toyota kaizen

1. 2.810 T.G.Gutowski 10/29/01 1
The Toyota Production System
High Quality and Low Cost
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 Control-
What Has Been, What Will Be” Working Paper 03 –2001
Michael McCoby, “Is There a Best Way to Build a Car?”
HBR Nov-Dec 1997
COST VS
DEFECTS

2. 2.810 T.G.Gutowski 10/29/01 2
Consumer Reports

3. 2.810 T.G.Gutowski 10/29/01 3
September January - September
Units % Share DSR Vol
Current Year-Ago Current Year-Ago % Chg. Current Year-Ago % Chg.
Domestic Cars 431,496 481,318 35.3 37.3 -2.6 4,594,203 4,865,569 -5.6
Import Cars 170,554 158,897 13.9 12.3 16.7 1,708,780 1,566,286 9.1
Total Cars 602,050 640,215 49.2 49.7 2.2 6,302,983 6,431,855 -2.0
Domestic Light Trucks 545,865 573,329 44.6 44.5 3.5 5,769,260 5,621,805 2.6
Import Light Trucks 75,999 75,575 6.2 5.9 9.3 798,656 711,178 12.3
Total Light Trucks 621,864 648,904 50.8 50.3 4.2 6,567,916 6,332,983 3.7
Domestic Light Vehicles 977,361 1,054,647 79.9 81.8 0.7 10,363,463 10,487,374 -1.2
Import Light Vehicles 246,553 234,472 20.1 18.2 14.3 2,507,436 2,277,464 10.1
Total Light Vehicles 1,223,914 1,289,119 100.0 100.0 3.2 12,870,899 12,764,838 0.8
Ward's U.S. Light Vehicle Sales Summary
Toyota vehicle sales
2002

4. 2.810 T.G.Gutowski 10/29/01 4
The Toyota Production System
1. Historical View
2. Performance measures
3. Elements of TPS
4. Six Eras of Manufacturing Practice
5. Difficulties with Implementation

5. 2.810 T.G.Gutowski 10/29/01 5
Three Major Mfg Systems
from 1800 to 2000
1800 1900 2000
Machine tools, specialized machine tools, Taylorism, SPC, CNC, CAD/CAM
Interchangeable
Parts at U.S.
Armories
Mass
Production
at Ford
Toyota
Production
System

6. 2.810 T.G.Gutowski 10/29/01 6
Key Elements for New Mfg Systems
Element/
System
Need of
Society
Work
Force
Motivation
Enabling
Technology
Leader Resources
Interchange-
able Parts
Military “Yankee
Ingenuity”
Machine
Tools,
Division of
Labor
Roswell
Lee/
John
Hall
U.S.
Govt
Mass
Production
Trans-
portation
$5/day
Immigrant
Moving
Assembly
Line,etc
Henry
Ford
Earnings
Toyota
Production
System
Post War Jobs,
Security
CNC,
Integration
of Labor
Taiichi
Ohno
Japanese
Banks

7. 2.810 T.G.Gutowski 10/29/01 7
Q. By what method did these
new systems come about?
A. Trail and Error

8. 2.810 T.G.Gutowski 10/29/01 8
History of the Development of the Toyota
Production System ref; Taiichi Ohno
1945 1975

9. 2.810 T.G.Gutowski 10/29/01 9
The Toyota Production System
1. Historical View
2. Performance measures
3. Elements of TPS
4. Six Eras of Manufacturing Practice
5. Difficulties with Implementation

10. 2.810 T.G.Gutowski 10/29/01 10
Japanese Japanese in American in All Europe
in Japan North America North America
Performance:
Producvitity (hours/Veh.) 16.8 21.2 25.1 36.2
Quality (as sembly
defects/100 vehicles) 60 65 82.3 97
Layout:
Space (sq.ft./vehicle/yr) 5.7 9.1 7.8 7.8
Size of Repair Area (as %
of ass embly space) 4.1 4.9 12.9 14.4
Inventories(days for 8
sample parts) 0.2 1.6 2.9 2
Work Force:
% of Work Force in Teams 69.3 71.3 17.3 0.6
Job Rotation (0 = none,
4 = frequent) 3 2.7 0.9 1.9
Suggestions /Employee 61.6 1.4 0.4 0.4
Number of Job Clas ses 11.9 8.7 67.1 14.8
Training of New Production
Workers (hours) 380.3 370 46.4 173.3
Absenteeis m 5 4.8 11.7 12.1
Automation:
Welding (% of direct steps) 86.2 85 76.2 76.6
Painting(% of direct steps) 54.6 40.7 33.6 38.2
As sembly(% of direct steps) 1.7 1.1 1.2 3.1
Source: IMVP World Ass embly Plant Survey, 1989, and J. D. Power Initial Quality Survery, 1989
Summary of Assembly Plant Characteristics, Volume Producers,
1989
(Average for Plants in Each Region)

11. 2.810 T.G.Gutowski 10/29/01 11
Cost Vs Defects
Ref. “Machine that Changed the World” Womack, Jones and Roos

12. 2.810 T.G.Gutowski 10/29/01 12
The Toyota Production System
1. Historical View
2. Performance measures
3. Elements of TPS
4. Six Eras of Manufacturing Practice
5. Difficulties with Implementation

13. 2.810 T.G.Gutowski 10/29/01 13
How do you get this kind of
performance?
1. Womack, Jones and Roos
2. J T. Black’s 10 Steps
3. Demand Flow Technology’s 9 Points
4. MSDD, D. Cochran and Students

14. 2.810 T.G.Gutowski 10/29/01 14
Womack Jones and Roos
Automation?
 Yes, but….
DFM?
 Probably
Standardized Production?
 No!
Lean Characteristics?
 Integration of Tasks
 Identification and removal of defects

15. 2.810 T.G.Gutowski 10/29/01 15
Cost Vs Automation
Ref. “Machine that Changed the World” Womack, Jones and Roos

16. 2.810 T.G.Gutowski 10/29/01 16
J T. Black’s 10 Steps
Ref; JT. Black “Factory with a Future” 1991
1. Form cells
2. Reduce setup
3. Integrate quality control
4. Integrate preventive maintenance
5. Level and balance
6. Link cells – KANBAN
7. Reduce WIP
8. Build vendor programs
9. Automate
10. Computerize

17. 2.810 T.G.Gutowski 10/29/01 17
Demand Flow Technology’s
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

18. 2.810 T.G.Gutowski 10/29/01 18
Current Value Stream Map

19. 2.810 T.G.Gutowski 10/29/01 19
Future Value Stream Map

20. 2.810 T.G.Gutowski 10/29/01 20
Manufacturing System Design
Decomposition (MSDD)
ROI
Sales Costs Investments
Lower level actions
quality predictable output delay reduction
- s resolving problems s m

21. 2.810 T.G.Gutowski 10/29/01 21
J T. Black –1, 2
1. Form Cells
Sequential
operations,
decouple operator
from machine,
parts in families,
single piece flow
within cell
2. Reduce Setup
Externalize setup
to reduce down-
time during
changeover,
increases flexibility

22. 2.810 T.G.Gutowski 10/29/01 22
TPS Cell

23. 2.810 T.G.Gutowski 10/29/01 23
Standardized Fixtures

24. 2.810 T.G.Gutowski 10/29/01 24
J T. Black – 3, 4
3. Integrate quality
control
Check part quality
at cell, poke-yoke,
stop production
when parts are bad
4. Integrate preventive
maintenance
worker maintains
machine , runs
slower

25. 2.810 T.G.Gutowski 10/29/01 25
J T. Black – 5, 6
5. Level and balance
Produce to Takt
time, reduce batch
sizes, smooth
production flow
6. Link cells- Kanban
Create “pull”
system –
“Supermarket”
System

26. 2.810 T.G.Gutowski 10/29/01 26
J T. Black – 7, 8
7. Reduce WIP
Make system
reliable, build in
mechanisms to self
correct
8. Build Vendor
program
Propagate low WIP
policy to your
vendors, reduce
vendors, make on-
time performance
part of expectation

27. 2.810 T.G.Gutowski 10/29/01 27
Manufacturing System Design
Decomposition (MSDD)
ROI
Sales Costs Investments
Lower level actions
quality predictable output delay reduction
- s resolving problems s m

28. 2.810 T.G.Gutowski 10/29/01 28
Example from Cochran –
Minimize production disruptions
DP-P1
Predictable production resources (people, equipment, info)
FR-P1
Minimize production disruptions
FR-P12
Ensure
predictable
equipment
output
FR-P11
Ensure
availability of
relevant
production
information
FR-P14
Ensure
material
availability
FR-P13
Ensure
predictable
worker output
DP-P12
Maintenance of
equipment
reliability
DP-P11
Capable and
reliable
information
system
DP-P14
Standard
material
replenishment
system
DP-P13
Motivated
work-force
performing
standardized
work
FR-P133
Do not interrupt
production for
worker
allowances
FR-P131
Reduce
variability of
task completion
time
DP-P133
Mutual Relief
System with
cross-trained
workers
DP-P131
Standard work
methods to
provide
repeatable
processing time
FR-P132
Ensure
availability of
workers
DP-P132
Perfect
Attendance
Program
DP-P142
Parts moved to
downstream
operations
according to
pitch
FR-P142
Ensure proper
timing of part
arrivals
DP-P141
Standard work
in process
between sub-
systems
FR-P141
Ensure that
parts are
available to the
material
handlers
FR-P121
Ensure that
equipment is
easily
serviceable
DP-P121
Machines
designed for
serviceability
FR-P122
Service
equipment
regularly
DP-P122
Regular
preventative
maintenance
program
DP-P1
Predictable production resources (people, equipment, info)
FR-P1
Minimize production disruptions
FR-P12
Ensure
predictable
equipment
output
FR-P11
Ensure
availability of
relevant
production
information
FR-P14
Ensure
material
availability
FR-P13
Ensure
predictable
worker output
DP-P12
Maintenance of
equipment
reliability
DP-P11
Capable and
reliable
information
system
DP-P14
Standard
material
replenishment
system
DP-P13
Motivated
work-force
performing
standardized
work
FR-P133
Do not interrupt
production for
worker
allowances
FR-P131
Reduce
variability of
task completion
time
DP-P133
Mutual Relief
System with
cross-trained
workers
DP-P131
Standard work
methods to
provide
repeatable
processing time
FR-P132
Ensure
availability of
workers
DP-P132
Perfect
Attendance
Program
DP-P142
Parts moved to
downstream
operations
according to
pitch
FR-P142
Ensure proper
timing of part
arrivals
DP-P141
Standard work
in process
between sub-
systems
FR-P141
Ensure that
parts are
available to the
material
handlers
FR-P121
Ensure that
equipment is
easily
serviceable
DP-P121
Machines
designed for
serviceability
FR-P122
Service
equipment
regularly
DP-P122
Regular
preventative
maintenance
program

29. 2.810 T.G.Gutowski 10/29/01 29
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

30. 2.810 T.G.Gutowski 10/29/01 30
Two Examples;
1.Takt Time
2.Pull Systems

31. 2.810 T.G.Gutowski 10/29/01 31
Takt Time
– to pace production
Demand
Product
Time
Available
Time
Takt 
Calculate Takt Time per month, day,
year etc. Available time includes all
shifts, and excludes all non-
productive time (e.g. lunch, clean-up
etc). Product demand includes over-
production for low yields etc.

32. 2.810 T.G.Gutowski 10/29/01 32
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.

33. 2.810 T.G.Gutowski 10/29/01 33
Engines shipped over a 3 month
period at aircraft engine factory “B”
0
2
4
6
8
10
12
7-Jun 15-Jun 23-Jun 30-Jun 7-Jul 15-Jul 24-Jul 31-Jul 7-Aug 15-Aug 24-Aug 31-Aug
Weeks
engines
shipped
per
week
month 1 month 2 month 3

34. 2.810 T.G.Gutowski 10/29/01 34
Engines shipped over a 3 month
period at aircraft engine factory “C”
0
1
2
3
4
5
6
7
may june jul y august
weeks
engines
shipped

35. 2.810 T.G.Gutowski 10/29/01 35
On-time performance of
engine plants
A B C
0%
20%
40%
60%
80%
100%
engines
delivered
A B C
on
time
late
on
time
on
time
late

36. 2.810 T.G.Gutowski 10/29/01 36
Push and Pull Systems
Machines
Parts Orders
1 2 3 4

37. 2.810 T.G.Gutowski 10/29/01 37
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 = 3
Time = 2
Time = 4
Time = 1
Time = 0

38. 2.810 T.G.Gutowski 10/29/01 38
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.

39. 2.810 T.G.Gutowski 10/29/01 39
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

40. 2.810 T.G.Gutowski 10/29/01 40
HP Video Results
Push system (6) Pull (3) Pull (1)
Space 2 Tables 2 Tables 1 Table
WIP 20 12 4
CycleTime 3:17 1:40 19 sec
Rework Units 26 10 3
Quality prob. hidden visible visible
Production Rate
L=W
6.1 parts per
minute
7.2 12.6

41. 2.810 T.G.Gutowski 10/29/01 41
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 3
Quality prob. hidden visible visible
Production Rate
L=W
6.1 parts per
minute
7.2 12.6
4/50/60=4.8

42. 2.810 T.G.Gutowski 10/29/01 42
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

43. 2.810 T.G.Gutowski 10/29/01 43
The Toyota Production System
1. Historical View
2. Performance measures
3. Elements of TPS
4. Six Eras of Manufacturing Practice
5. Difficulties with Implementation

44. 2.810 T.G.Gutowski 10/29/01 44
Six Eras of Manufacturing
Practice, Ken McKay
1. Pioneering
2. Systemization
3. Technology and Process
4. Internal Efficiency
5. Customer Service
6. Systems Level Re-engineering

45. 2.810 T.G.Gutowski 10/29/01 45
Ken McKay – 1, 2
1. Pioneering -
sellers market,
competition is not
by manufacturing
large margins
emphasize
throughput not
efficiency
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.

46. 2.810 T.G.Gutowski 10/29/01 46
Ken McKay – 3, 4
3. Technology and
Process – competition
is increasing, sales are
softening,
manufacturing is still in
early maturity and
competition is limited
to firms in similar
situation. Focus shifts
from increasing
production rate to
increasing the amount
of product per unit
time.
4. Internal Efficiency -
competition “cherry
pickers” enter the market
they don’t offer all of the
options and parts service but
focus on the 20% which
yields 80% of the revenue
stream. Internal plant is put
into order, problems are
pushed outside to suppliers,
best in class, bench marking
identifies the silver bullet.
Still using inventory to
cushion production support
variety, and maintain
functional features.

47. 2.810 T.G.Gutowski 10/29/01 47
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.
6. System Level Re-
engineering - 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.

48. 2.810 T.G.Gutowski 10/29/01 48
The Toyota Production System
1. Historical View
2. Performance measures
3. Elements of TPS
4. Six Eras of Manufacturing Practice
5. Difficulties with Implementation

49. 2.810 T.G.Gutowski 10/29/01 49
TPS Implementation
Physical (machine placement, standard
work etc) part
Work practices and people issues
Supply-chain part
Corporate Strategy

50. 2.810 T.G.Gutowski 10/29/01 50
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)

51. 2.810 T.G.Gutowski 10/29/01 51
Examples of “Innovative”
Work Practices
Work Teams
Gain Sharing
Flexible Job Assignments
Employment Security
Improved Communications

52. 2.810 T.G.Gutowski 10/29/01 52
“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.

53. 2.810 T.G.Gutowski 10/29/01 53
“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.

54. 2.810 T.G.Gutowski 10/29/01 54
“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.

55. 2.810 T.G.Gutowski 10/29/01 55
“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.

56. 2.810 T.G.Gutowski 10/29/01 56
Barriers to Implementation
Early abandonment
Costs
History of conflict and distrust
Resistance of supervisors
Lack of supportive infrastructure

57. 2.810 T.G.Gutowski 10/29/01 57
Summary
High quality and low cost ( and originally low
volumes)
Relationship to previous systems (see McKay
paper), yet new,………. in fact revolutionary
Many elements
 Overall, see ”The Machine that Changed the
World”
 Cells, next time
 People, see Maccoby Article

58. 2.810 T.G.Gutowski 10/29/01 58
Summary …….. continued
“Autonomation” automation with a
human touch
Worker as problem solver
TRUST