Toyota Production System

Manoj Agrawal – Margdarshan CEO

“Goal is achieved through team work. People are the building blocks of
success. Enabling and engaging people is the prime role of leadership.”
His mission is to enable professionals in achieving excellence in
their work and as a result of that deliver superlative performance
to the organization.
LSS Master Black Belt , TQM
•Process Improvement change agent in the field of certified from APO - Japan, ZED
Management, Supplier up gradation / Development , Process Master Trainer (28+Yrs)
based Management, TQM, TPM, Lean Manufacturing , Balance
Score Card , TPS , Six Sigma etc. Key Achievements :
• Domain experience – trained > 10000 personnel's with over >
300 projects on Auto OEM’s, Auto Component, Service
• Oil & Gas , Steel (PSU’s) –Six Sigma -
INR 40 Crs.
Industries, Garments , Heavy Engineering , Oil & Gas ,
• Rolounds Group – Lean Six Sigma INR
Petrochemicals , Steel , Electronic / Electrical as well as
approx 5.0 Crs
Overseas clients in China & Bangladesh
• 51 Supplier Improvement at China with
•Engaging People , Delivering Performance.
• Professional tenures in various organization in role from Get HUSQVARNA
• Lean Manufacturing implementation
to Sr Management in functional areas i.e. Quality,
with Approx 100 SME’s – INR > 15Crs
Manufacturing, Engineering ,Marketing with Corporate i.e. JAI
• GAIL / IGL - Quality Circles – 20 Crs
Springs, Voltas, FTE (Anand Group), Samtel, Sona Koyo, Omnex
•IKEA –Carpet Industries – Productivity
Inc. USA at India office as Master Black Belt
improvement by 40%
Previous Successes using Lean / Six Sigma / I4.0 / TPM / TQM
Our Differentiators Your Advantage

Hand Holding Quick Wins / Results

Skill building Enhanced Competencies

A la Carte methodology Sustained Transformation

Goal oriented program Business Results Guarantee

Specially Designed
Value for Money
interventions
Customer’s in the JOURNEY…….
Customer’s in the JOURNEY…….

Janpath Hotel
 Participation Guidelines

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Online Capability Building - Training, Coaching, Mentoring 7

Online Capability Building - Training, Coaching, Mentoring 8
Current Concerns… … & Opportunities

Volatile Demand Gain Market Share

Increased Input Costs Reduce Cost and Effort

Restricted Cash-flow Build Efficient Supply Chains

Labor shortage Reduce effort and cost

 Business Environment........
How you See Your Business with....
Good Profit

On Time
Motivated Team

Zero Defect

Happy Customer
 Is your Business Environment........
 Volatile If answer is YES !

Does it gives you WORRY

 Uncertain
If answer is YES !
 Complex Then What NEXT.....Loss to everything
 Ambiguous Did you think WHY it is so...

Not follow the Basic principle - DRAFT

 DRAFT.......Philip B. Crosby

 D - Do SOUNDS GOOD
but Not in
ACTUAL
 R - Right
 A - Always
 F - First Resulting in to.......Business Threat
 T - Time • Loss Making Unit
• Customer Loose
• Eating from Within
• Less Speed of Business
• No Good Quality
 Holding Shining Key In A dark to Achieve….

 Zero Second
 Zero Defect
By Reducing OR Eliminating WASTE
using
Do..Right..Always..First..Time
 World Class Performance

PRODUCT & LOW COSTS FAST

SERVICE (COPQ) DELIVERY
QUALITY
1% OF SALES 100%
99.99966%

This represents what our customers value

in today`s marketplace
 What is TPS Lean ?

Is a business strategy
adopted to achieve
Financial and customer
results with speed and
customer accepted quality
“People don’t go to Toyota to ‘work’
they go there to ‘think’”
- Taiichi Ohno
Toyota Production System
5 Principles of Lean
Why do we need to change ?
Profit = Price - Cost

Market
Competition
Perceived Value

Resources
Consumed
•Material
•Manpower
•Energy
•Consumables
 Value - the Driver of Profitability

Profit = Price - Cost

Transportation
Inventory Non-Value-added Value added Activities
Activities (NVA) (VA)
Motion
Waiting
Overprocessing
Overproduction
Defect  Change in Characteristic
 As wanted by customer
 For the first time

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 Optimization – Value vs Waste

Value Waste
What customer needs What customer will pay for
and only if there is no other
is willing to pay for option

Transportation
 Change in product characteristic Inventory
Motion
 Customer needs it
Waiting
 Change is happening first time Overprocessing
Overproduction
Defect

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 Hidden Opportunity
• ....is lying in the form of “WASTE” in
– Systems
– Processes

• What to Do....ECG
(SCAN Entirely)
 Cost of Poor Quality (COPQ)
……is a yardstick of business health……..
and
A Gold mine to business profitability……

W Edward Deming once said,

“Defect are not free….. Someone makes them and

get paid for making them”
So…..payment made to the people making the defect and then to people
who correct the defect……
Types of Quality Sought by Toyota
Industries
 Toyota Principles
• Long Term Philosophy
• Create Flow
• Use Pull
• Heijunka
• Culture – STOP to FIX to DRAFT
• Standardization – Foundation
• Visual Control
• Reliable Technology to use
• Grow Leaders Within
• Develop Exceptional People & Team
• Respect for each others- Partners
• GEMBA – GENCHI GENBUTSU
• Decision Making Slow – Fast implementation
• Learning Organization – Reflection & Kaizen

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 The Lean Enterprise*
• Lean companies use less of everything than do
more traditionally managed companies:
– half the human effort in the factory,
– half the manufacturing space,
– half the investment in tools,
– half the engineering hours to develop a new
product in half the time,
– less than half the inventory
*Womack, Jones, et.al., “The Machine
That Changed the World.”

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Toyota 3M model: Muda, Mura, Muri

Eliminating waste is just one-third of the equation for being successful.

Eliminating overburden to people, equipment and eliminating unevenness in
the production schedule is just as important
 Costs increase when Flow breaks

• Why Flow Breaks • What it costs

– Functional Layout – Inventory
– Lack of line balance – More people
– Bottleneck operations – More Defects
– Breakdown
– Absenteeism/Skill Gap
– Focus on productivity !!
 Processing Time vs. Lead Time

Lead time:
Period of time between the initiation and the completion of any process

Processing time:
Actual amount of time spent working on a product or service.
Note:
Lead time can easily be reduced by eliminating interfaces, whereas reducing processing
time requires usually investments in better equipment and training.
Pull Scheduling keeps inventory in check

• Why Do we need pull • What helps pull

– When flow breaks
– Production lead time is
more than delivery
– Prevent overproduction
– Reduce cost of PPC
– Kanban
– Super Market/FIFO Lane
– SMED (small batch)
– Milk Route/water spider
– Heijunka (levelling)
 WASTE i.e. MUDA
• Operational Definition of Waste is –
Activity / Process / system , we do not get
....Any Value

Typically 95% of Value-Added

all lead time is
non-value-
added

Customer Perceived Value:

Understanding What Appeals to the Consumer
 Types of Waste – TIMWOOD
Transportation Which one of these
Inventory is the worst ???

Motion Eating Profits

Waiting
Overproduction
Over processing
Defects
 Transportation
The waste due to Material movement internally within plant or
external to supplier or customer , Taking more time and cost

How Many Times –

• Dispatch Half load truck material to customer
• Freight & Cartage Cost extra paid
• Deliveries failed –On Time in Full not Met
 Inventory
The Material holding at various stages of Manufacturing , Raw
Material and Finish Good Stage , Also includes consumables

How Much / Many Times –

– Non-level scheduling Beyond NORMS
– Unreliable shipment by suppliers Increase i.e.
Cost of Carrying
– Over Purchase due to Pricing
material , Interest
– Customer Schedule Variation paid to banks , Non
– Higher machine interruption Value Added Floor
space utilization
– More Throughput time
 Materials / Motion Waste
- Any use of materials in excess of what is needed to create value
- Any Excess Motion of Human / Even Documents not adding Value
How Much / Many Times –
– How Much distance travelled to shift Non Conforming Material from
One place to other i.e. Approx 15 KM a Month
– Raw Material Yield is less then designed i.e. Scrap
– Zig -Zag Process Flow leading to No Synchronous flow of material

Material / Motion
loss may be approx
10%~ 15%
 Waiting
The waste of having materials “sitting around” in process without any value
being added to them , also called as “Idling”

How Many Times –

– Waiting due to high Change over time
– More Frequent Break Down keep check on your all types
of Timing –
1.Cycle Time
– Next Process cycle time not match 2.Inspection Time
3.Set up Time
– More Quality Defects 4.Loading / Unloading Time
5.Maintenance Time
6.Procurement Time
– No Man Power 7.Decision Time

– No Material
 Overproduction
The waste of making too much, too soon, too fast compared to the needs
of the next process.
How Many Times –
– Misuse of automation
– Long process setup
– Non-level scheduling
– Unbalanced workload
– Misunderstood communications
– Reward system  
What kind of losses i.e.
1.More Inventory
2.More Space Required
3.Non value added hrs utilized
for Material Movement &
Inspection
Approach to be
Toyota Production System
referred as “Just in Time”
(JIT)
 Over Processing
Adding More Value to the process for which customer does not pay
How Many Times –
– Keeping tight control in process
– Higher technology used
– Product and Machine allocation not aligned
– Nos of time inspection
– Same sample size and frequency for all parameters inspection
Example :
1.More Frequent inspection
2.Buying higher grade technology compare to application of part and their features
3.Basic Process not capable so continuous rework become HABIT and very much
difficult to remove later.
 Defects
Waste of generation , inspection, rework and scrapping of material to
which value has already been added.
Zero Defect /
Mistake /
Errors
How Many Times –

– Weak process control resulted in to defects

– Quality system Compliance issue
– Inadequate education/training/work instructions
– Rework / Repair ( Even Not Recorded Mostly)
 What are the Missed Opportunities ….??
Conformity Timely Combining Eliminating Visibility Sustainability

Availability Reliability Flexibility Durability Clarity Simplicity

Waiting / Profitability Agility Reusability Repair Reduce

Motion

Write down One example of each situation

 Result Quantification Example
Opportunity Missed UOM Type of Waste
Material Delivered to No of times Transportation
Wrong Address
Wrong Entry No of Times Defects
Tool Change Over Time High Mins Waiting / Idling
ANDON SYSTEM
 Perfection is a Journey
Tool/Concept Cost Benefit
5S/Visual Management Reduced cost of searching

Jidoka (Quality Control at source) Reduced Cost of Defects i.e.DPU / DPMO

Poka Yoke (Mistake Proofing) Reduced inspection cost

OEE/Autonomous Maintenance Reduced maintenance cost/inventory

Employee Engagement/Quality Circles Reduced cost of Supervision

 What Next …….
• Go to your work area
• Identify Waste
• Record what you saw as list of Waste and
convert in to business opportunity
• Do-IT …….Follow DRAFT