Toyota Way - Become Better and Better - Better Design and Further Industrial Engineering Changes

Information for IE - Case 60 - Industrial Engineering ONLINE Course.


Toyota welcomes industrial engineering. Continuous improvement after a design is put into production through total industrial engineering.

What is total industrial engineering?

Science + Common Sense

Experiment + Experience

Topline + Frontline Employees

Toyota Way is Improving Jidoka (Process Improvement) and JIT (Elimination of Delays and Improvement of Flow). The way is implemented in Toyota by Ohno through standardized instructions for machine and manual processes and material flow. Standardized, written instructions is the procedure developed by F.W. Taylor. Improvement of processes through development of productivity science is also advocated by F.W. Taylor. What Ohno did in addition, was the insistence on continuous improvement of the process. The process improvement team was expanded by Ohno. The engineer and the foremen were given the responsibility of improving the process every month in addition to maintaining material flow and completion of jobs following the existing process. Taylor also advocated that managers have to develop science of work. It is Ohno who could successfully implement the two ideas of Taylor, elementary rate fixing or industrial engineering and involvement of managers in improving processes and productivity.

Toyota's Engineering Excellence - Product Design Excellence + Process Design Excellence + Shop Floor Data Based Improvement of Product and Process (Industrial Engineering)

Toyota Motors - Industrial Engineering Activities 

Toyota Motors is the pioneer in JIT. Just in Time production that eliminates long term storage and short term delays in flow.

Toyota Motors enriched industrial engineering immensely. ASME standardized the process flow chart with two categories focusing on temporary delays on the shop floor and storage in stores or warehouses. It is the Toyota executives who reasoned that these two stages are costing money, but not adding any special value to the transformation of input materials into required product. They focused on this aspect to develop a flow production system that does not require inventory in the store or on the shop floor. Their quest led them to make improvements in the basic transformation operation/process, inspection operation, and material handling/transport operation. The improvements made to these three steps in process flow chart gave a competitive edge to Japanese production systems and they are appreciated with the term "World Class Manufacturing."

Toyota reports its cost improvement activities in its annual reports and investor presentations. Shigeo Shingo explained the role of industrial engineering in Toyota Motors and Toyota Production System in a book.

Industrial engineering is profit engineering - Taiichi Ohno

Development of Toyota’s unique IE-based kaizen method (T. Ohno, Toyota Production System, p. 71):

“IE [industrial engineering] is a system and the Toyota production system may be regarded as Toyota-style IE… Unless IE results in cost reductions and profit increases, I think it is meaningless.”

https://bobemiliani.com/toyotas-secret/

WHY TOYOTA KEEPS GETTING BETTER AND BETTER AND BETTER 

Success never gets in the way of constant improvement. 

Here's how the world's best automaker works harder than ever to avoid ''large-corporation disease.''
(FORTUNE Magazine)
By Alex Taylor III REPORTER ASSOCIATES Mark D. Fefer, Rick Tetzeli, Tricia Welsh, and Wilton Woods
November 19, 1990 (FORTUNE Magazine) –


Kaizen is a slogan all around in Toyota City.  It can be explained as  ''continuous improvement'' in Japanese.

Toyota keeps doing lots of little things better and better. It has to philosophy take enough tiny steps and pretty soon you outdistance the competition (FW. Taylor's element level improvement).  Toyota has grabbed a crushing 43% share of car sales in Japan. In the just-ended 1990 model year, it sold more than one million cars and trucks in the U.S. for the first time becoming No. 4.  

The company simply is tops in quality, productivity, and efficiency. From its factories pour a wide range of cars, built with unequaled precision. Toyota turns out luxury sedans with Mercedes-like quality using one-sixth the labor Mercedes does.

The company originated just-in-time mass production and remains its leading practitioner.  And it keeps getting better. They say their  current success gives them the confidence and  best reason to change things for better.'

Extensive interviews with Toyota executives in the U.S. and Japan demonstrate the company's total dedication to continuous improvement. 

The $44,700 Lexus LS400 has become the first Japanese car to show that prestige doesn't have to wear a German or British nameplate. After only 14 months on the market, it outsells competing models from Mercedes-Benz, BMW, and Jaguar in the U.S. Japanese buyers have to wait a year to park one in the driveway. 

 We wanted to recertify that customer satisfaction is our first priority.'' Globalization is a close second.  It is well on its way to its goal of six million cars and trucks a year by 1995. Global expansion and waves of new models haven't dented Toyota's profitability. It made a net profit of 4.7% on sales of $64.5 billion in fiscal 1990, which ended June 30. Toyota enjoys the highest operating margin in the world auto industry.

Toyota spends about 5% of sales on R&D, a slightly higher percentage than GM or Ford. 

Toyota builds its entire production process around just-in-time. It aims to manufacture only what is needed, when it is needed, and in the quantity needed. That leads to savings all along the line. The factory can balance production and stay in touch with shifting demand; the dealer keeps almost no inventory. Under Toyota's management, just-in-time has produced remarkable results. The company makes 59 passenger-car models from 22 basic designs. Ford, which sells about a third more cars, produces only 46 passenger-car models.

Using data collected by the International Motor Vehicle Program at MIT, professor Michael Cusumano estimates that Toyota needs only 13 man-hours to assemble a car in its best plant, vs. 19 to 22 hours for Honda and Nissan. Ford performs about as well as Honda and Nissan; GM lags behind. 

But Ohno spent 20 years perfecting it. Toyota's system is fed by a network of suppliers who also got education and training in Toyota methods of production and waste elimination using JIT production. The suppliers also perform more R&D than American ones.

Toyota's has 91,790 employees vs. 766,000 at GM. To feed its superb production system, Toyota reorganized product development in February. A council headed by Toyoda took over long-range product strategy. It is committed to more personalization with the statement ''In the 21st century, you personalize things more to make them more reflective of individual needs.'' The winners will be those who target narrow customer niches most successfully with specific models.

It is not only Industrial Engineering - Continuous Improvement - Design Excellence Also

To design each model,  Toyota employs a chief engineer with  broad responsibilities: He has charge of everything associated with the development of a car. First he determines its physical dimensions and suitability for its potential market, then how it will be made and who the suppliers will be. He meets and talks frequently with car buyers.  Besides getting the cars out, the chief engineer has to stay on top of social, political, and environmental trends and create a concept of the car that is in line with the trends. Toyota is grappling with issues that will affect future models, including fuel economy, alternative fuels, exhaust emissions, recyclability, highway congestion, and safety -- both active (antilock brakes, traction control) and passive (air bags, reinforced bumpers). 

Toyota can get its advanced engineering and design done sooner,  Product and manufacturing engineers are under the chief engineer who is concerned with managing both. So factory machinery gets developed in tandem with prototype testing. Typically prototype testing leads to changes in the car that require alterations in the assembly line. Since Toyota completes the two processes simultaneously, no last-minute changes stall the production plan. The Toyota system also drives down factory tooling costs. Tools and machinery can account for about three- quarters of the $1-billion-plus required to design a new model and ready a plant to build it. Custom-designed dies that punch out each piece of frame and sheet metal, and the big stamping presses that hold them cost a significant sum.

A researcher  estimates that Toyota designs and manufactures dies and presses for one-half to two-thirds less than the Big Three. They make 35% fewer strokes of the stamping press.  Fewer strokes mean lighter, less expensive dies, lower operating costs, shorter shutdowns, and reduced maintenance. Toyota parts are held  in the fixtures and require no force from the welding guns.'' It has automated the die manufacturing process. Computers drive numerically controlled machining tools that cut dies faster and more accurately than mechanical methods can. Giant cranes carry die castings to the machining tools and retrieve the finished dies. The whole system can run for ten days without human intervention: 

Quality is defined not as zero defects but, as another Toyota slogan has it, ''building the very best and giving the customer what he wants.'' Each worker serves as the customer for the process just before his, he becomes a quality-control inspector. If a piece isn't installed properly when it reaches him, he won't accept it. 

In quality circles, workers discuss ways to improve their tasks. The company is working to eliminate what it calls the three D's: the dangerous, dirty, and demanding aspects of factory work.

To reduce overtime, Toyota is investing heavily in automation. Capital spending will rise 39% to nearly $4.2 billion for the current fiscal year In final assembly, where the car body is fitted with its engine, transmission, electronics, and trim, Toyota has added robots that apply adhesive to the windshields and drop spare tires into trunks. Still, only 5% of the assembly line jobs are automated, vs. 30% at some Volkswagen and Fiat plants in Europe (which has long experience with labor shortages). White-collar workers,  also get a dose of training and job enrichment. ' A nine-month training regimen for new white-collar workers provides plenty of opportunity to imprint the company culture. College graduates embarking on a Toyota career spend four weeks working in a factory and three months selling cars. They get lectures from top management and instruction in problem solving. Their supervisors make them keep reworking solutions until they produce one that's suitable.

Until recently Toyota executives in USA found it hard to leave the supportive network of suppliers and well-established manufacturing practices of Toyota City. But now, american suppliers are being developed. Just-in-time was redefined from several hours to 3 1/2 days, but the discipline of the system was maintained.  Several hundred American supervisors went to Japan for training. The plant abounds with imported techniques, among them big electrical signs called andon boards that track daily production, signal overtime requirements, and identify trouble spots along the line.  Quality is high at Georgetown, Kentucky plant but productivity runs about 10% below Japanese levels. The company is also doubling the size of its California design center.

This local production is extended to many countries. This fall it started casting cylinder blocks in Indonesia, and it will soon begin making other parts in Thailand, Malaysia, and the Philippines. For now the parts are being shipped back to Japan, but eventually they will be assembled into cars at a more central location. Labor costs in Asia's less developed countries are one-third to one-fifth of Japan's, but workers require more intensive training and factories run more slowly. By 2000, Toyota expects to be operating one or two assembly plants in the region and selling one million cars and trucks annually in a 3.5 million vehicle market. Southeast Asia is a paradigm for how Toyota would like to operate in the future -- buying parts, building cars, and selling them around the world regardless of national boundaries.

Toyota has a plan for globalization.  It has five steps. Toyota is on the cusp of step four, which calls for turning overseas operations over to local managers. In the final stage, perhaps in 20 years, the company ''optimizes its operations by planning and managing all of them from a global perspective,'' Toyoda says. That would mean turning the world into a giant Toyota City with operations wherever they make economic sense. To pull that off,  Thanks to kaizen and kanban, continuous improvement and just-in-time, Toyota's lead over the competition -- American, European, and Japanese -- keeps growing and growing and growing.

 Long No. 3 among the world's automakers, Toyota could go ahead of Ford in cars in 1993. It pumps out new models faster than anyone and keeps quality high, with fewer defects than any other manufacturer.

https://money.cnn.com/magazines/fortune/fortune_archive/1990/11/19/74363/index.htm

Updated 30 July 2021

Pub 16 July 2021