Toyota Production System

The practical expression of Toyota's people and customer-oriented philosophy is known as the Toyota Production System (TPS). This is not a rigid company-imposed procedure but a set of principles that have been proven in day-to-day practice over many years. Many of these ideas have been adopted and imitated all over the world.

TPS has three desired outcomes:

• To provide the customer with the highest quality vehicles, at lowest possible cost, in a timely manner with the shortest possible lead times.
• To provide members with work satisfaction, job security and fair treatment.
• It gives the company flexibility to respond to the market, achieve profit through cost reduction activities and long-term prosperity.

TPS strives for the absolute elimination of waste, overburden and unevenness in all areas to allow members to work smoothly and efficiently. The foundations of TPS are built on standardisation to ensure a safe method of operation and a consistent approach to quality. Toyota members seek to continually improve their standard processes and procedures in order to ensure maximum quality, improve efficiency and eliminate waste. This is known as kaizen and is applied to every sphere of the company's activities.

Kaizen - Continuous Improvement

Kaizen is the heart of the Toyota Production System.

Like all mass-production systems, the Toyota process requires that all tasks, both human and mechanical, be very precisely defined and standardised to ensure maximum quality, eliminate waste and improve efficiency.

Toyota Members have a responsibility not only to follow closely these standardised work guidelines but also to seek their continual improvement. This is simply common sense - since it is clear that inherent inefficiencies or problems in any procedure will always be most apparent to those closest to the process.

The day-to-day improvements that Members and their Team Leaders make to their working practices and equipment are known as kaizen. But the term also has a wider meeting: it means a continual striving for improvement in every sphere of the Company's activities - from the most basic manufacturing process to serving the customer and the wider community beyond.

Just In Time

It is perhaps not widely known that the 'just in time' approach to production that has now gained almost universal acceptance in world manufacturing was actually pioneered by Toyota. In fact, a Toyota engineer coined the term itself.

This, too, is a simple but inspired application of common sense.

Essentially, 'just in time' manufacturing consists of allowing the entire production process to be regulated by the natural laws of supply and demand.

Customer demand stimulates production of a vehicle. In turn the production of the vehicle stimulates production and delivery of the necessary parts and so on.

The result is that the right parts and materials are manufactured and provided in the exact amount needed - and when and where they are needed.

Under 'just in time' the ultimate arbiter is always the customer. This is because activity in the system only occurs in response to customer orders. Production is 'pulled' by the customer rather than being 'pushed' by the needs or capabilities of the production system itself.

The linkage between customer demand and production is made by analysing takt time, a device for measuring the pace of sales in the market in relation to the capacity of a manufacturing plant. For example, if a plant operates for 920 minutes per day and daily demand is for 400 vehicles, then takt time will be 2.3 minutes.

If takt times are reduced more resources are allocated. Toyota never tries to accommodate changes in demand by making substantial changes in individuals' workloads.

Assigning more Members to a line means that each handles a narrower range of work. Assigning fewer means that each handles a broader range. Hence the paramount importance of having a well-trained, flexible and multi-skilled workforce.

Within the plant itself, the mechanism whereby production is regulated in this way is known as the kanban.

A kanban is simply a message. For example, in the assembly shop this message takes the form of a card attached to every component that is removed and returned when the component is used. The return of the kanban to its source stimulates the automatic re-ordering of the component in question.

Paperwork is minimised. Efficiency is maximised. And the Members themselves are completely in charge.

Jidoka

In Japanese 'jidoka' simply means automation. At Toyota it means 'automation with a human touch'.

In 1902 Sakichi Toyoda invented the world's first automatic loom that would stop automatically if any of the threads snapped. This principal, jidoka, of designing equipment and processes to stop and call attention to problems immediately when they sense a problem is a central concept of TPS.

The most visible manifestation of 'automation with a human touch' at the Altona plant is the andon cord situated above the line. The presence of the andon cord permits any Team Member to intervene and bring production to a halt if abnormalities occur.

The Toyota Production System has inherited the principle originated by Henry Ford of breaking down work into simple steps and distributing those steps amongst employees on the line. But employees in the Toyota system are in charge of their own jobs. Through their teams, they run their own worksites. They identify opportunities for making improvements and take the initiative in implementing those improvements in co-operation with management.

Suppliers & TPS

Just-in-time manufacturing and other elements of the Toyota Production System work best when they are a common basis for synchronising activity throughout the production sequence. This is an egalitarian arrangement in which each process in the production flow becomes the customer for the preceding process and each process becomes a supermarket to the following process.

Independent suppliers participate on an equal footing with Toyota operations in the production flow, each fulfilling their own role in that flow.

The only participant in the entire sequence who does not answer to anyone is the customer who selects a vehicle in the marketplace.

Suppliers who participate in the Toyota Production System enjoy the same benefits that Toyota does from the system. Just-in-time manufacturing can dissolve inventories at parts suppliers just as readily and effectively as it does at Toyota's assembly plants. Product quality improves, too. That's because the Toyota Production System includes measures for illuminating defects whenever and wherever they occur.

Suppliers who adopt the Toyota Production System also report improvements in employee-management relations. That is mainly because the system provides for an expanded role for employees in designing and managing their own work. It brings together employees and management in the joint pursuit of improvements in productivity, quality, and working conditions.