Taiichi Ohno Book - Toyota Production System
Quotes from Above.
Japanese businesses carefully studied industrial engineering (IE), a company-wide manufacturing technology directly tied to management that was developed and applied in the United States.
When first introduced, it was pointed out that the Toyota production system was method engineering (ME), not IE.
TPS is Industrial Engineering System of Toyota Motors.
IE is a system and the Toyota production system may be regarded as Toyota style IE.
Toyota style IE is mekeru or profitmaking IE, known as MIE.
Unless IE results in cost reductions and profit increases, I think it is meaningless.
Essentially, an industrial engineer studies systematic approaches to improvements.
It is my wish that the Toyota production system born and raised at Toyota Motor Company be comparable or superior to the American IE's business management and manufacturing system.
Industrial engineering (IE), a company-wide manufacturing technology directly tied to management that was developed and applied in the United States.
We are very happy that the Toyota production system has become, as I intended, a company-wide manufacturing technology directly tied to management.
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Industrial Engineering Theory and Practice is the foundation for development of Toyota Production Sysem. Taiichi Ohno, the engineering manager responsible for complete development of TPS clearly stated the importance of industrial engineering.
Advocating Profit-Making Industrial Engineering
After World War II, in the world of industry, America was, without dispute, the leader. Catching up with and surpassing America was not a job to be done in a day. To catch up, the shortest route was to buy advanced American technology. So, aggressive Japanese businesses imported and adopted America's high-level production and manufacturing technology. In academia and business, a great number of American business management techniques were also studied and discussed. In that endeavor, Japanese businesses carefully studied industrial engineering (IE), a company-wide manufacturing technology directly tied to management that was developed and applied in the United States.
Defining industrial engineering seems to be fairly difficult. When first introduced, it was pointed out that the Toyota production system was method engineering (ME), not IE.
To me, IE is not a partial production technology but rather a total manufacturing technology reaching the whole business organization. In other words, IE is a system and the Toyota production system may be regarded as Toyotastyle IE.
What is the difference between traditional IE and the Toyota system?
In brief, Toyotastyle IE is mokeru or profitmaking IE, known as MIE. Unless IE results in cost reductions and profit increases, I think it is meaningless. In Toyota, industrial engineering is done to register a decreased in cost and increase in profit of the enterprise.
There are various definitions of IE. A former head of the American Steel Workers' Union defined its function as that of entering a plant to improve methods and procedures and to reduce costs. And this is exactly so.
"IE is the use of techniques and systems to improve the method of manufacturing. In scope it: ranges from work simplification to large-scale capital investment plans."'
"IE has two meanings. One aims at improving work methods in the plant or in a particular work activity. The other one means the specialized study of time and action. However, this is the work of a technician. Essentially, an industrial engineer studies systematic approaches to improvements. "
I would like to add a definition from the Society for Advancement of Management (SAM), an organization that succeeded the Taylor Society:
Industrial engineering applies engineering knowledge and techniques for the study, improvement, planning, and iniplementation of the following:
1. method and system,
2. qualitative and quantitative planning and various standards including the various procedures in the organization of work,
3. measuring actual results under the standards and taking suitable actions.
This is all done to exercise better management with special consideration for employee welfare, and it does not restrict business to lowering the cost of improved products and services.'
I have listed various IE definitions, each saying good things, because they are useful references. However, in private business, implementing IE effectively is not easy.
I call Toyota's industrial engineering profitmaking IE and it is my wish that the Toyota production system born and raised at Toyota Motor Company be comparable or superior to the American IE's business management and manufacturing system.
We are very happy that the Toyota production system has become, as I intended, a company-wide manufacturing technology directly tied to management. And, fortunately, it is extending to the outside cooperating firms as well.
In the book, Ohno spent considerable space to explain what is IE and how it is being made use of in Toyota Motors to identify and reduce waste and decrease cost and increase profit.
Toyota used all theories and practices of industrial engineering in its cost reduction effort. But its innovations standout as pillars. They are unique to Toyota and from their use at Toyota only, they spread to others companies.
Cost Reduction through Productivity Improvement - Objective and Slogan of Industrial Engineering.
Productivity Improvement through Waste Elimination - Means and Slogan of Toyota Industrial Engineering (TPS).
The themes presented in the first three chapters
1. Starting from Need - Page 24
► "Catch Up with America"
► Just-In-Time
► Using a Common-Sense Idea
► Give the Machine Intelligence
► The Power of Individual Skill and Teamwork
► Cost Reduction Is the Goal
► The Illusion of Japanese Industry
► Establishing a Production Flow
► Production Leveling
► In the Beginning, There Was Need
► A Revolution in Consciousness Is Indispensable
2. Evolution of the Toyota Production System
Repeating Why Five Times
► Complete Analysis of Waste
► My Plant-First Principle
► Writing the Standard Work Sheet Yourself
► Teamwork Is Everything
► The Skill of Passing the Baton
► An Idea from the U. S. Supermarket
► What Is Kanban?
► Incorrect Use Causes Problems
► Establishing the Flow Is the Basic Condition
► Use Your Authority to Encourage Them
► Mountains Should Be Low and Valleys Should Be
Shallow
► Challenge to Production Leveling
► Production Leveling and Market Diversification
► Kanban Accelerates Improvements
► Carrying Carts as Kanban
► The Elastic Nature of Kanban
Chapter 3 . Further Development
An Autonomic Nervous System in the Business Organization
► Provide Necessary Information When Needed
► The Toyota-Style Information System
► Fine Adjustment
► Coping with Changes
► What Is True Economy?
► Re-Examining the Wrongs of Waste
► Generate Excess Capacity
► The Significance of Understanding
► Utilizing the Full Work System
► Do Not Make a False Show
► Required Numbers Are All-Important
► The Tortoise and the Hare
► Take Good Care of Old Equipment
► Look Straight at the Reality
► 0. 1 Worker Is Still One Worker
► Management by Ninjutsu
► In an Art Form, Action Is Required
► Advocating ProfitMaking Industrial Engineering
► Surviving the Slow-Growth Economy
I. Starting From Need
► "Catch Up with America"
The Toyota production system evolved out of need. Certain restrictions in the marketplace required the production of small quantities of many varieties under conditions of low demand, a fate the Japanese automobile industry had faced in the postwar period. These restrictions served as a touchstone to test whether Japanese car manufacturers could establish themselves and survive in competition with the mass production and mass sales systems of an industry already established in Europe and the United States.
All kinds of wastes occur when we try to produce the same product in large, homogeneous quantities. In the end, costs rise. It is much more economical to make each item one at a time. The former method is the Ford production system and the latter is the Toyota production system.
We kept reminding ourselves, however, that careless imitation of the American system could be dangerous. Making many models in small numbers cheaply -wasn't this some thing we could develop? And we kept thinking that a Japanese production system like this might even surpass the conventional mass production system. Thus, the principal objective of the Toyota production system was to produce many models in small quantities.
America has generated wonderful production management techniques, business management techniques such as quality control (QC) and total quality control (TQC), and industrial engineering (IE) methods. Japan imported these ideas and put them into practice. The Japanese should never forget that these techniques were born in America and generated by American
efforts.
15 August 1945 . Japan lost the war. Toyoda Kiichiro, President of the Toyota Motor Company said, "Catch up with America in three years. Otherwise, the automobile industry of Japan will not survive"
President Toyoda was saying that we should catch up in three years, but it would be very difficult to raise productivity by eight or nine times in such a time period to equal labor productivity of US.. It meant that a job then being done by 100 workers had to be done by 10 workers. But could an American really exert ten times more physical effort to give more productivity? Not, possible. Surely, in Japanese systems, we are wasting something (not using right equipment, right way of using equipment etc.) If we could eliminate the waste, productivity should rise by a factor of ten. This idea marked the start of the present Toyota production system. Waste elimination became a dominant objective and slogan.
Cost Reduction is the Goal
Frequently we use the word "efficiency" when talking about production, management, and business. "Efficiency" means cost reduction. At Toyota, profit can be obtained only by reducing costs. We cannot set prices based on our costs. Consumer sets the price and if the manufacturer sets a higher price due to his high manufacturing cost, the consumer will simply turn away. Cost reduction has to be the goal of manufacturers. The management has to develop human resources ability to its fullest capacity to best enhance creativity, and fruitfulness, to utilize facilities and machines well, and to eliminate all waste.
Cost Reduction through Productivity Improvement - Objective and Slogan of Industrial Engineering.
Productivity Improvement through Waste Elimination - Means and Slogan of Toyota Industrial Engineering (TPS).
Developments in Toyota Motors in the Initial Years
Restatement in chronological order (Under Progress)
In 1911, Toyoda Sakichi toured Europe and the United States. Prior to that, under adverse and complicated circumstances, he quit the Toyoda Spinning and Weaving Company. But in America, when he saw the Northrop and Ideal System automatic loons, deemed the period's outstanding achievements, he recognized the superiority of his own inventions. Thus, after traveling abroad, he reestablished himself and again demonstrated his unyielding spirit.
At that time in America, he also saw cars. He decided at once to go into automobile manufacturing after the automatic loom. In his mind, his looms and the automobile were strongly connected.
Toyoda Sakichi's mission in life, business, and the world was to cultivate and train the natural intellect of the Japanese people, sell original Japanese products produced by this intellect, and increase the national wealth of Japan.
Before his involvement with automobiles, Toyoda Kiichiro worked with weaving machines. In the early days, Toyoda Kiichiro worked busily at Toyoda Sakichi's feet developing and commercializing the automatic looms, selling them to foreign businesses, and negotiating contracts, and so forth.
Although interested in automobiles from the start, it was perhaps during his tour of Europe and America in 1930, when he went to England to negotiate with Platt Brothers, that he was most strongly influenced. New York especially must have shocked him with its flood of cars.
When Toyoda Kiichiro returned home, Toyoda Sakichi instructed him to spend the Y I million from Platt Brothers on automobile research, an amazing act of courage and foresight. Toyoda Kiichiro must have been filled with a sense of responsibility when he received the instructions.
In 1933, Toyoda Kiichiro announced the goal to develop domestically produced cars for the general public:
"We shall learn production techniques from the American method of mass production. But we will not copy it as is. We shall use our own research and creativity to develop a production method that suits our own country's situation."
I believe this was the origin of Toyoda Kiichiro's idea of just-in-time.
Toyoda Kiichiro had to narrow the gap between the Japanese and American automobile industries and create a domestic production system, he had to explore ways to learn the basic technology, master the different production technologies, organize the production system, and find a uniquely Japanese production technology.
Toyoda Kiichiro recognized that the market always demands reasonably priced products. Today's problem, however, is that, regardless of how good a car we make, it will mean nothing unless we make it economically. This problem eventually relates to price.
Toyoda Kiichiro must have clearly envisioned Justin-time as the first step in the evolution of a Japanese production system. It is, in fact, the starting point of the Toyota production system, constituting its skeletal structure.
Pursuit of a Japanese-Style Production Technique
Toyoda Kiichiro's mission, while laying the foundation of the automobile business, was to develop a Japanese production technique. This required intelligence.
► Toyotaism with a Scientific and Rational Nature
"Toyotaism" was established by Toyoda Kiichiro. He placed the following conditions on the automobile business:
• To provide cars for the general public
• To perfect the passenger car industry
• To make reasonably priced cars
• To recognize the importance of sales in manufacturing
• To establish the basic material industry
Toyoda Kiichiro wrote an article, published in September 1936, entitled "Toyota to the Present" that provides a good description of Toyotaism. In the following excerpt, he makes some provocative points:
At last, Toyota cars are out on the market. The cars were born from the intense research of numerous people, a synthesis of ideas from different fields, and from dedicated efforts and countless failures over a long period of time.
We started work early on engine design and research. Most preparation was finished in 1933, and on September 1, we formally became an automobile production company
Since formally deciding to go into car manufacturing, what have we done? ... I will describe some of our preparations of the past three years.
Is it even possible for Japan to make the materials required? Professor Honda Kotaro said that, at present, Japan did have the capability and that there was no need to hire foreigners. Greatly relieved, I immediately set out to build a steel mill.
Some visitors to our company ask what percentage of our cast products pass the quality test. To sustain the business, 95 percent must pass. We failed many times before successfully blowing cylinders into the dies using die presses with a pass ratio of over 90 percent. We eventually succeeded.
After making 1,000 pieces of an item, most workers become fairly skilled and defect-free. But the first several 100 pieces will contain some good and some bad. Until skills are established, we have to be prepared to discard anything borderline. This is how materials problems are satisfactorily solved.
In 1933, Toyoda Kiichiro announced the goal to develop domestically produced cars for the general public:
"We shall learn production techniques from the American method of mass production. But we will not copy it as is. We shall use our own research and creativity to develop a production method that suits our own country's situation."
Toyoda Kiichiro once told Toyoda Eiji that the best way to work in an automobile assembly plant would to have all parts for assembly at side of the line just in time for their use. The words "just-in-time" attracted many managers of Toyota and Ohno was also attracted by those words.
Evolution of the Production System in Toyota Based on Japanese Thinking and American Thinking -Toyota Production System
Cost Reduction is the Goal
Frequently we use the word "efficiency" when talking about production, management, and business. "Efficiency" means cost reduction. At Toyota, profit can be obtained only by reducing costs. We cannot set prices based on our costs. Consumer sets the price and if the manufacturer sets a higher price due to his high manufacturing cost, the consumer will simply turn away. Cost reduction has to be the goal of manufacturers. The management has to develop human resources ability to its fullest capacity to best enhance creativity, and fruitfulness, to utilize facilities and machines well, and to eliminate all waste.
The evolution of the production system in Toyota right from the beginning was guided two special ideas termed as pillars by Ohno. One is JIT and the other is Autonomation.
Idea of production flow in reverse:
A later process goes to an earlier process to pick up only the right part in the quantity needed at the exact time needed. It will indicate what and how many are needed when they come next.
We will call this means of indication kanhan (sign board) and circulate it between each of the processes to control the amount of production - that is, the amount needed. This was the beginning of the idea.
We experimented with this and finally decided on a system. The final assembly line is taken as the starting point. On this basis, the production plan, indicating the desired types of cars with their quantity and due date, goes to the final assembly line. To supply parts used in assembly, a later process goes to an earlier process to withdraw only the number of parts needed when they are needed. In this reverse way, the manufacturing process goes from finished product back to the earliest materialsforming department.
1945 - JIT - Just in Time was identified as the need. Every body was thinking how to do it. Ohno is also a manager thinking about it.
1945 - 71 - Setup Time Reduction
1945 - 55 - Set ups on Die Presses were taking 2 to 3 hours.
1962 - Main plant set up 15 minutes
1971 - Main plant and Motomachi setups 3 minutes.
Supply of Parts and Withdrawal - Warehousing
1948 - Withdrawal by subsequent processes started. - Pull
1949 - Intermediate warehouses abolished
1953 - Supermarket system in machine shop
1958 - Warehouse withdrawal slips abolished
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Summary of What Taiichi Ohno Shared in His Book
I. Starting From Need
During the 15-year period beginning in 1959-1960, Japan experienced unusually rapid economic growth. As a result, mass production, American style, was still used effectively in many areas.
We kept reminding ourselves, however, that careless imitation of the American system could be dangerous. Making many models in small numbers cheaply -wasn't this some thing we could develop? And we kept thinking that a Japanese production system like this might even surpass the conventional mass production system. Thus, the principal objective of the Toyota production system was to
produce many models in small quantities.
"Catch Up With America" Toyoda Kiichiro (1894-1952)
15 August 1945 . Japan lost the war. Toyoda Kiichiro, President of theToyota Motor Company said, "Catch up with America in three years. Otherwise, the automobile industry of Japan will not survive"
Just-In-Time
The basis of the Toyota production system is the absolute elimination of waste. The two pillars needed to support the system are:
Just in time
Autonomation - Intelligent machine that does not produce defect and also stops on it own. Also intelligent operator that do not produce defective parts and investigate and remove the root cause whenever a defective part is produced.
Just in time system eliminates one of the seven wastes specified by Ohno. In an assembly flow process, the right parts needed reach the appropriate place at the time they are needed, inventories can be reduced drastically even up to zero. But to reach the JIT ideal, many existing conventional management methods have to be changed.
Using a Common-Sense Idea
The common sense idea is making only those components demanded or used by the downstream process.
Ohno said, I am fond of thinking about a problem over and over. The normal planning and production process is for the component producer to produce as per plan and keep it inventory for the assembly department to draw when needed. But Ohno changed this method. Assembly department will go and take what they want and component department has to replenish that component only. So component department has no independent plan. Only assembly department has the plan. Every link in the production flow process or chain is connected with this method and synchronized. With this practice, the management work force is reduced drastically. This information system is given the name kanban.
Give the Machine Intelligence
At Toyota, machines automated along with an automatic stopping device in case of a problem
are utilized. In this way, human intelligence is given to machines. The machine stops in case of a problem and the management will come to know of it. Expanding the rule, even operators are asked to stop the flow, if there is a problem. Rapid counter measures are taken to prevent recurrence of a problem.
The Power of Individual Skill and Teamwork
A champion team must have good teamwork and people with individual skill. Likewise autonomation is individual machine skill and JIT is teamwork.
Cost Reduction is the Goal
Frequently we use the word "efficiency" when talking about production, management, and business. "Efficiency" means cost reduction. At Toyota, profit can be obtained only by reducing costs. We cannot set prices based on our costs. Consumer sets the price and if the manufacturer sets a higher price due to his high manufacturing cost, the consumer will simply turn away. Cost reduction has to be the goal of manufacturers. The management has to develop human resources ability to its fullest capacity to best enhance creativity, and fruitfulness, to utilize facilities and machines well, and to eliminate all waste.
The Illusion of Japanese Industry
Japanese industry believed in mass production. Till 1973 oil crisis, Japanese manufacturers had the illusion that this system fits their needs
Establishing a Production Flow
Establishing production flow in machine shop was difficult. But in 1947, Ohno arranged machines in a flow order and tried having one worker operate three or four machines (different machines). Even though working time did not go up, operators did not like the new system. Also Ohno wrote, that many adjustments that an operator has to make to machine created difficulties for the operators. Hence, Ohno said he became patient to implement the system even though he was convinced that the direction was right.
Production Leveling
We got the idea that we should spread production evenly throughout the workday. We wanted to get away from having to produce everything around the end of the month.
In the Beginning There was Need.
The key to progress in production improvement, I feel, is letting the plant people feel the need.
Opportunities to take care of the needs are always there. Once a need if felt, we just have to drive ourselves to find the practical opportunities that satisfy the needs.
A Revolution in Consciousness Is Indispensable
A person in business may feel uneasy about survival in this competitive society without keeping some inventories of raw materials, work-in-progress, and products. But Ohno says a revolution in consciousness is needed to realize that overproduction and the consequent inventory is a waste that has to be eliminated rather than accumulated.
2. Evolution of the Toyota Production System
Repeating Why Five Times
By asking why five times and answering it each time, we can get to the real cause of the problem, which is often behind behind more visible symptoms.
May be we can interpret it as prevention - appraisal - failure model. We see failure. We need to know ways to prevent the event very early in the event sequence.
Complete Analysis of Wastes
Improving efficiency makes sense only when it is tied to cost reduction. The efficiency of each operator has to be improved, each production line has to be improved and efficiency of the entire plant has to be improved due to them.
Waste of overproduction
Waste of time on hand (waiting)
Waste in transportation
Waste in processing itself
Waste of stock on hand (inventory)
Waste of Movement
Waste of making defective products
Ohno made the statement that eliminating these seven wastes completely can improve the operating efficiency by a large margin. To eliminate these wastes, we must make only the quantity needed, thereby releasing extra manpower. Management has to identify excess manpower and utilize it effectively in other activities. Eliminating wasteful and meaningless jobs and creating useful jobs enhances the value of work for workers.
My Plant-First Principle
A proper work procedure cannot be written from a desk. It must be tried and revised many times in the production plant. Production managers have to be in the plant which is a major source of information.
Writing the Standard Work Sheet Yourself
Standard work sheet is basis for all improvements in Toyota production system. Improving machining processes, improving tools, improving transportation processes, and optimizing the inventory, rearranging machines, all such things are implemented through standard work sheets only. The job of the field supervisor, section chief or group foreman is to train workers in standard work. The trainer must actually take the hand of the worker and teach them. Workers of a team also help their team members.
Teamwork is Everything
Team work is essential in manufacturing also like many of the sports. Assigning responsibility to individuals is not sufficient. Teamwork is essential.
The Skill of Passing the Baton
The work area is like track relay. There is a wide area in which baton can be passed.
Mutual Assistance Campaign
An Idea from the U.S. Supermarket
The communication system of Toyota is Kanban and Ohno got the idea for it from watching the transactions in Supermarkets of USA. At supermarkets buyers buy what they need. Supermarkets have to facilitate it.
The idea of supermarket was implemented in Toyota and to avoid a situation wherein large quantity of a component is demanded suddenly, production leveling was also introduced.
What is Kanban?
Kanban is a method for communicating production and use related messages among the plant personnel. Its most frequently used form is a piece of paper contained in a rectangular vinyl envelope. It contains 1. pickup information 2. transfer information and production information. The kanban method is used for information flow vertically and laterally within Toyota itself and between Toyota and its supply partners.
Kanban is autonomic nerve of the production line.
(The word Kanban literally means visible record).
Incorrect Use of Kanban Causes Problems
Incorrect use of Kanban system causes problems. Close supervision of the kanban rules is required to derive best results from it.
1. An assembly process (more generally later process) can pick up items only in the quantity specified in the kanban from the earlier process. So the quantity the assembly process can pick up at a time is specified in the kanban system.
2. Earlier processes produce items in the quantity specified in the kanban which is provided by the later process after withdrawing the item from stocks of earlier process.
3. No items are withdrawn or transported or produced without a kanban indicating it.
4. All items have to move with an attached kanban.
5. Defective items cannot be sent ahead from any processing station. The assembly line can be stopped if there are no defect-free components or assembly in process. But a defective item cannot move forward.
6. Reducing the batch quantities indicated in the Kanban would make the system more sensitive and makes the system more synchronized.
The Talent and Courage to Rethink What We Call Common Sense
Productivity improvement ideas may come but implementing them requires understanding by top management. The ideas when they defy the present conventional thinking or common sense, requires much more understanding the by the top management and the greater the commitment of top management, the more successful will be the implementation.
Ohno wrote that he came up with many revolutionary ideas and implemented them. They were sometimes regarded as high handed. But Toyota's top management watched the situation quietly and allowed Ohno to implement them.
In 1963 only JIT was extended to outside suppliers. Till that only internal production was handled on JIT basis.
Establishing the Flow is the Basic Condition
Toyota helped its suppliers or cooperating firms to set up flow systems first. Then Kanban system was introduced.
Kanban is the communication tool for implementing or realizing JIT. This tool works well when all the supporting processes are flow processes. So flow process is a basic condition for realizing JIT through Kanban communication system. The other important conditions are levelled production (eliminating surprise withdrawals of components) and working using standard work methods
Use Your Authority to Encourage Them,
Ohno said his ideas were not understood and hence not used initially by many. But he applied them in his department and when he was given more departments to manage, or was shifted to other departments, he implemented them there also, till Kanban became a company wide practice.
Mountains Should be Low and Valleys Should be Shallow
There must be efforts to level the production during the year. The mountains should be low and valleys should be shallow as much as possible and sales department has to strive for more uniform sales.
Challenge to Production Leveling
TPS works for production leveling during the year, the month and even a day. If 250 sedans, 125 hardtops, and 125 wagons are made daily, in assembly there are done in the sequence One sedan, one hard top, one sedan and then wagon etc. That gives a lot size of one. But lot size of one was not achieved overnight in various shops. In a die-press, in 1940 changing the die took to two or three hours. With such a die changing time, one cannot make small lots. So a decision was taken to make efforts to decrease the die changing times. During 1950s, the die change time went down to one hour. Then it was further reduced to 15 minutes. By late 1960s, the die changing time was drastically reduced to 3 minutes.
The challenge to production leveling and small lots was high set up times. The need for quick die changes was generated or identified and steps were taken to understand the issue and develop a solution. This problem was not attempted earlier. To do this, initial solutions were developed and the workers were trained. But subsequently, the enthusiasm spread and everybody chipped in with suggestions and method improved beyond the initial description. The system became the product of the effort of large number of people.
Product Leveling and Market Diversification
Ohno emphasized that production leveling (small batch quantity) is much more advantageous than the planned mass production system (larger batch quantity) in responding to the diverse demands especially of the automobile market.
Product leveling or small batches is more advantageous to respond to the market diversification. But still, leveling becomes more difficult as diversification develops. Toyota copes up with this problem well enough and keeps market diversification and production leveling in harmony. In this endeavor, it is important to avoid the use of dedicated facilities and equipment and also equipment that has very general utility. It is important to put in effort and develop specialized, and yet versatile production processes through use of machines and jigs that can handle minimal quantities (Lot sizes of one). It is difficult but we must utilize all available knowledge to avoid undermining the benefits of mass production.
Kanban Accelerates Improvements
Carrying Carts as Kanban
The Elastic Nature of Kanban
3. Further Development
An Autonomic Nervous System in the Business Organization
Ohno says that human body has autonomic nerves that work as instant reflux to certain external stimuli and motor nerves that work under the command of the brain.
Similar to that in TPS, worker make some decisions without the involvement of production control or engineering departments. Production control and engineering departments are the brain of the organization.
In TPS workers stop the plant when problem occurs, decide the sequence to follow in making parts and also decide when overtime is necessary. They need not involve brain in reacting to some small changes in plans.
Provide Necessary Information When Needed
Computers should not be bought and used indiscriminately. It should not lead to higher costs. Processing customer orders and information on market needs and wants by computers can be very effective. But kanban communication system is more effective in production communication.
The Toyota Style Information System
Toyota does production planning like other companies. It has an annual plan, say for instance making 2 million cars in the year. Next, there is a monthly plan, announced a month ahead. Based on the monthly plan daily production schedule is established and this is based on production leveling. Each production line is informed of the daily production quantity. But the daily sequence schedule (sequence of models and color) is sent to only one place - the final assembly line.
The production order for a specific car is issued to the process 1 of the assembly line. This production order will have all the information needed for its production and the workers in the following assembly processes can tell which parts to use by at the car this production order attached to car. Workers in the subprocesses can know what to do as soon as they see the car in assembly at the first stage. If needed they are sent the information directly. Toyota makes sure the right information reaches the operators at the right time by letting the products being produced carry the information needed to assemble them.
Fine Adjustment
To cope with a constantly fluctuating market, the production line must be able to respond to schedule changes. One day, the line may make four Car A's and six Car B's. But on another day, the ratio might turn out be the reverse - six car A's and four car B's. Such reversed ratios are followed the production line as per the information carried by the Kanban
Coping with Changes
Fine adjustment also means that mistakes are corrected immediately.
What Is True Economy?
True economy is tied directly to the survival of business. In Toyota production system, economy or efficiency is thought in terms of manpower reduction and cost reduction for making one car. Manpower reduction is a means for cost reduction, which the most critical condition for the growth of the business and its survival. The criterion for all decision making in Toyota is cost reduction.
Many improvement ideas are to be generated and each idea has to be thorougly investigated. The cost of improvement should not be more than the cost reduction. Unless, the judgment is made carefully, cost increasing improvements may be undertaken.
At Toyota, we still use many old machines, by maintaining them properly and daily, improving work methods and making layout changes. A layout must make worker activities easy and should not impede production flow.
Re-Examining the Wrongs of Waste
TPS is a method to thoroughly eliminate waste and enhance productivity. Waste refers to all activities of production that increase cost but not add any value (No increase in price takes place due to them). For example, excess people, inventory, and equipment.
The primary waste of excess people, inventory and equipment give rise to secondary wastes. Complete understanding of waste is essential to implement TPS successfully.
Generate Excess Capacity
If excess capacity is there, we can use it for various purposes. At Toyota, through continuous improvement, we create excess capacity first and then use it profitably.
The Significance of Understanding
Ohno emphasize the importance of thoroughly understanding production and improvement of production methods and organization and the process of manpower reduction and cost reduction.
Understanding needs an approach to examine an objective positively and comprehend its nature. Careful inspection of a production area reveals waste and scope for improvement. Only a very close observation reveals waste and work. There are work movements which are not processing, and there are processing activities which are a waste. Manpower reduction means raising the ratio value added processing activities to 100 percent of the working time.
Utilizing the Full Work System
All sources of waste have to be detected and crushed. Waste of overproduction is eliminated in TPS by strictly adhering to standard inventory. If the standard inventory is specified as 5, on a day when it becomes 3 only 2 are produced. On a day when it becomes 4 only one is produced. We call it a full work system, when all standard inventories are replenished in a day. We do not want any overproduction in a day.
Tact Time
(Do Not Make a False Show)
Tact is the length of time, in minutes and seconds, allowed by the customer demand to make one piece of the product. Tact is obtained by dividing the operable time per day (of the machine) by the required number of pieces per day. Operable rate in TPS refers to the time machine is available for production in a day. The ideal operable rate is 100 per cent. To achieve this, maintenance has to be regular to prevent breakdowns and setup times are to be reduced. Operating rate refers to the production per day.
At Toyota, improvements increase the production quantity per day from a group of workers. But, if excess production is not required as per demand, the number of workers are reduced from the team and only required production is made. Unnecessarily producing excess is no efficiency.
Required Numbers Are All-Important
For each production line, numbers or quantity required by the market is important. In Toyota, we do not produce extra above the required quantity in any line. The excess manpower is transferred to other lines where needed. The required number is adhered to in a disciplined way.
The Tortoise and the Hare
At Toyota we produce according to the needs of the market at slow or fast rate everyday. It is the way of tortoise. We do not run very fast some days and then take rest on other days like a hare.
Take Good Care of Old Equipment
Ohno says, the expertise of a worker increases overtime. But in case of machine, the depreciation of the machines is the popular idea. If machines are poorly maintained and driven close to death, enormous costs are incurred in replacement. Ohno says, with adequate maintenance, machines will have a longer life.
Look Straight at the Reality
When estimating future business, Ohno recommends that one must be realistic and be ready for instant declines in business.
0.1 Worker is Still One Worker
The savings that come from automation should result in saving a full worker. Then only automation will give cost reduction. Ohno says at the design stage of the production system itself, fewer workers are to be employed. One should not employ more workers initially and then remove them when not needed.
Ohno, in this point also stresses that, they form teams of workers and do not allow only one worker to work in isolation.
Management by Ninjutsu
Management by Ninjutsu means acquiring management skills by training.
In an Art Form, Action is Required
An engineer is an artist. Art requires action not speaking.
Profit Making Industrial Engineering at Toyota
Advocating Profit-Making Industrial EngineeringSurviving the Slow-Growth Economy
4. Genealogy of the Toyota Production System
This chapter gives many passages from the thoughts and sayings of Toyota Sakichi and Toyoda Kiichiro.
Toyoda Kiichiro once told Toyoda Eiji that the best way to work in an automobile assembly plant would to have all parts for assembly at side of the line just in time for their use. The words "just-in-time" attracted many managers of Toyota and Ohno was also attracted by those words.
Taiichi Ohno had experience of cost reduction at Toyota Spinning and Weaving also. The company was implementing cost reduction measures to catch up and surpass Lancashire and Yorkshire companies. Toyoda Sakichi had world class view. Toyoda Kiichiro also had world class view. In the two pillars of TPS, autonomation came from Toyoda Sakichi and JIT came from Toyoda Kiichiro.
Toyoda Sakichi said that he observed a grand mother hand weaving for a full day and developed interest in developing a machine for it. Ohno likes that idea of observing on the shop floor to understand things. He wrote "Stand on the shop floor all day and watch - you will eventually discover what has to be done."
Toyoda Kiichiro visisted America and he must have thought about how surpass America's highly developed automobile production system and utter the idea of JIT.
Toyoda Sakichi talked of inventions made by Japanese efforts, knowledge and intellect. He made 100 inventions with patents.
A Global World Around Us
Two Extraordinary Characters
Learning from the Unyielding Spirit
I believe just-in-time was Toyoda Kiichiro's dying wish - Ohno
Toyotaism with a Scientific and Rational Nature
Provide Good Equipment Even If the Factory Is Simple
Pursuity of a Japanese-Style Production Technique
Making Products That Have Value
Toyoda Kiichiro recognized that the market always demands reasonably priced products. He wrote "We know our cars will not sell unless they are cheaper than foreign models. "We might manage to sell 50 to 100 cars per month by appealing to patriotism. But selling 200 or 500 cars per month would be difficult. In the end, prices must be competitive."
Can we actually produce economical cars domestically? Cars with proper materials and proper quality?
A Chess Player's View
In Search of Something Japanese
Witnessing a Dialectic Evolution
Toyoda Kiichiro " we shall learn production techniques from the American method of mass production. But we will not copy it as is. We shall use our own research and creativity to develop a production method that suits our own country's situation."
I believe this was the origin of Toyoda Kiichiro's idea of just-in-time.
5. The True Intention of the Ford System
The Ford System and the Toyota System
Ohno acknowledges - Henry Ford without dispute created the automobile production system. Toyota system uses the flow system developed by Ford. But the difference is that at Ford they were concerned about warehousing the parts and moving the chassis past the warehouse. Toyota eliminated the warehouse.
Small Lot Sizes and Quick Setup
The American automobile business has continuously shown that planned mass production has the greatest effect on cost reduction. The Toyota system takes the reverse course. The slogan is "small lot sizes and quick setups." Toyota system works on the premise of totally eliminating the overproduction generated by inventory and costs related to workers, land, and facilitates needed for managing inventory.
Toyota system works on the premise of totally eliminating the overproduction generated by inventory and costs related to workers, land, and facilities needed for managing inventory.
Rapid changeovers are an absolute requirement for the Toyota Production System. Teaching workers to reduce lot sizes and setup times took repeated on-the-job training.
The Foresight of Henry Ford
Ford said what we do have to bother about is the waste of human labor. Material in our factory represented labor. When we are wasting material we are wasting labor of some body. We will use material more carefully if we think of it as labour. Our studies and investigations up to date have resulted in the saving of 80,000,000 pounds of steel a year and this amounts to about 3 million dollars a year.
Standard are Something to Set Up Yourself
Prevention Is Better than Healing
Toyota's strength does not come from its healing processes - it comes from preventive maintenance.
Is There a Ford after Ford?
Ohno said "I think the TPS can be applied in America where the market for many types in large quantities is there."
Toyota has learned a lot from the Ford system.
Inverse Conception and Business Spirit
Is cotton the best material we can use here? (in seats) As an answer to this question Ford came up with flax and methods to handle it mechanically. Ohno said, "I was intrigued by Ford's question. Is cotton the best material we can use here?" As Ford pointed out, people follow tradition. This might be acceptable in private life, but in industry, outdated customs must be eliminated. This process of aking why represents Ford's business spirit. Ohno said reading Ford shows many such brilliant inverse conceptions.
Getting Away from Quantity and Speed
Is efficiency in production systems wrecking all the finer things in life?
Efficiency is merely doing the work in the best way you know rather than in the worst way. It is the taking of a trunk up a hill on a truck rather than on one's back. It is training of the worker and the giving to him of power so that he may earn more and have more and live more comfortably.
6. Surviving the Low-Growth Period
The System Raised in the High-Growth Period
Raising Productivity during Low Growth
Learning from the Flexibility of Ancient People
Important Terms Used to Describe Toyota Production System
Andon
Autonomation
Baka-Yoke
Baton Passing Zone
Do NOt Mkae Isolated Islands
Five Why's
Just-in-Time
Kanban
Labor Saving to Worker Saving to Reducing Number of Workers
Moving vs. Working
Multi-Process Operation System
Operating Rate and Operable Rate
Production Leveling
Profit-Making Industrial Engineering
Real Cause
Required Numbers Equal Production Quantity
Small Lot Sizes and Quick Setups
Standard Work Procedures
Stopping the Line
Tact Time
Toyota Production System
Visual Control (Management by Sight)
Waste Recognition and Elimination
Work Flow and Work Forced to Flow
Work Improvement vs. Equipment Improvement
Work productivity improvement is productivity improvement using the existing equipment. Only tools, jigs and fixtures are introduced as required in work productivity improvement.
If equipment improvement comes first, manufacturing processes will never be improved.
Ud. 2.6.2025
Pub. 30.5.2025
