TOYOTA PRODUCTION SYSTEM (TPS)
May 6, 2010
Business Definition:
a manufacturing system, developed by Toyota in Japan after World War II, which aims to increase production efficiency by the elimination of waste in all its forms. The Toyota production system was invented, and made to work, by Taiichi Ohno. Japan’s fledgling car-making industry was suffering from poor productivity, and Ohno was brought into Toyota with an initial assignment of catching up with the productivity levels of Ford’s car plants. In analyzing the problem, he decided that although Japanese workers must be working at the same rate as their American counterparts, waste and inefficiency were the main causes of their different productivity levels. Ohno identified waste in a number of forms, including overproduction, waiting time, transportation problems, inefficient processing, inventory, and defective products. The philosophy of TPS is to remove or minimize the influence of all these elements. In order to achieve this, TPS evolved to operate under lean production conditions. It is made up of soft or cultural aspects, such as automation with the human touc autonomationâ and hard, or technical, aspects, which include just-in-time, kanban, and production smoothing. Each aspect is equally important and complementary. TPS has proven itself to be one of the most efficient manufacturing systems in the world but although leading companies have adopted it in one form or another, few have been able to replicate the success of Toyota.
GOALS:
Lean Manufacturing and the Toyota Production System
The use of the term «Lean», in a business or manufacturing environment, describes a philosophy that incorporates a collection of tools and techniques into the business processes to optimize time, human resources, assets, and productivity, while improving the quality level of products and services to their customers. Becoming «Lean» is a commitment to a process and a tremendous learning experience should you attempt to implement Lean principles and practices into your organization.
The term Lean in the manufacturing environment also refers to the Toyota Production system established by the Toyota Corporation. Within the organization, four prominent gentlemen are credited with developing the system: Sakichi Toyoda, who founded the Toyoda Group in 1902; Kiichiro Toyoda, son of Sakichi Toyoda, who headed the automobile manufacturing operation between 1936 and 1950; Eiji Toyoda, Managing Director between 1950 and 1981 and Chairman between 1981 and 1994; and Taiichi Ohno, the Father of the Kanban System.
Sakichi Toyoda invented a power loom in 1902 and in 1926 an automatic loom capable of detecting a snapped thread that automatically stopped the loom thus preventing production of poor quality. That same year, 1926, he founded the Toyoda Automatic Loom Works that manufactured automatic looms. In 1937, Sakichi sold his automatic loom patents to a company in England to finance an automobile manufacturing operation with his son Kiichiro managing the new venture. At the same time in Yokohama, Japan, the Ford Motor Company was building Model A cars and trucks with mixed models in a plant converted over from the Model T. At this time, Ford was the largest manufacturer of automobiles in Japan with General Motors as the second largest manufacturer, together producing over 90% of the vehicles manufactured in Japan. The new automotive venture for the Toyoda Group was risky.
Kiichiro Toyoda, the son of Sakichi, who possessed a greater interest in engines and automobiles then textiles and loom production, convinced his father to establish an automotive operation in 1936. As managing director of the new operation, Kiichiro traveled to the Ford Motor Company in Detroit for a year of studying the American automotive industry. Kiichiro returned to Japan with a strong knowledge of the Ford production system determined to adapt the system to smaller production quantities. In addition to the smaller production quantities, Kiichiro’s system provided for different processes in the assembly sequence of production, the logistics of material simultaneous to production consumption, and a supplier network capable of supplying component material as required. The system was referred to as Just-in-Time within the Toyoda Group.
Eiji Toyoda, a nephew of Sakichi Toyoda, joined the Toyoda Automatic Loom Works family business after graduating from the University of Tokyo in 1936. In 1950, Eiji was named Managing Director of the Toyoda Automotive Works when the Japanese government forced Kiichiro Toyoda into reorganizing the Toyoda Group. The forced reorganization separated the family businesses and resulted in the resignation of Kiichiro and his entire staff. In the first year as Managing Director, Eiji traveled to the United States to study the American automotive industry and report on American manufacturing methods. After touring the Ford Motor Company operations, Eiji returned to Japan with a desire to redesign the Toyoda Automotive Works plants. An important process learned during the trip was the Ford Motor Company suggestion system. Eiji instituted the concept and it is considered to be one of the major building blocks of the Toyota Production System of continuous improvement (Kaizen).
In 1957, Eiji renamed the Toyoda automotive operation The Toyota Company and again in 1983 to the Toyota Motor Corporation. In 1982, he established the Toyota Motor Sales USA. In 1986, Eiji returned to the United States to renew his study of the American automotive industry. Upon his return to Japan he presented the employees with new challenges. The Toyota Motor Corporation could not just copy the American automotive industry, but needed to produce superior automobiles, and do it with creativity, resourcefulness, wisdom, and hard work.
Taiichi Ohno, considered to be the creator of the Toyota Production System and the Father of the Kanban System, joined the Toyoda Automatic Loom Works after graduating from Nogoya Technical High School in 1932. Early in his career, he expanded upon the JIT concepts developed by Kiichito Toyoda to reduce waste, and started experimenting with and developing methodologies to produce needed components and subassemblies in a timely manner to support final assembly. During the chaos of World War II, the Loom Works was converted into a Motors Works and Taiichi Ohno made the transition to car and truck parts production. The war resulted in the leveling of all Toyoda Group Works production facilities, but under the management of Eiji Toyoda, the plants were gradually rebuilt and Taiichi Ohno played a major role in establishing the JIT principles and methodologies developed in the Loom manufacturing processes.
At the reconstructed Toyoda Group Automotive Operations, Taiichi Ohno managed the machining operations under severe conditions of material shortages as a result of the war. Gradually he developed improved methods of supporting the assembly operations. The systems that were developed( the Toyota Production System), Ohno credited to two concepts. The first concept from Henry Ford’s book Today and Tomorrow published in 1926 provided the basis of a manufacturing production system. The second concept was the supermarket operations in the United States observed during a visit in 1956. The supermarket concept provided the basis of a continuous supply of materials as the supermarket provided a continuous supply of merchandise on the store shelves.
Two other gentlemen who helped shape the Toyota Production System were Shigeo Shingo, a quality consultant hired by Toyota, who assisted in the implementation of quality initiatives; and Edward Deming who brought Statistical Process Control to Japan.
The principles and practices of Lean are simplistic and developed over a 90-year period of time. While they have evolved by trial and error over many decades, and many prominent men have contributed to their development, the principles and practices are not easily to implement, which many companies will attest too. Implementation requires a commitment and support by management, and participation of the all personnel within an organization to be successful.
PERSONAL CASE: Role of Management in a Lean Manufacturing Environment
Since this column is meant to link automotive engineers with lean manufacturing, I would like to share my personal experience as a mechanical engineer who started out in the traditional way of manufacturing, and along the way discovered a much better way — the Toyota Production System.
I will describe what it was like to transplant this philosophy to American soil, in hopes that anyone attempting to change the culture of an existing plant towards «lean manufacturing» can benefit from my experience and observations. In particular, I intend to focus on the role of management in a TPS (or any lean manufacturing) environment.
In 1964, I took my hot-off-the-press BSME diploma and went to work for GM in their management training program. Later I joined Ford and worked my way up through Quality, Engineering, Maintenance and Manufacturing Management. During this 18-year stint I became acutely aware that our industry was in trouble. We were stuck in doing things the same old way, and that way was not getting the job done. We couldn’t respond to the changing market. Worst of all, the people working in our plants couldn’t make things better, even though they had plenty of good ideas, because they were bogged down by the rigid, traditional structures.
So I was ready for something new, and I found it — or rather, it found me, when Toyota recruited me to help start up NUMMI — Toyota’s joint venture with GM. For Toyota, it was a cautious first step; they were not at all sure that Americans could learn how to apply the Toyota Production System. But I was convinced that American workers were just as good as workers anywhere, or at least they could be, if they were allowed to perform up to their potential.
That was in 1984. I was part of the NUMMI team for 15 years, and it was a great experience. TPS proved to be highly successful at NUMMI, in spite of the fact that Toyota took it into a plant that had been closed two years earlier, and hired back most of the same people who had worked there before. Toyota’s way of managing and manufacturing enabled us to make a total turnaround of that plant. Encouraged by NUMMI’s success, Toyota built a plant in Kentucky, where I am now President.
In my opinion, the key to the successful implementation of TPS at NUMMI, and TMMK, and at the other Toyota plants in North America, has been the total commitment on the part of everyone to make it work. By that I mean, all levels of the organization, from team members to the senior managers, have to be aware of the fundamentals of TPS and have to make their best efforts to practice and improve them day-by-day. This is much easier said than done, and I’ll come back to this point later.
One of the fundamental elements of TPS that management must be fully committed to is the «customer-first» philosophy. Typically, organizations envision the customer only in terms of the person who purchases the final product at the end of the process. TPS has a different view.
Essentially, each succeeding process or workstation or department is the customer. In a Toyota plant, we work very hard to ensure that all team members and all departments realize their dual role: they are at once the customers of the previous operation and the suppliers to the next operation downstream.
For this concept to flourish, there must be no artificial barriers walling off one area from another or one department from another. Rather, the entire organization shares problems and must work together to ensure that a solution is found. Therefore, it is critical for the successful implementation of TPS that all managers support this idea and aggressively seek to solve problems, even if they are not directly within their scope of control. This all-hands-on-deck attitude is essential in a TPS environment.
The Toyota Production system is an integrated and interdependent system involving many elements. I like to think of it as a triangle, where one side is philosophy, one side is technology; and the other side is management. Cradled in the middle of the triangle is what TPS is really all about – people. Human development is at the very core of TPS. It is often overlooked, as people seize on the more tangible aspects of TPS. Engineers are particularly likely to latch on to tools like kanban, heijunka, and jidoka, and think they have captured the essence of TPS.
Of course the tools are important. TPS uses the technical elements, such as kanban, just-in-time, small lot delivery, Jidoka or quality in the process, heijunka or leveling of demand, visual control and 5S or clean, orderly worksites, to manage the day-to-day production system as efficiently as possible.
But the basic tenet of TPS is that people are the most important asset, and, for that reason, management must have a shop-floor focus. Toyota managers are taught that all value-added activities start on the shop floor; therefore the job of managers is to support the team members. Production team members appreciate management on the shop floor only when they can see that we are out there to help them do their jobs, not as part of a command structure, bent on telling them what to do.
In my experience, the most common roadblock to the successful implementation of TPS is the failure on the part of management – and particularly senior level leaders – to understand TPS as a comprehensive approach to manufacturing and management. Too often, company leaders lack the total commitment to, and understanding of, TPS, that are essential to its adoption, and are unwilling to be involved in its day-to-day implementation and application. TPS is not simply a set of concepts, techniques and methods, which can be implemented by command and control. Rather it is a fully integrated management and manufacturing philosophy and approach which must be practiced throughout the organization from top to bottom and consistently applied and kaizened day in and day out.
Another common reason TPS implementations fail is that managers try to implement individual elements instead of the entire TPS approach. Since the elements of TPS are integrated and interdependent, any attempt to implement TPS only partially is bound to produce very unsatisfactory results.
For TPS to work effectively, it needs to be adopted in its entirety; not piecemeal. Each element of TPS will only fully blossom if grown in an environment that contains and nourishes the philosophies and managerial practices needed to support it. I liken this to a greenhouse, where just the right combination of soil, light, temperature, humidity, water and nutrients allow plants to grow and flourish. If any one of these elements is removed, the plants will weaken and eventually die.
TPS is an interlocking set of three underlying elements: the philosophical underpinnings, the managerial culture and the technical tools. The philosophical underpinnings include a joint shop-floor, customer-first focus, an emphasis on people first, a commitment to continuous improvement or kaizen, and a belief that harmony with the environment is of critical importance. The managerial culture for TPS is rooted in several factors, including developing and sustaining a sense of trust, a commitment to involving those affected by first, teamwork, equal and fair treatment for all, and finally, fact-based decision making and long-term thinking.
All of these facets of TPS – the philosophical mindset, the managerial culture and the technical tools – must be in place and in practice for TPS to truly flourish and provide the high-quality, high-productivity results it is capable of producing.
What have I learned from my experience with the Toyota Production System, that I can pass along to you? First, I have learned that the human dimension is the single most important element for success. Management has no more critical role than motivating and engaging large numbers of people to work together toward a common goal. Defining and explaining what that goal is, sharing a path to achieving it, motivating people to take the journey with you, and assisting them by removing obstacles – these are management’s reason for being.
I’ll never forget the wise advice given me by a man I grew to respect and admire very deeply, Mr. Kan Higashi, who was our second president at NUMMI. When he promoted me to vice president, he said my greatest challenge would be «to lead the organization as if I had no power.» In other words, shape the organization not through the power of will or dictate, but rather through example, through coaching and through understanding and helping others to achieve their goals. This, I truly believe, is the role of management in a healthy, thriving, work environment.
http://www.youtube.com/watch?v=5MjEYrfclt4
http://www.youtube.com/watch?v=aJVSxMHUOGU&feature=related
References:
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