Lean Manufacturing

Toyota Production System

By
Hemant Pundle
Definition of Lean

“A philosophy of manufacturing based

on planned elimination of waste and
continuous improvement of productivity
……”
Definition of Lean
“The primary elements of Lean are:
 to have only the required inventory when
needed;
 to improve quality to zero defects;
 to reduce lead times by reducing setup
times, queue lengths, and lot sizes;
 to incrementally revise the operations
themselves;
 and to accomplish these things at minimum
cost”.
Lean Synonyms
 IBM - Continuous Flow Manufacturing
 HP - Stockless Production
- Repetitive Manufacturing System
 GE - Management by Sight
 Motorola - Short Cycle Manufacturing
 Japanese - The Toyota System
 Boeing - Lean Manufacturing
Definition of Lean
“A philosophy of production that emphasizes
the minimization of the amount of all the
resources (including time) used in the various
activities of the enterprise. It involves:
 … identifying and eliminating non-value-adding
activities,
 … employing teams of multi-skilled workers,
 … using highly flexible, automated machines”
Time-Based Competition
 It is no longer good enough for firms to be
high-quality and low-cost producers.
 To succeed today, they must also be first in
getting products and services to the customer
fast.
 To compete in this new environment, the
order-to-delivery cycle must be drastically
reduced.
 JIT is the weapon of choice today in reducing
the elapsed time of this cycle.
Lean Manufacturing
Systematic approach of identifying &
eliminating waste.
Improved Quality, Higher throughput,
Better efficiency.
To do more & more with less & less –
Less men, less equipment, less time, less
space, less material.
 Lean Manufacturing
Traditional System of Manufacturing –
- Production based on demand forecast.
- Storage of Material & Components till required
for processing.
- Actual production with stress on large batches.
- Storage of components required for assembly.
- Assembly, final inspection & packaging.
- Storage of finished goods in company Godowns;
Zonal depots ; retail outlets.
 Traditional View of Manufacturing
 A key objective was to fully utilize production capacity so
that more products were produced with fewer workers
and machines.
 This thinking led to large queues of in-process inventory
waiting at work centers.
 Large queues meant workers and machines never had to
wait for product to work on, so capacity utilization was
high and production costs were low.
 This resulted in products spending most of their time in
manufacturing just waiting, an arrangement that is
unacceptable in today’s time-based competition.
JIT Manufacturing Philosophy
 The main objective of JIT manufacturing is to
reduce manufacturing lead times.
 This is primarily achieved by drastic
reductions in work-in-process (WIP).
 100% capacity utilization is not the
predominant objective.
 The result is a smooth, uninterrupted flow of
small lots of products throughout production.
Lean Manufacturing
Weakness of traditional system -
- Risk related to forecasts.
- Long overall business cycle.
- Buffers in various stages leading to slackness in

the system.
- Encourages departmental focus.
 Lean Manufacturing
 Wastes associated with traditional system –
 Waste due to waiting time of men, machine,
material
 Waste due to un-necessary movement of
material.
 Waste due to In-process inventory.
 Waste due to producing defective goods.
 Lean Manufacturing
 Lean manufacturing system –

Produce against order – As per Takt time
 JIT receipt of material
 Pull system
 Lean Manufacturing
 Key Principals –
 Minimize Material handling.
 Handle products once only.
 Minimize distance – Create cells, Avoid walking,
carrying.
 Minimize strain – Ergonomic design, Hydro
pneumatic clamping.
 Lean Manufacturing
 Key Principals –
 Minimize clutter – parts, tools, gauges, products
at designated places, 5S.
 Minimize storage.
 Maximize utilization of – People, space,
equipment.
 Maximize flexibility : Personal – Multi skilling
Equipment – SMED.
 Lean Manufacturing
 Key Principals –
 Maximize visibility – Quality spot problem.
 Maximize communication –

Sunrise meetings,
 Daily plan Vs achieved.
The Toyota Way
 Using operational excellence as a
strategic weapon.
 The constant improvement or so to say
the improvement based on action, one
can rise to higher level.
The Toyota Way
 Toyota way is deceptively simple. It can
be too easy to read on the simple
principle & say “sure I know that …”.
 Rather than saying “I got it”; you will be
encouraged to listen; understand;
reflect … & learn.
The Toyota Way
 Toyota way is about “Tacit” knowledge;
not explicit procedural knowledge.
“Tacit” knowledge is the craft type of
knowledge that you gain from
experience & reflection.
 Toyota always starts with the goal of
generating value for the customer,
society & the economy.
The Toyota Way
 Toyota’s impact on the world has gone
beyond making money. It has even gone
beyond making excellent vehicles people
can enjoy driving. Toyota has contributed a
new paradigm of manufacturing; “WCM”.
 Evaluation of manufacturing beyond Ford’s
mass production. And if that’s not enough’
there is a revolution in service industry
working to apply lean thinking to drive out
waste; including banks, insurance, hospitals.
The Toyota Way
 The tools are just tools that can be
picked by any company. A gifted
carpenter who leaves his tools lying
around so some one else can steal
them; does not have to worry about
being replaced by an amateur who finds
his tools.
Toyota Production System
 Philosophy. ( Long term thinking)
 Process (Eliminate waste).
 People & partner ( Respect, challenge
& grow them).
 Problem solving ( Continuous
improvement & learning).
Toyota Production System
Philosophy
 Base Management decision on long
term philosophy; even at the expense of
short term financial goals.
Toyota Production System
Philosophy
 Will Toyota still use JIT if there is a major
disaster that shuts down supply chain.
 Doesn’t Toyota lay off employees when
business is bad.( e.g. TABC –Toyota Auto
Body Inc. California; plant in California
converted to manufacturing trucks and 4
cylinder engines)
 If Toyota does not lay off employees, what do
they do with them?
Toyota Production System
(TPS)
 Definition: The production system developed by
Toyota Motor Corporation to provide best quality,
lowest cost, and shortest lead time through the
elimination of waste.
 TPS is comprised of two pillars, Just-in-Time and
Jidoka (autonomation) , and is often illustrated with
the "house" shown on the next slide.
 TPS is maintained and improved through iterations of
standardized work and kaizen (continuous
improvement), following Plan–Do-Check-Act (PDCA
Cycle from Dr. Deming), or the scientific method.
House of Toyota
 Introductory Quotation

Waste (“muda” in Japanese) is

‘anything other than the minimum
amount of equipment, materials,
parts, space, and worker’s time,
which are absolutely essential to
add value to the product.’
— Shoichiro Toyoda
Founder, Toyota
© 1995 Corel Corp.
Toyota Production System
Process – Eliminate Waste.
 Create process flow to surface problems.
 Use pull system to avoid over production.
 Level out the production (Heijunka).
 Stop when there is a quality problem (Jidoka).
 Standardize task for continuous improvement.
 Use visual controls, so no problems are
hidden ( e.g. Andon).
 Use only reliable thoroughly tested
technology. ( e.g. CAD vs. CATIA –
Computer aided three dimensional interactive
application).
 What Does Just-in-Time Do?
 Attacks waste
 Anything not adding value to the product

From the customer’s perspective
 Exposes problems and bottlenecks
caused by variability
 Deviation from optimum
 Achieves streamlined production
 By reducing inventory
 Lowering Inventory
Reduces Waste

Work in process inventory level

(hides problems)

Unreliable Vendors Capacity Imbalances

Scrap
Push versus Pull

 Push system: material is pushed into

downstream workstations regardless of
whether resources are available

 Pull system: material is pulled to a

workstation just as it is needed
TPS – Eliminate Waste – Pull System
 There are three primary elements of pull that
distinguish it from push:
 1 Defined – A defined agreement with specified limits
pertaining to volume, product mix & sequence of
model mix between the two parties (supplier &
customer).
 2 Dedicated – Items that are shared between the two
parties must be dedicated. These include resources,
locations, containers .. Etc.
 3 – Controlled – Simple control methods, which are
visually apparent, maintain the defined agreement.
Continuous Flow

 Producing and moving one item at a time (or

a small and consistent batch of items)
through a series of processing steps as
continuously as possible, with each step
making just what is requested by the next
step.

It is also called the one-piece flow, single-

piece flow, and make one, move one.
Eight Types of Waste
 Over production
 Over staffing, storage , transportation.
 Waiting
 Workers waiting for automatic machine to
complete cycle.
 Waiting for tools, parts supply, stock out,
lot processing delays, breakdowns,
capacity bottlenecks.
Eight Types of Waste
 Unnecessary transport
 Long distance, Huge quantity.
 Over processing or Incorrect
processing.
-Inefficient processing due to poor tool,
poor process design, causing unnecessary
motion & defects
-Waste is generated when providing higher
quality product than is necessary.
Eight Types of Waste
 Excess inventory
 Longer lead time, obsolescence, damage in
transit, storage transportation costs.
 Extra inventory hides problems such as late
deliveries, equipment down time, long set up time.
 Unnecessary Movements
 Wasted motions employees have to perform such
as looking for, reaching for, stacking parts.
Eight Types of Waste
 Defects
 Rework, Reject, Inspection.
 Unused Employee Creativity
 Ideas, Skills, Improvement opportunities.
Eliminate waste –1, 2
1. Form Cells 2. Reduce Setup
Sequential Externalize setup
operations, to reduce down-
decouple operator time during
from machine, changeover,
parts in families, increases flexibility
single piece flow
within cell
Eliminate waste – 3, 4
3. Integrate quality 4. Integrate preventive
control maintenance
Check part quality worker maintains
at cell, poke-yoke, machine , runs
stop production slower
when parts are bad
Eliminate waste – 5, 6
5. Level and balance 6. Link cells- Kanban
Produce to Takt Create “pull”
time, reduce batch system –
sizes, smooth “Supermarket”
production flow System
 Kanban
 Japanese word for card
 Pronounced ‘kahn-bahn’ (not ‘can-ban’)
 Authorizes production from downstream
operations
 ‘Pulls’ material through plant
 May be a card, flag, verbal signal etc.
 Used often with fixed-size containers
 Add or remove containers to change
production rate
Eliminate waste – 7, 8
7. Reduce WIP 8. Build Vendor
Make system program
reliable, build in Propagate low WIP
mechanisms to self policy to your
correct vendors, reduce
vendors, make on-
time performance
part of expectation
Production Line Balancing
Jidoka
 Jidoka = Autonomation = Automation with “human” intelligence.

 Sakichi Toyoda, founder of the Toyota group of companies,

invented the concept of Jidoka in the early 20th Century by
incorporating a device on his automatic looms that would stop
the loom from operating whenever a thread broke. Dr. Shigeo
Shingo then developed his idea further.

 This enabled great improvements in quality and freed people up

to do more value creating work than simply monitoring
machines for quality (separating people’s work and machine’s
work).

 Eventually, this simple concept found its way into every

machine, every production line, and every Toyota operation.
Quality At The Source
 Doing it right at the first time.
 Jidoka allows workers to stop
production line
 Andon lights signal quality problems
 Under capacity scheduling allows for
planning, problem solving &
maintenance
 Visual control makes problems visible
 Poka-yoke prevents defects
Jidoka Techniques
 Poka-yoke (mistake or error proofing)

 A form of device for building-in quality at each production

process.

 This device may take many shapes and designs.

 Typical types of Pokayoke are sensors, proximity switches,

stencils, light guards and alignment pins. Simple circuitry is
usually used to operate these electrical error proof devices
as they should be of low cost and simple design.

 Goal: Finding defects before they occur = Zero Defects

 Statistical Quality Control (SQC): Finding defects after they

occur

 Visual management including using Andon Lamp

Cost Vs Defects
Ref. “Machine that Changed the World” Womack, Jones and Roos
The Importance of Standardized Work:

Without it, all improvement efforts using Kaizen to eliminate

waste (muda) are not sustainable. You will go back to the
original position before Kaizen.
 Standard Work

When manpower, equipment, and materials are used in the most efficient
combination, this is called Standard Work.
There are three elements to Standard Work:
1) Takt Time
2) Work Sequence
3) Standard Work-in-Process

Once a Standard Work is set, performance is measured and continuously

improved.
Standardized processes &
Procedures (SOP)
 Standardized work evokes images of
industrial engineers with stop watches
terrorizing the workforce by squeezing out
every second of productivity.
 It brings to the mind a highly regimented
existence. It is bureaucracy run rampant
where human will & creativity are wiped out &
people become robots.
Standardized processes &
Procedures (SOP)
 Standardization is starting point for
continuous improvement.
 Standardization is the key to create
consistence performance.
 It is a part of ongoing activity of
identifying problems, establishing
effective methods & defining the way
those methods are performed.
Standardized processes &
Procedures (SOP)
 It is driven by the people; not done to the
people.
 Focus on creating truly efficient process that
will deliver consistent result (And not on work
measurement – F. W. Taylor).
 This seemingly simple method is deceivingly
difficult for other companies to mimic.
Toyota Production System
People and Partners.
 We often think respecting people mean
creating stress free environment that
provides lots of amenities & is
employee friendly. But many of the tools
of Toyota Production System aim to
raise problems to surface; creating
challenging environment; that force
people to think & grow.
Toyota Production System
People and Partners.
 Grow leaders who live the philosophy
( e.g. Engineer working on Lexus).
 Respect, develop and challenge your
people and team ( e.g. development of
hybrid Prius).
 Respect, challenge and help your
suppliers.
Suppliers / Partners
 Respect your extended network of partners &
suppliers by challenging them & helping them
improve.
 Hands on and more driven to improve their
own system first & then showing how that
improves the supplier.
 Level the production ( Heijunka) to make it
easier on supplier.
 Come measure the work to get cost out of the
system. ( vs. Competitive biding / e-biding).
Suppliers / Partners
 Find solid partners & grow together to mutual
benefit in the long term.
 Logistics – Cross docking or Break bulk
facility.
 Partnering with supplier while maintaining
internal capability.
 Learn with the supplier core knowledge &
technology ( e.g. IGBT – Insulated Gate Bipolar
Transistor – in hybrid vehicle).
 SIC ( Sick supplier club) help from OMCD
( Operations Management Consulting
Division).
Toyota Production System
Problem Solving
 Continual Organizational learning
through Kaizen.
 Go see for yourself to thoroughly
understand the situation ( Genchi
Gembatsu).
 Make decision slowly by consensus,
thoroughly considering all options.
Implement rapidly.
 GEMBA
 GEMBA" is a Japanese word meaning "real place",
where the real action takes place. In business,
GEMBA is where the value-adding activities to satisfy
the client are carried out.
 Manufacturing companies have three main activities
in relation to creating money: developing (designing),
producing and selling products. In a broad sense,
GEMBA means the sites of these three major
activities.
 In a narrower context, however, GEMBA means the
place where the products are made.
 The term is often used to stress the that real
improvement can only take place when there is a
shop-floor focus on direct observation of current
conditions where work is done, e.g., not only in the
engineering office.
Five Golden Rules of Gemba
 Masaaki Imai promoted Kaizen to people outside Japan through his two
highly acclaimed books:

1. Kaizen: The Key To Japan's Competitive Success.

2. Gemba Kaizen: A Commonsense, Low-Cost Approach to
Management

 He preaches the Five Golden Rules of Gemba , the first of which is

'When a problem (abnormality) arises, go to gemba first'. So what's
gemba? It's the shop floor, or equivalent. Once there, you apply
Golden Rule Two: check with gembutsu (relevant objects).
Three: take temporary counter-measures on the spot.
Four: find the root cause.
Five: standardize to prevent recurrence.
Standardization is the managing part of getting good gemba. You also
need good housekeeping (Imai is very keen on cleaning machines) and
muda, the elimination of waste. But all hinges on getting away from
your desk. Obey the master Imai. GO TO GEMBA!
5Whys: Finding the root cause of
a problem.
 5 Whys analysis as an effective problem-solving technique. It is also used in Six
Sigma. Example:

 Why is our client unhappy? Because we did not deliver our services when we
said we would.

 Why were we unable to meet the agreed-upon timeline or schedule for delivery?
The job took much longer than we thought it would.
 Why did it take so much longer? Because we underestimated the complexity of
the job.

 Why did we underestimate the complexity of the job? Because we made a quick
estimate of the time needed to complete it, and did not list the individual stages
needed to complete the project.
 Why didn't we do this? Because we were running behind on other projects. We
clearly need to review our time estimation and specification procedures.
Plan-Do-Check-Act
(PDCA/Shewart /Deming Cycle)
 Plan: Go to the real place/factory flow (gemba),
obverse the real thing/product (gembutsu), get the
real fact (genjitsu). Focus on reducing response time,
lead times, exposing wastes in your process
 Do: Conduct Kaizen. Create models of excellence so
others can aspire to. Flow everything: product,
information material replenishment, services.
 Check for direction by aligning activities with long-
term business direction
 Act: Take actions to sustain and accelerate
improvement activities
Source: www.leanbreakthru.com
 Minimize production disruptions
FR-P1
Minimize production disruptions

DP-P1
Predictable production resources (people, equipment, info)

FR-P11 FR-P12 FR-P13 FR-P14

Ensure Ensure Ensure Ensure
availability of predictable predictable material
relevant equipment worker output availability
production output
information

DP-P11 DP-P12 DP-P13 DP-P14

Capable and Maintenance of Motivated Standard
reliable equipment work -force material
information reliability performing replenishment
system standardized system
work

FR-P121 FR-P122 FR-P131 FR-P132 FR-P133 FR-P141 FR-P142

Ensure that Service Reduce Ensure Do not interrupt Ensure that Ensure proper
equipment is equipment variability of availability of production for parts are timing of part
easily regularly task completion workers worker available to the arrivals
serviceable time allowances material
handlers

DP-P121 DP-P122 DP-P131 DP-P132 DP-P133 DP-P141 DP-P142

Machines Regular Standard work Perfect Mutual Relief Standard work Parts moved to
designed for methods to
preventative Attendance System with in process downstream
serviceability provide
maintenance repeatable
Program cross-trained between sub - operations
program processing time workers systems according to
pitch
“What Works at Work:
Overview and Assessment”,
 Conclusion 1; “Bundling”
Innovative human resource management
practices can improve business productivity,
primarily through the use of systems of
related work practices designed to enhance
worker participation and flexibility in the
design of work and decentralization of
managerial tasks and responsibilities.
“What Works at Work:
Overview and Assessment”,
 Conclusion 2; “Impact” 
New Systems of participatory work
practices have large economically
important effects on the performance of
the businesses that adopt the new
practices.
“What Works at Work:
Overview and Assessment”,
 Conclusion 3; “Partial Implementation”
A majority of contemporary U.S. businesses now
have adopted some forms of innovative work
practices aimed at enhancing employee participation
such as work teams, contingent pay-for-performance
compensation, or flexible assignment of multiskilled
employees. Only a small percentage of businesses,
however, have adopted a full system of innovative
work practices composed of an extensive set of these
work practice innovations.
“What Works at Work:
Overview and Assessment”,
 Conclusion 4; “Barriers to Implementation”
The diffusion of new workplace innovations is limited,
especially among older U.S. businesses. Firms face a number
of obstacles when changing from a system of traditional work
practices to a system of innovative practices, including: the
abandonment of organization change initiatives after limited
policy changes have little effect on performance, the costs of
other organizational practices that are needed to make new
work practices effective, long histories of labor-management
conflict and mistrust, resistance of supervisors and other
workers who might not fare as well under the newer practices,
and the lack of a supportive institutional and public policy
environment.
Toyota Production System
 What makes Toyota stand out is not
any of the individual elements …. But
what is important is having all the
elements together as a system. It must
be practiced every day in a very
consistent manner.