TPS-Overview

The Toyota Production System : 

2.810 T.G.Gutowski 10/29/01 1 The Toyota Production System High Quality and Low Cost Readings; James Womack, Daniel T. Jones and Daniel Roos, The Machine that Changed the World, 1990, Ch 3 and 4 Kenneth N. McKay, “The Evolution of Manufacturing Control- What Has Been, What Will Be” Working Paper 03 –2001 Michael McCoby, “Is There a Best Way to Build a Car?” HBR Nov-Dec 1997

Consumer Reports : 

2.810 T.G.Gutowski 10/29/01 2 Consumer Reports

Slide 3: 

2.810 T.G.Gutowski 10/29/01 3 Toyota vehicle sales 2002

The Toyota Production System : 

2.810 T.G.Gutowski 10/29/01 4 The Toyota Production System Historical View Performance measures Elements of TPS Six Eras of Manufacturing Practice Difficulties with Implementation

Three Major Mfg Systems from 1800 to 2000 : 

2.810 T.G.Gutowski 10/29/01 5 Three Major Mfg Systems from 1800 to 2000 1800 1900 2000 Machine tools, specialized machine tools, Taylorism, SPC, CNC, CAD/CAM Interchangeable Parts at U.S. Armories Mass Production at Ford Toyota Production System

Key Elements for New Mfg Systems : 

2.810 T.G.Gutowski 10/29/01 6 Key Elements for New Mfg Systems

Q. By what method did these new systems come about? : 

2.810 T.G.Gutowski 10/29/01 7 Q. By what method did these new systems come about? A. Trail and Error

History of the Development of the Toyota Production System ref; Taiichi Ohno : 

2.810 T.G.Gutowski 10/29/01 8 History of the Development of the Toyota Production System ref; Taiichi Ohno 1945 1975

The Toyota Production System : 

2.810 T.G.Gutowski 10/29/01 9 The Toyota Production System Historical View Performance measures Elements of TPS Six Eras of Manufacturing Practice Difficulties with Implementation

Summary of Assembly Plant Characteristics, Volume Producers, 1989 (Average for Plants in Each Region) : 

2.810 T.G.Gutowski 10/29/01 10 Summary of Assembly Plant Characteristics, Volume Producers, 1989 (Average for Plants in Each Region)

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

2.810 T.G.Gutowski 10/29/01 11 Cost Vs Defects Ref. “Machine that Changed the World” Womack, Jones and Roos

The Toyota Production System : 

2.810 T.G.Gutowski 10/29/01 12 The Toyota Production System Historical View Performance measures Elements of TPS Six Eras of Manufacturing Practice Difficulties with Implementation

How do you get this kind of performance? : 

2.810 T.G.Gutowski 10/29/01 13 How do you get this kind of performance? Womack, Jones and Roos J T. Black’s 10 Steps Demand Flow Technology’s 9 Points MSDD, D. Cochran and Students

Womack Jones and Roos : 

2.810 T.G.Gutowski 10/29/01 14 Womack Jones and Roos Automation? Yes, but…. DFM? Probably Standardized Production? No! Lean Characteristics? Integration of Tasks Identification and removal of defects

Cost Vs AutomationRef. “Machine that Changed the World” Womack, Jones and Roos : 

2.810 T.G.Gutowski 10/29/01 15 Cost Vs AutomationRef. “Machine that Changed the World” Womack, Jones and Roos

J T. Black’s 10 StepsRef; JT. Black “Factory with a Future” 1991 : 

2.810 T.G.Gutowski 10/29/01 16 J T. Black’s 10 StepsRef; JT. Black “Factory with a Future” 1991 1. Form cells 2. Reduce setup 3. Integrate quality control 4. Integrate preventive maintenance 5. Level and balance 6. Link cells – KANBAN 7. Reduce WIP 8. Build vendor programs 9. Automate 10. Computerize

Demand Flow Technology’s 9 Points : 

2.810 T.G.Gutowski 10/29/01 17 Demand Flow Technology’s 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

Current Value Stream Map : 

2.810 T.G.Gutowski 10/29/01 18 Current Value Stream Map

Future Value Stream Map : 

2.810 T.G.Gutowski 10/29/01 19 Future Value Stream Map

Manufacturing System Design Decomposition (MSDD) : 

2.810 T.G.Gutowski 10/29/01 20 Manufacturing System Design Decomposition (MSDD) ROI Sales Costs Investments Lower level actions quality predictable output delay reduction - s resolving problems s m

J T. Black –1, 2 : 

2.810 T.G.Gutowski 10/29/01 21 J T. Black –1, 2 1. Form Cells Sequential operations, decouple operator from machine, parts in families, single piece flow within cell 2. Reduce Setup Externalize setup to reduce down-time during changeover, increases flexibility

TPS Cell : 

2.810 T.G.Gutowski 10/29/01 22 TPS Cell

Standardized Fixtures : 

2.810 T.G.Gutowski 10/29/01 23 Standardized Fixtures

J T. Black – 3, 4 : 

2.810 T.G.Gutowski 10/29/01 24 J T. Black – 3, 4 3. Integrate quality control Check part quality at cell, poke-yoke, stop production when parts are bad 4. Integrate preventive maintenance worker maintains machine , runs slower

J T. Black – 5, 6 : 

2.810 T.G.Gutowski 10/29/01 25 J T. Black – 5, 6 5. Level and balance Produce to Takt time, reduce batch sizes, smooth production flow 6. Link cells- Kanban Create “pull” system – “Supermarket” System

J T. Black – 7, 8 : 

2.810 T.G.Gutowski 10/29/01 26 J T. Black – 7, 8 7. Reduce WIP Make system reliable, build in mechanisms to self correct 8. Build Vendor program Propagate low WIP policy to your vendors, reduce vendors, make on-time performance part of expectation

Manufacturing System Design Decomposition (MSDD) : 

2.810 T.G.Gutowski 10/29/01 27 Manufacturing System Design Decomposition (MSDD) ROI Sales Costs Investments Lower level actions quality predictable output delay reduction - s resolving problems s m

Example from Cochran – Minimize production disruptions : 

2.810 T.G.Gutowski 10/29/01 28 Example from Cochran – Minimize production disruptions

Some Basics Concepts of TPS : 

2.810 T.G.Gutowski 10/29/01 29 Some Basics Concepts of TPS Smooth Flow and Produce to Takt Time Produce to Order Make system “observable” and correct problems as they occur Integrate Worker Skills

Two Examples; : 

2.810 T.G.Gutowski 10/29/01 30 Two Examples; Takt Time Pull Systems

Takt Time – to pace production : 

2.810 T.G.Gutowski 10/29/01 31 Takt Time – to pace production 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 over-production for low yields etc.

Takt Time : 

2.810 T.G.Gutowski 10/29/01 32 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.

Engines shipped over a 3 month period at aircraft engine factory “B” : 

2.810 T.G.Gutowski 10/29/01 33 Engines shipped over a 3 month period at aircraft engine factory “B”

Engines shipped over a 3 month period at aircraft engine factory “C” : 

2.810 T.G.Gutowski 10/29/01 34 Engines shipped over a 3 month period at aircraft engine factory “C”

On-time performance of engine plants : 

2.810 T.G.Gutowski 10/29/01 35 On-time performance of engine plants

Push and Pull Systems : 

2.810 T.G.Gutowski 10/29/01 36 Push and Pull Systems Machines Parts Orders 1 2 3 4

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? : 

2.810 T.G.Gutowski 10/29/01 37 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 = 3 Time = 2 Time = 4 Time = 1 Time = 0

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. : 

2.810 T.G.Gutowski 10/29/01 38 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.

Comparison in delivery times : 

2.810 T.G.Gutowski 10/29/01 39 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

HP Video Results : 

2.810 T.G.Gutowski 10/29/01 40 HP Video Results

HP Video Results Revisited : 

2.810 T.G.Gutowski 10/29/01 41 HP Video Results Revisited

So what are the advantages of the pull systems? : 

2.810 T.G.Gutowski 10/29/01 42 So what are the 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

The Toyota Production System : 

2.810 T.G.Gutowski 10/29/01 43 The Toyota Production System Historical View Performance measures Elements of TPS Six Eras of Manufacturing Practice Difficulties with Implementation

Six Eras of Manufacturing Practice, Ken McKay : 

2.810 T.G.Gutowski 10/29/01 44 Six Eras of Manufacturing Practice, Ken McKay Pioneering Systemization Technology and Process Internal Efficiency Customer Service Systems Level Re-engineering

Ken McKay – 1, 2 : 

2.810 T.G.Gutowski 10/29/01 45 Ken McKay – 1, 2 1. Pioneering - sellers market, competition is not by manufacturing large margins emphasize throughput not efficiency 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.

Ken McKay – 3, 4 : 

2.810 T.G.Gutowski 10/29/01 46 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. 4. Internal Efficiency - competition “cherry pickers” enter the market they don’t 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.

Ken McKay- 5, 6 : 

2.810 T.G.Gutowski 10/29/01 47 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. 6. System Level Re-engineering - 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.

The Toyota Production System : 

2.810 T.G.Gutowski 10/29/01 48 The Toyota Production System Historical View Performance measures Elements of TPS Six Eras of Manufacturing Practice Difficulties with Implementation

TPS Implementation : 

2.810 T.G.Gutowski 10/29/01 49 TPS Implementation Physical (machine placement, standard work etc) part Work practices and people issues Supply-chain part Corporate Strategy

Work practices and people issues : 

2.810 T.G.Gutowski 10/29/01 50 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)

Examples of “Innovative” Work Practices : 

2.810 T.G.Gutowski 10/29/01 51 Examples of “Innovative” Work Practices Work Teams Gain Sharing Flexible Job Assignments Employment Security Improved Communications

“What Works at Work: Overview and Assessment”, : 

2.810 T.G.Gutowski 10/29/01 52 “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.

“What Works at Work: Overview and Assessment”, : 

2.810 T.G.Gutowski 10/29/01 53 “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.

“What Works at Work: Overview and Assessment”, : 

2.810 T.G.Gutowski 10/29/01 54 “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 pay-for-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.

“What Works at Work: Overview and Assessment”, : 

2.810 T.G.Gutowski 10/29/01 55 “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.

Barriers to Implementation : 

2.810 T.G.Gutowski 10/29/01 56 Barriers to Implementation Early abandonment Costs History of conflict and distrust Resistance of supervisors Lack of supportive infrastructure

Summary : 

2.810 T.G.Gutowski 10/29/01 57 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

Summary …….. continued : 

2.810 T.G.Gutowski 10/29/01 58 Summary …….. continued “Autonomation” automation with a human touch Worker as problem solver TRUST