Tuesday, February 18, 2014

The Toyota Production System (TPS) and its Lean Manufacturing put to test!

The Toyota Production System (TPS) is undoubtedly a world-renowned production system that many companies try to emulate. This philosophy was put into test by massive recalls of its cars as a result of gas-pedal related issues. According to a report by Valdes, (2010), of CNNMoney in New York, the car maker had to recall a total of 8.1 million cars around the world. The cost related to this global recall was estimated at $2 billion, including a loss of 100,000 vehicle sales in the United States and Europe. 

So the question is, ‘Do the recent recall-problems of Toyota disqualify the famous TPS philosophy?

The TPS is embodied on the philosophy of the complete elimination of all waste inbuilt in all aspects of production in pursuit of the most efficient methods (Inside Toyota, n.d). Well this did not deter the company from practicing this deep rooted practice that has been the source of its outstanding performance as a manufacturer. According to (Ede, 2010), Toyota have instead returned to their roots: deep self-reflection, listen to the customers’ voice to make increasingly better products, and, if any problems are observed: stop, think and make improvements. With the TPS, it is known that to make any changes, Toyota uses a rigorous problem-solving process that requires a detailed assessment of the current state of affairs and a plan for improvement that is, in effect, an experimental test of the proposed changes (Spear & Bowen, 2006)

Two key concepts of TPS holds:

Jidoka - Highlighting/visualization of problems

Under this concept, quality must be built in during the manufacturing process. This means that when equipment malfunction or a defective part is discovered, the affected machine automatically stops, and operators cease production and correct the problem. Only products satisfying quality standards will be passed on to the following processes on the production line.

Just-in-Time - Productivity improvement 

This means 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.

But despite these important concepts the defects happened leading to the massive recalls. Does this mean being Toyota became too lean or applying other continuous improvement methods, can lead to problems such as a huge recall? Well, it has been proved that applying methods like Lean will lead to better products, lower costs and shorter delivery times. This said then it means the defects in the Toyota cars were as a result of a mix of several other probable causes that (Ede, 2010) illustrates as:
  • Too fast growth - the yearly production of Toyota rose from five to eight million cars over the last ten years leading to the manufacturer rolling out to other areas and thus not keeping up with the globalization complexities
  • Central lead management – Despite the roll-out process as the company expanded and established new factories in other parts of the world, the management remained rigid and all decisions had to be made from made in Japan including the recalls. In its lean manufacturing concept, Toyota did not decentralize its operations to disperse responsibilities more to local offices.
  • Too much media attention – because of its reputation in producing high quality cars at low costs, attracts too much media attention when a defect occurs more so from the rivals. As a result, it was remarkable that most number of reported sudden unintended acceleration incidents in America was much higher than within Europe.
  • Standardization of components - Toyota, standardizes components and uses these in more than one car type. As a result, when there is a problem, this will lead to a much bigger recall, because several types of cars are affected.
  • Increasingly complex car engineering and related software - Regarding to the accelerator pedal problem: What could have increased the complexity according to Toyota, this problem occurs only in rare situations and as a rule after a certain period of time. These kind of problems are harder to detect than things which can be tested during production.

Works Cited

Ede, J. v., 2010. Business-improvement.eu: Inspire Business to Flow. [Online]
Available at: http://www.business-improvement.eu/lean/Toyota_recall_and_Toyota_Production_System.php
[Accessed 18 February 2014].

Inside Toyota, n.d. Toyota Production System. [Online]
Available at: http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/
[Accessed 18 February 2014].

Spear, S. & Bowen, K., 2006. Decoding the DNA of the Toyota Production System, s.l.: Harvard Business Review.

Valdes, P., 2010. Toyota recalls total 8.1 million vehicles. [Online]
Available at: http://cnnfn.cnn.com/2010/02/04/autos/toyota_recall_total/index.htm?postversion=2010020410
[Accessed 18 February 2014].

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