Toyota Production System (Part I of II)

"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." - Toyota Website

This is the first paragraph in the Toyota website describing what the Toyota Production System, or TPS  is. As stated in the website, these principles were studied and adopted worldwide, by many companies trying to understand and replicate the success of this system. Many other systems and methodologies were born from TPS, Lean Manufacturing being the most famous. It is important to differentiate at this point Lean and TPS. Although there are a few discussions on the subject, the most accepted concept is that TPS is the precursor of the more generic Lean Manufacturing. For more information on Lean, there is a post discussing its principles in this blog here.

The history of the TPS goes back to Sakishi Toyoda, in the year of 1896. Sakishi developed a loom machine with automatic stop mechanism. This was the remote principle of Jidoka, allowing an automatic machine that could be stopped by human intervention. This was a very important step towards quality, that the Toyota would maintain until these days. The concepts of flow and JIT were first introduced by Kiichiro Toyoda when he designed a production method using a chain conveyor into the assembly line of a textile plant, in 1927. Later in 1938, Kiichiro introduced the same system in the body production line at Toyota Motor Co. Those were mechanisms used by Toyota Motor Co., but was under Eiji Toyota and Taiichi Ohno that the TPS become the philosophy that we know today as TPS.

The TPS is based in 14 principles divided in 4 different sessions.

Principle 1. Base your management decisions on a long term philosophy, even at the expense of short-term financial goals.

This is probably the most important aspect in TPS. It represents the company's culture and how this culture is shared and observed by every worker and partner. It is something that is present from the company's CEO office to every plant floor, in every location. It is there to guide decisions and set expectations of every single person involved in this enterprise. Generate value for the customer, society, and the economy. This is the starting point where every function in the company is evaluated in terms of its ability to achieve it.
The great importance of this principle make me choose to create a blog post dedicated to discuss it. You can find it here.

Principle 2. Create continuous process flow to bring problems to the surface.

 Most business process are full of waste. Create a continuous flow of information or material, will help to identify and reduce the waste in a process. 

Flow means that when your customer places an order, this triggers the process of obtaining the raw materials needed just for that customer's order. The raw materials then flow immediately to supplier plants, where workers immediately fill the order with components, which flow immediately to a plant, where workers assemble the order, and then the complete orders flow to the costumer.  - The Toyota Way 

 In the core of the continuous flow process is the One-Piece Flow and the Takt Time, that works as a heart beat for it.
Takt is the rate of customer demand. If customer demands is 3600 pieces per month, and the factory works 7 hours a day, 22 days per month, your Takt time will be 154 seconds per piece (554400 worked seconds in a month, divided by the 3600 pieces required in the same month). This means that, in order to achieve a continuous flow, every step in the one-piece flow should spend 154 seconds. If the step is going in a faster pace, they will end up overproducing (waste), and if the step is going too slow, they will become a bottleneck, accumulating inventory (waste). Takt time is used to measure the work in each production step, detect issues and help to solve them.
One-piece flow is also an important element in the flow creation. The idea of one-piece flow is that no step in the production can produce any part unless that is required by the next step. In order to make flow process possible inside production, a U shape one piece flow cell unit concept was developed by Toyota. The idea was to have in one production cell, all the steps required to build a product, and that the work flow from station to station with minimum waste.

A production environment can have multiple cells.

In the end, creating flow helps to eliminate waste (muda) and unevenness (muda).

Principle 3. Use "pull" systems to avoid overproduction

The best definition for a Pull System that I could find states that is a method of controlling the flow of resources by replacing only what has been consumed, and produce no more than what is already ordered. Toyota usually says that the goal of a pull system is to provide your customer with what they want, when they want it, and in the amount they want. No more, no less.

This system avoids the creation of big inventory buffers, that is also considered waste (muda) by Toyota. Taiichi Ohno use to say that the more inventory a company has, the less likely they will have what they need.

One important point is to admit that zero inventory and one-piece flow are not easy systems to master. Some companies will take a long time, improving their processes in order to approach those ideal models, and sometimes they will come to realize that, for their business model, some level of buffer are acceptable and necessary. Rother and Shook in their book, Learning to See (1999) stated "Flow where you can, pull where you must." What is important is to ensure that those buffers have a small size and are replenished by pull system (only when the buffer reach a low level you refill the buffer).

In the Toyota line, this concept was implemented using bins with a color code in the bottom. A station would have two bins filled with a specific part. When one of the bins become empty, they would send it to refill. The code in the bottom of the bin would give the instructions of which part should be filled and where to deliver it. This way, the station would always have the parts required to perform work without the need for a large inventory. They called this card system kanban. Kanban, inside Toyota, are cards and signs that help to signal events and requests on the production line. This days, Toyota will often use a computer system for scheduling some operations, but then use manual cues like cards or white boards to visually control the process.

Principle 4. Level Out the Workload (Heijunka)

One of the goals of the TPS is to eliminate waste. Toyota managers and employees use three japanese words to define waste:

• Muda - Non-value-added. In the production line, there are 8 types of muda:
• Transport
• Inventory
• Motion
• Waiting
• Overproducing
• Overprocessing
• Defects
• Mnemonics
• Muri - Overburdening people or equipment. Overburdening people results in safety and quality problems. Overburdening equipment causes breakdowns and defects.
• Mura - Unevenness. Unevenness on production implies that there will be overburden periods and periods of underuse.

Having starts and stops, overutilization then underutilization, is a problem because it does not lend itself to quality, standardization of work, productivity, or continuous improvement.

Heijunka is the leveling of production by both volume and product mix. It does not build products according to the actual flow of customer orders, which can swing up and down wildly, but takes the total volume of orders in a period and levels them out so the same amount and mix are being made each day. 

Principle 5. Build a Culture of Stopping to Fix Problems, to Get the Quality Right the First Time.

Jidoka traces back to Sakichi Toyoda and his loom. Amoung his improvements was a device that detected when a thread broke and, when it did, it would stop the loom at once. The idea was to solve the problem right away before move production on. Quality should be built in. This means that a method to detect problems when they occur and stop production to fix the issue should be present. If not, the defect will continues downstream.

Another important aspect of jidoka is autonomation. Autonomation is the power that every employee have to make a decision to stop the line when he detects something unusual or wrong. Toyota says that In-station quality (when the problems can't move upstream in the flow) is much more effective and less costly than inspecting and repairing quality problems in a later station up in the flow, or even have to deal with a low quality product in the end of the process.

When the line was stopped, a light signal would be ligt to point in what part of the flow the issue was originated. This signalling is called andon, and represents a call for help. In the Toyota line, the first andon would not stop the whole cell. It would stop one station. The team leader would have one takt to respond before the andon becomes red and stops the cell. If the teamleader can fix the issue or determined that the line does not need to stop to fix the problem, he can push the button again to cancel the andon.

Another tool used to detect issues on the stations are what the japanese call Poka-Yoke. Poka-Yoke is a mechanism in the station that helps an equipment operator (yokero) to avoid mistakes (poka).

Principle 6. Standardized Tasks Are the Foundation for Continuous Improvement and Employee Empowerment.

There in no improvement without standardization. This is Masaaki Imai's message in his book Gemba Kaizen: A Commonsense, Low-Cost Approach to Management.

A standard is a set of instructions, formulas and information that describes how to operate a process.

A standard is a living document and should be updated under two circumstances  a better routine to conduct the process is discovered and must be attached or adapted to the standard, or an error lead to a standard revision which recommended a change to avoid the recurrence of the error.

More on standards, according to Imai:

• Standards represents the best, easier and safest way to do a job.
• Offer the best way to preserve know-how and expertize.  
• Provide a way to measure performance.  
• Show the relationship between cause and effect. 
• Provide basis for both maintenance and improvement.
• provide objectives and indicate training goals.
• Provide a basis for training.
• Create a basis for audits and diagnosis.
• Provide a means for preventing recurrence of errors and minimizing variability.

Another important aspect of the standard lies in the ability to empower the employee that operates the process. Because the operator is the person with the most familiarity with the process, he is the most indicated person to propose improvements to the process. Standards have to be specific enough to be useful guides, yet general enough to allow for some flexibility. This flexibility is the entry point for continuous improvement in the standard.

Principle 7. Use Visual Controls So No Problems are Hidden

A clean environment improves visibility. In Japan, the Toyota factories were all very organized and clean. This was an effect of another TPS tool: The 5S program. This program are a series of activities that aim to eliminate waste in the workplace. Each S was originally a japanese word that ended up translated to english:

• Seri or Sort - Keep only what is really necessary to do the work. All other items are distractions and potential sources for accidents.
• Seiton or Straighten - It is about how organized your work environment is. "A place for everything and everything in its place"
• Seiso or Shine - Keep it clean. In a clean environment is easier to detect problems. Also, the process of cleaning is also a good inspection process.
• Seiketsu or Standardize - Develop processes to ensure the first 3 Ss are being applied.
• Shitsuke or Sustain - Ensure that the workplace is kept organized and clean at all times. Audit the environment regularly.

There is a story that a group of Japanese managers came to US to visit a potential partnership with a vendor. When the Japanese arrived, the vendor had already organized an schedule for the day, starting with a long presentation about the company and the product. The japanese managers insisted to skip the presentation and asked to be taken right away to the factory (Gemba). Once arriving there, it took them less then 15 minutes to come to a decision. When they told the vendor that it would not be possible to do business with them, the vendor asked why. The answer was simple: You do not understand 5s. So you can not understand TPS. This represents how important 5S is to TPS.

Visual controls are broadly used in the workplace, from the assembly line to the offices. The idea is to make information available just by looking. One of the most important visual controls from Toyota is the Obeya. Obeya is a large room that received information from different systems and metrics and have this information available in large monitors inside the room. It is used to help decision making based on the informations available. 

"A well-developed visual control system increases productivity, reduces defects and mistakes, helps to meet deadlines, facilitates communication, improves safety, lower costs, and generally gives the workers more control over their environment" - The Toyota Way.

Principle 8. Use Only Reliable, Thoroughly Tested Technology That Serves Your People and Processes

For Toyota, the process to adopt a new technology requires a long period of evaluation and trials. One of the important aspects analyzed is regarding the impact of the new technology. If no value is added, the idea is just discarded. It is necessary to verify that real value will be added to the product, people or processes before it can be adopted. Another aspect of great importance is around the cultural aspect. Toyota will not adopt a technology that conflicts with it's philosophies and operation principles. Above all, Toyota look at technology as a tool, and as any other tool, it is there to support the process and the people who operates it.

Before it can be adopted, a process must be created and implemented manually, to verify efficiency and functional aspect.

"First work out the manual process, and then automate it. Try to build into the system as much flexibility as you possibly can so you can continue to kaizen the process as your business changes. And always supplement the system information with "genchi genbutsu" or "go look, go see". - The Toyota Way.

It is too long for one post...lets split in two posts and make it easier for both the reader and for me :).
to be continued...