A Case Study - Toyota Production System

A Case Study - Toyota Production System

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

Consumer Reports

The Toyota Production System

  • Historical View

  • Performance measures

  • Elements of TPS

  • Six Eras of Manufacturing Practice

  • Difficulties with Implementation

Three Major Mfg Systems from 1800 to 2000

Key Elements for New Mfg Systems

Q. By what method did these new systems come about?

  • A. Trail and Error

History of the Development of the Toyota Production System ref; Taiichi Ohno

The Toyota Production System

  • Historical View

  • Performance measures

  • Elements of TPS

  • Six Eras of Manufacturing Practice

  • Difficulties with Implementation

Summary of Assembly Plant Characteristics, Volume Producers, 1989 (Average for Plants in Each Region)

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

The Toyota Production System

  • Historical View

  • Performance measures

  • Elements of TPS

  • Six Eras of Manufacturing Practice

  • Difficulties with Implementation

How do you get this kind of performance?

  • Womack, Jones and Roos

  • J T. Black’s 10 Steps

  • Demand Flow Technology’s 9 Points

  • MSDD, D. Cochran and Students

Womack Jones and Roos

  • Automation?

    • Yes, but….
  • DFM?

    • Probably
  • Standardized Production?

    • No!
  • Lean Characteristics?

    • Integration of Tasks
    • Identification and removal of defects

Cost Vs Automation Ref. “Machine that Changed the World” Womack, Jones and Roos

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

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

Current Value Stream Map

Future Value Stream Map

Manufacturing System Design Decomposition (MSDD)

J T. Black –1, 2

  • 1. Form Cells

  • Sequential operations, decouple operator from machine, parts in families, single piece flow within cell

TPS Cell

Standardized Fixtures

J T. Black – 3, 4

  • 3. Integrate quality control

  • Check part quality at cell, poke-yoke, stop production when parts are bad

J T. Black – 5, 6

  • 5. Level and balance

  • Produce to Takt time, reduce batch sizes, smooth production flow

J T. Black – 7, 8

  • 7. Reduce WIP

  • Make system reliable, build in mechanisms to self correct

Manufacturing System Design Decomposition (MSDD)

Example from Cochran – Minimize production disruptions

Some Basics Concepts of TPS

  • Smooth Flow and Produce to Takt Time

  • Produce to Order

  • Make system “observable” and correct problems as they occur

  • Integrate Worker Skills

Two Examples;

  • Takt Time

  • Pull Systems

Takt Time – to pace production

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.

Engines shipped over a 3 month period at aircraft engine factory “B”

Engines shipped over a 3 month period at aircraft engine factory “C”

On-time performance of engine plants

Push and Pull Systems

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?

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.

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.

HP Video Results

HP Video Results Revisited

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

The Toyota Production System

  • Historical View

  • Performance measures

  • Elements of TPS

  • Six Eras of Manufacturing Practice

  • Difficulties with Implementation

Six Eras of Manufacturing Practice, Ken McKay

  • Pioneering

  • Systemization

  • Technology and Process

  • Internal Efficiency

  • Customer Service

  • Systems Level Re-engineering

Ken McKay – 1, 2

  • 1. Pioneering - sellers market, competition is not by manufacturing large margins emphasize throughput not efficiency

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.

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.

The Toyota Production System

  • Historical View

  • Performance measures

  • Elements of TPS

  • Six Eras of Manufacturing Practice

  • Difficulties with Implementation

TPS Implementation

  • Physical (machine placement, standard work etc) part

  • Work practices and people issues

  • Supply-chain part

  • Corporate Strategy

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)

Examples of “Innovative” Work Practices

  • Work Teams

  • Gain Sharing

  • Flexible Job Assignments

  • Employment Security

  • Improved Communications

“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.

“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.

“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.

“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.

Barriers to Implementation

  • Early abandonment

  • Costs

  • History of conflict and distrust

  • Resistance of supervisors

  • Lack of supportive infrastructure

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

Summary …….. continued

  • “Autonomation” automation with a human touch

  • Worker as problem solver

  • TRUST

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