The presentation is about Management Control System at Toyota. The presentation briefly covers the various techniques developed by Toyota with reference to the "Toyota House Diagram".

1. -Presented by
 Akshay Katariya (13218)
 Harshad Jain (13224)
 Pravin Jadhav (13239)
 AkshayGhone (13248)
 Shivaji kothewad (13256)

2.  Established in Japan in Year 1937
 Largest and most profitable automobile manufacturer
in the world since 2008
 Produced 20 crore vehicles till July 2012
 About 70 different vehicle models,
 Largest listed company in Japan
 14th largest listed company world over
 Factories in 27 countries in the world
 Over 3,33,498 employees world over
 Following Best Management Practices since 1940

3.  Starts with Sakichi Toyoda who grew up in
predominantly farming community in late 1800s.
Weaving was a major industry promoted by the Japanese
government.
 By 1894, Sakichi began to make manual looms that were
cheaper but of better quality (more features and less
failures).
 Started working on his own to develop power-driven
loom. This approach of learning and doing yourself
became integral part of TPS (genchi genbutsu).
 Among his inventions was a special mechanism to
automatically stop a loom whenever a thread broke –
building in quality as you produce the material (jidoka or
poka-yoke).

4.  The “mistake-proof” loom became Toyoda’s most popular
model
 In 1929, his son Kichiro, negotiated the sale of patent rights to
Platt Brothers of England for £100,000.
 In 1930, these funds were used to start building the Toyota
Motor Corp.
 Kichiro’s contribution to the Toyota philosophy – JIT.
 What is JIT? – marriage between the Ford’s idea of assembly
line and US supermarket system of replacing products on the
shelves just in time as customer purchased them.
 Not much later WWII started.

5.  Post-WWII, rampant inflation meant getting paid by
customers was very difficult. Cash-flow problems lead to pay
cuts.
 When situation worsened, 1600 workers were asked to “retire
voluntarily.”
 The resultant work stoppages and public demonstrations by
workers led to resignation of Kichiro.
 Eiji Toyoda took over as president.
 Eiji’s main contribution – leadership towards development of
the TPS.
 Eiji hired Taiichi Ohno as the plant manager and asked him to
improve Toyota’s manufacturing process so that it equals the
productivity of Ford.

6.  Taiichi Ohno benchmarked the competition by visiting Ford
and studied Henry Ford’s “book.”
 Impressed with Ford’s philosophy of eliminating waste. Ford
itself didn’t seem to practice it.
 Took idea of reducing inventory by implementing “pull”
system from the US supermarkets.
 “Pull” system was implemented by Kanban cards.
 Ohno also took ideas from Deming when he was lecturing in
Japan about quality and productivity.

7.  Deming told the Japanese industry about meeting and
exceeding customer satisfaction. Also broadened the
definition of customer to include both internal as well as
external customers.
 “The next process is the customer” became the most
significant expression for JIT, because in a pull system it
means the proceeding process must always do what the
subsequent process says. Otherwise JIT won’t work.
 Deming’s PDCA cycle led to Kaizen.

8. The Toyota Production System …….
Best Quality – Lowest Cost – Shortest lead Time –
Best Safety – High Morale
People & Teamwork
• Selection
•Common Goals
• Ringi Decision-making
• Cross-Trained
Leveled Production (Heijunka)
Stable & Standardized Process
Visual Management
Toyota Way Philosophy
Just-in-Time
Right Part, Right Amount,
Right Time
• Takt Time Planning
• Continuous Flow
• Pull System
• Quick Changeover
• Integrated Logistics
Jidoka
(In-station Quality)
Make Problems Visible
• Automatic Stops
• Andon
• Person-Machine separation
• Error-proofing
• In-station Quality Control
• Solve Root Cause of Problems
(5 Why’s)
Continuous
Improvement
Waste Reduction
• Genchi Genbutsu
• 5 Why’s
• Eyes for Waste
• Problem Solving

9.  Overproduction: Producing items for which there are no
orders, which generates such wastes as overstaffing and
storage and transportation costs because of excess inventory.
 Waiting: Workers having to stand around waiting for the next
processing step, tool, part etc. Or no work because of stock-outs,
lot processing delays, equipment downtime, and capacity
bottlenecks.
 Unnecessary transport: Carrying WIP long distances, creating
inefficient transport, or moving parts in and out of storage
facility.

10.  Over-processing or incorrect processing: Taking unneeded
steps to process the parts. Inefficient processing due to poor
tools and product design, causing unnecessary motion and
producing defects. Waste generated when providing higher-quality
products than is necessary.
 Excess inventory: Excess raw material, WIP or finished goods
causing longer lead times, obsolescence, damaged goods.
Extra inventory hides problems such as production
imbalances, late deliveries from suppliers, defects, equipment
downtime, and long set-ups.
 Unnecessary movements: Any wasted motion employees have
to perform during the course of their work, such as looking
for, reaching for, or stacking parts, tools etc. Walking is a
waste.

11.  Defects: Production of defective parts or correction. Repair or
rework, scrap, replacement production, and inspection mean
wasteful handling, time and efforts.
 Unused employee creativity: Losing ideas, skills,
improvements, and learning opportunities by not engaging or
listening to your employees.

12. Just-in-Time means PRODUCING:
a)Right item
b) At right time
c) In the right amount

16.  Mr. Ohno used to say that no problem
discovered when stopping the line should wait
longer than tomorrow morning to be fixed.
Because when making a car every minute we
know we will have the same problem again
tomorrow.
- Fujio Cho, President,
Toyota Motor corp.

17. Competitor’s culture
• No matter what Do not shut down the
Assembly line.
Toyota’s culture
• If you are not shutting the assembly line
that means you have no problem. All
manufacturing plants must have problems.
That means you must be hiding your
problems. You will also continue to solve
your problems and make even better quality
products more efficiently.

18.  Stopping the Process to build in Quality
 Quality should be built in.
 Jidoka- Equipment endowed with human
intelligence to stop itself when it has a
problem.
 Much more effective and less costly.
 Solving quality problems at source saves time
and money.
 Eliminates waste, productivity soars.

20.  If the problem is small enough that can be solved
in the lead-time between two workstation, 100%
quality is achieved without stopping the line.
 If the problem is complex, the team leader can
conclude that the line should stop.
 In TPS, the workstation detects the defects by
using countermeasures and error-proofing (poka-yoke).

21.  Mr. Ohno was passionate about TPS. He said
you must clean up everything so you can see
problems. He would complain if he could not
look and see and tell if there is a problem.
- Fujio Cho, President

22. Sort
Clean out
rarely used
items by red
tagging
Straighten
Organize and
label a place
for everything
Shine
Clean it.
Sustain
Use regular
management
audits to stay
disciplined
Standardize
Creates rules
to sustain the
first 3 S’s
Eliminate
Waste
The 5 S’s

23.  “The factories were so clean you could eat off of the floor”. – Americans
reaction to Japanese plants.
 “5 S programs”- comprise a series of activities for eliminating wastes that
contribute to errors, defects and injuries.
 Sort- Sort through items and keep only what is needed while disposing of
what is not.
 Straighten- “ A place for everything and everything in its place”.
 Shine (cleanliness)- The cleaning process often acts as a form of inspection
that exposes abnormal and pre-failure conditions that could hurt quality or
cause machine failure.
 Standardize- Develop systems and procedures to maintain and monitor the
firset 3 S’s
 Sustain- Maintaining a stabilized workplace is an ongoing process of
continuous improvement.

25.  People are the centre of the house because only through
continuous improvement can the operation attain the
system stability.
People must be trained to see waste and solve the root
cause by repeatedly asking the question why.

26. Growing your leaders rather than purchasing
them
The Newsmaker of 2002 by The Automative News
 Bill Ford (Ford CEO)
Robert Lutz (GM Executive VP)
Dieter Zetzche (Crysler group President)
Carlos Ghosn (Nissan President)
Fuijo Cho (Toyota President)

27. Toyota Leaders view of the TPS

28. Customer First

29. The Chief Engineer: Critical Link to Innovation,
Leadership and Customer Satisfaction.

31. The Common Themes of Leadership at Toyota
TOYOTA LEADERS
Group Facilitator
“You are Empowered”
Bureaucratic
Manager
“Follow the Rules”
Builder of Learning
Organizations
“Here is Our Purpose
and Direction,
I will Guide and Coach”
Task
Master
“Here is what to do and how
– Do It!”
Bottom-up
(Development)
Top-Down
(Directives)
General
Management
Expertise
In-Depth
Understanding
Of Work

32. CommonTraits:
Focused on Long-term Purpose as a Value-Added Contributor to Society.
Never deviated from the Precepts of the Toyota Way DNA and lived and
modeled their themselves around this for all to see.
Worked their way up doing the Detailed Work and continued to Go and See
theGemba.
Saw Problems as Opportunities to train and coach their people.
The Leaders’ real challenge is having the long-term vision of knowing what
to do, the knowledge of how to do it, and the ability to develop people so
they can understand and do their job excellently.

33. • Importance of team work
• Co-ordinate the work, motivate and learn together
• Suggest innovative ideas, even control through peer
pressure
• Excellent individual performers are required to make up
teams that excel

34. Team Size
Team Member
5 ~ 8
Team Leader
3 ~ 4
Group Leader
5 ~ 8
Assistant Manager
4 - 10
Manager
PTMSB
Working Group
Associate
Associate Leader/
Line Keeper
Supervisor
Executive
Head Of Department

35. Internal
Motivation
• Maslow’s need hierarchy
• Herzberg’s Job enrichment theory
External
• Taylor’s scientific Management
• Behaviour Modification
• Goal Setting

36. • Find Solid Partners and GrowTogether to Mutual Benefit in the Long-Term
• Cross-Docking (“Break-Bulk” Facilities)
• Partner –Transfreight – Cross-docking needs forToyota:
• Achieved JIT deliveries despite great distances in NorthAmerica.
• Costs ofTransportation went down considerably.
• Saves money on returnable containers.
• Transfreight continually improving & reducing costs.
• Saving “Sick” SuppliersThroughTPS

37. Learning
Enterprise
Enabling
System
Clear Expectations
Stable, Reliable Processes
Fair & Honorable Business Relations
Next Level
Of Improvement
Stability
SUPPLY CHAIN NEED OF HIERARCHY

38. Genchi Genbutsu

39. Deeply understand and report what you see
Genchi Genbutsu - Going to the actual place
(Gemba) to see the actual situation for
understanding

40. Ohno Circle

41. See for America, then design for America

42. Kiichiro Toyoda: “ How can you expect to do
your job without getting your hands dirty”

43. • Toyota’s leaders see the company as a vehicle for adding value to customers,
society, the community and its associates.
• People are most important asset.
• Management on the floor.
• Be responsible. All leaders must take responsibility.
• This strong philosophies have often separated them from their competitors.

44. • Visual management is one of the lean techniques designed so
that anyone entering a work place, even those who are
unfamiliar with the detail of the processes, can very rapidly
see what is going on, understand it and see what is under
control and what isn’t.
Visual management helps you:
• Understand and indicate work priorities
• See whether performance (usually daily) was met
• Identify the flow of work and what is being done
• Identify when something is going wrong or not happening
• Show what standards of work should be
• Provide real time feedback to everyone involved in the whole
process

45. Techniques used in visual management
The techniques used to create a visually managed workplace fall into a number of
categories:
The workplace itself:
• Signs
• Marked floor areas/hatching
• Direction of process flow shown on floor or wall
Visual production control
• Production status boards
• Kanban visual signals
Autonomation
• The machinery automatically stops when there is a problem and attracts attention
Visual performance measurement
• Quality charts
• Performance charts (dashboard metrics based on KPI’s)
• Status of the organisation
Visual safety management
• Safety warnings
• Precaution information

46.  Today’s standardization ..is the necessary
foundation on which tomorrow’s improvement
will be based. If you think of “standardization”
as the best you know today, but which is to be
improved tomorrow- you get somewhere. But
if you think of standards as confining , then
progress stops.

47. Takt time(time required to complete one
job at the pace of customer demands
Toyota’s Standardized
Work
Inventory on hand the worker
needs to have in order to
accomplish the standardized work
Sequence of doing things
or sequence of processes
TOYOTA’S Standardized Work

48.  The slower but consistent tortoise causes less
waste and is much more desirable than the
speedy hare that races ahead and then stops
occasionally to doze. The Toyota Production
System can be realized only when all the
workers become tortoises.
-( Taiichi Ohno, 1988)

49. -Focuses on what
customers want
and when they
want it.
-Unpredictable
customer needs
-stressing people
and equipment
-creates piles of
inventory, hidden
problems and
poor quality
Build to
Order
Accumulates
order and level
the schedule
-may able to
reduce
production lead
time
-cut inventories
- Greater
customer
satisfaction
Toyota
production
System

50. Muda
Waste
Muri
Overburden
Mura
Unevenness
The Three M’s of Toyota Production System

51. Muda
• Non value added
• Focus of lean manufacturing system- Eliminating Muda
Muri
• Overburdening people or Equipment
• Overburdening people-Results in safety and quality
problems
• Overburdening Equipment- Breakdowns and defects
Mura
• Unevenness
• Results from irregular production schedule or fluctuating
production volume

52.  Levelling the production both by volume and
product mix.
 Does not produce according to customer orders
 Takes total volume of orders and levels them
 Flexibility to make what customer wants and
when they want it.
 Reduce risk of unsold goods.
 Balanced use of labour and machines.
 Smoothed demand on upstream processes and
plant’s suppliers.

53. CONCLUSION
Best Quality – Lowest Cost – Shortest lead Time –
Best Safety – High Morale
People & Teamwork
• Selection
•Common Goals
• Ringi Decision-making
• Cross-Trained
Leveled Production (Heijunka)
Stable & Standardized Process
Visual Management
Toyota Way Philosophy
Just-in-Time
Right Part, Right Amount,
Right Time
• Takt Time Planning
• Continuous Flow
• Pull System
• Quick Changeover
• Integrated Logistics
Jidoka
(In-station Quality)
Make Problems Visible
• Automatic Stops
• Andon
• Person-Machine separation
• Error-proofing
• In-station Quality Control
• Solve Root Cause of Problems
(5 Why’s)
Continuous
Improvement
Waste Reduction
• Genchi Genbutsu
• 5 Why’s
• Eyes for Waste
• Problem Solving