Toyota Production System

We have all seen the triumphant rise of Japanese manufacturing companies over the last several decades, especially in the automotive and electronics manufacturing sectors. So why has this system, developed by Toyota Motors, been so successful? The main philosophies, cultural values, and overall process of the Toyota Production System (TPS) have driven its worldwide notoriety. The following are some of the central doctrines of the Toyota Production System that make it so universally successful, regardless of what industry.

What is the Toyota Production System Philosophy?

1. Having a long-term philosophy that drives a long-term approach to build a learning organization

• Base your management decisions on a long-term philosophy, even at the expense of shorter financial goals

2. The proper process will produce the right result

• Create a continuous process flow to bring problems to the surface. Use constraint management to tackle the biggest to smallest issues in order of impact.

• Use the “pull” systems to avoid overproduction. This will help uncover issues in your manufacturing process, rather than masking them with piles of overproduced products at each station.

• Level out the workload (heijunka). Build orders as they come in. Don’t batch and queue your production.

• Build a culture of stopping to fix problems, to get quality right the first time. Empower everyone to stop the production of non-compliant material (NCM) parts.

• Standardized tasks and processes are the foundation for continuous improvement and employee empowerment. Standardization breeds efficiency at all levels of the operations.

• Use only reliable, thoroughly tested technology that serves your people and processes.

• Use visual control, so no problems are hidden. Visual indicators can create a fast and easy way to take the pulse of the operation at all levels without requesting time-consuming charts and data sheets to be compiled.

3. Add value to the organization by developing its people and partners

• Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others

• Develop exceptional people and teams who follow your company’s philosophy

• Respect your extended network of partners and suppliers by challenging them and helping them improve.

4. Continuously solving root problems to drive organizational learning

• Go and see for yourself to thoroughly understand the situation. Manage by walking around your operations rather than sitting in your office and expecting things to change.

• Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly. Once you have proven that changes need to happen, execute as quickly as possible so you can take full advantage of the benefits of your decision.

• Become a learning organization through the relentless reflection of lessons learned and continuous improvement (Kaizen).

Reduction of Waste

Reducing waste in all aspects of your operations is key to maintaining the edge needed to compete in the global economy. The Toyota Production System teaches that waste, “Muda,” is one of the evils to avoid. Following are some examples of ways to reduce waste.

1. Reduce Setup Times – All setup practices are wasteful because they add no value and tie up labor and equipment. By organizing procedures, using carts, and training workers to do their setups, Toyota managed to slash setup times from months to hours and sometimes even minutes.

2. Small-Lot Production – Producing large batches results in huge setup costs, the high capital cost of high-speed, dedicated machinery, larger inventories, extended lead times, and higher defect costs. Because Toyota has found a way to make setups short and inexpensive, it became possible for them to produce various things in small quantities economically.

3. Employee Involvement and Empowerment – Toyota organized their workers by forming teams and gave them the responsibility and training to do many specialized tasks. Teams have the responsibility for housekeeping and minor equipment repair. Each unit has a leader who also works as one of them on the line.

4. Quality at the Source – To eliminate product defects, they must be discovered and corrected as soon as possible. Since workers are in the best position to find a defect and fix it immediately, they are assigned this responsibility. If they cannot readily fix a defect, any worker can halt the entire line by pulling a cord (called Jidoka).

5. Equipment Maintenance – Toyota operators are assigned primary responsibility for essential maintenance since they are in the best position to detect signs of malfunctions. Maintenance specialists diagnose and fix only complex problems, improve equipment performance, and train workers in maintenance.

6. Pull Production – To reduce inventory holding costs and lead times, Toyota developed the pull production method wherein the quantity of work performed at each stage is dictated solely by demand for materials from the immediate next step. The Kanban scheme coordinates the flow of small containers of materials between stages. This is where the term Just-in-Time (JIT) originated.

7. Supplier Involvement – Toyota treats its suppliers as partners and integral elements of the Toyota Production System (TPS). Manufacturers train suppliers to reduce setup times, inventories, defects, machine breakdowns, and other tasks and take responsibility to deliver their best possible parts.

Corporate Culture

Culture refers to an organization’s values, beliefs, and behaviors. Firms with strong cultures achieve higher results because employees focus on what to do and how to do it, and the corporate hierarchy supports them. Culturally, the main focus in a lean manufacturing company that follows the TPS methods is called Kaizen, or Continuous Improvement. The culture of continuous improvement needs to be so ingrained that each employee is self-motivated to look for ways to improve those processes or functions that affect the company’s ability to remain strong and progressive. Kaizen efforts should focus on not only improving all aspects of the company but also on the elimination of waste as described above.

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