Sunday, February 2, 2014

Understanding Toyota’s Production System (TPS)

What is TPS?
  • Toyota’s Production System (TPS) is a unique system of producing vehicles developed by Toyota.
  • The goal is to make and deliver vehicles in the quickest and most efficient way possible. Also known as “The Toyota Way”.
TPS was established on two concepts:
  • Just-In-Time (JIT)
  • Jidoka
Just-In-Time means:
  • When Toyota builds a new car, the parts arrive at the specific time they’re needed.
  • For example, a vehicle’s seats (or wheels or engine) will show up on the assembly line moments before these parts are installed.
  • This keeps the factory floor free of extra parts and keeps things running smoothly.
  • Just-In-Time also means that the factory never waits for a critical part to arrive (natural disasters like earthquakes and tsunamis notwithstanding).
Toyota doesn't hold any “extra” parts inventory at the factory, which reduces factory size and cost.

Parts arrive at the Toyota factory pre-organized and ready to go. Even the packaging on parts is minimal – reducing the chance of mistakes.

Many suppliers choose to build their facility next door to the main Toyota assembly plant. This means:
  • Factories are concurrently running on the same “just-in-time” principle.
  • Minimized transportation costs and maximized efficiency.
The idea has its origins from former Toyota VP Taiichi Ohno who noticed the efficiency of supermarkets. Supermarkets only stock items when they’re needed, and then only in specific amount that meets demand.

Jidoka can be loosely translated as “automation with a human touch”. It operates on the premise that quality gets built during the operation process.

If there is a problem during auto assembly, anyone on the line has the power to stop production to address the problem. From the factory manager all the way down to the janitorial staff, all are encouraged to look for ways to increase efficiency. All processes are constantly being improved.

The People
  • Perhaps most importantly, the Toyota Production System emphasizes human development and a long-term view.
  • Workers themselves are respected as a precious resource, and Toyota works to ‘grow’ staff members by providing free education and skills training programs.
  • It’s this dedication to staff and a long-term vision that have helped Toyota become one of the biggest – and arguably the best – automaker in the world.

The System in Practice

TPS Principles

Illustration of the Toyota Production System

Practical Principles of Lean Manufacturing
  • To cut lead-time, cut out all the bits that don't add value.
  • The line must stop if there is a problem.
  • Deal with defects only when they occur, and less staff will be needed.
  • Ask yourself "Why?" five times.
  • Train people to follow rules and standards as if second nature.
  • Find where a part is made cheaply and use that price as a benchmark.
  • Develop people who can come up with unique ideas.

Video: Toyota Production System (TPS)

Given the huge success story of the Toyota Way, do you think Toyota’s approach would work at your organization? 

Please leave your thoughts and comments below.

  • Article: Decoding the DNA of the Toyota Production System (Spear and Bowen, Harvard Business Review, January 2006)

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