The Toyota Production System

High Quality and Low Cost
COST VS DEFECTS

Readings; James Womack, Daniel T. Jones and Daniel Roos, The Machine that Changed the World, 1990, Ch 3 and 4 Kenneth N. McKay, ³The Evolution of Manufacturing ControlWhat Has Been, What Will Be´ Working Paper 03 ±2001 Michael McCoby, ³Is There a Best Way to Build a Car?´ HBR Nov-Dec 1997

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Consumer Reports

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Toyota vehicle sales

Ward's U.S. Light Vehicle Sales Summary 2002
Septem ber Units Current Domestic Cars Import Cars Total Cars Domestic Light Trucks Import Light Trucks Total Light Trucks Domestic Light Vehicles Import Light Vehicles Total Light Vehicles Year-Ago % Share Current Year-Ago DSR % Chg. Current Year-Ago January - Septem ber Vol % Chg.

431,496 170,554 602,050 545,865 75,999 621,864 977,361 246,553 1,223,914

481,318 158,897 640,215 573,329 75,575 648,904 1,054,647 234,472 1,289,119

35.3 13.9 49.2 44.6 6.2 50.8 79.9 20.1 100.0

37.3 12.3 49.7 44.5 5.9 50.3 81.8 18.2 100.0

-2.6 4,594,203 4,865,569 16.7 1,708,780 1,566,286 2.2 6,302,983 6,431,855 3.5 5,769,260 5,621,805 9.3 798,656 711,178 4.2 6,567,916 6,332,983 0.7 10,363,463 10,487,374 14.3 2,507,436 2,277,464 3.2 12,870,899 12,764,838

-5.6 9.1 -2.0 2.6 12.3 3.7 -1.2 10.1 0.8

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The Toyota Production System
1. 2. 3. 4. 5.
Historical View Performance measures Elements of TPS Six Eras of Manufacturing Practice Difficulties with Implementation

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Three Major Mfg Systems from 1800 to 2000

Machine tools, specialized machine tools, Taylorism, SPC, CNC, CAD/CAM

1800 Interchangeable Parts at U.S. Armories

1900 Mass Production at Ford

2000 Toyota Production System

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810 Trans$5/day Moving portation Immigrant Assembly Line.S.Gutowski 10/29/01 .Military able Parts Roswell U. Lee/ Govt John Hall Henry Ford Taiichi Ohno Earnings Mass Production Toyota Production System 2.etc Post War Jobs. Integration of Labor Japanese Banks 6 T.Key Elements for New Mfg Systems Element/ System Need of Society Work Force Motivation Yankee Ingenuity Enabling Technology Machine Tools.G. Security CNC. Division of Labor Leader Resources Interchange.

Gutowski 10/29/01 7 .Q.G. Trail and Error 2. By what method did these new systems come about? A.810 T.

G. Taiichi Ohno 1945 1975 2.810 T.Gutowski 10/29/01 8 .History of the Development of the Toyota Production System ref.

The Toyota Production System 1. 4.810 T.G.Gutowski 10/29/01 9 . 5. 2. Historical View Performance measures Elements of TPS Six Eras of Manufacturing Practice Difficulties with Implementation 2. 3.

4 67.1 46.2 9.2 3.810 Source: IMVP World Assembly Plant Survey.2 33.3 12. 4 = frequent) Suggestions/Employee Number of Job Classes Training of New Production Wor ers (hours) Absenteeism Automation: Welding (% of direct steps) Painting(% of direct steps) Assembly(% of direct steps) 16.7 4.6 1.1 82.7 370 4.2 65 5.4 14.9 7.8 12. D.3 2.3 0.4 11.8 173.9 0.G.2 97 7. and J.1 0. Power Initial Quality Survery.1 76.1 ¥ §§ Japan Japan n an n Eu op   £ ¢ ¦ ¥  ¤ ¢ £ ¦ ¥  ¤ ¢ £ ¢  ¡   ¡  ¢  ¨    ¨    © ¨    ¨ 10 .3 5 71.7 1. 1989.6 11.9 0.1 4.1 2.3 3 61./vehicle/yr) Size of Repair Area (as % of assembly space) Inventories(days for 8 sample parts) Wor Force: % of Wor Force in Teams Job Rotation (0 = none.6 1.Summary of Assembly Plant Characteristics. 1989 T. 1989 (Average for Plants in Each Region) Perf r n e: r / eh.2 54.4 8.6 1.8 14.8 60 21.7 0.9 1.3 36.8 86.9 2.7 1.) Pr d vi i y ( Quali y (assembly defects/100 vehicles) Lay ut: Space (sq.9 380.6 38.ft.7 85 40. Volume Producers.Gutowski 10/29/01 ¥ ¥ n Japan No th a No th America 25.6 69.4 2 17.2 76.

Machine that Changed the World Womack.Cost Vs Defects Ref.G.Gutowski 10/29/01 11 . Jones and Roos 2.810 T.

3. 4. Historical View Performance measures Elements of TPS Six Eras of Manufacturing Practice Difficulties with Implementation 2. 5.G.810 T.Gutowski 10/29/01 12 .The Toyota Production System 1. 2.

How do you get this kind of performance? 1. MSDD. D. J T. Cochran and Students 2. Womack.G. Demand Flow Technology s 9 Points 4. Black s 10 Steps 3.810 T. Jones and Roos 2.Gutowski 10/29/01 13 .

810 .Womack Jones and Roos Automation?  Yes. but .G.Gutowski 10/29/01 14 2. DFM?  Probably Standardized Production?  No! Lean Characteristics?   Integration of Tasks Identification and removal of defects T.

Cost Vs Automation Ref.G.810 T. Jones and Roos 2. Machine that Changed the World Womack.Gutowski 10/29/01 15 .

8.J T.G. 7. Form cells Reduce setup Integrate quality control Integrate preventive maintenance Level and balance Link cells KANBAN Reduce WIP Build vendor programs Automate 10. 6. 4. 2. Black Factory with a Future 1991 1. 3. JT.810 T.Gutowski 10/29/01 16 . Black s 10 Steps Ref. 5. 9. Computerize 2.

Total Product Cycle Time 7. Kanbans 9.G. Line Balancing 8. Demand at Capacity 5. Mixed Model Process Maps 3.Demand Flow Technology s 9 Points 1. Operational Method Sheets 2.810 T. Operational Cycle Time 6. Product Synchronization 2.Gutowski 10/29/01 17 . Sequence of Events 4.

G.810 T.Current Value Stream Map 2.Gutowski 10/29/01 18 .

810 T.G.Future Value Stream Map 2.Gutowski 10/29/01 19 .

Manufacturing System Design Decomposition (MSDD) ROI Sales Costs Investments  Wresolving problems WQ quality predictable output delay reduction Lower level actions 2.810 T.Gutowski 10/29/01 20 .G.

Black 1. Form Cells Sequential operations. Reduce Setup Externalize setup to reduce downtime during changeover. decouple operator from machine. 2 1. parts in families.J T.G. single piece flow within cell 2. increases flexibility 2.Gutowski 10/29/01 21 .810 T.

G.Gutowski 10/29/01 22 .TPS Cell 2.810 T.

810 T.Standardized Fixtures 2.Gutowski 10/29/01 23 .G.

runs slower 3.J T. poke-yoke. 4 4. Integrate preventive maintenance worker maintains machine . Integrate quality control Check part quality at cell.Gutowski 10/29/01 24 .G. stop production when parts are bad 2.810 T. Black 3.

Kanban Create pull system Supermarket System 5. reduce batch sizes.Gutowski 10/29/01 25 .810 T. Link cells. smooth production flow 2.G.J T. Level and balance Produce to Takt time. Black 5. 6 6.

reduce vendors.810 T.J T. make ontime performance part of expectation 7.G. build in mechanisms to self correct 2. Reduce WIP Make system reliable.Gutowski 10/29/01 26 . Black 7. 8 8. Build Vendor program Propagate low WIP policy to your vendors.

Gutowski 10/29/01 27 .810 T.Manufacturing System Design Decomposition (MSDD) ROI Sales Costs Investments  Wresolving problems WQ quality predictable output delay reduction Lower level actions 2.G.

info) FR-P11 DP-P11 Capable and reliable information system DP-P12 Maintenance of equipment reliability DP-P13 Motivated work wor -force performing standardized work wor FR-P121 Ensure that equipment is easily serviceable FR-P122 Service equipment regularly FR-P131 Reduce variability of task completion time FR-P132 Ensure availability of workers DP-P121 Machines designed for serviceability DP-P122 Regular preventative maintenance program DP-P131 Standard work methods to provide repeatable processing time DP-P132 Perfect Attendance Program 2.Gutowski 10/29/01 28 .G.810    Ensure availability of relevant production information FR-P12 Ensure predictable equipment output FR-P13 Ensure predictable worker wor er output FR-P14 Ensure material availability DP-P14 Standard material replenishment system FR-P133 Do not interrupt production for worker wor er allowances FR-P141 Ensure that parts are available to the material handlers FR-P142 Ensure proper timing of part arrivals DP-P133 Mutual Relief System with cross-trained workers DP-P141 Standard work in process between sub systems DP-P142 Parts moved to downstream operations according to pitch T. equipment.Example from Cochran Minimize production disruptions FR-P1 Minimize production disruptions DP-P1 Predictable production resources (people.

Produce to Order 3. Make system observable and correct problems as they occur 4.Gutowski 10/29/01 29 . Smooth Flow and Produce to Takt Time 2. Integrate Worker Skills 2.810 T.G.Some Basics Concepts of TPS 1.

Pull Systems 2.Gutowski 10/29/01 30 .Two Examples. 1.810 T.G. Takt Time 2.

T. day. clean-up etc). Product demand includes overproduction for low yields etc.Takt Time to pace production Available Time Takt Time ! Product Demand Calculate Takt Time per month. lunch.G.Gutowski 10/29/01 31 2.g. Available time includes all shifts. and excludes all nonproductive time (e.810 . year etc.

Demand = 1600 cars per day.G.Gutowski 10/29/01 32 .Takt Time Automobile Assembly Line. Takt Time = 51 sec Aircraft Engine Assembly Line.5 hr X 3 shifts = 22. Available time = 7. 500 engines per year. 2. Takt time = 7 hrs.810 T. 2 shifts X 7 hrs => 14 hrs/day X 250 day/year = 3500hrs.5 hrs or 1350 minutes per day.

G.810 T.Engines shipped over a 3 month period at aircraft engine factory B 12 10 8 6 4 2 0 7-J 15-J 23-J 30-J 7-J l 15-J l 24-J l 31-J l 7-A 15-A 24-A 31-A Weeks 2.Gutowski 10/29/01 #! #! % $ #! #! ! ! % $ ! m nt 1 m nt 2 m nt 3 ! "! "! % $ "! "! 33 .

810 T.Gutowski 10/29/01 34 .Engines shipped over a 3 month period at aircraft engine factory C 7 6 5 4 3 2 1 0 may june july august weeks 2.G.

810 T.G.Gutowski 10/29/01 35 .On-time performance of engine plants 100% 80% l t engines delivered l t 60% on ti 40% on ti 20% on ti 0% A B C 2.

Gutowski 10/29/01 36 .Push and Pull Systems Machines 1 2 3 4 Parts 2.810 Orders T.G.

Q.G.810 T. How long did it take for the order to go through the system? Time = 0 Time = 1 Time = 2 Time = 3 2.Gutowski 10/29/01 Time = 4 37 .Push Systems Order arrives at the front of the system and is produced in the economical order quantity.

2. Design can help here but not in all cases. but must keep inventory for all part types.G.Pull SystemsThe order arrives at the end of the line and is pulled out of the system. Pull can fill small orders quickly.Gutowski 10/29/01 38 . WIP between the machines allows quick completion.810 T. Pros and Cons.

G. it takes Nnt time to process a batch through N steps. Nnt time from a push system plus setup and transportation delays. See HP Video 2. To deliver one part it takes. and the batch size is n .810 T.Gutowski 10/29/01 39 .Comparison in delivery times If the process time per part is t . and t for a pull system.

HP Video Results ush system (6) pace WI ycleTime e ork Units uality prob.810 ull (3) 2 Tables 12 1:40 10 visible 7.2 ull (1) 1 Table 4 19 sec 3 visible 12.Gutowski 10/29/01 .G.6 40 2 Tables 20 3:17 26 hidden 6.1 parts per minute T. roduction ate =PW 2.

8 41 CycleTime Rework nits ~WIP Quality prob. Production Rate L PW 2.HP Video Results Revisited Push system (6) Space WIP L W 2 Tables 20 6X 24 3:17 6t(3:20 or 2:00) 26 hidden 6.1 parts per minute Pull (3) 2 Tables 12 3X 12 1:40 3t(1:40 or 40) 10 visible 7.6 4/50/60 4.810 T.2 Pull (1) 1 Table 4 1X 4 19 sec (say 20) 1t (50 or 20) 3 visible 12.G.Gutowski 10/29/01 .

Gutowski 10/29/01 42 .810 T.G.So what are the advantages of the pull systems? continuous (synchronous) flow single piece flow capabilities observable problems (if stopped = problem) sensitive to state of the factory (if no part = problem) possible cooperative problem solving 2.

810 T. 5. 4.G. Historical View Performance measures Elements of TPS Six Eras of Manufacturing Practice Difficulties with Implementation 2. 3. 2.Gutowski 10/29/01 43 .The Toyota Production System 1.

2. 5. Ken McKay 1.810 Pioneering Systemization Technology and Process Internal Efficiency Customer Service Systems Level Re-engineering T.Six Eras of Manufacturing Practice.Gutowski 10/29/01 44 . 6. 4. 3. 2.G.

Pioneering sellers market. Systemization . demand still high. competition begins to make its presence felt.Gutowski 10/29/01 . inventory used to buffer against instabilities. 2 2. competition is not by manufacturing large margins emphasize throughput not efficiency 2.firm grows and system gets complex gross inefficiency becomes apparent.Ken McKay 1. Need for standard operating procedures.810 T.G. 45 1.

Internal Efficiency Process competition competition cherry pickers enter the market is increasing. Technology and 4. production rate to Still using inventory to increasing the amount cushion production support variety. situation. and maintain of product per unit functional features. options and parts service but manufacturing is still in focus on the 20% which early maturity and yields 80% of the revenue competition is limited stream. bench marking from increasing identifies the silver bullet. 2.Ken McKay 3. 4 3. sales are they don t offer all of the softening.Gutowski 10/29/01 46 .810 T. Internal plant is put into order. problems are to firms in similar pushed outside to suppliers.G. Focus shifts best in class. time.

Customer Service talk to the customer. focused factory etc.5. 2. 6 5. supply chain development. System Level Reengineering firms have addressed the internal system and factory no more to squeeze out look to improving indirect and overhead. identify core competency.Gutowski 10/29/01 47 . be responsive.810 6.G. eliminate feature creep. reduce lead time. era of mass customization. outsource. T.Ken McKay.

Gutowski 10/29/01 48 .810 T.G. 4. Historical View Performance measures Elements of TPS Six Eras of Manufacturing Practice Difficulties with Implementation 2. 3.The Toyota Production System 1. 2. 5.

G.TPS Implementation Physical (machine placement. standard work etc) part Work practices and people issues Supply-chain part Corporate Strategy 2.810 T.Gutowski 10/29/01 49 .

Ontario Canada.G. Kochan et al What Works at Work: Overview and Assessment . T. see MacCoby art Innovative Work Practices Ref. Ichniowski.Gutowski 10/29/01 50 . Industrial Relations Vol 35 No. GM-Suzuki.810 T. Saturn.Work practices and people issues Failed TPS attempts. C.3 (July 1996) 2. Successes GM NUMMI. GM Linden NJ.

G.Gutowski 10/29/01 51 .Examples of Innovative Work Practices Work Teams Gain Sharing Flexible Job Assignments Employment Security Improved Communications 2.810 T.

What Works at Work: Overview and Assessment . Bundling Innovative human resource management practices can improve business productivity. 2.810 T. primarily through the use of systems of related work practices designed to enhance worker participation and flexibility in the design of work and decentralization of managerial tasks and responsibilities.Gutowski 10/29/01 52 .G. Conclusion 1.

Gutowski 10/29/01 53 .810 T.What Works at Work: Overview and Assessment . Impact New Systems of participatory work practices have large economically important effects on the performance of the businesses that adopt the new practices.G. 2. Conclusion 2.

G. however. or flexible assignment of multiskilled employees.S. have adopted a full system of innovative work practices composed of an extensive set of these work practice innovations.What Works at Work: Overview and Assessment . contingent pay-for-performance compensation. businesses now have adopted some forms of innovative work practices aimed at enhancing employee participation such as work teams. Conclusion 3.Gutowski 10/29/01 54 . 2. Only a small percentage of businesses. Partial Implementation A majority of contemporary U.810 T.

Firms face a number of obstacles when changing from a system of traditional work practices to a system of innovative practices. 2.810 T.Gutowski 10/29/01 55 . resistance of supervisors and other workers who might not fare as well under the newer practices. businesses.S.What Works at Work: Overview and Assessment . the costs of other organizational practices that are needed to make new work practices effective. including: the abandonment of organization change initiatives after limited policy changes have little effect on performance. Barriers to Implementation The diffusion of new workplace innovations is limited. Conclusion 4.G. long histories of labor-management conflict and mistrust. and the lack of a supportive institutional and public policy environment. especially among older U.

810 T.Barriers to Implementation Early abandonment Costs History of conflict and distrust Resistance of supervisors Lack of supportive infrastructure 2.G.Gutowski 10/29/01 56 .

yet new. next time People.Summary High quality and low cost ( and originally low volumes) Relationship to previous systems (see McKay paper). . see Maccoby Article T.Gutowski 10/29/01 57 2.810 . in fact revolutionary Many elements    Overall. see The Machine that Changed the World Cells.G.

Summary .Gutowski 10/29/01 58 .G..810 T. continued Autonomation automation with a human touch Worker as problem solver TRUST 2.

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