Lean/Toyota System

Sanjay Choudhari

Indian Institute of Management

Indore
Toyota
Toyota
 Toyota Production System (TPS)

Waste of Overproduction
- Block the working capital in inventory
- Need warehouse storage space, transportation to move
goods, people to track inventory locations
 Eight Wastes or MUDA
1. Overproduction
2. Inappropriate Processing / Process waste
3. Waiting
4. Transportation
5. Motion
6. Inventory
7. Defects
8. Underutilized Employees
 Eight Wastes
1. Overproduction
▪ Manufacturing an item before it is needed.
▪ Building more than what is demanded.

2. Inappropriate Processing / Process waste

▪ Using expensive high precision equipment when simpler
machines would suffice.
▪ Excessive or redundant operations.

3. Waiting
▪ Wasteful time incurred when product is not being moved
or processed.
 Eight Wastes
4. Transportation
▪ Excessive movement and material handling of product
between processes.

5. Motion
▪ Unnecessary effort related to the ergonomics of bending,
stretching, reaching, lifting, and walking.
▪ Unnecessary or excessive human activity.

6. Inventory
▪ Excess inventory hides problems on the shop floor,
consumes space, increases lead times, and inhibits
communication.
▪ Building more to protect against system problems
 Eight Wastes
7. Defects
▪ Quality defects result in rework and scrap, and add
wasteful costs to the system in the form of lost capacity,
rescheduling effort, increased inspection, and loss of
customer good will.

8. Underutilization of Employees
▪ Failure of the firm to learn from and capitalize on its
employees’ knowledge and creativity impedes long term
efforts to eliminate waste.
Eight Wastes or MUDA : Examples
Eight Wastes or MUDA : Examples
Eight Wastes or MUDA : Examples
Toyota ..elimination of waste ?
 Toyota Production System (TPS)
Waste of Overproduction
- Block the working capital in inventory
- Need warehouse storage space, transportation to move
goods, people to track inventory locations

Just in Time (JIT )

- Produce only what was needed
- Any deviation from real production is waste
- Pull system , Standardization of process and documenting
the standard, people attitude (training), KANBAN

Jidoka
- Make problem instantly self-evident
- Stop producing when problems were detected
- Build quality in first place….any deviation from value
addition is waste …next station as next customer
 Element of Lean

1. Pull method of work flow

◆ Push method
◆ Pull method
 Element of Lean
1. Pull/Push method of work flow
PUSH CONTROL

CENTRAL OPS. PLANNING AND CONTROL SYSTEM FORECAST

Instruction on OR
what to make
and where to
send it

Work Work Work Work DEMAND

centre centre centre centre

PULL CONTROL

Request Request Request Request

Work Work Work Work

centre centre centre centre DEMAND

Delivery Delivery Delivery Delivery

 Pull system in TPS

Magic happens ….
- Kentucky Framed Seat (KFS) : only Seat supplier
- Blue DX sedan arrive at seat assembly station : seat set with
blue fabric reach at the same time from KFS among the few
variation of colors.
 Element of Lean

2. Quality at the source

• Jidoka
• Poka-yoke
• Andon

▪ Statistical process control

▪ Worker involvement
▪ Inspect own work
▪ Quality circles
▪ Immediate feedback
 Element of Lean
1 2 3 4 5 6 7
8 9 10 11 12 13 14
STOP BUTTON
(STOP THE L INE AUTHOR ITY ) STOP BUTTON
(STOP THE L INE AUTHOR ITY )

5
4 Abnormality
Station 5

2. Quality at the source

◆ Jidoka Team Leader
◆ Andon
Element of Lean

3. People
• Standardization
• Stick to the facts
• Get down to the root cause of problems
• Ask why ? Why ? Why?
• Developing problem solving approach
• People should practice this as they want to
than they have to…
• Employee involvement
• Kizen
 Element of Lean
Standardized components and work
methods

Standardized
Work Element Sheet
Work
Detail of the Elements
Detail of each of each Process Step
Process Step
Why
 Jidoka in TPS
- 353 stations, 57 min cycle time, 7.5 hr shift, team
members, group leaders,
- Every station is embodied with Jidoka guidelines, process
and work to be performed etc., 5S
- Any deviation from above
- Stop ..!!
- Why ? Why ?Why ? Why ? Why ? Route cause analysis…!

Workstation

Start point 70 % End point

0% 100%
 Lean Systems
Lead time =
f(Inventory)

Inventory
 Element of Lean
4. Uniform workstation loads
◆ Takt time
◆ Heijunka
◆ Mixed-model assembly
◆ Batch size of one (ideal)
Weekly Production Required
A 10 units
B 20 units
C 5 units
D 5 units
E 10 units
Traditional Production Plan
Monday Tuesday Wednesday Thursday Friday
AAAAA BBBBB BBBBB DDDDD EEEEE
AAAAA BBBBB BBBBB CCCCC EEEEE
JIT Plan with Level Scheduling
Monday Tuesday Wednesday Thursday Friday
AABBBB AABBBB AABBBB AABBBB AABBBB
CDEE CDEE CDEE CDEE CDEE
 Element of Lean
4. Uniform workstation loads
◆ Takt time
◆ Heijunka
 Element of Lean
5. Small lot sizes
◆ Reduce the average level of inventory
◆ Pass through system faster (MLT)
◆ Create uniform workload and prevent overproduction
◆ Increase setup frequency
 Element of Lean
5. Small lot sizes
◆ Set up time reduction
90 min
Initial Setup Time

Separate setup into preparation, and actual

setup, doing as much as possible while the
Step 1
machine/process is running (save 30 minutes)
60 min
Move material closer and
Step 2 improve material handling (save
20 minutes) 45 min
Standardize and
improve tooling
Step 3
(save 15 minutes)
25 min
Eliminate
adjustments (save Step 4 15 min
10 minutes) 13 min
Step 5
Training operators and standardizing
work procedures (save 2 minutes)
 Element of Lean
6. Close supplier ties
◆ Look for ways to improve efficiency and reduce
inventories throughout the supply chain
◼ Supplier proximities
◼ Improvement in supplier quality
◼ Rationalizing number of suppliers
◼ Close supplier relationships
◼ Help in lowering suppliers cost
◆ JIT II
◆ In-plant representatives from suppliers
◆ Benefits to both buyers and suppliers
 Purchasing in TPS
Manager Purchasing…
“ before Toyota, I was working for another auto company. My
job basically was to get the lowest price by pitting suppliers
against one another”

In Toyota
- Our boss care less about the low price
- Supplier jack up their initial quote
- We want only low cost suppliers
- W/o low cost it is logically impossible for any supplier to
offer low price.
- Vendor development ideas…improve manufacturing process
and help then in doing that.
 Element of Lean

7. Flexible workforce/ Resources

▪ Capable to do many different things with
minimal setup time
▪ Workers assume considerable responsibility
▪ Cross-trained to perform several different
duties
▪ Trained to also be problem solvers
 Element of Lean

8. Automation ….

9. Total Preventive Maintenance (TPM)

◆ Scheduled & daily PM
◆ Operator performs PM
◼ Knows machines
◼ Responsible for product quality

10.Five S (5S) practices

 Element of Lean
5S DEFINED
5S Term 5S Defined
1. Sort Separate needed from unneeded items (including tools, parts, materials,
and paperwork), and discard the unneeded.
2. Straighten Neatly arrange what is left, with a place for everything and everything in its
place. Organize the work area so that it is easy to find what is needed.

3. Shine Clean and wash the work area and make it shine.
4. Standardize Establish schedules and methods of performing the cleaning and sorting.
Formalize the cleanliness that results from regularly doing the first three S
practices so that perpetual cleanliness and a state of readiness are
maintained.
5. Sustain Create discipline to perform the first four S practices, whereby everyone
understands, obeys, and practices the rules when in the plant. Implement
mechanisms to sustain the gains by involving people and recognizing them
via a performance measurement system.
Toyota Seat Problem
Toyota Seat Problem
Toyota Seat Problem
 Lean Systems
⚫ Lean management is continuously enabling
organization eliminating waste from the system
and create value to customers (products or
services). The goal is to eliminate the eight
types of waste.
⚫ JIT is part of lean system to expose problems
to related to wastes . It means getting the right
quantity of goods at the right place and the
right time. It is forced continuous problem
solving mechanism.
⚫ Synonymously used

Value added, Non-value added (necessary and unnecessary)

 ?
⚫ JIT is problem solving approach than inventory
reduction plan
⚫ JIT should be adopted and practiced inside the
factory where company can control problem
⚫ Factory and vendor are driven by final stage
(final assembly). It is place to start
implementing JIT. BIG JIT and Small JIT
⚫ JIT success depend on high quality materials.
Line stoppage will realize the importance of
quality.
⚫ Work with few suppliers as a initial start point.
⚫ Practice before you preach benefits to others
 Benefits of JIT Manufacturing
⚫ Shorter lead times
⚫ Lower defect rates
⚫ Less raw materials inventory
⚫ Less WIP inventory
⚫ Less finished goods inventory
⚫ Enhancements in system flexibility
⚫ Reduction in floor space requirements
⚫ Improvement in communication
⚫ Improvement in employee morale
 JIT can be effective If…
⚫ Production system has a flow structure
⚫ Set up times are low
⚫ Demand is stable
⚫ High volume, Repetitive Manufacturing
 Designing Lean System Layouts

1. Line flows recommended

◆ Eliminate waste
◆ Workstationsin close physical proximity to
reduce transport & movement

2. One worker, multiple machines (OWMM)

3. Group technology
◆ Group parts or products with similar
characteristics into families