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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, The Evolution of Manufacturing ControlWhat Has Been, What Will Be Working Paper 03 2001
Michael McCoby, Is 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

Domestic Cars
Import Cars
Total Cars
Domestic Light Trucks
Import Light Trucks
Total Light Trucks
Domestic Light Vehicles
Import Light Vehicles
Total Light Vehicles

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Current

Year-Ago

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

January - Septem ber

% Share

DSR

Current Year-Ago

% Chg.

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

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Vol
Current

Year-Ago

-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

% Chg.

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

The Toyota Production System


1.
2.
3.
4.
5.

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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

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1900
Mass
Production
at Ford

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2000
Toyota
Production
System

Key Elements for New Mfg Systems


Element/
System

Need of
Society

Work
Force
Motivation

Enabling
Technology

Leader

Resources

Interchange- Military
able Parts

Yankee
Ingenuity

Machine
Tools,
Division of
Labor

Roswell
Lee/
John
Hall

U.S.
Govt

Mass
Production

Trans$5/day
portation Immigrant

Moving
Assembly
Line,etc

Henry
Ford

Earnings

Toyota
Production
System

Post War

CNC,
Integration
of Labor

Taiichi
Ohno

Japanese
Banks

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Jobs,
Security

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Q. By what method did these


new systems come about?
A. Trail and Error

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History of the Development of the Toyota


Production System
ref; Taiichi Ohno
1945

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1975

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The Toyota Production System


1.
2.
3.
4.
5.

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Historical View
Performance measures
Elements of TPS
Six Eras of Manufacturing Practice
Difficulties with Implementation

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Summary of Assembly Plant Characteristics, Volume Producers,


1989
(Average for Plants in Each Region)
Pe rformance:
Produ cviti ty (ho urs/Veh .)
Qua li ty (a ssembl y
de fe cts/10 0 veh icle s)
La you t:
Sp ace (sq .ft./ve hi cl e/yr)
Si ze o f Rep ai r Area (as %
of assemb ly spa ce)
Inve ntorie s(days for 8
sampl e parts)

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Ja panese

Ja panese in

in Japan

North America

American in

All Europe

North America

16 .8

21 .2

25 .1

36 .2

60

65

82 .3

97

5.7

9.1

7.8

7.8

4.1

4.9

12 .9

14 .4

0.2

1.6

2.9

69 .3

71 .3

17 .3

0.6

Work Fo rce:
% of Wo rk Force i n Tea ms
Jo b Rotati on (0 = n one ,
4 = fre que nt)
Su ggestio ns/Emp lo yee
Nu mb er o f Job Cl asses
Trai ni ng of New Prod ucti on
Worke rs (h ours)
Ab sen te ei sm

3
61 .6
11 .9

2.7
1.4
8.7

0.9
0.4
67 .1

1.9
0.4
14 .8

38 0.3
5

37 0
4.8

46 .4
11 .7

17 3.3
12 .1

Au toma ti on :
Wel di ng (% of di rect step s)
Pa inti ng(% of d irect ste ps)
Asse mbl y(% o f di rect steps)

86 .2
54 .6
1.7

85
40 .7
1.1

76 .2
33 .6
1.2

76 .6
38 .2
3.1

So urce: IMVP Worl d Assembl y Pl an t Survey, 198 9, a nd J. D. Po wer Ini tia l Qua li ty Surve ry, 19 89

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Cost Vs Defects
Ref. Machine that Changed the World Womack, Jones and Roos

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The Toyota Production System


1.
2.
3.
4.
5.

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Historical View
Performance measures
Elements of TPS
Six Eras of Manufacturing Practice
Difficulties with Implementation

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How do you get this kind of


performance?
1. Womack, Jones and Roos
2. J T. Blacks 10 Steps
3. Demand Flow Technologys 9 Points
4. MSDD, D. Cochran and Students

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Womack Jones and Roos


Automation?

Yes, but.

DFM?

Probably

Standardized Production?

No!

Lean Characteristics?

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Integration of Tasks
Identification and removal of defects
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Cost Vs Automation

Ref. Machine that Changed the World Womack, Jones and Roos

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J T. Blacks 10 Steps

Ref; JT. Black Factory with a Future 1991

1.
2.
3.
4.
5.
6.
7.
8.
9.

Form cells
Reduce setup
Integrate quality control
Integrate preventive maintenance
Level and balance
Link cells KANBAN
Reduce WIP
Build vendor programs
Automate

10. Computerize
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Demand Flow Technologys


9 Points
1. Product Synchronization
2. Mixed Model Process Maps
3. Sequence of Events
4. Demand at Capacity
5. Operational Cycle Time
6. Total Product Cycle Time
7. Line Balancing
8. Kanbans
9. Operational Method Sheets
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Current Value Stream Map

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Future Value Stream Map

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Manufacturing System Design


Decomposition (MSDD)
ROI
Costs

Sales

- s
quality

resolving problems

predictable output

Investments

m
delay reduction
Lower level actions

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J T. Black 1, 2
1. Form Cells
Sequential
operations,
decouple operator
from machine,
parts in families,
single piece flow
within cell

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2. Reduce Setup
Externalize setup
to reduce downtime during
changeover,
increases flexibility

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TPS Cell

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Standardized Fixtures

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J T. Black 3, 4
3. Integrate quality
control
Check part quality
at cell, poke-yoke,
stop production
when parts are bad

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4. Integrate preventive
maintenance
worker maintains
machine , runs
slower

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J T. Black 5, 6
5. Level and balance
Produce to Takt
time, reduce batch
sizes, smooth
production flow

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6. Link cells- Kanban


Create pull
system
Supermarket
System

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J T. Black 7, 8
7. Reduce WIP
Make system
reliable, build in
mechanisms to self
correct

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8. Build Vendor
program
Propagate low WIP
policy to your
vendors, reduce
vendors, make ontime performance
part of expectation

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Manufacturing System Design


Decomposition (MSDD)
ROI
Costs

Sales

- s
quality

resolving problems

predictable output

Investments

m
delay reduction
Lower level actions

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Example from Cochran


Minimize production disruptions
FR-P1
Minimize production disruptions

DP-P1
Predictable production resources

(people, equipment, info)

FR-P11

FR-P12

FR-P13

FR-P14

Ensure
availability of
relevant
production
information

Ensure
predictable
equipment
output

Ensure
predictable
worker output

Ensure
material
availability

DP-P11

DP-P12

DP-P13

DP-P14

Capable and
reliable
information
system

Maintenance of
equipment
reliability

Motivated
work -force
performing
standardized
work

Standard
material
replenishment
system

FR-P121

FR-P122

FR-P131

FR-P132

FR-P133

FR-P141

FR-P142

Ensure that
equipment is
easily
serviceable

Service
equipment
regularly

Reduce
variability of
task completion
time

Ensure
availability of
workers

Do not interrupt
production for
worker
allowances

Ensure that
parts are
available to the
material
handlers

Ensure proper
timing of part
arrivals

DP-P121

DP-P122

DP-P131

DP-P132

DP-P133

DP-P141

DP-P142

Machines
designed for
serviceability

Regular
preventative
maintenance
program

Standard work
methods to
provide
repeatable
processing time

Perfect
Attendance
Program

Mutual Relief
System with
cross-trained
workers

Standard work
in process
between sub systems

Parts moved to
downstream
operations
according to
pitch

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Some Basics Concepts of TPS


1. Smooth Flow and Produce to Takt Time
2. Produce to Order
3. Make system observable and correct
problems as they occur

4. Integrate Worker Skills

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Two Examples;

1. Takt Time
2. Pull Systems

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Takt Time
to pace production

Available Time
Takt Time
ProductDemand

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Calculate Takt Time per month, day,


year etc. Available time includes all
shifts, and excludes all nonproductive time (e.g. lunch, clean-up
etc). Product demand includes overproduction for low yields etc.
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Takt Time
Automobile Assembly Line; Available time = 7.5 hr

X 3 shifts = 22.5 hrs or 1350 minutes per day.


Demand = 1600 cars per day. Takt Time = 51 sec

Aircraft Engine Assembly Line; 500 engines per

year. 2 shifts X 7 hrs => 14 hrs/day X 250 day/year


= 3500hrs.

Takt time = 7 hrs.

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Engines shipped over a 3 month


period at aircraft engine factory B
12

month 2

month 1

month 3

engines shipped per week

10

0
7-Jun

15-Jun

23-Jun

30-Jun

7-Jul

15-Jul

24-Jul

31-Jul

7-A ug

15-A ug

24-A ug

31-A ug

Wee k s

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Engines shipped over a 3 month


period at aircraft engine factory C
7

engines shipped

0
may

june

july

august

we e ks

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On-time performance of
engine plants
10 0%

80 %

engines delivered

late
late
60 %

on
time
40 %

on
time

20 %

on
time

0%

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Push and Pull Systems


Machines

Parts
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Orders
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Push Systems

Order arrives at the front of the system and is produced in the


economical order quantity.
Q. How long did it take for the order to go through the system?

Time = 0
Time = 1
Time = 2
Time = 3
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Time =37 4

Pull Systems-

The order arrives at the end of the line and is pulled out of the
system. WIP between the machines allows quick completion.

Pros and Cons;


Pull can fill small orders quickly, but
must keep inventory for all part
types. Design can help here but not
in all cases.
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Comparison in delivery times


If the process time per part is t, and the
batch size is n, it takes Nnt time to
process a batch through N steps. To
deliver one part it takes;
Nnt time from a push system plus
setup and transportation delays, and
t for a pull system.

See HP Video
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HP Video Results
Push system (6)

Pull (3)

Pull (1)

Space

2 Tables

2 Tables

1 Table

WIP

20

12

CycleTime

3:17

1:40

19 sec

Rework Units

26

10

Quality prob.

hidden

visible

visible

Production Rate
L=W

6.1 parts per


minute

7.2

12.6

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HP Video Results Revisited


Push system (6)

Pull (3)

Pull (1)

Space

2 Tables

2 Tables

1 Table

WIP = L

20
6X =24

12
3X =12

4
1X =4

CycleTime = W

3:17
6t(3:20 or 2:00)

1:40
3t(1:40 or 40)

19 sec (say 20)


1t (50 or 20)

Rework Units
~WIP

26

10

Quality prob.

hidden

visible

visible

Production Rate
L=W

6.1 parts per


minute

7.2

12.6
4/50/60=4.8

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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


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The Toyota Production System


1.
2.
3.
4.
5.

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Historical View
Performance measures
Elements of TPS
Six Eras of Manufacturing Practice
Difficulties with Implementation

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Six Eras of Manufacturing


Practice, Ken McKay
1.
2.
3.
4.
5.
6.
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Pioneering
Systemization
Technology and Process
Internal Efficiency
Customer Service
Systems Level Re-engineering

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Ken McKay 1, 2
1. Pioneering sellers market,
competition is not
by manufacturing
large margins
emphasize
throughput not
efficiency

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2. Systemization - firm
grows and system gets
complex gross
inefficiency becomes
apparent, competition
begins to make its
presence felt. Need for
standard operating
procedures, demand
still high, inventory
used to buffer against
instabilities.

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Ken McKay 3, 4
3. Technology and
4. Internal Efficiency Process competition
competition cherry
pickers enter the market
is increasing, sales are
they dont offer all of the
softening,
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. Internal plant is put
into order, problems are
to firms in similar
pushed outside to suppliers,
situation. Focus shifts
best in class, bench marking
from increasing
identifies the silver bullet.
production rate to
Still using inventory to
increasing the amount
cushion production support
variety, and maintain
of product per unit
functional features.
time.
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Ken McKay- 5, 6
5. Customer Service talk to the
customer, identify
core competency,
outsource, be
responsive, reduce
lead time, eliminate
feature creep,
focused factory etc.
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6. System Level Reengineering firms


have addressed the
internal system and
factory no more to
squeeze out look to
improving indirect and
overhead, era of mass
customization, supply
chain development.

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The Toyota Production System


1.
2.
3.
4.
5.

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Historical View
Performance measures
Elements of TPS
Six Eras of Manufacturing Practice
Difficulties with Implementation

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TPS Implementation
Physical (machine placement, standard
work etc) part

Work practices and people issues


Supply-chain part

Corporate Strategy
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Work practices and people


issues
Failed TPS attempts; GM Linden NJ,
GM-Suzuki, Ontario Canada. Successes
GM NUMMI, Saturn. see MacCoby art
Innovative Work Practices Ref; C.
Ichniowski, T. Kochan et al What
Works at Work: Overview and
Assessment, Industrial Relations Vol 35
No.3 (July 1996)
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Examples of Innovative
Work Practices
Work Teams
Gain Sharing

Flexible Job Assignments


Employment Security

Improved Communications
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What Works at Work:


Overview and Assessment,
Conclusion 1; Bundling
Innovative human resource management
practices can improve business productivity,
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.

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What Works at Work:


Overview and Assessment,
Conclusion 2; Impact
New Systems of participatory work
practices have large economically
important effects on the performance of
the businesses that adopt the new
practices.

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What Works at Work:


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


Overview and Assessment,
Conclusion 4; Barriers to Implementation
The diffusion of new workplace innovations is limited,
especially among older U.S. businesses. Firms face a number of
obstacles when changing from a system of traditional work
practices to a system of innovative practices, including: the
abandonment of organization change initiatives after limited
policy changes have little effect on performance, the costs of
other organizational practices that are needed to make new
work practices effective, long histories of labor-management
conflict and mistrust, resistance of supervisors and other
workers who might not fare as well under the newer practices,
and the lack of a supportive institutional and public policy
environment.
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Barriers to Implementation
Early abandonment
Costs
History of conflict and distrust
Resistance of supervisors
Lack of supportive infrastructure

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Summary
High quality and low cost ( and originally low
volumes)
Relationship to previous systems (see McKay
paper), yet new,. in fact revolutionary
Many elements

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Overall, see The Machine that Changed the


World
Cells, next time
People, see Maccoby Article
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Summary .. continued
Autonomation automation with a
human touch

Worker as problem solver


TRUST

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