ToyotaProdSystemLean

Toyota Production System
was created by Taiichi Ohno

They visited Ford and General Motor Plant, US in
the early of 1956 and brought back the Operation
System to adapt to the small production volume of
Japanese market. However, Toyota Production
System was only a dream if without greatest
assistance from Shigeo Shingo, the consultant
and teacher for Taiichi Ohno.

There are 2 Pillars of Toyota Production System -
Just in time and automation with human touch or
autonomation.

The whole idea of Toyota Production System are
first, produce as the market demand and eliminate
all unnecessary wastes throughout the production
process to maximise the profit.

Taiichi Ohno
(1912-1990)

DO YOU KNOW???!

Kiichiro Toyoda
(1894-1952)

Sakichi Toyoda
(1867-1930)

They saw Just in Time / Kanban
applied at Piggly Wiggly

During the tour to General Motor and Ford Plant US, Kiichiro
Toyoda and Taiichi Ohno visited Piggly Wiggly, an American
Supermarket and noticed Just in Time and Kanban System
Concept being applied. By applied the System, Piggly Wiggly
enabled customers 'buy what they need at any time' with
lowest holding stock.

Piggly Wiggly founded in 1916 in Memphis, Tennessee by
Clarence Saunders. This was the 1st seft service grocery
shop.

Piggly Wiggly Grocery

The Logo

Saunders

" A machine's value is not
determined by its years of services or
its age. It is determined by the
earning power it still retains. " -Taiichi Ohno-

Many people thought it is good to replace a new
machine when the accounting book show no
value to the machine after its depreciation.
Therefore, no one willing to spend time and
resources in maintaining the machine as it 'should'
be replaced after achieve certain years of service.
However, according to Taiichi Ohno, the value of
the machine is not determined by the years of
services or its age, it depends on the earning
power it still retains. Taiichi Ohno said, when
there is adequate maintenance has been done,
replacement with new machine is never than
cheaper.

Toyota Production System get
popular after oil crisis!!

Taiichi Ohno was promoting Toyota Production
System since 1950s and it attracted little interest
especially from corporate firms.

Oil Crisis fall on October 17, 1973 when the
members of Organization of Arab Petroleum
Exporting Countries (OAPEC) announced, as a
result of the ongoing Yom Kippur War, that they
would no longer ship oil to nations (the United
States, its allies in Western Europe, and Japan)
that had supported Israel in its conflict with Syria
and Egypt.

In 1974, Japan's economy had collapsed and
experienced negative economy growth rate. Many
companies suffering loss but Toyota sustained
with greater earning. It attracted attention from
companies to study seriously of Toyota
Production System.

Koromo Plant

Koromo Production Plant

Type G -
Machine

Sourced from
Toyota Motor
Company

Japan Automobile Industry was
protected almost 13 years !!

Japan Automobile Industry was protected since
1936 to 1949 by Government. However, Kiichiro
Toyoda recognised that the market always
demands reasonably priced products. He afraid
that if they relied too heavily on this, it would
eventually force customers to abandon the
domestic industry.

Sakichi Toyoda did not
always follow scientific
method in invention!!

Sakichi did not need newspapers
and others to help in an
invention. He never studied
mathematics or
physics...because his invention
was developed from actual
practices, therefore he did not
always follow scientific
principles. However, the result is
better. No mathematics or
mechanical expert could find fault
with his inventions. He put his
ideas into actions, not words!!

How would you price Tata's Nano if your are Ratan Tata ( Chairman )?

If you are chairman for Tata, how would you price
the cheapest car in the world? We commonly practice the following method in determining selling price;

Cost + Profit = Selling Price

but how to make out a costing for Nano in just USD2,500? do you think Tata can achieve this by applying the above costing method?

When others are struggling to push their products to market, Toyota uses "non-cost" principle;

Selling Price - Cost = Profit

When economy is good, you sell on whatever you can produce. But when economy is bad, Ohno said "Consumer decide the selling price,
profit is what remains after deducting the cost from it."

Apart from Tata, we can notice that Dell is dropping their price too. Now, you can buy Inspiron 1525 at just USD499. Both Tata and Dell are
practicing "non-cost" principle. More will come... in order to survive

This formula has permitted Toyota to often take the lead in reducing the selling price over past 35 years!!

Mick Ng

Toyota Kanban Stock is
not a waste!!. -Shingo Shigeo-

Many people said, Toyota
Production System will increase
the inventory. However, the
inventory produced is only for
products actually sold, not those
that might be sold. There is
difference between forecast and
actual demand. There isn't any
overstock if the parts are
processed only in response to
actual daily demand.

Toyota carry out market
survey at least twice per year

Toyota surveys about 600,000 people at least twice per year to
determine market trends at cost about 120 million yen. The total
annual marketing budget around 600 to 700 million yen. In addition,
unofficial monthly production forecast was given to supplier at least
two months ahead and firmed up one month later. Daily production
schedule will then be given at least two weeks in advance

Law concerning the Manufacture of
Motor Vehicles to protect Toyota in 1935

In 1935, Ministry Commence and Industry of Japan
announced the Law Concerning the Manufacturing of
Motor Vehicles. It limits that only small number of
domestic car producers allowed to compete and each of
the participants has to pass the capacity of 200,000
cars.

This Wikipedia and Wikimedia Commons image is from the user Chris 73 and is freely available at
http://commons.wikimedia.org/wiki/Image:Toyota_Model_AA.jpg under the creative commons
cc-by-sa 2.5 license

Toyota 1st Car -
Model AA, 1936

Do not wrongly apply TPS!!

Shingo said Toyota Production System (TPS) is focused on relentless elimination of “waste”. This is an innovation
approach to production that is founded on the revolutionary insight that stock must be rejected utterly.

He commented that, a clear understanding of the TPS is essential. If someone merely imitate the superficial aspects of
TPS and hastily apply to existing practices, it will end up with the opposite of the desired result. This will not only create
havoc in the production plant but also cause suppliers a great deal of stress!

Shingo will not waste his time!!

Norman said, Shingo will never waste his time in consultancy. He expected his customers to have work completed
before he came back a month later. He didn't want them to waste time and he didn't want them to waste his time!! He
wrote something every day and completed 25 books on manufacturing management about his learning from the day's
consulting assignment.

Norman Bodek
Godfather Lean

Who discover Lean??

When Norman asked ex-Toyota Group Manager, Chihiro Nakao on who was the one discovered lean? His answer
was " Which came first? Chicken or Egg?

Shingo Shigeo
(1909-1990)

Never transfer your cost to customer !!

Shingo said, when buying a vehicles you want to pay for value
adding not the manufacturing waste. Customer shouldn't pay for the
cost that produce the defect during manufacturing

Toyota Production System /
Lean Manufacturing

How Taiichi transferred JIT to suppliers?

According to Norman, Taiichi Ohno tooks almost 20
years in establishing TPS. JIT was then slowly
introduced to their subsidiaries. Ohno then took up 10
people from each of the top tier suppliers as leader to
lead the effort. The team called Toyota Autonomonous
Study Group.

There are 10 wastes instead of 7
wastes!!

According to Norman, instead of 7 wastes
there are 10 types of wastes; 1) inventory,
2) motion, 3) transportation, 4) defects, 5)
waiting time, 6) over production, 7)
processing, he added another 3 more; 8)
inspection inefficiency, 9) excess cost and
10) underutilised people.

Do you produce just in case of just in time?

Most of the Factory Operators are producing more than order to
prevent any unforeseen circumstances such as material shortage
or disaster that might possible cause interruption to production
supply, called 'just in case' system. However, Toyota Production
System does not agreed with such 'traditional arrangement'. 'Just
in time' supplies only the quantity required that force engineer to
investigate root causes and find out solution when there is
interruption the production process!! Ohno said, if there is bad
snow storm strikes and factory has to close for a day, it was still
better to build up inventory 'just in case'.

From ONE DAY ONE IDEA!!

How Ohno learnt about JIT?

When Norman asked Ohno on how he learnt about
JIT, he laughed and said that he learnt through
Henry Ford's book - Today and Tommorrow!

Henry Ford's
Today and
Tommorow

Do you practice Multiple Machine Handling or Multiple Process Handling??

Shingo said, TPS focefully advocating what it calls " multiple process handling" instead of "multiple machine
handling". "Multiple machine handling" put a single operators in charges of more than one machine. While,
"multiple process handling" required single operators handling several machines in accordance with the process
flow. Two type of "multiple process handling"; a) Vertical multiple machine and b) Horizontal multiple machine.

Kanban is not Toyota Production
System!!

Many people misunderstand that Toyota
Production System is Kanban and Kanban is
Toyota Production System. Ohno said, "
There are two pillar for Toyota Production
System which are just-in-time and
automation with a human touch or called as
autonomation. The tool used to operate the
system is called Kanban.

Do you know what is cushion stock??

Shingo said, in order to start a Toyota Production System on Kanban System and small
lot production one must reduce the current buffer stock to the minimum level. However,
how to determine the stock level? One best method recommended was designating
current stock as cushion stock and seal it. Then, run a trial on kanban and small lot
without relying the cushion stock. “Borrow” the cushion stock only when defects occurs or
when there is breakdown of equipment or when there is failure in kanban or small lot
system.
After some period, you will discover the quantity of cushion stock required by referring to
the quantity being ‘borrowed’ during the trial. As according to Shingo, Asahi National
Electric managed to determine 40 percentage of the cushion were untouched. When
improvement done in kanban, small lot and SMED ( Single Minutes Exchanged Dies ), the
cushion stock should be reduced accordingly to the minimum level. But always remember,
the lowest of the cushion stock is the lowest MUDA of your organisation.

You might have the 'know-how' on
TPS but do you have the
'know-why' as well?

Both Shingo and Akira Shibata ( MD of Daiho Industries, Inc ) agreed that, most people in the market are content to understand merely
the 'know-how' of the Toyota Production System. However, plant improvement is impossible if they do not have 'know-why' of the
practices of TPS. They are only imitating the TPS's Tools such as one piece flow, kanban system and so on without knowing the
reasons, its advantages and impact of inappropriately implementation. By simply imitate TPS will lead to negative impact to both internal
and external suppliers...I agreed of what Shingo said, ..the manufacturing improvement we see now is transient, superficial, and
insubstantial. It does hit the roots the concepts of the System, thus it will not lead to innovative production systems..

Production consists of
Process and Operation!

Shingo said, many people thought production is process and process is same as operation. When talk about production improvement,
some start cycle time study while some improve from manual material transferring to conveyor or auto transferring. They thought the
process and operation are lying in the same axis. However, according to Shingo, process is entirely different from operation. Process is
lying along y axis represent the flow from raw materials to finished goods while x axis representing the flow in which succession of
workers works on items. According to Shingo, production constitutes a network of process and operations. In improving production,
process phenomena should be given a priority. In order, production improvement should be process improvement first then only followed
by operation improvement

McDD never stop on Lean,
how about u??

Regardless how established a company is,
nothing can stop them from continuously
improve and eliminate all possible wastes.
McDD, Malaysia has changed the typical
'gravity transferring' process flow to recent
stockless technique. Now, your burger will
only being made after you have placed your
order. Your order that appear in the cash
register will exactly appear in the screen in the
kitchen. Operators will make to your order,
therefore now you will never see any more
burger hanging and waiting for order...

As what you can see the Screen behind the
cashier and kitchen at McDD outlet since 2007

NOTHING can stop them from continuously
improve - elimination of wastes!!

Very GOOD!!

Do you need 10 years to reduce your setup time to 3 minutes?

People thought it needs long time to improve the setup time from hours to 3 minutes. Some even think this is a theory and impractical.
According to Shingo, a Japanese authority on skill engineering reported in the newspaper that it took 10 years for Toyota to reduce 4 hours
setup to 3 minutes. They said, the achievement was in line with the calculations on accumulative skill. However, Shingo said, Toyota’s
achievement was not base on accumulation of practice, it was a fundamental revolution in AWARENESS!! In other words, it does not need
long time for plant to improve if they really want to do so. To reduce the setup time from hours to 3 minutes is not impossible if they are
positive thinking and commitment with trial an error…
Ahston T. Marcus, a senior vice president of Omark Industries said, they managed to reduce the setup time from 2 hours to 2 minutes 40
seconds after they learned from Shingo. He said, they had started with assumption that nothing more could be done because a top-notch
skill worker said they need 2 hours for setup. They are now realize that the assumption was their BLIND SPOT!!

Do you feel proud of your BIG warehouse??

Many Companies feel proud when they have a BIG and HUGE warehouse. For some, it shows the
‘SIZE ‘of the company to generate self, employees, stake holders’ confidence in terms of the
capability and stability. However, do they even know that the biggest warehouse it is, the greater
cash flow required or risk to the company. Do they even calculate the interest wasted by holding such
high volume of stock, space per square feet required to keep the stock, machinery required to move
the stock, employees required to handle the stock and losses when there is face out of model.
Toyota Production System names this as one of 7 wastes or ‘muda’ – Over Stock.
Traditional Manufacturing System is that, the higher volume of stock the more comfortable it is
especially prevent customer’s fluaction of order, machine breakdown, insufficient raw material,
insufficient labor and so on. Some said, this is minimum quantity of produce due to long set up time.
However, all this can be prevented thru’ the application of Toyota Production System –Pull System,
Small Lot, Synchronize System, Just in Time, Kanban, Single Minutes Exchange Dies (SMED), One
Piece Flow, Autonomation and so on. Some said, all this are theory and impractical. BUT, why
Toyota and others companies can do it but you cannot? Toyota Production System is not a overnight
set up system, it takes time and most important is that someone has started, improved it thru’ trial and
error….

Purchase this
book from
AMAZON

Photo from
Wikipedia

Photo from Wikipedia

Reduce workforce not necessary cutting down head count!!

Ohno started his multi-process / machine handling or one piece flow in 1947. It used to be single skill operator but trained to handle multi
process / machine same as in America, a lathe operators is always a lathe operator. It takes 2 years to change the lathe process in L shape
from 1 operator for 1 machine to 3-4 machines in different processes. Ohno said, they encountered strong resistance. Although young and
earger to push but decided not to press for quick, drastic changes, but to be patient.

However, sometimes might not necessary to reduce manpower. Ohno has given an example, 1 production line has 100 workers to make 100
products daily. It means 10 pieces produced by 1 operator per day. Instead of reduce 10 workers to 8 workers after reducing all the wastes, it
can be done by increasing 10 to 12.5 piece per operator.

Renault-Nissan and Bajaj take on Tata's Nano

Another example show company is applying Toyota's NON COST PRINCIPLE ( Profit = Selling Price - Cost ). Renault-NIssan and Bajaj
decided to launch another cheapest car right after Tata's NANO in order to compete in the marketplace. Can someone simply determined car
price without even the prototype? Yes, This is so-called Toyota's NON COST PRINCIPLE. Traditional pricing method ( Cost + Profit =
Selling Price ) is no more workable if one wishes to 'fight' in the market. What Renault-Nissan will do next? They will definately reduce the
possible wastes in order to retain profit - this is Toyota Production System / Lean Manufacturing. Are you ready for this??

As Management, do you always walk down to
your production floor??

Ohno said, production plant is manufacturing’s major source of
information. It provides the most direct, current and stimulating
information about management. He said, the time that provides him
the most vital information about management is in the time he spent
in the plant not in the vice president’s office.

We can't talk about work improvement, but unless we know
production thoroughly otherwise we can accomplish nothing. Stand
on production floor for the all day and watch, then you will eventually
discover what has to be done.

Be Positive !

The ability to eliminate waste in production is developed by
giving up the believe of ‘NO OTHER WAY’ to perform a task. It is
USELESS to say ‘It has to be done this way’ or ‘This can't be
helped’. Shingo said, when they discovered waste, they don't say
‘This can't be help’, instead they say ‘This doesn't add value,
they will change it - but tolerate it until we can find way to
eliminate it completely’.
He added, The production and management system developed in
Toyota was a result of TRIAL AN ERROR efforts.

Do you display ‘ELIMINATION WASTE’ poster at your company

When Shingo visited a company K, he noticed the slogan ‘ELIMINATION WASTE’ was posted on the wall. He
asked the President that he must has many STUPID employees at the company. President was surprise when
heard what Shingo had said and asked for justification. Shingo commented only STUPID employees that do
nothing when they have recognised the waste but the real problem is when people do not recognise waste when
they see it..

He commented further, there is nothing wrong with the slogan ‘ELIMATION WASTE’ but in many cases a better
slogan would be ‘FIND WASTE’ as it solicited employees ideas for solving specific problems. After that, over 500
suggestion were collected and many of them adopted and the project was a great success.

Shingo said, ‘ There are many examples of waste in the workplace but not all waste is obvious. It often appears
in the guise of useful work. We must see beneath the surface and grasp the essence. '

Understand the Fact, not assumption!!

When Shigeo involved in a project to reduce the lead time in shipbuilding, they had developed a new production method. However,
there was strong opposition from one of the engineer. The engineer said, “ It’s all very good in theory but it won’t work in practical”.
The engineer further commented that the crane do not have enough capacity to support. Shigeo was than asked him to study the
operation ratio together and found the following finding.

Loaded Empty
Moving 25.4% 27.8%
Stopped 18.5% 28.3%

As per above finding, there was only 25.4% of time the crane was working, means the cranes only worked 3 months out of a year.
When they went to the dock every day to observe the operation of the cranes, they discover waste, eliminate it and solve the
‘insufficient capacity’. Finally, they managed to set a world record for reducing the time required to build a ship.
In other words, improvement can only be achieved through detailed, quantifying, classifying observation and analysis of fact. Not
assumption…

Our Problem here is NO PROBLEM!!

For continual improvement, one must always identify problem.
People satisfy with current status will never get improvement. If you
or you always hear the following statements:
“ There no particular problem”
“ This problem is unavoidable, it happens at every company”
“ We can’t spend too much money, let’s be remain what we are
doing”
Shigeo said, people with these type of attitude will become
complacent and may not recognize a real problem. When you have
no problem, then what problem that you can solve? No problem can
be solved, then what improvement that you are expected?

Toyota pays OT for Kaizen Activities!!

Toyota will pay overtime for workers who are voluntary work overtime for
kaizen activities. Toyota, the 1st automotive maker in Japan famous on his
continual improve or kaizen rely lots on the workers’ suggestion to reduce
waste or ‘muda’ from workplace for better quality and productivity. Starting
from June 08, Toyota will pay workers for their QCC ( quality control circle )
activities. Asahi Shimbun, Japanese daily said, the paid will limit to 2 hours a
month. Some believe the decision comes after the death of Toyota workers,
30, in charge of checking body car defect worked more than 100 hours per
month.

Do you appreciate and pay OT for your employees for the kaizen
contribution?

Speculative Production System

What Shigeo said was correct, the current
production system is based on estimation or
speculation. It is accepted as perfectly natural and
the inventory is considered as necessary evil. But
do we make products that 'may sell' or products that
'will sell'? In the actual fact, what we want is to make
products that will sell but current production method
incurs significant losses by creating 2 undesirable
phenomena:
Item was made too early and waiting long time in the
inventory
Overproduction that generates ‘dead’ stock and
eventually discarded.

The other 2 more reasons are; we are force to make
earlier based on speculation as production lead time
is longer than customer allowable interval and we
believe cost can be reduced with large lot
production.

However, we can overcome this by reducing the
production lead time thru’ synchronized production
system or cell manufacturing and set up by Single
Minute Exchange Dies (SMED).

Time Study and Time Establishment..

Shigeo commented that most of the industrial engineers are following Taylor's time study method as: 1) Analyze the task, 2)
Improve the task, 3) Accept the improved time performance as standard time used for contract work systems.

However, standard time used for contract work system should not discard the abnormal values. Not all workers equipped with the
same and highest efficiency. To take the highest and fastest speed as benchmark standard time might not help to improve the
current work task.

Shigeo said, 2nd Step of Taylor's time study method should be eliminated in establishing standard time. The analysis of status quo
is the 1st step for making improvement. Industrial engineer shall take into consideration the weakness of others and suggest an
improvement can be adopted for all. There is wasting time to 'force' the weak one to follow the 'efficient one'. The best method is
recognise weak one as current performance and analyse the area for improvement.

Keep Idea Formulation from Judgement...

Shigeo suggested that we should separate idea formulation from judgement. We need idea for continual improvement and idea
cannot turned realistic without proper evaluation. Idea formulation is a creative activities but not a cool, objective analysis of various
conditions. ‘Judgement is a process that restrains creativity and attempts to compromise with the restrains imposed by real
conditions’, Shigeo said.
Separate the idea formulation from judgement will help to increase the number of ideas formulated. Regardless whether the idea is
‘nonsense’ or ‘illogical’, we need that too as it shows participation from various levels under different condition. Therefore, it is
extremely important to formulate ideas and evaluate ideas at different times.

Do you criticize in a constructive way...

We need ideas during brainstorming section. Brainstorming required creativity. Shigeo said, ‘being creative is difficult but being
criticizing on the other hand is very easy’. Improvements are impossible without creativity and criticism is a secondary function
whose only the role is to steer creativity in the right direction. No doubt, we need critical evaluation for a final improvement plan but
many people only know how to criticize in the way that kills. They are not capable to criticize in a constructive way. If everyone
behaved in that manner, the true function of criticism would be lost…, according to Shigeo.

We know how to criticize but in the mean time do we provide good suggestion or solution..?

4 Golden Rules in Brainstorming...

According to Shigeo, A.F. Osborne was the one that started use the term ‘brainstorming’. The original meaning is a cerebral
disturbance of a sudden and violent character.
Brainstorming is important as it helps to develop ideas more effectively than single individual. It stimulate better ideas as one can’t
able to achieve.
Shigeo suggested that there are 4 Golden Rules in brainstorming;
1. Never criticize
2. Welcome original, novel ideas
3. Express as many ideas as possible
4. Encourage improving or using other people’s ideas.

Everyone has dual personality. What Shigeo said is correct, we like to think that people will act as we wish if we managed to get
them to understand the points. Therefore, many training and workshop were provided to teach them theory and practical. However,
the result did not turn in to what we expected. To get a person to implement a proposed improvement, you have to persuade both of
his or her personalities, the rational one and the emotional-governed one. Shigeo added, people can understand a theory when it is
explained to them but understanding does not in itself guarantee that people will act on it. People take action only after they are
persuaded and persuasion is achieved not by reason, but though the emotions.
A person will never act unless both personalities are persuaded and this is the greatest headache for those who wish to introduce
improvement.
The good example that Shigeo has quoted “ Well, I know he is right but I am not going to do it because I don’t like him”..

Persuading for Continual Improvement

Henry Ford – the founder or lean manufacturing did say, “ Profits may be stupidly fixed and stupidly used. If so, they destroy their
source and vanish. A business that charges too high a profit disappear about as quickly as one that operates at a loss… That
money is the public’s money, and the public, having confidence enough in our product to pay the money to us, is entitled to benefit
by its confidence. The duty of the manager of industry is to encourage business by making it easy for people to obtain what they
need at price they can afford. Good management pays dividends in good wages, lower prices and more business; it is bad
management that can see in a revival of national ambition only an opportunity to lay heavier burden on the spirit of enterprise.”

Toyota learns the lesson from Henry Ford. Toyota continuously find way to reduce the production cost to offer lower price to the
consumers. Toyota never compromise their quality by lower price, therefore it deserved more businesses as what Henry Ford said
in 1926.

Are Profits Wrong?

There are 3 types of engineer in Japan and everywhere..
Table Engineers – Those only voice their opinion around the conference
table. They object any proposed improvement based on theoretical logic
but they do not go to production floor. They argue base on theory…
Catalog Engineer – The engineer likes to collect catalog and spend money
on new equipment and technology. They have no compunction about
buying more equipment than really needed.
Nyet Engineer – Nyet means ‘no’ in Russia. There is common to have
several nyet-sayers who always reject any proposal improvement. They
like to say, “ No way”, “ Impossible”, “ this won’t work”.

Are you sure you aren’t one of them…
Shigeo Shingo

Are you a Nyet Engineer..

Shingo said, no matter how good your intentions may
be, they are useless if the workers are
misunderstood. The staff members checking a line
operations should not act like a prosecutor. He should
act like a doctor to whom people go voluntarily,
seeking a cure. Human relationships are based not on
theory, but heart to heart contact. Shingo said, no
matter how good a management system may be, it will
not function properly unless lubricated by good
human relations.

They are not prosecutors..

Human Intelligence: Automation

There are 23 stages to turn manual job to automation. The first 20 is mechanization, not automation. To qualify as
automated, the system must be equipped with ability to sense abnormalities and must be equipped with an ability to
sense abnormalities and must be able to correct abnormalities. With these 2 conditions, the system can be said to be
fully automated.

Machine with pre-automation only able to detect abnormalities. They called as autonomation in Toyota Production
System. Toyota going thru’ 6 stages prior achieving automation as according to Shingo.
Stage 1 – Manual operation
Stage 2 – Manual feed and automatic cutting
Stage 3 – Automatic feeding and cutting
Stage 4 – Semiautomation
Stage 5 – Automation of the machining and detection of abnormalities
Stage 6 – Automation of the machining and the detection and correction of abnormalities

To promote company-wide improvement activities

“ Around 1961, education and training began to be directed at workers, supervisor and foremen. Quality Control Circles believed
born since 1962 and its goal is to involve in quality-circle activities people in the production plant. Through quality circle activities,
ordinary workers became aware of quality and began discussion proposed improvement.” Shingo said.

When production increased in scale, the job become organized and a vertical division is instituted. The division of labor will be
structurized as:

Top Management – Motivation, policies and satisfaction
Middle Management – Organising ( planning ), control and monitoring
Workers – Actual processes and operation required for production

So, do you mess up their function??..

Inventory like a river…

Ohno did say, inventory like river and it flows through the plants hide away of problems and wastes. It hides the machine
problems, quality and defects problems and others. As you lowering down the river, the problem will rise to the surface of your
awareness. One by one you solve this problems and eliminate them, then you can lower the river again. Lowering the river of
inventory is core activity of Lean Manufacturing or Toyota Production System. Keep this centered in your mind and practice it.
People have a tendency to complicate things. It only because they do not fully understand and appreciate the simplicity and
power of reduction inventory”.

Kaikaku, Norman Bodek

Treat your dealers as partners…

In 1926, Henry Ford did say, one organisation must have profit to pay the demand of those persons who have invested in the
business but who have no hand in its operation. A business should pay everybody connected with it and for every element used
in it. It should pay for managerial brains, productive ability, contributive labour – but it should also pay the public whose patronage
supports it. A business that does not make a profit for the buyer of a commodity, as well as for the seller, is not a good business.
Buyer and seller must both be wealthier in some way as a result of a transaction, else the balance is broken. – Today and
Tomorrow by productivity press.

The concept is adopted by Toyota. “ Toyota is different from other manufacturers in its philosophy toward dealers. We treat
dealers as partners. We truly listen to their opinions and incorporate them as integral part of our entire business formula. We
pursue growth with our dealers based on the same Toyota principles while helping to make them profitable”, said Yoshimi Inaba,
Exec. Vice President and Former President of Toyota Motor Sales, US. – Extreme Toyota by Wiley.

Therefore, how do you treat your distributors, dealers or business partners? Do you only make‘ one way profit’?

Impossible Goals

According to Hirotaka Takeuchi, Emi Osono and Norihiko Shumizu who have carried out 6 years of research on Toyota including
220 interviews, there are 6 forces that lead Toyota toward new challenges and greater diversity and complexity.
1st Force – Impossible Goal
Toyota sets goals that almost impossible to achieve and it does this knowing full wel that the means to achieve them may not yet
exist. When Kiichiro Toyoda, the founder of Toyota Motor Corporation, decided to enter the automobile business, his goals was to
produce automobiles independently, without relying on an overseas partnership. This was the challenges for big conglomerates
(zaibatsu) such as Mitsui and Mitsubishi were hesitate to enter the automobile business.
‘Global 15’ was another goals that set in the late of 2002 by Toyota President Fujio Cho to inpire employees rather than express a
commitment to a specific numerical target. Global 15 was set, General Motors and Ford accounted for 15 percent and 12 percent
of global market. Year after year, Toyota market share crept upward, aided by incremental sales averaging 650,000 units per year
since 2002. At this rate, the inpiring Global 15 dream is expected to become a reality by 2010 - Hirotaka Takeuchi, Emi Osono
and Norihiko Shumizu.

Eagerness on Experiment

One of secret recipe for Toyota is persistently in trial an error and learning from mistake. “Let give it a try, don’t be afraid to make
mistake” These was motor of Sakichi Toyoda and becomes the most importance philosophy for Toyota to continuous experiment
and making improvement.
Eiji Toyoda, the 2nd President of Toyota Motor Corporation Japan did say, “ It was a wild risk to take, but the timing was pretty
good. Our initial bad experience merely strengthened our determination to make cars that would sell in the States. We knew that
TMS ( Toyota Motor Sales, USA) would collapse if we didn’t have decent products to sell. The first time we tried, we failed. So we
took up the challenge and tried again, redoubled our efforts, and the second time we succeeded… In the end, the risk was worth
taking.
The force of experimentation drives Toyota to act on impossible goals, but a highly disciplined way - Hirotaka Takeuchi, Emi
Osono and Norihiko Shumizu.

The Gemba Walk

During a Trip to Japan, Dr. Fukada took Norman to Meidensha Electric Plant and introduced him to the plant manager. The Plant
Manager took them for daily production floor walk. The Manager told them that he walked the plant twice a day and that it was
the most valuable part of this job…

Impressed the most to Norman was..it was the most valuable part of this job.

The Plant select different theme for every walk and always drop by to the selected section and question the supervisors their
current performance and way of improvement. He listened attentively. In fact, this is a learning exercise for the manager. He then
share what he learned from the previous section to the next as he walked through the plant. He will write a short memo on what
he learned and post it for others to see. Lastly, he will definitely follow up to see the progress was made.

This is the way urged by Taiichi Ohno, a creator of Toyota Production System (TPS). A Manager shall always walk through the
plants and observe himself the real situation and find way of improvement. A good manager will never be a AIRCON MANAGER.

The recognition

Norman Bodek said “ One day I called Dr. Shingo Shigeo and asked him, which one of his clients, in his opinion, had the very
best factory in all Japan. Without hesitation, he said it was Matsushita (Panasonic) Washing Plant in Shizuoka…On visiting the
manufacturing plant, I noticed the punch presses, which was applying Dr. Shingo’s quick die changing techniques and I was
shown many poka-yoke devices invented by employees to absolutely prevent defects from occurring. Beside each poka-yoke was
card explaining its purpose, and who had invented it..”

What the management trying to do is to show appreciation to employees of their participation in continual improvement or called
as kaizen. Put aside the card, do you really spend time to listen to your employees’ feedback….

Photo from www.panasonic.co.jp

TOYOTA PERCEPTS,
the percepts for
everyone

1. Be contributive to the development and welfare of the country by working together,
regardless of position, in faithfully fulfilling your duties.

2. Be at the vanguard of the times through endless creativity, inquisitiveness and
pursuit of improvement.

3. Be practical and avoid frivolity.

4. Be kind and generous; strive to create a warm, homelike atmosphere.

5. Be reverent, and show gratitude for things great and small in thought and deed.

Info. from www.toyota.co.jp

Production
Planning

At most of the American Plants, the whistle would blow at the end of each work day
signaling the end of shift. In Japan, often the workers know what they have to finish
the production schedule for their shift and either they would finish early or stay a few
minutes later. At many of the Japanese plants, we would see the daily production. The
worker then knew if they were leaving early or late. It was an excellent motivation to
keep people focused on the job...Norman Bodek.

Freedom to Voice Contrary Opinions

According to Emi Osono, Norihiko Shimizu and Hirotaka Takeuchi, a six years research done on Toyota’s Culture said, “ The organization
should also be open to criticism and contradiction for the nerve system to function properly. This means everyone has to feel free to voice
contrary opinions to top management and headquarters. At Toyota, employees do not blindly follow their bosses’ orders, even those from
top management.”

They added, “ Toyota current President, Katsuaki Watanabe recalled how he came up the ranks, always fighting with his bosses. “ Pick a
friendly fight or you may ended up with a compromise. If that happen, there is no speed and no progress.”

Each individual in Toyota is expected to act according to what that person thinks is right. Authority, responsibility, and accountability rest
with the person, not a title or years of seniority. This a cultural remnant of the famous Toyota Production System ( TPS) practice of jidoka.
Employee has the power to pull the andon cord bringing the entire assembly line to a halt if they see something that is not up to standard.
Machines also stop the line when they detect abnormalities in excess of a certain level.

Title and rank are irrelevant in discussions of quality. Confronting your boss is acceptable. Bringing bad news to the boss is encouraged.
Ignoring the boss is excused in the process of coming to the right decision.

Obeya Room

Toyota has found that one of the best ways to create an open and flat environment is to have everyone work together in a large room with
no partitions. The large-room concepts or obeya originated in Japan because of a perennial shortage of office space. Individuals
representing the different functional groups on the production preparation team such as technology, production, procurement, logistic ,
marketing, and accounting, were assembled into large room to foster open communication and teamwork. To enhance communication and
teamwork, the team posted information about the project on the walls of a dedicated “situation room” obeya for everyone to see, in a
process known as mieruka, or visualization.

Accordingly to Hiroshi Nakagawa, Executive Managing Coordinator of IMV Project Office at Toyota Motor Thailand,

One young Thai Employee suggested that we put all this information on our server so that it could be accesses at the click of a mouse,
Even though this was possible, we still insisted that everything be posted on the walls. If people have to start up their computers and strike
a few keys to access information, they won’t bother, and the information won’t be shared. People often give up simply in the process of
looking for information.

(Source from Extreme Toyota)