The Toyota Production

System
HighQualityandLowCost
COST VS
DEFECTS

Readings;
JamesWomack,DanielT.JonesandDanielRoos,
TheMachinethatChangedtheWorld,1990,Ch3and4
KennethN.McKay,TheEvolutionofManufacturingControl
WhatHasBeen,WhatWillBeWorkingPaper032001
MichaelMcCoby,IsThereaBestWaytoBuildaCar?
HBRNovDec1997

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Consumer Reports

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Toyota vehicle sales

Ward's U.S. Light Vehicle Sales Summary 2002

Septem ber
Units

Domestic Cars
Import Cars
Total Cars
Domestic Light Trucks
Import Light Trucks
Total Light Trucks
Domestic Light Vehicles
Import Light Vehicles
Total Light Vehicles

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Current

Year-Ago

431,496
170,554
602,050
545,865
75,999
621,864
977,361
246,553
1,223,914

481,318
158,897
640,215
573,329
75,575
648,904
1,054,647
234,472
1,289,119

January - Septem ber

% Share

DSR

Current Year-Ago

% Chg.

35.3
13.9
49.2
44.6
6.2
50.8
79.9
20.1
100.0

37.3
12.3
49.7
44.5
5.9
50.3
81.8
18.2
100.0

T.G.Gutowski 10/29

Vol
Current

Year-Ago

-2.6 4,594,203 4,865,569

16.7 1,708,780 1,566,286
2.2 6,302,983 6,431,855
3.5 5,769,260 5,621,805
9.3
798,656
711,178
4.2 6,567,916 6,332,983
0.7 10,363,463 10,487,374
14.3 2,507,436 2,277,464
3.2 12,870,899 12,764,838

% Chg.

-5.6
9.1
-2.0
2.6
12.3
3.7
-1.2
10.1
0.8

The Toyota Production

System
1.
2.
3.
4.
5.

Historical View
Performance measures
Elements of TPS
Six Eras of Manufacturing Practice
Difficulties with Implementation

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Three Major Mfg Systems

from 1800 to 2000

Machine tools, specialized machine tools, Taylorism, SPC, CNC,

CAD/CAM

1800

1900

Interchangeab
le Parts at U.S.
Armories
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Mass
Productio
n at Ford

T.G.Gutowski 10/29

2000
Toyota
Production
System
5

Key Elements for New Mfg

Systems
Element/
System

Need of
Society

Work
Enabling
Leader Resourc
Force
Technology
es
Motivatio
n

Interchang
e-able
Parts

Military

Yankee
Machine
Ingenuity Tools,

Division of
Labor

Roswel U.S.
l Lee/
Govt
John
Hall

Mass
Production

Transportatio
n

$5/day
Moving
Immigran Assembly
t
Line,etc

Henry
Ford

Earnings

Toyota
Production
System

Post
War

Jobs,
Security

Taiichi
Ohno

Japanese
Banks

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CNC,
Integration
of Labor
T.G.Gutowski
10/29

Q. By what method did

these new systems come
about?
A. Trail and Error

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History of the Development of the Toyota

Production System
ref; Taiichi Ohno
1945

1975

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The Toyota Production

System
1.
2.
3.
4.
5.

Historical View
Performance measures
Elements of TPS
Six Eras of Manufacturing Practice
Difficulties with Implementation

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Summary of Assembly Plant Characteristics, Volume

Producers, 1989
(Average for Plants in Each Region)
Performanc e:
Produc vitity (hours/Veh.)
Quality (assembly
defec ts/100 vehic les)
Layout:
S pac e (sq.ft./vehic le/yr)
S iz e of Repair Area (as %
of assembly spac e)
Inventories(days for 8
sample parts)
Work Forc e:
% of Work Forc e in Teams
Job Rotation (0 = none,
4 = frequent)
S uggestions/Employee
Number of Job Classes
Training of New Produc tion
Workers (hours)
Absenteeism
Automation:
Welding (% of direc t steps)
Painting(% of direc t steps)
Assembly(% of direc t steps)

Japanese

Japanese in

American in

in Japan

North America

North America

All Europe

16.8

21.2

25.1

36.2

60

65

82.3

97

5.7

9.1

7.8

7.8

4.1

4.9

12.9

14.4

0.2

1.6

2.9

69.3

71.3

17.3

0.6

3
61.6
11.9

2.7
1.4
8.7

0.9
0.4
67.1

1.9
0.4
14.8

380.3
5

370
4.8

46.4
11.7

173.3
12.1

86.2
54.6
1.7

85
40.7
1.1

76.2
33.6
1.2

76.6
38.2
3.1

S ourc e: IMVP World Assembly Plant S urvey, 1989, and J. D. Power Initial Quality S urvery, 1989

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Cost Vs Defects
Ref. Machine that Changed the World Womack, Jones and Roos

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The Toyota Production

System
1.
2.
3.
4.
5.

Historical View
Performance measures
Elements of TPS
Six Eras of Manufacturing Practice
Difficulties with Implementation

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How do you get this kind

of performance?
1. Womack, Jones and Roos
2. J T. Blacks 10 Steps
3. Demand Flow Technologys 9
Points

4. MSDD, D. Cochran and Students

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Womack Jones and Roos

Automation?

Yes, but.

DFM?

Probably

Standardized Production?

No!

Lean Characteristics?

Integration of Tasks
Identification and removal of defects
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Cost Vs Automation

Ref. Machine that Changed the World Womack, Jones and Roos

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J T. Blacks 10 Steps

Ref; JT. Black Factory with a Future 1991

1.
2.
3.
4.
5.
6.
7.
8.
9.

Form cells
Reduce setup
Integrate quality control
Integrate preventive maintenance
Level and balance
Link cells KANBAN
Reduce WIP
Build vendor programs
Automate

10. Computerize

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Demand Flow
Technologys
9 Points

1. Product Synchronization
2. Mixed Model Process Maps
3. Sequence of Events
4. Demand at Capacity
5. Operational Cycle Time
6. Total Product Cycle Time
7. Line Balancing
8. Kanbans
9. Operational Method Sheets
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Current Value Stream Map

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Future Value Stream Map

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Manufacturing System
Design Decomposition
ROI
(MSDD)
Sales

CostsInvestments

resolving problems
quality predictableoutputdelayreduction
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Lowerlevelactions
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J T. Black 1, 2
1. Form Cells
Sequential
operations,
decouple
operator from
machine, parts
in families,
single piece flow
within cell
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2. Reduce Setup
Externalize setup
to reduce downtime during
changeover,
increases
flexibility

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TPS Cell

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Standardized Fixtures

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J T. Black 3, 4
3. Integrate quality
control
Check part
quality at cell,
poke-yoke, stop
production when
parts are bad

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4. Integrate
preventive
maintenance
worker maintains
machine , runs
slower

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24

J T. Black 5, 6
5. Level and
balance
Produce to Takt
time, reduce
batch sizes,
smooth
production flow

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6. Link cellsKanban
Create pull
system
Supermarket
System

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25

J T. Black 7, 8
7.Reduce WIP
Make system
reliable, build in
mechanisms to
self correct

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8. Build Vendor
program
Propagate low
WIP policy to your
vendors, reduce
vendors, make
on-time
performance part
of expectation

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Manufacturing System
Design Decomposition
ROI
(MSDD)
Sales

CostsInvestments

resolving problems
quality predictableoutputdelayreduction
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27

Example from Cochran

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
availability of
relevant
production
information

Ensure
predictable
equipment
output

Ensure
predictable
worker output

Ensure
material
availability

DP-P11

DP-P12

DP-P13

DP-P14

Capable and
reliable
information
system

Maintenance of
equipment
reliability

Motivated
work -force
performing
standardized
work

Standard
material
replenishment
system

FR-P121

FR-P122

FR-P131

FR-P132

FR-P133

FR-P141

FR-P142

Ensure that
equipment is
easily
serviceable

Service
equipment
regularly

Reduce
variability of
task completion
time

Ensure
availability of
workers

Do not interrupt
production for
worker
allowances

Ensure that
parts are
available to the
material
handlers

Ensure proper
timing of part
arrivals

DP-P121

DP-P122

DP-P131

DP-P132

DP-P133

DP-P141

DP-P142

Perfect
Attendance
Program

Mutual Relief
System with
cross-trained
workers

Standard work
in process
between sub systems

Parts moved to
downstream
operations
according to
pitch

Machines
designed for
serviceability

Regular
preventative
maintenance
program

Standard work
methods to
provide
repeatable
processing time

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Some Basics Concepts of

TPS
1. Smooth Flow and Produce to Takt Time
2. Produce to Order
3. Make system observable and correct
problems as they occur

4. Integrate Worker Skills

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Two Examples;

1. Takt Time
2. Pull Systems

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Takt Time
to pace
production Available Time

Takt Time

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Product Demand

Calculate Takt Time per month,

day, year etc. Available time
includes all shifts, and excludes
all non-productive time (e.g.
lunch, clean-up etc). Product
demand includes overT.G.Gutowski 10/29
31
production for low yields etc.

Takt Time
Automobile Assembly Line; Available time =
7.5 hr X 3 shifts = 22.5 hrs or 1350 minutes
per day. Demand = 1600 cars per day. Takt

Time = 51 sec
Aircraft Engine Assembly Line; 500 engines
per year. 2 shifts X 7 hrs => 14 hrs/day X 250
day/year = 3500hrs.

Takt time = 7 hrs.

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Engines shipped over a 3 month

period at aircraft engine factory
B
engines shipped per week

12

month 2

month 1

month 3

10

0
7-Jun

15-Jun

23-Jun

30-Jun

7-Jul

15-Jul

24-Jul

31-Jul

7-Aug

15-Aug

24-Aug

31-Aug

Weeks

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Engines shipped over a 3 month

period at aircraft engine factory
C
7

engines shipped

0
may

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june

weeks

july

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august

34

On-time performance of
engine plants
100%

engines delivered

80%

late
late

60%

40%

on
time
on
time

20%

on
time

0%

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Push and Pull Systems

Machines

Parts
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Orders
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36

Push Systems

Order arrives at the front of the system and is produced in

the economical order quantity.
Q. How long did it take for the order to go through the
system?

Time = 0
Time = 1
Time = 2
Time = 3
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Time37
=4

Pull Systems-

The order arrives at the end of the line and is pulled out
of the system. WIP between the machines allows quick
completion.

Pros and Cons;

Pull can fill small orders quickly,
but must keep inventory for all
part types. Design can help here
but not in all cases.
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Comparison in delivery
times
If the process time per part is t, and
the batch size is n, it takes Nnt
time to process a batch through N
steps. To deliver one part it takes;
Nnt time from a push system plus
setup and transportation delays, and
t for a pull system.

See HP Video
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HP Video Results

Pushsystem(6)

Pull(3)

Pull(1)

Space

2Tables

2Tables

1Table

WIP

20

12

CycleTime

3:17

1:40

19sec

ReworkUnits

26

10

Qualityprob.

hidden

visible

visible

ProductionRate
L=W

6.1partsper
minute

7.2

12.6

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HP Video Results
Revisited
Pushsystem(6)
Pull(3)

Pull(1)

Space

2Tables

2Tables

1Table

WIP=L

20
6X=24

12
3X=12

4
1X=4

CycleTime=W

3:17
6t(3:20or2:00)

1:40
3t(1:40or40)

19sec(say20)
1t(50or20)

ReworkUnits
~WIP

26

10

Qualityprob.

hidden

visible

visible

ProductionRate
L=W

6.1partsper
minute

7.2

12.6
4/50/60=4.8

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advantages of the pull

systems?
continuous (synchronous) flow
single piece flow capabilities
observable problems
(if stopped = problem)

sensitive to state of the factory

(if no part = problem)

possible cooperative problem solving

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The Toyota Production

System
1.
2.
3.
4.
5.

Historical View
Performance measures
Elements of TPS
Six Eras of Manufacturing Practice
Difficulties with Implementation

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Six Eras of Manufacturing

Practice, Ken McKay
1.
2.
3.
4.
5.
6.

Pioneering
Systemization
Technology and Process
Internal Efficiency
Customer Service
Systems Level Re-engineering
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Ken McKay 1, 2
1. Pioneering sellers market,
competition is not
by manufacturing
large margins
emphasize
throughput not
efficiency

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2. Systemization firm grows and system

gets complex gross
inefficiency becomes
apparent, competition
begins to make its
presence felt. Need
for standard operating
procedures, demand
still high, inventory
used to buffer against
instabilities.

T.G.Gutowski 10/29

45

Ken McKay 3, 4
3. Technology and
Process competition is
increasing, sales are
softening,
manufacturing is still in
early maturity and
competition is limited
to firms in similar
situation. Focus shifts
from increasing
production rate to
increasing the amount
of product per unit time.

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4. Internal Efficiency -

competition cherry pickers

enter the market they dont
offer all of the options and
parts service but focus on
the 20% which yields 80% of
the revenue stream. Internal
plant is put into order,
problems are pushed outside
to suppliers, best in class,
bench marking identifies the
silver bullet. Still using
inventory to cushion
production support variety,
and maintain functional
features.

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Ken McKay- 5, 6
5. Customer Service
- talk to the
customer, identify
core competency,
outsource, be
responsive, reduce
lead time,
eliminate feature
creep, focused
factory etc.
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6. System Level Reengineering - firms

have addressed the
internal system and
factory no more to
squeeze out look to
improving indirect
and overhead, era of
mass
customization, supply
chain development.

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The Toyota Production

System
1.
2.
3.
4.
5.

Historical View
Performance measures
Elements of TPS
Six Eras of Manufacturing Practice
Difficulties with Implementation

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TPS Implementation
Physical (machine placement,
standard work etc) part
Work practices and people issues
Supply-chain part
Corporate Strategy
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Work practices and people

issues
Failed TPS attempts; GM Linden NJ,
GM-Suzuki, Ontario Canada. Successes
GM NUMMI, Saturn. see MacCoby art
Innovative Work Practices Ref; C.
Ichniowski, T. Kochan et al What
Works at Work: Overview and
Assessment, Industrial Relations Vol
35 No.3 (July 1996)
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Examples of Innovative
Work Practices
Work Teams
Gain Sharing
Flexible Job Assignments
Employment Security
Improved Communications
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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.
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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.

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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 payfor-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.

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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.

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Barriers to Implementation
Early abandonment
Costs
History of conflict and distrust
Resistance of supervisors
Lack of supportive infrastructure

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Summary
High quality and low cost ( and originally
low volumes)
Relationship to previous systems (see McKay
paper), yet new,. in fact revolutionary
Many elements

Overall, see The Machine that Changed the

World
Cells, next time
People, see Maccoby Article

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Summary .. continued
Autonomation automation with a
human touch
Worker as problem solver
TRUST

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