a clear purpose for meetings. Clearly assign tasks to yourself and to others Think and speak based on verified, proven information and data Go and confirm the facts for yourself You are responsible for the information you are reporting to other. Take full advantage of the wisdom and experiences of others to Send, gather or discuss information Share your information with others in a timely manner Always consider who will benefit from receiving the information. Always report, inform and consult in a timely manner. Analyze and understand shortcomings in your capabilities in a measurable way Clarify the skills and knowledge that you need to further develop yourself. Relentlessly strive to conduct kaizen activities Think “outside the box,” or beyond common sense and standard rules. Always be mindful of protecting your safety and health.
• • • • • • • •
7. Themes of Leadership at Toyota
Focused on a long-term purpose for Toyota as a value-added contributor to society. Never deviated from the precepts of the Toyota Way DNA and lived and modeled themselves around this for all to see. Worked their way up doing the detailed work and continued to go to the Gemba-the actual place where the real added-value work is done. See problems as opportunities to train and coach their people. A common phrase heard around Toyota is “Before we build cars, we build people.”.
How to adopt TPS
• A Commitment from the Top to Build a Total • Culture from the Ground Up • What do we know about a change of the
• • •
culture? Start from the top Involve from the bottom up. Use middle managers as change agents. It takes time to develop people who really understand and live the philosophy.
13 Tips for Transitioning to a Lean Enterprise
• • • • • • Start with action in the technical system; follow quickly with cultural change. Learn by doing first and training second. Start with value stream pilots to demonstrate lean as a system and provide a “go see” model. Use value stream mapping to develop future state visions and help “lean to see”. Use kaizen workshops to teach and make rapid changes. Organize around value streams.
• • • • • • • Make it mandatory. A crisis may prompt a lean movement, but may not be necessary to turn a company around. Be opportunistic in indentifying opportunities for big financial impacts. Realign metrics with a value stream perspective. Build on your company’s roots to develop your own way. Hire or develop lean leaders and develop a succession system. Use experts for teaching and getting quick results.
Six Sigma, Lean Tools, and Lean Sigma: Just a Bunch of Tools?
Myth What TPS Is Not
- A tangible recipe for success - A management project or program - A set of tools for implementation - A System for production floor only. - Implementable in a short-or mid-term period -
Reality What TPS Is
A consistent way of thinking A total management philosophy Focus on total customer satisfaction An environment of teamwork and improvement A never-ending search for a better way Quality built in process Organized, disciplined Workplace. Evolutionary
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