Contents

1. INTRODUCTION ........................................................................................................................................ 1
1.1 Automotive industry overview.............................................................................................................. 1
1.2 Lean manufacturing .............................................................................................................................. 1
1.3 Kanban .................................................................................................................................................. 2
1.4 Just in Time (JIT) .................................................................................................................................. 2
1.5 About TOYOTA ................................................................................................................................... 3
1.6 Company strategy: The Toyota way ..................................................................................................... 3
CASE STUDY ...................................................................................................................................................... 4
2. DISCUSSION ............................................................................................................................................... 5
2.1 Integrating Lean Manufacturing and Kanban ............................................................................................. 5
2.1.1 Advantages of Kanban ......................................................................................................................... 5
2.2 Maintaining JIT by the Kanban System ...................................................................................................... 5
2.3 Information via Kanban .............................................................................................................................. 6
2.4 Kanban 6 Rules ..................................................................................................................................... 7
2.5 JIT in Toyota ......................................................................................................................................... 8
2.6 Kaizen ................................................................................................................................................... 8
3. CONCLUSION ............................................................................................................................................. 9
3.1 limitations ................................................................................................................................................... 9
3.2 Recommendations ....................................................................................................................................... 9
4. REFERENCE .................................................................................................................................................. 10

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Case study 01: Lean Manufacturing Case Study with Kanban
System Implementation

Company: Toyota Motor Corporation

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 1. INTRODUCTION

1.1 Automotive industry overview

The automobile industry, the business of producing and selling self-powered vehicles, includes
complete passenger automobiles, trucks, commercial cars and buses, and special purpose motor
vehicles. By enabling consumers to commute long distances to work, shopping, and entertainment, “the
auto industry has encouraged the development of an extensive road system, made possible the growth
of suburbs and shopping centers around major cities, and played a key role in the growth of ancillary
industries, such as the oil and travel businesses. The auto industry has become one of the largest
purchasers of many key industrial products, such as steel. The large number of people the industry
employs has made it a key determinant of economic growth.

1.2 Lean manufacturing

Lean means manufacturing without waste. Waste (“muda” in Japanese) has seven types: waste from
overproduction, waste of waiting time, transportation waste, inventory waste, processing waste, waste
of motion, and waste from product defects. Despite the wide knowledge and available resources, many
companies are struggling to stay “lean” .The goals of lean manufacturing are to reduce waste in human
effort and inventory, reaching the market on time, and managing manufacturing stocks that are highly
responsive to customer demand while producing quality products in the most efficient and economical
manner . The concept of Lean Thinking (LT) originated from Toyota Production System (TPS) that
determined the value of any process by distinguishing value-added activities or steps from non-value-
added activities or steps; and eliminating waste so that every step adds value to the process. Lean
manufacturing focuses on efficiency, aiming to produce products and services at the lowest cost and as
fast as possible. For lean manufacturing, Kanban serves as a tool to control the levels of buffer
inventories in the production; in simpler terms to regulate production quantities. When a buffer reaches
its preset maximum level, the upstream machine is directed to stop producing that part type. Hence, in
the manufacturing environment, Kanban are signals used to replenish the inventory of items used
repetitively within a facility.
Key tools and techniques within the ‘lean’ system includes:
 Kanban
 5 S’s
 Visual control
 Poke yoke
 SMED (single minute exchange of dies

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 1.3 Kanban

In the late 1940s, Toyota found a better engineering process from an unlikely source: the supermarket.
They noticed that store clerks restocked a grocery item by their store’s inventory, not their vendor’s
supply. Only when an item was near sellout did the clerks order more. The grocers’ “just-in-time”
delivery process sparked Toyota engineers to rethink their methods and pioneer a new approach—a
Kanban system—that would match inventory with demand and achieve higher levels of quality and
throughput.
In simplest terms, by better communication through visual management. Kanban is an inventory
control system used in just-in-time manufacturing. It was developed by Taiichi Ohno, an industrial
engineer at Toyota, and takes its name from the colored cards that track production and order new
shipments of parts or materials as they run out. Kanban is Japanese for “visual signal” or “card.” Toyota
line-workers used a kanban (i.e., an actual card) to signal steps in their manufacturing process. The
system’s highly visual nature allowed teams to communicate more easily on what work needed to be
done and when. It also standardized cues and refined processes, which helped to reduce waste and
maximize value.

1.4 Just in Time (JIT)

In manufacturing, speed to market and costs of production can make or break a company. Just in time
(JIT) manufacturing is a workflow methodology aimed at reducing flow times within production
systems, as well as response times from suppliers and to customers. JIT manufacturing helps
organizations control variability in their processes, allowing them to increase productivity while
lowering costs. JIT manufacturing is very similar to Lean manufacturing, and the terms are often used
synonymously.
The just-in-time inventory system is a management strategy that aligns raw-material orders from
suppliers directly with production schedules. Companies use this inventory strategy to increase
efficiency and decrease waste by receiving goods only as they need them for the production process,
which reduces inventory costs. This method requires producers to forecast demand accurately.

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 1.5 About TOYOTA

Over the past 80 years Toyota, a Japanese company created and honed a production system that fostered
its ascension in the automotive industry. Furthermore, the concepts that fuel Toyota’s production
system extend beyond its manufacturing walls to the entire supply chain, creating a value chain where
every link is profitable with an unwavering focus on teamwork, communication, efficient use of
resources, elimination of waste, and continuous improvement. Toyota production system has propelled
it to become the world’s 2nd largest automobile manufacturer (Forbes, 2017), behind General Motors.
Toyota has experienced enduring success through its combination of world leading manufacturing
process. The Toyota production system, closely related to lean manufacturing, has become the paragon
for manufacturing across industries. The Toyota production system is widely recognized for its
groundbreaking techniques as it is considered to be the next stage in development of manufacturing
after mass production. Toyota’s supply chain structure and relations with suppliers has become a source
of competitive advantage.

1.6 Company strategy: The Toyota way

Toyota's management philosophy has evolved from the company's origins and has been reflected in the
terms "Lean Manufacturing" and Just in Time Production, which it was instrumental in developing.
Toyota's managerial values and business methods are known collectively as the Toyota Way. In April
2001, Toyota adopted the "Toyota Way 2001", an expression of values and conduct guidelines that all
Toyota employees should embrace. Under the two headings of Respect for People and Continuous
Improvement, Toyota summarizes its values and conduct guidelines with these five principles:
 Challenge
 Kaizen (improvement)
 Genchigenbutsu (go and see)
 Respect
 Teamwork
According to external observers, the Toyota Way has four components:
1. Long-term thinking as a basis for management decisions
2. A process for problem-solving
3. Adding value to the organization by developing its people
4. Recognizing that continuously solving root problems drives organizational learning.
The Toyota Way incorporates the Toyota Production System.

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CASE STUDY

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 2. DISCUSSION

2.1 Integrating Lean Manufacturing and Kanban

Kanban can help organizations control the rate of production by ensuring that materials are received only when
required - when they are demanded by the customer. Kanban allows manufacturers to visualize - and therefore
more effectively manage - how inventory flows through their systems.

Kanban is not an inventory control system by itself. Rather, it is a scheduling system that tells a company what
to produce, when to produce it, and how much to produce. Kanban cards play an important role in the
implementation of JIT by serving as visual aids that trigger action. It is its very nature that makes it a suitable
element in implementing JIT. Kanban is used as an indicator of demand that it immediately signals to the whole
of the supply chain.

Integrating JIT and Kanban helps organizations reduce risk by fine-tuning inventory demand and requirement
processes. Using a hybrid JIT Kanban system can help manufacturers maintain greater control over their
inventory, while improving operational efficiency and productivity.

2.1.1 Advantages of Kanban

Kanban is easy to learn and understand the methodology. It improves the workflow and minimizes the time
cycle. Some major advantages are listed here:

 Kanban methodology increases the process flexibility.

 It reduces the wastes from the process.
 Kanban is easy to understand the methodology.
 It improves the delivery flow.
 It reduces the time cycle of the process.

2.2 Maintaining JIT by the Kanban System

In the Toyota Production System, the kanban system is supported by the following:
• Smoothing of production

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• Standardization of jobs
• Reduction of setup time
• Improvement activities
• Design of machine layout
• Autonomation

Many people incorrectly call the Toyota Production System a kanban system. Toyota Production System makes
products; the kanban system manages the JIT production method. In short, the kanban system is an
information system which harmoniously controls the production quantities in every process. Unless the various
prerequisites of this system are implemented perfectly (e.g., design of processes, standardization of
operations, and smoothing of production), then JIT will be difficult to realize, even when the kanban system is
introduced. A kanban is a card that is usually placed in a rectangular vinyl envelope. Two kinds are mainly used:
the withdrawal kanban and the production ordering kanban. A withdrawal kanban details the quantity which
the subsequent process should withdraw, while a production-ordering kanban shows the quantity which the
preceding process must produce.

2.3 Information via Kanban

These cards circulate within Toyota factories, between Toyota and its many cooperative companies, and within
the factories of cooperative companies. In this manner, the kanban can convey information on withdrawal and
production quantities in order to achieve JIT production.

Fig : flow of 2 kanban

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Within the production system two types of kanban flows
1. Production instruction kanban
2. Parts retrieval kanban
In the figure to produce product A firstly, production instruction kanban A is removed when an operator
retrieve parts. Then, only the exact number of parts indicate on the kanban are produced. Finally the
kanban is attached to the newly produced parts, ready for the next process.
In the next process the parts retrieval kanban is removed when the operator uses the parts, then the
operator carries the kanban to retrieve replacements parts, next the operator removes the production
instruction kanban and replace it with a parts retrieval kanban. Finally the parts displaying the parts
retrieval kanban are transported to the next level.

2.4 Kanban 6 Rules

To ensure a proper setup of Kanban in the workplace, Toyota has provided us with six rules for an
effective Kanban system:

1. The Kanban system ensures that precise amounts are being withdrawn, as specified by the
settings that your business works to and is being asked for. As Kanban runs on a Pull planning
mechanism, it’s vital that only what is needed is ordered and then processed to ensure extremely
efficient costs;
2. No items should ever be produced or moved to a new group outside of the Kanban system pre
established flow; it has to be the key process in everything, and it always has to be up-to-date
with the latest changes and additions to the service. A failure to do so can make things harder
to manage for other members of the team, and limit the chances of success later on down the
line;
3. The supplier is expected to produce items in the precise levels that are being asked for by the
Kanban system; it should display and detail everything needed for each process so that no
wastage occurs and to make sure that each member of the team is keeping up with the requires
resources for every project being undertaken;
4. Every process or task created and/or updated should be carried out with a Kanban Card
alongside it – this means it will have detailed, intricate information on the card that comes along
with everything that is being included with the process. This should never be neglected as it
ensures safe, clear instructions for everything;
5. Any incorrect or damaged resources will never be sent on to the next process; they will be
returned and re-determined in the right phase; at the very start. This is very important as it

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 ensures there is never an excess on any project, always delivering precision in every single
event;
6. Kanban systems will be reduced over time to minimize the amount of inventory space being
used and to also find any gaps in the plan along the way to maximize productivity and ensure
the process can be run as smoothly as it possibly can.

2.5 JIT in Toyota

Big manufacturing companies look towards implementing JIT in order to improve their productivity
consistently by making only "what is needed, when it is needed, and in the amount needed. Producing quality
products efficiently through the complete elimination of waste, inconsistencies, and unreasonable
requirements on the production line. In order to deliver a vehicle ordered by a customer as quickly as possible,
the vehicle is efficiently built within the shortest possible period of time by adhering to the following:

1. When a vehicle order is received, a production instruction must be issued to the beginning of the
vehicle production line as soon as possible.
2. The assembly line must be stocked with required number of all needed parts so that any type of
ordered vehicle can be assembled.
3. The assembly line must replace the parts used by retrieving the same number of parts from the parts-
producing process (the preceding process).
4. The preceding process must be stocked with small numbers of all types of parts and produce only the
numbers of parts that were retrieved by an operator from the next process.

2.6 Kaizen

Kaizen is a Japanese term for incremental improvement process. Through Kaizen key members of the
production process collectively come up with ways to improve quality, efficiency, and the work environment.
By indoctrinating employees into the improvement frame of mind, employees are able to identify
opportunities for improving their jobs.

The foundation of kaizen method has 5S framework . 5S is a system for organizing spaces so work can be
performed efficiently, effectively, and safely. This system focuses on putting everything where it belongs and
keeping the workplace clean, which makes it easier for people to do their jobs without wasting time or risking
injury.

1. Sort (Seiri)- Removing all unnecessary items from the workplace

2. Set In Order (Seiton)- Creating a specific location for everything
3. Shine (Seiso)- Clean the work area
4. Standardize (Seiketsu)- Standardize the best practice within the workplace
5. Sustain (Shitsuke)- Never slip back into the old ways

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 3. CONCLUSION

Taking everything into account, the Kanban framework actualized in this assembling organization was
observed to be sufficient because of the numerous advantages, for example, the operational costs,
squanders, scraps and misfortunes were limited, over creation stocks were controlled with adaptable work
stations. The variables that ruin SME organizations from executing the Kanban framework are recognized as
incapable stock administration, absence of provider investment, absence of value enhancements and quality
control and absence of worker interest and best administration duty. Ramifications of this examination
recommend that further research should be done on additional SMEs in order to have more indisputable
discoveries on Kanban usage and obstructions looked by the SME business visionaries. Other than that, the
organization must create standard working techniques for all procedures engaged with creation line by
enhancing the current arrangement with the end goal to make generation process more effective in future
and it very well may be executed by other assembling organizations.

3.1 limitations

Most of the disadvantages of Kanban is due to misuse or mishandling of Kanban board. Some common
disadvantages are given:

1. Less Effective in Shared-Resource Situations, Infrequent orders may render the kanban process
ineffective
2. Product Mix or Demand Changes May Cause Problems, As the kanban system assumes stable,
repetitive production plans.
3. Outdated Kanban board can lead to issues in the development process.
4. Sometime Kanban team make the board overcomplicate.
5. Lack of timing is another disadvantage because there is no timeframes are associated with each phase.

3.2 Recommendations

1. Each production line should have their separate signaling cards

2. Kanban should try to increase its efficiency in push strategy as well.
3. Kanban boards should be fully updated.
4. The board should be clear n simple for others to understand.
5. Looking at its numerable advantages, companies should move towards establishing Lean
manufacturing and kanban system as well.

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 4. REFERENCE

https://leankit.com/learn/kanban/how-to-integrate-jit-and-kanban/
Monden, Y., 1981. Adaptable Kanban system helps Toyota maintain just-in-time production. Industrial
Engineering, 13(5), p.29.

Rahman, N.A.A., Sharif, S.M. and Esa, M.M., 2013. Lean manufacturing case study with Kanban system
implementation. Procedia Economics and Finance, 7, pp.174-180.

Monden, Yasuhiro. Toyota production system: an integrated approach to just-in-time. Productivity Press, 2011.

https://www.toyota-global.com/company/vision_philosophy/toyota_production_system/just-in-
time.html
https://www.processexcellencenetwork.com/lean-six-sigma-business-performance/articles/what-is-
kanban
Brown, M., 2005. Toyota Production System & Supply Chain.

Iyer, A.V., Seshadri, S. and Vasher, R., 2009. Toyota supply chain management: A strategic approach to
Toyota's renowned system (Vol. 240). New York, NY: McGraw-Hill.

Papadopoulou, T.C., 2013. Application of lean scheduling and production control in non-repetitive manufacturing
systems using intelligent agent decision support (Doctoral dissertation, Brunel University School of Engineering
and Design PhD Theses).

SESHADRI, S. and VASHER, R., A STRATEGIC APPROACH TO THE PRINCIPLES OF TOYOTA’S

RENOWNED SYSTEM.

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