TPS /Lean Seminar, 28 Sep.~02 Oct. /2018, M.P.E.C. at Yangon

Toyota Way&Toyota Production SystemPart 1

Satoshi Kuroiwa (skuro@esd21.jp)

Managing director Association for Support of ESD 21
Former Visiting Professor, NIT and KIT
Former Toyota Corp.

Introduction

Outline of ESD21
Economic Sustainable Development for21st Century

1. ESD21 ; Abbreviation of our Association- Non Profit Organization founded in 2010
- Corporate Member: 70 Individual : 120
cf. -Toyota Tsusho -Kojima press, -USP, etc.

2. Mission- “Kaizen(TPS) & Innovation(IT)” of the people
for business competitiveness.
- Practical philosophy of “ Sanpou-Yoshi”(三方よし：Seller, Buyer, Society).

3. Activities(1) Various support services based on
TPS(Toyota Production System) ,and IT (Information Technology).
(2) Special projects and events
Ex. Collaboration with SEDA (NGO in Myanmar)

Part1, contents
１．Introduction
２．Why should you learn TPS/Lean system
３．Toyota’s ”Monozukuri “ , Toyota Way
and Toyota Production System (TPS)<Speaker’s profile>

TPS=Toyota Production System“Monozukuri”= Manufacturing- Worked for Toyota for 34 years and had experience in the carproduction preparation engineering together with IT engineering- Specialized in Factory Automation and IT enhanced TPS (1980~2000)- Involved in associations related to Japan’s IT strategy organized METI
- Visiting professor of Nagoya /Kyusyu Institute of Technology(2004~’16)- Now, working for NPOs, such as ESD21, APSOM and TMS &TPS
certification instituteIntroduction

Structural change to the global economy
Almost issues brought by ICT evolution and digitalization
ICT= Information & Communication Technology
Key Issues
1. Globalization of economy
2. Environment and energy issues
3. Change of the industrial structure
4. Brexit and US. President Trump (American first)
5. New ICT impact to the manufacturing industries

ICT Sector

VerticalHorizontal
StructureStructure(40 years ago) (20 years ago)
CPU：IntelIBM
OS： Win, Mac
Apps： SAP
N/W： Cisco
Peripheral：Canon
PC ： HP, Dell
All ProductsPrius(HV)
Auto Sector
1. Mega-competition
Mirai（FCV）
New ICT era 2. EV/HV/PHV/FCV
3. Car Modularization(Now)Four innovations in the new ICT era
GoogleHardware to Software ,Now new business modelAppleAmazonFacebook……

 EV
 Autonomous Vehicle
 Connected SharingIntroduction

Short history of ICT and some topics in Japan70s
80s
90s
Main-frame, LAN, VAN
μCPU(1971)⇒PC

2000s
InternetMobile

40 Years ago(IBM)20 years ago (Wintel)

μCPU changed
the world ofcomputer

Internet changed
the world ofcommunication

DARPA/ARPA net
at DOD in USIntel 8008
NEC, TK80

Establishment ofVLS ResearchAssociation（1975）
Start of E-nationJapan Industry advanced
information projects
 Acceleration ofglobal business＜Projects
organized by METI＞

Now
Cloud, IoT,
Big data, AI

Current (GAFA)～

Creation of new
business modelby IoT, AI, Big Data,and CPS
Project or Consortiumin Germany ,US Industry 4.0,
 Industry InternetConsortium＜Activities in Japan ＞

 Robot revolution
initiative
 IoT acceleration
AssociationIntroduction

Initiative or consortium for collaborative works
in Manufacturing

IoT Acceleration
Consortium＜Members＞

Why learn TPS/Lean

Toyota System and ICT are criticalfor sustainable manufacturing

General-purpose technologies (GPTs) are technologies that canaffect an entire economy (usually at a national or global level)<B.C.>-Domestication of plants-Domestication of animals-Melting -Wheel -Bronze -Iron<After AD to 18th Century>“Printing” and so forth<GPTs in the 20th Century>

 Automobile
 Airplane Mass Production(Ford System) Computer Lean Production(Toyota System) Internet
 Biotechnology

https://en.wikipedia.org/wiki/General_purpose_technology

Why learn TPS/LeanManagement system exchange
between Japan and the U.S.

Toyota Production System is globally well- known as the lean system

Japan

QC

SQC

TQM

TQC

Management
Quality

Toyota Production System（TPS)
KanbanUnion-mgt.
cooperation

Post World
WarⅡ

U.S.A.

E. Deming

Scientific
Mgt.
SQC

Keiretu
KaizenJIT
Teamwork

1980’sJapan-style
Management
Malcolm Baldrige
National Quality Award
Performance
Mgt.
Strategic
Mgt.
Marketing
Strategyﾞ

JMS

Current（2000~)（ManagementQuality）

Reengineering

Lean system
Six Sigma
Information
StrategyBSC

CMM
TOC
ABC/ABMWhy learn TPS/Lean

Basic fundamentals of Monozukuri

Global NO.1
TPS(Toyota Production System) Product-Just-In-Time-Jidoka (Autonomation)

Quality First-Gnechi-genbutu (Go and see)
- QC(Quality control)

Monozukuri-Making things is making people-Production technology-Processing technology Continuous Improvement -Respect for people- TQM / TPM - IT system with Technology and Skill -Teamwork

TechnologyEvolving

Hitozukuri

Monozukuri management
TQM, TPS, TPM
Production Control(Management)

Process management
Progress management
Quality management

Hitozukuri= Human development
Monozukuri= Manufacturing
TQM=Total Quality Management),
TPM=Total productive Maintenance

Cost management

Work management

Facility management
Material management

Labor management

Safety management

Why learn TPS/Lean

People are the greatest management resource
Goalof TPS

Create teams and members who continue kaizen activities
always seeking for “ To Be ” , ideal system

Input
PeopleMaterialMoney
Information

Value added byInformation processing/creating ,communication（Design/ Production preparation/Parts procurement/ and etc.)

and Production

Resources of an enterprisemoneywisdompeople
material
information

OutputProducts
Service
CS/CV

Aim for an ideal Factory

Why learn TPS/Lean

Business consists of people and machines(IT)Business Activities are information processing
with people and machine systems (IT)
PeopleSystems

People (Brain)

Computer(software)

Organization

IT Architecture
Analogy Control

Management
Communication
Enterprise
Organization
Org
Man

Man

Business
Partners

Man

Org.
Ent.

Connection
Ent.

Org.

COM

Intranet
LAN

Ent.

Org.

Machine/IT
SystemsCOM

Ent.

＝ People
Office work
Production work ＝ People

TPS

Extranet
COM
COMInternetCOM

COM

COM

COM

WAN
COM

COM

Ent.

COM

COM

COM＝Computer＋ Machine （CAD/ERP, RPA, e-Mail, Printer )＋ Machine （Robot/Automation, FA/IT)

ITWhy learn TPS/Lean

Productivity and Competitiveness
OUTPUT

Sales
Added Value＝Productivity ＝＝Cost
Lead-time
INPUT

Increase Sales
Reduce Cost

Competitiveness= Relative height of productivity to competitors
What should do you do to increase competitiveness(1) - Increase added Value- Increase amount of Sales
Improve Productivity(2) - Reduce Cost
TPS(Toyota Production System)- Shorten lead-time- Eliminate waste (Muda)- Two pillars of TPS
 Just-In-Time Jidouka (Autonomation)

Sales
Innovation

KaizenCostToyota Way（TPS)

Trend of Toyota’s production and overview
Sales volume : 10,386 thousand
Worldwide production
Operating incomes: 29,384.07B jpy
Toyota’s globalization
Net incomes:
2,493.98B jpy
Number of employees: 369,124
Recession in the collapse( FY2017 )Prius
Camryof the bubble economy

ColloraVitz (Yaris)

Domestic production

Motorization in JapanIMV

Toyota’s crisis

Overseas Production

Lexus
http://www.toyota-global.com

Toyota Way（TPS)

Toyota’s origin of making things
1. Enterprising spirit- Commit yourself to research and creation. (Toyota’s platform)
2. Principle of genchi genbutsu (Go and see: 現地現物)-Try first. Don’t be afraid of making mistakes (Sakichi Toyoda)-Engineers who do not wash their oil-stained hands more than
two times a day are not engineers at all. (Kiichiro Toyoda)
3. Total participation-Good products, good thinking (Company’s slogan for inventiveness)
4. Making things is making people-"Because people make our automobiles,
nothing gets started until we train and Taiichi OONO
Sakichieducate our people.“ (Eiji Toyoda)
Eiji Toyoda TOYODA

Toyota Production System (TPS),Toyota Way

Kiichiro TOYODAToyota Way（TPS)History of the Toyota Production System
1. Stop-the-Line Culture

Toyoda Sakichi“Jidoka” (=Autonomation) concept in 1902
-Automation with human with human touch

2. Just-In-Time Process

Toyoda Kichiro“Just-In-Time” concept in 1938
-Produce only what is needed by the next process- Eliminate Waste

3. Single minute exchange of die Sigeo Shingo
4. Kanban System
Taiichi Ohno

- Pull Production - Replenishment of the next process
Type-G Toyoda Automatic
Loom with Non-stop Shuttle
Change Motion (1924)

Toyota Way（TPS)

Toyota’s management and guidelines for activities
Toyota’s platform

Origin ofToyota’s spirit(Five main principle of Toyoda)

Guiding Principle Contribution towards

Toyota’s Constitution

Global Vision2020
Medium &Long-term
Business Plan

Sustainable Development

Published in 2001
6 pages booklet

Toyota Way
2001

Corporate image
that Toyota is aiming
towards the 2020
Plans for globalvision realized in2020

Toyota GlobalVision 2020

Action principleof employeesin Toyota

Deployment of the Toyota WayCompany
policyChallenge for themedium and longterm management
planToyota Production System (TPS)Corporate Philosophy “Toyota Way 2001”
 Established as an action program of “Toyota’s basic principles”
 Based on TPS which is “People are the most importantmanagement resource.”
Visual control/sharing information
throughout Global Toyota in Toyota Way
Challenge
Continuous
Improvement

Respect
for People

Kaizen6 pages’booklet

We form a long-term vision, meeting challengewith courage and creativity to realize our dreams.
We improve our business operations continuously
always driving for innovation and evolution.

We practice genchi genbutsu. Go to the source
Genchito find the facts to make collect decisions, buildGenbutsu consensus and achieve goals at our best speed.
We respect others, make every effort toTeamwork understand each other, take responsibility
and do our best to build mutual trust.
We stimulate personal and professional growthshare the opportunities of development andRespect
maximize individual and team performance

Toyota Way（TPS)

TPS/Lean manufacturing
Craft-man Production

19th Century（Hand operation）

First half
20 Century
Latter half
20 Century

Craft -man

Mass Production（Ford system= Fordism）

Ford system

Lean Production

Eiji Toyoda
Taichi Oono
Shigeo Shingo（Toyota system= Toyotism）＜Benchmarking between GM and Toyota ＞
Assembly hours［Hours/Car］

Defects/100cars
Assembly space/car［ sq. ft. ］

Average Parts
inventory

Research in 1987

GM
Framingham

ToyotaTakaoka

NUMMIFremont

311619135

4545

8.1

4.8

7.0

2 Weeks

2 Hours

2 DaysLean system
named by MIT

Source：J.P.Womack, et al.,The Machine that Changed
the World （IMVP Survey）

Toyota Way（TPS)

US. learned TPS at NUMMI in 1980’s
High-tech (Robotics, CIM, etc. )was defeated by Low-tech based on TPS
Magazine, “Fortune” report in1986

1982 – GM closed the Fremont, CA Plant

Fremont plant- Lowest Productivity - Highest Absenteeism

1984 – Reopened as NUMMI (Toyota & GM)- Same work force- White-collar jobs switch from directing to support.
- Small work teams trained to design, measure,standardize and optimize their own work.
- If an operator finds a defectiveon the assembly line, he can stop the line.

1985- Productivity & quality doubled, exceeded all other GM plants

2010 – End of Toyota-GM joint venture-Tesla Motor and Toyota announced a partnershipto work on EV development.
- Tesla S sedan is built at the plant.

Tesla S sedan
Flagship car

Toyota Way（TPS)

Toyota’s DNA, according toHarvard Business Review Magazine“Decoding the DNA of the Toyota Production System”
by S. Spear and H.K. Bowen Sep.& Oct. 1999

The tacit knowledge that forms the basis of the Toyota Production
System can be understood according to four rules. These rules areused as a guide for process design, work, and improvements in all
activities and procedures used for products and services.

Rule 1: How People Work
Rule 2: How People Connect
Rule 3: How the Production Line Is Constructed
Rule 4: How to ImproveOn-site managers do not teach these rules directly to supervisors
and workers, but teach the rules (ways of working, links betweentasks, zero defects, improvements) and ways of learning on site.

Toyota Way（TPS)

What is Toyota’s DNA ?
1. Principle of “Customer Orientation”- The first is Customer, second is Dealer, third is Maker- Next process is the customer

2. Genchi-genbutu (Go and see)

3. The head office, car development division and production plant
are adjacent- The climate of Toyota’s head office is good Spartan Mikawa.
- The headquarters in Tokyo, are mostly bad

4. Focus on human resource development- Making Things is Making People

5. Strong energy for transformation

Okuda (Former chairman and top of Keidanren) saying ;"It is wrong not to change”"Those who oppose change are not silently next to me at least"

6. The strength of the sense of crisis

Toyota Way（TPS)

Publishing examples spread TPS/Lean to the world
TPS established（1970’s）⇒TPS spread to U.S.（1980’s）、TPS named as Lean system

S. Shingo（1981）

Y.Monden（1983）

K.Ishikawa(1985)

M. Imai（1986）

Taichi Oono Lester & Solow（1988)（1989）

Lean system spread from U.S to Europe（since 90’s） ⇒ Lean System spread widely

Womack & Daniel Jones（1990） （1996）

Jeffrey Liker Mike Rother K. Sobek II.
(2009)（2003）（2009）
Shingo Prize

Eric Ries(2011)

Toyota Way（TPS)

Deployment of Toyota Production System (TPS)TPS has been studied by people around the worldin the name of “Lean system”
1970

1980

’37TMC founded

DevelopmentofTPS(Japan)1990
Collapse of
bubble economy

Japan bashing
In U.S.

’73 TPS （In-house Manual)

DeploymentofLean system（US,Overseas）
Method and conceptoriginated in TPS

2000’78 TPS Publish（Oono）’84 NUMMI launched’83 TPS Publish （Monden）
T2010

Break away fromthe traditional TPS· Global expansion· From production togeneral management· ICT innovation

Visit of Japanese industry from US.
’89 Made in America（Lester）’90 The machine that change the world（Womack）

Deployment ofLean production’03 The Toyota Way (Liker)

Spreadto other sector
Six Sigma、ECR,TOC

Agile software process

Toyota Way（TPS)

TPS (Toyota Way) is evolving
 TPS is a people centered system rather than the methodology.
 Principles of traditional TPS don't change. But TPS is evolving
by advanced IT with many researcher and TPS consultants
TPS/Lean/Agile system
1. Toyota Production system
CS (Customer Satisfaction)
QCD ( Quality, Cost, Delivery)

Just-In-Time

People &Teamwork
KaizenActivities

自働化(Autonomation)

Eliminating
Muda
Leveled Production, Standardized Work
Visual Management, Information Sharing
ES (Employee Satisfaction)
Mutual Trust between Employeeand Management, DNA at Toyota

2. Lean Thinking

3. Toyota Way 4 Ps

DefineCustomer
Value
Define theValue Stream
Make Value
FlowPull System

ProblemSolving
Peopleand Partners
Process-Continuous flow
-Pull System

Philosophy
Strive forPerfection-Respect people

Toyota Way（TPS)

Examples of the basic principles that TPS teaches

Premises for applying Just-In-Time:-Building quality in process. -Next process is your customer.
-Never hand over defective units to the next process.
-Elimination 7 Muda (wastes)-Continuous small flows (Leveled production and delivery)-No kaizen if there is no standard-Working is totally different from moving. 自働化(Autonomation）-Remove intra-process distribution that does not add value-Elicitation of problems (Each worker can stop the line. No warehouses)-No problem is a problem
Characteristics of vehicle manufacturing process
MaterialForging

MaterialCasting

MaterialSintering

Heat treatment

Deep multistage process

Machining

Unit assembly
Plastic molding

Vehicle assembly plant
Stamping

Welding

Painting

Assembly

Toyota Way（TPS)

Commonly used terminology in TPS
Andon Andon (行灯) : Signboard Mieruka (見える化) : Visibility ,Visual management
 Genchi Genbutsu (現地現物) :Go and see for yourself
 Hansei (反省) : Self-reflection
 Heijunka (平準化) : Production Smoothing Jidoka (自働化): Autonomation,Automation with human intelligence
Type-G Toyoda Automatic Just-in-Time (ジャストインタイム) :JIT
Loom with Non-stop Shuttle Kaizen (改善):Continuous Improvement
Change Motion (1924)
 Kanban (かんばん) :Sign, Index Card
 Muda (ムダ) : Waste Mura (ムラ) : Unevenness
Kanban Muri (無理) : Overburden

Toyota Way/TPS“ Know why” more critical than ” Know how”
Traditional TPS is Toyota's manufacturing philosophy constructedby practices and wisdom of Toyota’s ancestors.
 Due to its philosophy with variable implicit knowledge, TPS is not sounderstandable as American methodology (ex. Lean, TOC, Six Sigma ).
“Know How” to use
Explicit
knowledge

Tool, Method“Know Why”

Implicit
knowledge

Essence of Tools“What is ”

Essence (Fundamentals) of TPS

TPSAgile software
process

Kanban, Andon
Poka-yoke, Pull
Muda, Heijunka

Refactoring, Splint
Pair Programing
Iteration, TDD

Essence of TPS
 Enlargement and enrichmentof human capacity
 Improvement of Kaizen power Respect for workers

Toyota Way/TPS

What is TPS?
Basic philosophy is “Customer First”

Two pillars
Goal・JIT (Just-In-Time)・Jidoka (Autonomation, Autonomy)

Create teams and members who continue Kaizen activities
always seeking for “ To Be ” , ideal system

Ideal system:

Construct continuous flow business process

Objective of JIT: Shorter lead-time by eliminating waste (Muda)
TPS :First step to apply TPS

Symphonyorchestramodel（１）Awareness of TPS（２）５S（３）Visibility (Mieruka)
Sato Sanpei

Harmonizedautonomous
De-centralizedsystem

Principle of TPS/Lean

The basis of TPS is “Trust the worker.”
1. Mutual Trust between Labor and Management
 “Labor-Management Declaration” in 1962 at Toyota Improved productivity brings prosperity to the company
and the employees
 Two pillars of Toyota Way which focus on people(1) Continuous improvement (Kaizen)(2) Respect for people

2. The fundamental of TPS is human resource development
 People are the greatest management resource
 To make good products requires well-trained member
 To vitalize people and organization〔１〕; Role of management〔2〕： Making workplace lively〔3〕： Steps for vitalization

End of Part 1“Open the window and look outside.
It`s a big world waiting for you.”by Toyoda Sakichi （豊田佐吉）