Wednesday, August 21, 2019

Toyota Production System Industrial Engineering - Shigeo Shingo

Toyota Production System Industrial Engineering (TPS IE) Part 2

Shigeo Shingo said 80% of the TPS is waste elimination that is industrial engineering, 15% production management and 5% kanban communications.

Toyota production system was developed by managers of Toyota with major contribution from Taiichi Ohno by implementing waste elimination methods advocated by industrial engineering. Taiichi Ohno specially applauds industrial engineering as profit making engineering for Toyota. Shingo builds up on the Ohno's explanation of TPS by clearly bringing out the role of industrial engineering in the development of TPS in his book.

Summary of Shigeo Shingo's Book - A Study of the Toyota Production System

Toyota Production System Industrial Engineering (TPS IE) Part 1

Summary of Chapters 1 to 3

Remaining Chapters

Chapter 4  Conclusions of Developing Non-Stock Production 

The principal feature of the TPS is eliminating the total cost associated with inventory - the total of inventory carrying cost, setup or order cost and shortage cost. Hence, TPS is described as stockless or non-stock system.

Stock occur due to two reasons:

Naturally Occurrence:

Stock accumulates because of
* Incorrect market demand forecasts
* Overproduction just to be on the safe side due to likely defects
* Lot production (Batch production)
* Due technological and capacity constraints in certain processes. Heat treatment in three shifts but doing further operations in one shift.

Stock that get accumulated due to inefficiencies in the production system
* Production cycle being longer than order-to-delivery cycle.
* Stock produced in advance to take care of extra demand in the future
*Stock produced to compensate for delays in inspection and transport
* Stock produced to compensate for machine breakdowns
*Stock maintained as buffer between machines to take care of defectives
*Stock generated as per calculation of economic batch quantity to take care of high setup or order cost.

Stock reduction was carried out rationally in Toyota production system.

Three strategies can be pursued to approach the idea of non-stock production.

* Reduce the production cycle
* Eliminate the breakdowns - do preventive maintenance to make the machine available all the time for production (Total productive maintenance)
*Eliminate defect - zero defects through process improvement - detect the reasons for defects and remove
them from the process. 
* Reduce setup times and reduce batch quantity to single piece.

Chapter 5 The Principles of the Toyota Production System

The Toyota Production System is 80 percent waste elimination (Industrial Engineering), 15 percent production system and only 5 percent kanban communication.

Some Commonly Used Terms in TPS

Waste of Overproduction

There are two types of overproduction:
* Making more than required quantity for a delivery period.
* Making a product before it is needed.

Many systems are happy to produce an item before its delivery date and feel comfortable. But Toyota system does not want both types of overproduction.


JIT also means just-on-time. An item should be made available when it is required not before or after the required time.

Separation of Worker from the Machine

The whole productivity movement of Toyota was based on the fact that per worker production of cars in America was 10 times that of Toyota company. Toyota wanted to improve their productivity and therefore concentrated on reducing the time spent by a worker on the machine. Machines must work without the assistance of the worker as much as possible. Jidoka or autonomation is the name given to this activity. Along with JIT or stockless production, separation of worker from the machine forms the two pillars of Toyota Production System.

Low Utilization Rates

Toyota's machine-output ratio is two to three times  that of similar companies. This could be due to flow production systems or due to planned extra machine capacity to take care of extra demand. But one must always remember that Toyota's main goal is cost reduction and every decision in Toyota is subjected to engineering economic evaluation.

Multi-machine Handling

In 1955, 700 workers were handling 3500 machines. Hence sometimes machines are idle because worker is busy with other machines and cannot load the machines. Toyota permits machine idle times but it does not permit man idle time. The reason is that a machine costs $500 per month but a man costs twice or thrice more.

Equipment Planning and Low Operating Rates

As low operating rate is expected, Toyota buys less expensive machines. But it improves the machines to suit its requirements continuously.  Because in normal times machines have excess capacity or low operating rates,  peak demand can be handled by hiring temporary workers.

Perform Operation and Remove the Defective Part

Whenever a problem appears, Toyota insists on proper diagnosis of the root cause and demands that an operation is done to remove the replace the defective part of the process. It is not content  with the temporary cure of rework on the defective workpiece.

Fundamentals of Toyota Production System

Adopting a Non-Cost Principle

Elimination of Waste

Eliminating waste through fundamental process improvements
               Processing purpose evaluation and rationalization
               Inspection purpose evaluation and rationalization
               Transport purpose evaluation and rationalization
               Delay reason evaluation and rationalization
               Storage purpose evaluation and rationalization

Eliminating waste through fundamental operation improvement
               Setup improvement
               Auxiliary improvement
               Job allowance improvement
               Workshop allowance improvement
               Improving processing and essential operations

Ask the "five W's and one H" and "Why?" Five Times

              What -  What is being produced  - Is it required - Value engineering
               Who - Men, machines, tools and jigs used for the production
               When - Time  - Production planning also comes here.
                Where - Space (Layout)
              Why - rational for the use of everything used in production. Because it provides opportunities for improvement.
              How - The methods - motion used by man, speed and feeds used by machines

At Toyota specially, 5 Whys are used to identify root causes for defects and appearance of problems.

Mass Production and Large Lot Production are not same

Mass production is beneficial. Large lot production has extra cost. It can be reduced with SMED.

Order-based Production

Characteristics of Order-based Production

To take care of fluctuations in the orders, Toyota sets basic productions capacity at minimum demand level and handles increases through overtime and the use of excess machine capacity and temporary workers.

Overtime: There are four hour breaks between the two shifts and overtime can be given in either shift as needed.

Excess capacity: During the minimum load, many workers manage ten machines but up to 50% capacity only. As demand increases, temporary workers are hired and machines can work at 100% capacity. But machine work has to be simplified and standardized so that temporary workers can be trained in three days and they operate the machines.

Strong Market Research

Toyota does spend on market research to know market requirements. Twice in a year 60,000 people are surveyed. Five or six additional surveys are done in a year.

Production Planning

Long term planning is done.
Annual planning is done.
Monthly planning is done.
Daily planning is done. Daily planning based on actual orders. The actual orders are informed to the first stage of assembly section and they draw the components as required from component supply stages.

Toyota's Supermarket System

In the supermarket system of Toyota, stocking is triggered by actual demand for the components for a daily requirement.

Differences between Ford and Toyota Systems

Large lot versus small lot production

Mixed model assembly in Toyota system

More consistent one piece flow in Toyota system

Chapter 6  Mechanics of the Toyota Production System

Improving the Process - Schedule control and Just-in-Time

Toyota makes efforts and reduces production cycle.

Seven Principles for Shortening the Production Cycle

Reduce process delays
Reduce lot delays
Reducing production time
Employ layout, line forming, and the full work control system
Synchronize operations and absorb deviations
Establishing tact time
Ensure product flow between processes

Adopting SMED

Elimination of Defects

Inspection to prevent defects must be practiced.

100% inspection must be adopted.

Poka-Yoke has to be used as a means for zero defects.

Eliminating Machine Breakdowns
It is also process improvement in TPS. Workers are asked to stop  a machine if there is some trouble. Supervisors are given training and are urged to try to keep machines running. When a trouble appears, a visual indication is given and all try to take care of the problem. Preventing recurrence is the motto of TPS.

Chapter 7 Mechanics of the TPS

Improving Process - Leveling and the Nagara System

What is Leveling?

Leveling is a method of balancing load and capacity in a way different from the traditional way.
For example if load on car assembly plant is 300,000 sets of model A, 600,000 sets of model B and 900,000 units of model C and capacity is 1,800,000 units, the traditional solution is  to make 300,000 sets of model A and 300,000 sets of model B in the first 10 days, 300,000 sets of model B and 300,000 sets of model c and in the next 10 days, and 600,000 units of model C in the last 10 days. The load is balanced at the month level, but it gives rise to inventories of various models and even shortages of some models.

 But Toyota followed a different way because it has as its aim prevention and reduction of over production. In the first 10 days, production of 100,000 units of model A, 200,000 units of model B and 300,000 units of model C are produced. We can see now that inventory will come down. It the 10 day planning/production period can be further reduced, all models are produced in much smaller periods the over production can further be reduced. Toyota uses this approaches and reduces the planning period in which all models are made further and further. This is called "mixed production" and on assembly line it is called "mixed model assembly."

Segmented Production

Making production plans for half a month(H), ten days (T), week (W) and Day (D) are segmented production plans.

Mixed Production and Tact Time

Toyota combines product A with 30 Seconds and product B with 25 seconds and specifies 55 seconds as tact time for A+B.

Nagara System

The nagara system facilitates one piece flow by laying out machines in the sequence of operations by transcending the earlier shop divisions and training and facilitating operators to operate multiple unrelated machines in sequence.

Smooth production flow, ideally one piece at a time, characterized by synchronization (balancing) of production processes and maximum use of available time; includes overlapping of operations where practical. A nagara production system is one in which seemingly unrelated tasks can be produced simultaneously by the same operator.

Nagara is multi-machine handling in a process or flow system. The operator works with two or more different machines.

The example given in the body refers to a spot welding operation, followed by a press operation and then a welding operation that attached the pressed part to a body.

Chapter 8 Mechanics of the TPS

Improving Operations

Operations concern the flow of equipment and operators in time and space. Improvements in operations have long been emphasized in the Toyota Production system.

Components of Operations

1. Preparation and after-adjustment
2. Principal operations
3. Marginal allowances

Preparation and After-Adjustment

Reduce them through SMED

Margin Allowances

Personal allowances - For fatigue and personal needs
Non-personal allowances -
Operational allowances: Oiling, clearing away chips etc.
Workplace related: parts arriving late and machine breakdowns

Standard Operation and Standard Operation Sheets

Standard operation implies optimization of work conditions by analyzing

What is produced
Who - persons, machines, tools,and jigs
How - Method - machine speeds and feeds, man's movements
Where - Layout of the equipment and man - Work Station Design
When - Standard time, and Schedule

There has to be a standard operation sheet by the side of the machine using which new workers are trained.

The Toyota system demands that all work is done within standard time and supervisor is charged with the responsibility. He has to train the worker. Also supervisor is responsible for improvements.

Types of Standard Operating Charts

Capacity charts by part
Standard task combination
Task manual
Task instruction manual
Standard operating sheet

The topic of standard operations is discussed in more detail in
Standard Operation and Standard Operation Sheets in Toyota Production System

Improving Methods of Operation

The operation, which is a man-machine combination can be improved through:

1. Improvements in human motions
2. Improvement in machine movements - increasing machine cutting speeds, reducing time through simultaneous cutting on multiaxis machines, and using multiple turret heads to shorten tool replacements.
3. Mechanizing human motions.

Improving human motions

Motion study can be used to reduce the operation time or the operator time. Motion study improves the movements or motions made by the operator and also improves the arrangement of materials and tools. 5S movement of Japanese industry is basically the offshoot of principles of motion economy.

Items must be arranged neatly, they must be easily accessible and they must be uniformly aligned.

Improvements in Machine Movements

Examples include raising output by increasing machine cutting speeds, reducing time through simultaneous cutting on multi-axis machines, and using multiple turret heads to shorten tool replacement time. This could involve using faster cutting processes like milling in the place of slower process like shaping.

Mechanizing Human Motions

In Toyota, first the human motions are optimized and then mechanization is attempted. Whenever mechanization is thought of its economics are thoroughly investigated. Toyota insists on kaizen - good change.

Machine Layout and Worker Efficiency

Workers are stationed with in a U layout so that they can easily help one another in case of need. Toyota encourages workers to assist each other in case of need or necessity. It discourages island mentality.  The system requires each worker to learn the operations performed at the two processes adjacent to his or her own and help the others when needed.

Multiple Machine Handling Operations

In 1955 itself, Toyota operated 3,500 machines with only 700 workers.  So one worker operates five machines on an average. In recent years (1981), Toyota managers started advocating multi-process handling. In multiple machine handling, the worker may handling the same type of machines. But in multi-process handling, the worker will handling multiple machines in accordance with the flow of operations or process. The capability of multi-process handling by a worker improves the flow of the process and also improves productivity.

Shingo's Summary of the Toyota Production System - The Last Section of Chapter 8

Basic Features of the TPS

# Cost Reduction through Industrial Engineering methods (elimination of waste)
# Emphasis on non stock production - elimination of overproduction
# Emphasis on labor cost reduction through elimination of waste motions and use of minimal permanent manpower.
# Use of SMED to have low set up times and realize small lot production. Ideal: One piece flow.
# Use order based production
# Follow the rule quantity produced must be quantity ordered.

Process Features of TPS

# Active use of value engineering to optimize the design itself.
# Make effective use of division of labor in design of process
# Using Nagara system
# Inspection - depend on self inspection, successive inspection and poka-yoke
# Transportation - Use flow lay out through out the production system.
# Delay - All operations must have equal times as far as possible. Avoid process delay.
             - Lots must be small - Avoid lot delay

Operation Features of TPS

# Use of SMED and its advanced and automated form one touch setups
# Use autonomatic machines as much as possible rationally (based on engineering economic analysis)
# Use nagara system (machines laid out in flow and operators handling multiple machines in the flow line.
# Autonomate material loading and unloading
# Encourage cooperative  work and eliminate isolated person mentality. Operators have to help the upstream or downstream colleagues as needed and as possible.
# Actively pursue minimum manpower deployment in the production system.

Toyota production system brought two revolutionary changes in the production system thinking and practice.

First one is the thinking that market should pay cost plus profit. Toyota changed it to market expansion through cost reduction and price reduction achieved through identifying and eliminating waste from the product  and production system design and operation.

Second,  the traditional thinking was mass production in large lot based on forecasted demand and keeping inventories. Toyota changed it to small lot production based on no inventory and actual orders.

Based on the above two changes, Shingo concludes that Toyota Production System represents a revolution in production philosophy.

Chapter 9 The Evolution of the Kanban System

Kanban and Railway Tablet System

Ohno discussed the introduction of Kanban system with Shingo. Shingo remembered the tablet system in railways which is exchanged between the driver of the train and the station master. Until the tablet is put into a track switches, the station master cannot allow another train to get into the track segment. Similarly the station master removes the tablet from the next segment of the track and gives it to the driver. The driver cannot move from the station unless he was given the tablet. May be there is a system that will allow the tablet to be removed only when the earlier train completed its journey in the track segment. Shingo felt Kanban system was similar to it.

Then Shingo brings into discussion the order point formula.

Order point is equal to consumption during lead time plus the safety stock.
The batch quantity has to be more than the order point. Reduction in set up time allows the reduction in batch quantity and any reduction in production lead time results in reduction of order point. Thus each improvement in set up time can reduce batch quantity and resulting lead time reduction can reduce order point. Similarly, by attacking root causes that create the need for safety stocks like appearance of defects, machine breakdowns, worker absenteeism, material shortages can reduce safety stocks. Thus measures can be taken to reduce inventories in the system.

Supermarkets and the Kanban System

1. Consumers choose goods of their choice and take the items to the cash counter.
2. The store personnel restock, what has been removed by customers.

Using Kanban for communication is similar to the super market system.

Kanban meaning "Sign" in Japanese language has the three functions.

1. Identification tag - indicates what the product is.
2. Job instruction tag - indicates what is to be made, quantity and time
3. Transfer instruction tag - indicates where the item is to be delivered.

Kanban is also treated as a signal to make a pallet load of parts. Hence the number of kanbans or pallet loads permitted as work in process inventory is an important number.

Number of kanbans or pallet loads permitted as WIP (N) =
[Maximum stock permitted = Batch quantity + safety stock]/Capacity of one pallet (n)

In Toyota system, there are efforts to reduce WIP continuously to zero.

To make the lot size one and WIP zero various steps like implementing SMED, Minimum transport layouts, zero defect and zero breakdown programs etc. are necessary.

Regulatory Function of Kanban

Giving production instructions at the final assembly line allows the kanban system to make transmit the information on new car models (model required by the customers) automatically and easily to upstream processes.

Chapter 10. Elimination of the Seven Kinds of Waste

1. Processing

Value analysis and engineering needs to be made. Also purpose analysis needs to be done.

2. The waste of making defective products

Poka-yoke needs to be used to prevent defects. Self inspection and successive inspection are to be promoted.

3. Transport

Improve the layout and reduce the need for transport.

4. Delay

Use small lot sizes and minimize delay for the jobs. Allot multiple machines to workers such that there is no waiting time for them. If needed machines can be idle.

5. Inventory

Use SMED and one piece flow and reduce production cycles.


6. Wasted Motions

Do motion studies

7. Overproduction

Reduce production for inventory rationally. Use SMED and decrease lot sizes. Improve informative inspection and avoid defects. Maintain machines such that there are no breakdowns and machines are available production all the time. Produce just-in-time for stockless production.

Kanban Rules

1. A process withdraws parts from the preceding process as per Kanban instructions and removes the Kanban from the pallet and leave the kanban there.

2. The earlier process makes parts in the quantities and order specified in the kanban that they pick up from the storage bin.

3. Nothing is transported and nothing is made without kanban.

4. Kanban always accompanies the parts themselves (identification tag must always be present.

5. Every part placed on a pallet must be of acceptable quality.

6. Efforts are to be made to reduce WIP by reducing kanbans over time.

Extending the System to Parts Suppliers

Toyota did not order suppliers to supply on JIT basis. It implemented JIT in its plants over a period of 20 years and then helped suppliers to implement it over a period of 10 years. Suppliers did not suffer because of the change but benefited through increased profits.


Shingo said MRP is not committed to the fundamental improvements like SMED, Zero defects and Zero breakdowns like TPS.

Shingo gave the opinion that companies may use MRP after doing fundamental improvement to the system as done by Toyota.

Chapter 11 - The Future Course of the Toyota Production System

Shingo says people say Just on Time is better tern than Just in Time. But the JIT has become a popular term.

Shingo mentions some steps that companies can take to get orders early and thus increase order to delivery period.

* Solicit advance orders from previous users based on life expectancy of the purchased item.
* In the case of car, approach persons learning to drive.
* Approach people who are getting their building licenses or permissions
* Contact printing presses who prepare wedding invitations, find out the bride and bridegroom and propose various household appliances.

The above things point out to events that precede actual demand and action by sales people can give larger order-to-delivery period.

Of course, actions to reduce production cycle has to go on.

Companies have to move from SMED to One-Touch Setups

No-touch methods

Shingo points out that manufacture can be done in sets, so that one component is made after another component without the operator touching the machine. It means that even change of component is automated.

The Development of a Comprehensive Flow System

TPS presently uses supermarket system. Can it be eliminated and the entire system be made a flow system?

Extending mixed production to machine shop, presswork, welding, forging and casting.

Kanban System Developments

Shingo says he foresees further reduction in Kanbans between processes means less WIP.
Second,. Shingo says the Kanbans can go to further upstream processes instead of the preceding process and thus helping in cutting WIP further.

Developing low cost machines and implementing multi-process handling
It needs to be extended to all the production system.

Extending to Supplier Plants

Efforts will be made to spread the TPS to the entire supply chain.

Chapter 12  - Introducing Toyota Production System

Introducing and Implementing the Toyota Production System - Shigeo Shingo

Chapter 13. The Toyota Production System in Summary

1. The Minus-Cost Principle
2. Non-Stock (JIT) - The First Cornerstone of Waste Elimination
3. Toward Flow Operation
4. Shortening Setup Changeover Times
5. The Elimination of Breakdowns and Defects
6. Fusing Leveling and Non-Stock Production
7. Toward Comprehensive Integrated Flow Operations
8. Labor Cost Reduction (Autonomation): The Second Cornerstone of Waste Elimination
9. From Mechanization to Autonomation
10. Maintaining and Developing Standard Operations
11. Toward a Kanban System

Chapter 14 Afterword

A thesis will have antithesis in dialectics.
There can be a compromise between the two to satisfy both the groups at a point in time.

But Shingo says, the proponents of thesis can try sublation.

What is sublation?

In it's basic meaning, it stands for raising something, from a lower place to a higher place.  Hegel, the famous proponent of dialectics, uses meaning and advocates the need to take the original thesis to a higher level, by preserving what is good in it and improving the disadvantages indicated by the antithesis.

Shingo gives the example that non-stock required deliveries from suppliers every two hours.  The opposing argument pointed out that truck efficiency of the supplier or from the supplier end will go down drastically and will result in increased cost. This disadvantage assumes that one truck will carry the load of one supplier. The sublated solution was that a truck was going to various suppliers and collecting material from them. So trucks were loaded to capacity and trucking cost was not allowed to go up. Thus a higher-level plan involving a totally new method - frequent mixed load deliveries emerged.

The disadvantage of smaller lot sizes was tackled by reduction of set up cost through SMED.

The sublation approach is used in many problems in Toyota.

The primary features of the Toyota production are:
1. Elimination of waste based on the belief that a company's only legitimate source of profits is cost reduction.
2. Satisfy demand through order based non-cost production.

The TPS has been compared to squeezing water from a towel thought to be dry. Many people settle for placing that towel under sun to dry further. But there are some people who squeeze the towel further and bring out some more water. Similarly there are many who eliminate waste that everyone recognizes as waste. Certain problems are allowed to exist in companies are necessary evils and people have become hostage to them. But in TPS, such problems are understood with detailed observation supported by deep thinking and problem solving  goes back to basic issues from which designs emerge to make revolutionary improvements.

Anyone undertaking the study of the Toyota production system comes face to face with SMED concept. Shingo said, "It is developed by me." SMED is now a theory and technique. It is now employed in hundreds of Japanese companies.

TPS is not entirely different from ordinary production management systems. But has unique concepts and special techniques to implement them.  It would be dangerous to take any of the techniques of TPS and implement it in a hurry. This will lead to problems. Shingo himself gave a plan to implement the techniques in a sequence.  One should not rush in to implementation of techniques. The objective is cost reduction and as long as the objective is being achieved, there is no need to rush into techniques. The importance is to be given achieve cost reduction in a continuous way and the next priority is schedule of implementing the next technique.

Updated on 22 August 2019, 1 December 2014


  1. Sir!
    Toyota has honorable approach,.
    What is Major differences in TPM & TPS production sciences or both are same ?

    1. Thank you for the comment. Apologies for delay in answering.
      TPM is a systerm that provided effectiveness and efficiency improvement for plant and equipment primarily from a maintenance view point.

      TPS is a system of production that uses all resources to produce some item or service. TPS uses TPM to reduce breakdowns of machines and this make JIT system less troublesome.