Wednesday, October 21, 2009

The Toyota Production System

Toyota has been by far one of the few companies to have applied lean production techniques with the most success. Toyota effectively uses the just in time system, whereby stock of raw material is only ordered when needed. Management firmly believes in empowering the workers and they are given the responsibility of finding and correcting all defects. Cell production is also an important aspect of the Toyota Production System (TPS). This is when the entire car making process is divided into smaller processes which are confined into ‘cells’ for example the painting process will be done at one cell and the bumper will be fitted in another. Materials are provided to these cells through the kanban system where the materials are brought in through bins. A method that Toyota increases productivity is by making cells which do the same job compete against each other. This healthy competition improves the rate at which cars are produced. The following are the 7 principles of the TPS:

1. Reduced Setup Times:

All setup practices are wasteful because they add no value and they tie up labor and equipment. By organizing procedures, using carts, and training workers to do their own setups, Toyota managed to slash setup times from months to hours

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

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 are also given responsibility for housekeeping and minor equipment repair. Each team 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 at the best position to discover a defect and to immediately fix it, they are assigned this responsibility. If a defect cannot be readily fixed, any worker can halt the entire line by pulling a cord (called Jidoka).

5. Equipment Maintenance: Toyota operators are assigned primary responsibility for basic maintenance since they are in the best position to defect signs of malfunctions. Maintenance specialists diagnose and fix only complex problems, improve the performance of equipment, 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 of the process is dictated solely by demand for materials from the immediate next stage. 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, as integral elements of Toyota Production System (TPS). Suppliers are trained in ways to reduce setup times, inventories; defects, machine breakdowns etc., and take responsibility to deliver their best possible parts.



Azeem Akhtar said...

Fair Enough

Mehar Athar said...
This comment has been removed by the author.
Mehar Athar said...

do the production process has any relation with marketing?

Aqsa Bashir said...

@Mehar Athar the production process us a segment in the marketing series.

Marketing is just not promotion of a product, it starts with identifying the need of the consumer
creating/ producing the product accordingly
determining the price
placing the product in the correct market
promoting/ publicizing it well.

All of this has to do with marketing.

Syed Ahmad Hashmi said...

Its a very proper representation of the actual toyota's production system, therefore in my opinion much of the needed information is present for better understanding.

Cindy said...

I am actually surprisied with the point 2, because I thought materials usually come cheaper in a bigger quantity?

Nabeel said...

Yes, materials do some cheap when ordered in large quantities, but what Toyota does it has a contract with its suppliers and it buys only when it needs to. This way there is no raw material storage, no risk of damages, and moreover no need to have storage places. And in a way this saves money, but for this you need to have reliable suppliers and time should be of essence. Timing is a very important factor in this method. Kaizen, another Japanese method works by reducing any wastage i.e: continuous improvement by reducing waste, these methods are a bit hard to implement and in a Country like Pakistan it is even more difficult, but these methods are used in other parts of the world, having originated from Japan.