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Transcript of Toyota
THE TOYOTA WAY 03/49
Toyota Production System 14 Principles
ΩPhilosophy (01 principle)
ΩProcess (07 principles)
ΩPeople / Partners (03 principles)
ΩProblem Solving (03 principles)
THE TOYOTA WAY 04/49
Lean Engineering / Manufacturing / Thinking / Enterprise /System is a: -
A Five Step ProcessDefining customer value (internal / external)Defining the Value Stream (Process)Making it Flow (Process)“Pulling” from the Customer back (Inventory)Striving for Excellence (Long term)
THE TOYOTA WAY 05/49
Objectives of TPSEliminating wasted time and resources
Building quality into workplace systems
Finding low cost but reliable alternatives to
expensive new technology
Perfecting business processes
Building learning cultures for continuous
improvements
THE TOYOTA WAY 06/49
+Continual org learning.
+Go & see yourself.
+Decision slowly by consensus and implement rapidly.
+Grow leaders who live the philosophy.
+Respect, develop and challenge people, teams and suppliers.
+Create process flow to surface problems
+Use pull system to avoid over production
+Stop when there is a quality problem. (Jidoka)
+ Level out the workload. (heijunka)
+Standardize tasks for continuous improvement.
+Use visual control so no problems are hidden.
+Use only reliable technology.
+Base management decisions on a long term philosophy, even at the expense of short term financial gains.
“4 P” MODEL OF THE TOYOTA WAY
THE TOYOTA WAY 07/49
Long-Term PhilosophyPrinciple 1 - Management Decisions on a Long–Term Philosophy, even at the expense of Short-Terms Financial Goals.
We wanted to break new ground in ride quality. To get
that, our tire compounds were fairly soft. So even though
the customer experienced a good ride and the tires were
well within our specs, they did not last as long initially as
many customers wished. 5-7% of the customers actually
complained about tire life. For Toyota that is a big deal, as
Toyota is used to dealing in complaint level far < 1%.
THE TOYOTA WAY 08/49
Long-Term PhilosophyBase Management Decisions on a Long–Term Philosophy, even at the expense of Short-Terms Financial Goals.
So Toyota sent the owner of every Lexus who had the
specified batch of tires, a coupon they could redeem for $500
and apologised for inconveniency. Many of these customers
had already sold their Lexus.
The way you treat your customer when you do not owe them
anything, like how you treat somebody who can not fight back
– that is the ultimate test of character and long term
philosophy of values.
THE TOYOTA WAY 09/49
+Continual org learning.
+Go & see yourself.
+Decision slowly by consensus and implement rapidly.
+Grow leaders who live the philosophy.
+Respect, develop and challenge people, teams and suppliers.
+Create process flow to surface problems
+Use pull system to avoid over production
+Stop when there is a quality problem. (Jidoka)
+ Level out the workload. (heijunka)
+Standardize tasks for continuous improvement.
+Use visual control so no problems are hidden.
+Use only reliable technology.
+Base management decisions on a long term philosophy, even at the expense of short term financial gains.
“4 P” MODEL OF THE TOYOTA WAY
THE TOYOTA WAY 10/49
Process – Eliminate WastePrinciple 2. Create Continuous Process Flow to Bring Problems to the Surface
Flow is the heart of the Lean message that shortening the elapsed time from raw material to finished goods / service will lead to the best quality, lowest cost and shortest delivery time
Flow means when a customer places an order, this triggers the process of obtaining raw material from suppliers, flow to production plant, assemble the order, transport to dealer and deliver to customer
Flow also forces the implementation of other lean tools such as preventive maintenance, built-in quality (jidoka), continuous improvement (kaizan) and even production (heijunka)
THE TOYOTA WAY 11/49
Process – Eliminate WastePrinciple 2. Create Continuous Process Flow to Bring Problems to the Surface
Toyota Identified 7 Major Non-Value Adding Waste
1. Overproduction – Producing items for which there are no orders
2. Waiting (time on hand) – Worker waiting for a preceding process to be over, tool, part, lot processing, capacity bottlenecks
3. Unnecessary transport or conveyance – Carrying work-in-progress (WIP) long distance
THE TOYOTA WAY 12/49
Process – Eliminate WastePrinciple 2. Create Continuous Process Flow to Bring Problems to the Surface
4. Over / incorrect processing - Inefficient process due to poor tooling or production design
5. Excess / unavailable Inventory – Extra inventory hides problems such as production imbalances, late deliveries, defects, downtime and long set up time
6. Unnecessary Movement – Wasted motion like looking for, reaching for, stacking part, tools etc, even walking is a waste during production
7. Defects – Production of defective parts and its correction, Repair or rework, replacement production and inspection
THE TOYOTA WAY 13/49
PROCESS FLOW ‘Batch & Queue’ Computer Base Dept (1 min each)
Computer Monitor Dept (1 min each)
Computer Test Dept (1 min each)
Complete processing of first batch of 10 takes 30 minutes
Transportation from Base to Monitor Dept is in batch of 10
First good computer ready in 21 minutes
There are at least 21 sub-assemblies in process at a time
Batch Processing Example
THE TOYOTA WAY 14/49
PROCESS FLOW – ‘One Piece’Computer Base Dept
Computer Monitor Dept
Computer Test Dept
First part is ready in 3 minutes
10 complete assembly ready in 12 minutes
Only two sub-assembly in process at a time
Continuous Flow Example
Product requires three processes that takes one minute each (One Piece Flow Production Cell)
Lean Thinking – Batch size - ONE
Process – Eliminate Waste
Principle 3. Use “Pull” Systems to Avoid Overproduction“The more inventory a company has, .....the less likely they will have what they need.” Taiichi Ohno
Provide your down line customers in the production process with what they want, when they want it, and in the amount they want. Material replenishment initiated by consumption is the basic principle of just-in-time (JIT). It triggers at a customer’s orders of Toyota. Minimize your work in process (WIP) and warehousing of inventory by stocking small amounts of each product and frequently restocking based on what the customer actually takes away. Be responsive to the day-by-day shifts in customer demand rather than relying on computer schedules and systems to track wasteful inventory.
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Process – Eliminate Waste
Principle 4. Level out the Workload (heijunka)(Work like the tortoise not the hare)
Eliminating waste is just one-third of the equation for making lean successful. Eliminating overburden to people and equipment and eliminating unevenness in the production schedule are just as important
The slower and consistent tortoise causes less waste and is much more desirable than the speedy hare that races ahead and then stops occasionally to doze. The TPS can be realised only when all move at the speed of tortoise.
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Process – Eliminate Waste Principle 4. Level out the Workload (heijunka)
(Work like the tortoise not the hare)
Elimination
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Process – Eliminate Waste
Principle 5. Build a Culture of Stopping to Fix Problems, to Get Quality Right the First Time
GM followed the golden rule of automotive engine production: do not shut down the assy plant! At GM, managers were judged by their ability to deliver the numbers, Get the job done no matter what – and that meant getting the assy plant to keep it running.
How Toyota Reacted – If you are not shutting down the assy plant, it means that you have no problem. All mfg plants have problems. So you must be hiding your problems. It is better to shut down the plant and work on quality and continue to solve your problems.
18/49
Process – Eliminate Waste
Principle 5. Keep Quality Controls Simple and Involve Team Members
Things like ISO-9000, an industrial quality standard that
calls for all kinds of detailed SOPs, for whatever good they
have done, have made companies believe that if they put
together detailed rule books the rules will be followed. Quality
planning dept are armed with reams of data analyzed using
most sophisticated statistical analysis methods. Six Sigma has
brought us roving bands of black belts who attack major
quality problems with a vengeance, armed with an arsenal of
sophisticated technical methods. But at Toyota........................
19/49
Process – Eliminate Waste
Principle 5. Keep Quality Controls Simple and Involve Team Members
..........they keep things simple and use very few complex statistical tools, the quality team have just four key rules (power of simplicity): -
Go and SeeAnalyze the situationUse one piece flow and andon (cord to stop production) to surface problemsAsk “Why?” Five times to get to the root of problem
Quality for customer drives your value proposition, because adding value to customer is what keeps you in business and allow you to make money.
20/49
Process – Eliminate Waste
Principle 6. Standardized Tasks are the Foundation for Continuous Improvement and Employee Empowerment (Kaizan)
It is impossible to improve any process until it is standardized.Standardization, stabilize the process before continuous improvements can be made.Until you have the fundamental skill needed to swing the club consistently, there is no hope of improving your golf game.Standardization is to find that balance between providing employees with RIGID procedures to follow and providing the freedom to INNOVATE and be creative.
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Process – Eliminate WastePrinciple 6
Coercive Vs Enabling Systems and Standards
Coercive Enabling
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Process – Eliminate WastePrinciple 7
Use Visual Controls so No Problems Are Hidden
Traffic signals tend to be well-designed visual controls. Good traffic signs don’t require you to study them: their meaning is immediately clear
The visual aspect means being able to look at the process, a piece of equipment, inventory, or information or at worker performing a job and immediately see the standards being used to perform the task and if there is a deviation from standards
Visual management complements humans because we are visual, touch and audio oriented
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Process – Eliminate WastePrinciple 8
Use Only Reliable, Thoroughly Tested Technology That Serves Your People, Processes
and Values
“Society has reached the point where one can push a button and be immediately deluged with technical and managerial information. This is all very convenient, of course, but if one is not careful there is a danger of losing the ability to think. We must remember that in the end it is the individual human being who must solve the problems”
Eiji Toyoda
Any information technology must meet the acid test of supporting people and processes and prove it adds value before it is implemented broadly.
First work out the manual system and then automate it
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THE TOYOTA WAY 26/49
+Continual org learning.
+Go & see yourself.
+Decision slowly by consensus and implement rapidly.
+Grow leaders who live the philosophy.
+Respect, develop and challenge people, teams and suppliers.
+Create process flow to surface problems
+Use pull system to avoid over production
+Stop when there is a quality problem. (Jidoka)
+ Level out the workload. (heijunka)
+Standardize tasks for continuous improvement.
+Use visual control so no problems are hidden.
+Use only reliable technology.
+Base management decisions on a long term philosophy, even at the expense of short term financial gains.
“4 P” MODEL OF THE TOYOTA WAY
PEOPLE & PARTNERSPrinciple 9
Grow Leaders Who Thoroughly Understand the Work, Live the Philosophy, and Teach It to Others
The Automotive News recognized newsmakers in the auto industry. Direct quotes from the issue about these newsmakers: -
Bill Ford (Ford): Talks up revitalization, brings backs old guys, stars in TV commercial. Ford stock remains mired in the $10 range
Robert Lutz (GM): Former Marine pilot inspires GM’s troops and simplifies product development, giving designers a bigger voice
Dieter Zetzsche (Chrysler): Turns the company around a year early with 3 Qtrs in the black
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PEOPLE & PARTNERSPrinciple 9
Grow Leaders Who Thoroughly Understand the Work, Live the Philosophy, and Teach It to Others
Fujio Cho (Toyota): Toyota President presides over rise in operating profit to industry record. Take lead on hybrids. Grabs 10 point of US market. Joins with Peugeot for plants in Eastern Europe.
Changing the culture each time a new leader comes into office necessarily means jerking the company about superficially, without developing any real depth or loyalty from the employees. The problem with the radical shifts in the culture is that organization will never learn – it loses its ability to build on achievements, mistakes, or enduring principles.
Deming, the Quality Guru terms it “Constancy of Purpose”.
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PEOPLE & PARTNERSPrinciple 9
Grow Leaders Who Thoroughly Understand the Work, Live the Philosophy, and Teach It to Others
Long term assets Learned skillsMachinery depreciates Loses value
People appreciates continue to grow
PHILOSOPHY
Customer FirstPeople are most important asset
Kaizan – continuous improvementGo and See – Give feedback
Efficiency thinkingTrue (vs. Apparent) condition
Total (vs. Individual) team involvement
PEOPLE
+Stability+JIT+Jidoka+Kaizan+Heijunka
+Growth+Attention+Go & See+Problem solving+Presentation skills+Project Mgt+Supportive culture
Toyota Leader’s view of the TPS
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PEOPLE & PARTNERSPrinciple 9
TOYOTA LEADERSHIP MODEL
General Management Expertise
In-depth Understanding of Work
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PEOPLE & PARTNERSPrinciple 10
Develop Exceptional People and teams Who Follow Your Company’s Philosophy
Internal Motivation Theories
Concept Toyota Approach
Maslow’s Need Hierarchy
Satisfy lower level of needs and move employees up the hierarchy towards self actualization
Job security, good pay, safe working conditions satisfy lower level needs. Culture of continuous improvement supports growth towards self actualization.
Herzberg’s Job Enrichment Theory
Eliminate “dissatisfies” (hygiene factors) and design work to create positive satisfiers (motivators)
5 S, ergonomics programs, visual management, HR policies address hygiene factors. Continuous improvement. Job rotation, and built-in feedback supports motivators.
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PEOPLE & PARTNERSPrinciple 10
External Motivation Theories
Concept Toyota Approach
Taylor’s Scientific Management
Scientifically select, design, standardize jobs, train, and reward with money performance relative to standards
All scientific management principles followed but at the group level other than individual learned based on employee involvement
Behaviour Modification
Reinforce behaviour on the spot when the behaviour naturally occurs
Continuous flow and andon creates short lead times for rapid feedback. Leaders constantly on the floor and providing reinforcement
Goal Setting Set specific, measurable goals, achievable challenging goals and measure progress
Set goals that meet these criteria through policy deployment. Continuous measurement of targets
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PEOPLE & PARTNERSPrinciple 11
Respect Your Extended Network of Partners and Suppliers by Challenging
Them and Helping Them Improve
Auto industry suppliers consistently report that TOYOTA is their best customer ….and also their toughest.
Have respect for your partners and suppliers and treat them as an extension of your business.
Challenge your outside business partners to grow and develop.
It shows that you value them.
Set challenging targets and assist your partners in achieving them.
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PEOPLE & PARTNERSPrinciple 11
Respect Your Extended Network of Partners and Suppliers by Challenging Them and Helping Them Improve
Toyota is very carefully when deciding what to outsource and what to do in house. Toyota outsource about 70% of the components. It still wants to maintain internal competency
Even when Toyota chooses to outsource a key component, it does not want to lose internal capability
As a general rule, Toyota wants to have at least two suppliers for every component
Toyota is very bureaucratic in their dealings with suppliers, having extensive standards, auditing procedures, rules etc. But suppliers consider Toyota as their partner and Toyota is viewed as enabling customer who participate and solve their problems too.
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PEOPLE & PARTNERSPrinciple 11
Respect Your Extended Network of Partners and Suppliers by Challenging Them and Helping Them Improve
Supply Chain Need Hierarchy
Next Level of Improvement
Stability
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THE TOYOTA WAY 36/49
+Continual org learning.
+Go & see yourself.
+Decision slowly by consensus and implement rapidly.
+Grow leaders who live the philosophy.
+Respect, develop and challenge people, teams and suppliers.
+Create process flow to surface problems
+Use pull system to avoid over production
+Stop when there is a quality problem. (Jidoka)
+ Level out the workload. (heijunka)
+Standardize tasks for continuous improvement.
+Use visual control so no problems are hidden.
+Use only reliable technology.
+Base management decisions on a long term philosophy, even at the expense of short term financial gains.
“4 P” MODEL OF THE TOYOTA WAY
PROBLEM SOLVINGPrinciple 12
GO and SEE to Thoroughly Understand the Situation (Genchi Genbutsu)
“Observe the production floor without preconceptions and with a blank mind. Repeat “why” five times to every matter.”
Taiichi Ohno (as quoted in the Toyota Way document)
It is more than going and seeing. “What happened? What did you see? What are the issues? What are the problems?” At the root of all of that, we try to make decisions based on factual information, not based on theory, statistics and number contribute to the facts, but it is more than that. Some time we get accused of spending too much time doing all the analysis. Some will say, “Common sense will tell you. I know what the problem is.” But collecting data and analysis will tell you if your common sense is right.
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PROBLEM SOLVINGPrinciple 12
GO and SEE to Thoroughly Understand the Situation (Genchi Genbutsu)
Mr. Ohno at times made his supervisor / managers to draw a circle on the floor of a plant and they were told, “Stand in that and watch the process and think for yourself”, and then he did not even give you any kind of hint of what to watch for. This is the real essence of TPS.
The Power of Deep Observation To Question, Analyze and Evaluate
We often depend upon computers to analyze and evaluate data
Like Six Sigma quality improvement initiatives – we collect data and run it through statistical analysis – correlations, regressions, variance etc, some of the results we get are statistically significant. But do we really understand the context of what is going on or the nature of the problem?
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PROBLEM SOLVINGPrinciple 12
GO and SEE to Thoroughly Understand the Situation (Genchi Genbutsu)
Data is of course important in manufacturing, but place greatest emphasis on facts – go and see
Think and speak based on personally verified data
See America, then design for America – to design Sienna minivan in 2004, the Chief Engineer of D&D drove extensively in US, Canada and Mexico to get a feel of what people wants in a minivan
You can not expect to do your job without getting your hands dirty
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PROBLEM SOLVINGPrinciple 13
Make Decisions Slowly by Consensus, Thoroughly Considering All Options; Implement Rapidly
If there is a project supposed to be fully implemented in a year. A typical company anywhere would spend about three months on planning and begin to implement. But they encounter all sorts of problems after implementation and would spend rest of the year in correcting them
Toyota will spend 10 months planning, building consensus, implement it in a small pilot production – and fully implement at the end of year, with virtually no remaining problems
Nothing is assumed. Every thing is verified
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PROBLEM SOLVINGPrinciple 13
Make Decisions Slowly by Consensus, Thoroughly Considering All Options; Implement Rapidly
Decide and Announce
Seek individual input, then Decide and Announce
Seek group input, then decide and announce
Group consensus, Management Approval
Group consensus with full authority
Preferred
Fallback
FallbackIf consensus not achieved
Decision making is highly situationalPhilosophy is to seek maximum involvement for each situation
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PROBLEM SOLVINGPrinciple 14
A Learning Org Through Relentless Reflection (Hansei) and Continuous Improvement (Kaizen)
We view errors as opportunities for learning. Rather than blaming individuals, the organisation takes corrective actions and distributes knowledge about each experience broadly. Learning is a continuous company-wide process as superiors motivates and train subordinates; as predecessors do the same for successors; and as a team subordinates at all levels share knowledge with one another.
The Toyota Way Document 2001
Toyota has judiciously used stability and standardization to transfer individual and team innovations into organisational-wide learning. Standardisation punctured by innovation, gets translated into new standards (Kaizen) .
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PROBLEM SOLVINGPrinciple 14
Relentless Reflection (Hansei) and Continuous Improvement (Kaizen)
5 Whys is a method to pursue the deeper, systematic causes of a problem to find correspondingly deeper countermeasures
Level of Problem Countermeasure
There is a puddle of oil on the shop floor
Clean up the oil
Because the machine is leaking oil Fix the machine
Because the gasket has deteriorated Replace the gasket
Because we bought gasket made of inferior material
Change gasket specifications
Because we got a good price on those gaskets
Change purchasing policies
Because the purchase agent gets evaluated on short term cost savings
Change the evaluation policy for purchasing agent
Why
Why
Why
Why
Why
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3. Locate Area / Point of Cause
Direct Cause
Cause
Cause
Cause
Cause
5. Countermeasure
6. Evaluate
7. Standardize
Root Cause
Why
Why
Why
Why
Why
Grasp the Situation
Cause Investigation
Basic Cause and Effect Investigation
4. Five Whys?Investigation of Root Cause
Toyota’s Practical Problem Solving Process
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PROBLEM SOLVINGPrinciple 14
Relentless Reflection (Hansei) and Continuous Improvement (Kaizen)
Eliminate Waste
Deming Circle of Quality (PDCA)
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THE TOYOTA WAY
One man did his part, and the other his, and neither even had to check to make sure both parts were getting done. Like the dance of atoms Alvin had imagined in his mind. He never realized it before, but people could be like those atoms, too. Most of the time people were all disorganized nobody knowing who anybody else was, nobody holding still long enough to trust or be trusted, just like Alvin imagined atoms might have been before God taught them who they were and gave them work to do.
It was a miracle seeing how smooth they knew each other’s next move before the move was even begun. Alvin almost laughed out loud in the joy of seeing such a thing. Knowing it was possible, dreaming of what it might mean – thousands of people knowing each other that well, moving to fit each other just right, working together. Who could stand in the way of such people?
Orson Scott CardPrentice Alvin: The Tales of Alvin Maker
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THE TOYOTA WAY
The Lessons and Secrets of Toyota way
It creates bonds among individual and patterns such that they “move to fit together just right, working together” towards a common goal.
Creating a WHOLE much greater and stronger than the SUM of the individuals
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THE TOYOTA WAY
Bibliography &Recommended Readings
The Toyota Way – Jeffery K. Liker
The Machine that Changed the World – Womack, Jones & Ross
Lean Thinking – Womack & Jones
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