Modern Management Theory: Toyota Production System
The Toyota Production System [1] between 1948 and 1975. The TPS is a unique system of producing vehicles developed by Toyota. The goal is to make and deliver vehicles in the quickest a way possible also known as “The Toyota Way”. The philosophy was first conceived by Sakichi Toyoda, who invented the first automatic weaving versions of these looms would stop themselves automatically if a thread broke, so that product quality could be maintained and waste avoided. The architect of TPS is TaiichiOhno, who in the early 1950s drew inspiration from American supermarkets. He marveled that the supermarkets shelves where hardly ever empty, since the replenished so quickly. Customers could quantity they wanted. This is c as Lean Production. This means that the production process will be launched after the customer has placed an order. Once production starts, parts arrive Just in Time at the factory and on the production lines and the supplies are regulated in accordance to the precise production requirements. TPS is supported by two pillars:
Just in Time: When Toyota builds a new car, the parts arrive at the specific time they’ve needed. For example, a vehicle’s seats (or wheels or engine) will show up on the assembly line moments before they’re installed. This keeps the factory floor free of extra parts and keeps things running smoothly. Toyota doesn’t hold any “extra” inventory parts at the factory, which reduces factory size and cost. JIT also means that the factory never waits for a critical part to arrive (earthquakes and tsunamis notwithstanding). Parts arrive at the 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 that factories are concurrently running on the same Just in Time principle: transportation costs are minimized and efficiency maximized. On the production lines, Kanban cards can be used to replenish parts Just in Time when stocks become low. The time it takes to produce a car or truck is recorded, and these are called takt-time. These times and work cycles are carefully monitored and then coordinated through detailed scheduling called Heijunka. Wasteful periods are called MUDA, and one of the objectives is to reduce or eliminate MUDA.
Jidoka: it refers to “automation with a human touch”. Jidoka operates on the premise that quality gets built during the operation process. Every team member is encouraged to stop the production process whenever a potential fault is detected so a solution can be found immediately. If there is a problem during the 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 Toyota Production System emphasizes human development and a long-term view. Workers are respected as a precious resource, and Toyota works to “grow” staff members by providing free education and skills training programs. It’s dedication to staff and long-term vision has helped Toyota become one of the best automakers in the world. It’s philosophy contains five values: GenchiGentbusu (go and see), Kaizen (continuous improvement), Challenge, Teamwork and Respect. These values are practiced and shared by all the team members at every level at every work and relations with others.
The TPS is legendary. For the first time, the focus switched from a push towards a pull concept. By triggering production after receiving orders, inventory levels were significantly reduced leading to strong cost savings. The focus is still internal though, mainly towards large industries with heavy inventory levels. I have seen it applied to successful results in big factories. It laid the ground work for future management theory, and made the Ford Assembly Line obsolete. Even if inventory appears as one of the hugest costs for factories, TPS can also be applied to services. Consider that an idle resource is also an inventory cost, since all resources should be put to productive uses all the time. In services this is even more important since the resources are actually human beings and these cannot be exchangeable as auto-parts. Human beings present a unique value which companies should at all time know how to make the best of.
https://en.wikipedia.org/wiki/Toyota_Production_System
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