Professional Documents
Culture Documents
Toyotas Way
What is Toyota doing now?
Taiichi Ohnos answer was very simple:
All we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-valueadded wastes.
(Taiichi Ohno. Toyota Production System: Beyond Large-Scale Production. p. ix.) http://www.youtube.com/watch?v=kq4JVkkCzKY
Littles Law
Example
A major manufacturer sells $300 million worth of cellular equipment per year. Average amount in accounts receivable is $45 million. What is the average elapse time from the time a customer is billed to the time payment is received?
Note that in this case, the process is the manufacturers account receivable department and the flow unit is a dollar in accounts receivable.
7-4
7-5
Details of Method
Requisition made by department head Put in pick-up basket To accounting department Account and signature verified Amount approved by treasurer Amount counted by cashier Amount recorded by bookkeeper Petty cash sealed in envelope Petty cash carried to department Petty cash checked against requisition Receipt signed Petty cash stored in safety box
7-6
7-7
Case Study
Paediatric Orthopaedic Clinic at the Children's
Introduction
As Chief of Paediatric Orthopaedic Surgery, Dr. Leitch was
very concerned by the long wait times that the young patients (and their parents) were experiencing in the clinic. Long wait times tended to aggravate the already pent-up distress and concern that they were feeling. She glanced at recently collected data on service times and wondered how the process might be improved, while continuing to balance budgetary pressures to reduce costs. Moreover, any changes could not be done in isolation, as her clinic shared resources with other departments. A monthly executive meeting was fast approaching, and expectations were starting to run high that Leitchs efforts might be able to spur improvements in other departments too.
Issues
Major: Reducing lengthy wait times Minor: Improving process and service performance Reducing variability in activity times and wait times Identifying the interactions with patients from other departments (shared resources) Efficiently managing both demand and human resources to address patient needs.