TPS (Toyota Production System) In Brief
As a defeated country during the World War 2, Japan was devastated. There was an attempt to achieve industrial development and shift to a mass production method. Known as the American quality guru, W. Edwards Deming was invited to Japan in 1950 by Japanese scientists and engineers to deliver conferences. Back then, Japanese products were considered cheap and poor quality like Chinese products in the past. During the conferences, Deming defended the idea that improvement in quality would result in an increased market share, decreasing expenses and enhancing productivity. As the quality increases, less scrap would be produced and, the need for repair would decrease resulting in improved machine productivity and a reduced level of consumables. This would enhance productiveness; an opportunity would be achieved to offer products for affordable prices thanks to high quality and improved costs resulting in an increased market share.
In the western countries, quality control took place after the manufacturing of products so that defective ones were sorted out, repaired or scraped and, quality ones would be sent to customers.
Deming suggested to Japan that quality should be applied in each stage of the production and assembly processes so that each step would internally achieve quality.
He also found a chance to apply his systems (such as SPC ‘Statistical process control’, and PDCA ‘Plan-Do-Check-Act”), mainly in Japan, although these systems had been developed in the USA.
Toyota adopted this principle and became a candidate for Deming Awards. It started to implement and enrich the philosophy ‘’Build in Quality’ on which the TPS (Toyota Production System) is based.
Taichii Ohno was one of those who contributed to the establishment and development of the TPS putting it into practice. He taught the principles of Leadership through the Root Cause Analysis with 5 Whys and the infinite Kaizen philosophy. According to Taichii Ohno, ’No problem was a big problem”. Accordingly, the TPS adopted the approach that a problem is an opportunity to improve our business place and the business itself.
In the production, the Jidoka principle (Intelligent Automation/ Do not receive, make, send those defective) started to be implemented with an approach that each process is the customer of the next one. An order was brought to all types of movements of materials based on the principle of JIT (Just In Time). JIT and Jidoka have become the two keystones of the TPS. Based on the Kaizens (change for better), a continuous improvement has been achieved to solve problems in cooperation, deliver permanent solutions, and seek the better. The mudas (wastefulness-all factors with no added-value): Waiting, Repair, Stock, Overproduction, Unnecessary Processing, Transport, Movement) have been approached with the Kaizen approach. According to Taichii Ohno, the standards should not be forced by the management but directly created by those who do the job. In this way, there would be no functionless procedures that are hard to be applied. As stated in today’s lean management understanding, a standard business logic would be adopted instead of a business standard and, the focus would be given on the solution of root causes rather than people accusing one another whenever a problem occurs.
In addition to the principle of continuous improvement, one of the most important TPS concepts is ‘respect.’ Respect for nature and people. This is the power for motivation for the efforts concerning continuous improvement. In the book “’The Toyota Way,” Jeffry Liker explains the key management principles adopted in Toyota to deliver the best service to customers. Some of these principles are as follows:
• A management decision should be taken based on long term objectives, even if these would harm the short term financial objectives.
• A pull system should be employed to avoid over/unnecessary production. Production based on customer requests.
• Creation of a culture that takes a risk of stopping the production when a problem arises in order to deliver quality at source.
• Standardization of works and processes to ensure continuous improvement and engagement of employees.
• Visual checks to ensure that problems are not hidden.
• Training select people and teams that put into practice the founding philosophy.
• Direct observation to understand what is going on in a detailed manner. (‘Genchi Genbutsu’ concept.)
• Consideration of all the options with all details to ensure that decisions are taken with all the related parties' participation and quickly put into practice.
• Formation of a self-learning organization through self-criticism and continuous improvement.
In the TPS, the logic of profitability differs from the general approach.
General Logic of Profitability
Sales Price = Cost + Profit
Toyota Logic of Profitability
Sales Price – Cost = Profit
Costs are the only control point and should be reduced. Therefore, the TPS focuses on Muda (Wastefulness), Muri (Excessiveness), and Mura (Unevenness).
When you buy bananas, all you want is the fruit, not the skin. But you have to pay for the skin also. And you, the customer, should not have to pay for the waste. Shigeo Shingo Greatly contributed to the development of the TPS. (Creator of the methods ‘Poke-Yoke’, Inadvertent Error Prevention, and ‘SMED’ - Single Minute Exchange of Die.)
Göksel Savaş Erözmen
Plant Manager - Acron