Thursday, November 14, 2013

Changes in Toyota Production System Brought in by Taiichi Ohno

Vehicles per worker was ten times the figure of Japan in USA.

Taiichi Ohno,  had joined Toyota in 1943, having worked previously in Toyoda loom-machinery plant. . Ohno gradually introduced a series of interrelated innovations in manufacturing to implement JIT combined with Jidoka (poka yoke)  that complemented and rivaled the achievements of Frederick Taylor and Henry Ford.

1948: Ohno instituted a “pull” system in the machining shop for engines, asking each worker to move back to the previous station to retrieve work-in-process, just at the necessary time in the amount needed only for immediate processing.  This contrasted with the traditional “push” systems used  in the U.S., Japan, and Europe, where components were made according to a schedule released by production planning department.

1949: Ohno also made workers in the machining shop operate several machines each, rather than specialize This procedural change seemed to improve worker productivity. Ohno then asked production workers to conduct their own inspections. This improved quality on the line and raised worker output by cutting down on nonproductive inspection staff.

1950: Toyota extended the pull concept to mar keting through the policy of limiting production to orders received by Toyota Motor Sales from dealers.
Toyota synchronized engine and transmission machining with final assembly, to reduce further in-process inventories.

Indicator lights introduced on the engine lines alerted supervisors to problems.

1953: Ohno introduced an early “kanban” system into the machining shop, using the exchange of paper tags to signal processing operations or parts production. The Japanese called this the “super market method,” since it mimicked the practice in U.S. supermarkets where customers went to stores to buy what they wanted  while the supermarket replaced items on shelves as it sold them.
To simplify manufacturing, procurement, and conveyance Toyota also instituted a standardization program for car and truck components.

1955: Toyota synchronized its body and final assembly shops to eliminate more in-process in ventories.
Controls introduced on parts deliveries further cut inventories.

Toyota started to mix the loading of components in small lots for machine tools and to mix model runs on final assembly lines to raise equipment utilization as well as lower inventories.

Line-stop buttons introduced on assembly lines gave workers authority to halt production if they noticed defects or if other problems arose.

1957: Indicator lights installed on all production lines alerted supervisors outside the machining shop to problems.
1959: A control system for internal and in-house-to-outside conveyances again cut in-process inventories and waiting time.
1961: Toyota introduced the kanban system to some outside parts suppliers.
1962: Toyota then extended the kanban system to all in-house shops, placing the entire company on a small-lot, pull system.
Foolproof devices (poka-yoke) added to machine tools helped prevent defects and overproduction.

Toyota lowered stamping-press changeover times for dies from two or three hours in previous years to fifteen minutes, Rapid setups increased equipment utilization and made small-lot production more economical, as well as helped reduce in-process inventories by cutting lead times.

1963: Managers were now asking workers to operate an average of five machines each, compared with three to four since 1949, two in 1947, and one in previous years. This seemed to raise labor productivity further.
1965: Toyota extended the kanban system to all outside parts deliveries, further reducing in-process inventories.
1971: Toyota cut die setup times for stamping presses to three minutes and adopted the practice of moving workers to different positions on assembly lines as needed.
1973: Toyota allowed suppliers to deliver directly to assembly lines, fully linking them with its in-house parts conveyance system.

Improvements in Productivity and Inventory Levels

Vehicles manufactured per worker per year tripled at Toyota between 1955 and 1957 and then rose another 60 percent by 1964. Toyota appears to have passed the productivity levels at GM, Ford, and Chrysler by 1965.

Nissan on the other hand focused on improving its levels of automation, also worked at reducing setup times, improving in-house synchronization, and controlling parts deliveries. Gross productivity levels at Nissan increased fivefold between 1955 and 1964 and doubled between 1965 and 1970.

World Markets Automotive Productivity Index for Europe - Results for 2000 cont.
Actual Vehicles per Employee
  Manufacturer                            Produced  1997   1998   1999   2000
               Plant          Country     in 2000                            
  Nissan       Sunderland   UK            327,701   98     105    94     101
  Toyota       Burnaston    UK            171,338   58     72     81     86  
  Ford         Saarlouis    Germany       383,893   59     59     77     81  
  GM           Eisenach     Germany       145,200   77     76     82     81  
  Ford         Valencia     Spain         343,794   57     58     73     77  
  GM           Antwerp      Belgium       329,300   n/a    n/a    63     77  
  Renault      Valladolid   Spain         280,667   59     64     71     77  
  Volkswagen   Pamplona     Spain         376,164   77     76     60     77  
  Fiat         Melfi        Italy         364,882   70     73     70     76  
  Renault      Novo Mesto   Slovenia      122,919   n/a    n/a    n/a    73  
  Renault      Palencia     Spain         255,621   n/a    n/a    69     71  
  SEAT         Martorell    Spain         516,146   69     69     66     71  
  Renault      Flins        France        379,722   57     59     80     70  
  Renault      Douai        France        399,933   61     68     68     67  
  Renault      Maubeuge     France        245,648   n/a    56     63     67  
  PSA          Aulnay       France        401,370   51     58     62     64  
  GM           Zaragoza     Spain         373,600   67     67     69     62  
  GM           Bochum       Germany       350,000   n/a    n/a    n/a    62  
  Ford         Dagenham     UK            148,000   62     61     60     62  
  Fiat         Termini      Italy         153,265   n/a    n/a    n/a    61  
  GM           Ellesmere    UK            169,200   n/a    n/a    n/a    60  
  PSA          Mulhouse     France        425,764   55     58     61     59  
  Fiat         Tychy        Poland        241,651   n/a    n/a    n/a    59  
  Fiat         Mirafiori    Italy         379,733   54     61     58     57  
  PSA          Vigo         Spain         437,162   35     52     52     56  
  Honda        Swindon      UK            74,017    62     64     83     55  
  PSA          Ryton        UK            187,797   n/a    n/a    n/a    55  
  Daimler      Rastatt      Germany       200,000   n/a    n/a    48     53  
  MG Rover     Longbridge   UK            178,557   34     31     n/a    52  
  GM           Luton        UK            112,900   39     43     47     49  
  Volkswagen   Wolfsburg    Germany       686,240   39     42     50     46  
  Volvo        Ghent        Belgium       122,200   n/a    n/a    n/a    45  
  Fiat (2)     Cassino      Italy         219,096   39     40     44     See
  PSA          Poissy       France        282,985   36     45     43     44  
  Volvo (3)    Born         Netherlands   156,336   36     50     n/a    40  
  Volvo        Torslanda    Sweden        133,680   n/a    n/a    n/a    40  
  PSA          Madrid       Spain         166,272   n/a    n/a    n/a    40  
  PSA          Mangualde    Portugal      49,753    n/a    n/a    n/a    40  
  PSA          Rennes       France        245,860   n/a    41     39     35  
  GM           Russelsheim  Germany       189,400   n/a    n/a    n/a    34  
  Skoda        Mlada        Czech         264,592   33     35     32     34  
               Boleslav     Republic                                        
  PSA          Sochaux      France        250,861   25     31     31     34  
  Renault      Sandouville  France        194,831   36     41     40     32  
  Volkswagen   Emden        Germany       225,693   28     37     29     27

For 2010 GM leads the pack with 42 sold per worker. Ford is a close second at 38 vehicles per employee, while VW finishes woefully behind at just 18 units per worker.

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