Toyota Production System (TPS)

SUPPLY CHAIN
MANAGEMENT

Manufacturing systems
Toyota Production System (TPS),
Just-in-Time (JIT), and Lean
Manufacturing

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 PlanDo-Check-Act (PDCA
Cycle from Dr. Deming), or the scientific method.

Jidoka = Autonomation = Automation with human intelligence

House of Toyota

JIT & Lean Manufacturing

Jidoka =
Autonomation

Lean Manufacturing
Doing more with less
Less of:

materials, time, resources

overhead, people
waste
money

JIT is a subset of Lean Manufacturing

Now seen as most applicable to mass
production settings

Heijunka = Leveling (Smoothing) Production Schedule

The Five Steps of Lean Production

Step 1: Specify Value

Step 2: Value Stream Mapping

Step 3: Create Continuous Flow

Step 4: Create Pull Production

Step 5: Perfection

The Five Steps of Lean Production/Toyota

Production System Implementation
Step 1: Specify Value
Define value from the perspective of the final
customer. Express value in terms of a specific product,
which meets the customer's needs at a specific price
and at a specific time.
Step 2: Value Stream Mapping.
Identify the value stream, the set of all specific actions
required to bring a specific product through the three
critical management tasks of any business: the
problem-solving task, the information management
task, and the physical transformation task. Create a
map of the Current State and the Future State of the
value stream. Identify and categorize waste in the
Current State, and eliminate it!

The Five Steps of Lean Production/Toyota

Production System Implementation

Attributes of Lean Producers - they

Step 3: Create Continuous Flow

Make the remaining steps in the value stream flow.
Eliminate functional barriers and develop a productfocused organization that dramatically improves leadtime.
Step 4: Create Pull Production
Let the customer pull products as needed.
Step 5: Perfection
There is no end to the process of reducing effort, time,
space, cost, and mistakes. Return to the first step and
begin the next lean transformation, offering a product
which is ever more nearly what the customer wants.

use JIT to eliminate inventory

build systems to help employees produce a perfect
part every time
reduce space requirements
develop close relationships with suppliers
educate suppliers
eliminate all but value-added activities
develop the workforce
make jobs more challenging
reduce the number of job classes and build worker
flexibility
apply Total Productive Maintenance (TPM)

What is JIT?

Just-in-Time Systems
Reducing Variance, Waste and Lead Time in
the Supply Chain

Variability Occurs Because

Employees, machines, and suppliers
produce units that do not conform to
standards, are late, or are not the
proper quantity

Engineering drawings or specifications
are inaccurate

Production personnel try to produce
before drawings or specifications are
complete

Customer demands are unknown

a corporate system designed to produce

output within the minimum lead time and at
the lowest total cost by continuously
identifying and eliminating all forms of
corporate waste and variance.
a corporate strategy
a philosophy
Focus of JIT:
variance & waste

Introductory Quotation
Waste (muda in Japanese) is
anything other than the minimum
amount of equipment, materials,
parts, space, and workers time,
which are absolutely essential to
add value to the product.
Shoichiro Toyoda
Founder, Toyota
1995 Corel Corp.

Seven Basic Types of Waste

Common Causes of Waste

Transportation waste
Process Waste
Inventory Waste
Waste of motion
Waste from product defects
Waiting time
Overproduction

Objective of JIT

JIT Principles

Produce only the products the customer wants.

Produce products only at the rate that the
customer wants them, with only those features
the customer wants.
Produce with perfect quality
Produce with minimum lead time.
Produce with no waste of labor, material or
equipment -- every movement must have a
purpose so that there is zero idle inventory.
Produce with methods that allow for the
development of people

Layout (distance)
Long setup time
Incapable processes
Poor maintenance
Poor work methods
Lack of training

1.

2.
3.

Inconsistent
performance
measures
Ineffective production
planning
Lack of workplace
organization
Poor supply
quality/reliability

Create flow production

one piece flow
machines in order of processes
small and inexpensive equipment
U cell layout, counter clockwise
multi-process handling workers
easy moving/standing operations
standard operations defined
Establish TAKT time
-- rate at which the customer buys a product
Build Pull Product
-- use of kanban system

JIT Tactics

Reducing Variance
Eliminating Waste
Pull strategy
U- Shaped Lauout
Perfect Quality
Visual Control
Fixed kanban size
Doable stable
schedules with
adequate visibility
Takt Time
Multi task workers
Kaizen

Workers empowerment
Tools at the point of need
Product redesign
Group Technology
Total Productive
Maintenance
Low set-up time, SMED
3Gs
5S

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.

Continuous Flow Production

Traditional Flow

Production Process
(stream of water)

Suppliers

Flow with JIT

Pull (JIT) System

The production of items only as demanded
for use or to replace those taken for use.

Customers
Inventory (stagnant
ponds)

Suppliers

Material
(water in
stream)

Work
Station 1

A system for making problems obvious without

the need for sophisticated monitoring computer
systems
Light system
Kanbans
Create a sense of urgency
Clearly identify where the problems are located

WS 3

Material
Information (via Kanban/Card)

Customers

Visual Control

WS 2

Visual Management
Andon Lamp

Red - line stoppage

Yellow - call for help
Green - normal
operation

Kanban

Japanese word for card

Authorizes production from downstream

operations

 Pronounced

 Pulls

kahn-bahn (not can-ban)

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

Triangular Kanban
Part #

Kanban

Part Description

Date Triggered

Location

Lot Size

Trigger (Reorder) Point

Tool #

Machine #

Kanban
The function of Kanban
The function of Inventory Reorder Point
(ROP)

Kanban System

Single card
 Move only containers
with C
(Conveyance)kanban)
 e.g.: Kawasaki

Dual card
 Move only container
with C- kanban
 Produce only when
authorized by P
(Production)- kanban
 e.g.: Toyota

Transparency 17.5

Number of Kanbans Required

DT + S
N=
C

Quiz
A production facility wants to determine the
number of kanbans it needs for one of its parts.
This parts daily demand is 200; it has a
production lead time of day; its safety stock is
day and the container size is 10. How many
kanbans are needed?

N = number of containers
D = demand rate at the withdraw station
T = lead time from supply station
C = container size
S = safety stock

Inventory
Traditional: inventory exists in case
problems arise

JIT objective: Eliminate inventory

JIT requires

A. 15
B. 10
C. 5
D. 50

Lowering Inventory Reduces Waste

Reducing inventory reveals

problems so they can be solved.

 Small

lot sizes
setup time
 Containers for fixed number of parts
 Low

JIT inventory: Minimum inventory to keep

system running

Heijunka = Leveling (Smoothing) Production

Schedule using Mixed Model Sequencing

Production quantities evenly distributed

over time (e.g., 7/day)

Build same mix of products every day

in many small lots

 1 month = 20 working days
 Item Monthly Quantity
Daily Quantity
A
40
2
B
60
3

Small versus Large Lots

JIT produces same amount
in same time if setup times
are lowered

JIT Small Lots

A

Time

 Results

Small lots also increase flexibility to meet

customer demands

Large-Lot Approach
A

Time

To Lower Inventory,
Reduce Lot Sizes

Which Increases
Inventory Costs
Cost

Inventory Level
Lot Size 200

Average inventory = 40
Average inventory = 100

Lot Size 80

Setup Cost
Smaller Optimal
Lot Size Lot Size

Time

Average inventory = (Lot size)/2

Unless Setup Costs are Reduced

Balanced Production

Cost

Setup Cost
New optimal Original optimal
lot size
lot size

Lot Size

TAKT Time

TAKT
the beat
(Net Available Operating Time) /
Customer Requirements
time periods must be consistent

Lot Size

Three elements
TAKT time
Work sequence
Standard WIP
Objective
Build at rate that the customer wants work
Balance the system to maximize
efficiency at this rate

Quick setup = Quick changeover

Reducing setup cost reducing setup time

Setup reduction time is a prerequisite to lot
size reduction
SMED: Single Minute Exchange of Dies
The method has been developed by Toyota
and then expanded by Dr. Shigeo Shingo (a
consultant to Toyota), and has proven its
effectiveness in many companies by
reducing changeover times (non-value added
times) from hours to a less than 10 minutes

Kaizen
Change for better = continuous
improvement

Kaizen event: A group of Kaizen activity,
commonly lasting five days, in which a
team identifies and implements a
significant improvement in a process, e.g.,
creating a manufacturing cell.

JIT and TQM- Partners

Build quality into all processes

Focus on continuous improvement - Kaizen
Quality at the source- sequential inspection
Jidoka (authority to stop line)
Fail-safe all processes (Jidoka)
Preventive maintenance- scheduled
Work environment- everything in its place, a
place for everything

Manufacturing Cell

Supplier Partnerships
Reliance on suppliers for
problem solving expertise
quality at the source
timely communication
participants in cost reduction programs

Increased reliance on supplier certification

Other JIT Policies

The 3 Gs (Gemba, Gembutsu, and Genjitsu)

actual place, actual thing, and actual
situation.
 Management

by Walking Around (HP)

House Keeping Rules: 5S

 sort,

straighten, sweep, standardize. self

discipline

Attributes of Lean Producers - they

JIT Tactics

Reducing Variance
Eliminating Waste
Pull strategy
U- Shaped Lauout
Perfect Quality
Visual Control
Fixed kanban size
Doable stable
schedules with
adequate visibility
Takt Time
Multi task workers
Kaizen

The Role of Management

Responsible for culture of mutual trust

Serve as coaches & facilitators

Support culture with appropriate incentive
system including non-monetary

Responsible for developing workers

Provide multi-functional training

Facilitate teamwork

Respect for People: The Role of

Employees
Associates gather performance data

Team approaches used for problem-solving

Decisions made from bottom-up

Everyone is responsible for preventive
maintenance

Workers empowerment
Tools at the point of need
Product redesign
Group Technology
Total Productive
Maintenance
Low set-up time, SMED
3Gs
5S

use JIT to eliminate inventory

build systems to help employees product a perfect
part every time
reduce space requirements
develop close relationships with suppliers
educate suppliers
eliminate all but value-added activities
develop the workforce
make jobs more challenging
reduce the number of job classes and build worker
flexibility
apply Total Productive Maintenance (TPM)

Respect for People: The Role of

Employees

Genuine and meaningful respect for associates

Willingness to develop cross-functional skills
JIT uses bottom-round management consensus
management by committees or teams
Actively engage in problem-solving (quality
circles)
Everyone is empowered
Everyone is responsible for quality: understand
both internal and external customer needs

Barriers to Successful
Implementation of JIT
Cultural resistance to change

Lack of resources

Frequently top management lack
understanding or commitment

Lack of or difficulty establishing
performance measures

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JIT Highlights
JIT is a philosophy that was developed by the
Toyota Motor Company in the mid-1970s. It
has since become the standard of operation
for many industries. It focuses on simplicity,
eliminating waste, taking a broad view of
operations, visibility, and flexibility. Three
key elements of this philosophy are JIT
manufacturing, total quality management,
and respect for people.

JIT views waste as anything that does not
add value.

SUMMARY

JIT Highlights

Traditional manufacturing systems use push

production, where as JIT uses pull production.
Push systems anticipate future demand and
produce in advance in order to have products in
place when demand occurs. This system usually
results in excess inventory.
Pull systems work backwards. They last workstation
in the production line requests the precise amounts
of materials required.

JIT Highlights

TQM creates an organizational culture that

defines quality as seen by the customer.
The concepts of continuous improvement
(kaizen) and quality at the source are
integral to allowing for continual growth and
the goal of identifying the causes of quality
problems.

JIT Highlights
JIT manufacturing is a coordinated
production system that enables the right
quantities or parts to arrive when they are
needed precisely where they are needed.

Key elements of JIT manufacturing are the
pull system and kanban production, small lot
sizes and quick setups, uniform plant
loading, flexible resources, and streamlined
layout.

JIT Highlights
JIT considers people to be the
organizations most important resource.

JIT is equally applicable in service
organizations, particularly with the push
toward time-based competition and the need
to cut costs.

JIT success is dependent on interfunctional
coordination and effort.

10

The end

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