Lean Approach The Toyota Production System

3 Vital Elements:
A time-based strategy
The Toyota Production System Standard Operations

The New Equation

Profit SALES

Traditional View

Sales Price

Mfg. Cost

Sales Price

Principle of Cost Plus: Sales Price = Cost + Profit

Profit

New View

Sales Price

Mfg. Cost

Sales Price

Principle of Cost Reduction: Profit = Sales Price - Cost

How well we use time is...

the single best indicator of competitiveness
On a sign seen at Pella Corp.

Time-Based Strategy Model

Time
Sales Define

Produce

Service
(Customers)

Business Resources

Sales

Define

Produce

Customer Service

Business Resources

Production Lead Time

Cost and Time

FG OP 3 WIP

Traditional Manufacturing (Batch & Queue)

OP 2 OP 1 RM WIP

Total Cost Time

Time-Based Manufacturing

OP 3 O P 1 OP 2

FG

RM

Total Cost Time

Total costs decrease with lead time reduction!

Typical vs. Preferred Approach

5 5
5

% % of of Lead Lead Time Time 10 15 20 25 30 35 40 % 45 of50 55 60 65 70 75 80 85 90 95 100 Lead 10 15 20 25 30 35 40 45 50 55 Time 60 65 70 75 80 85 90 95 100

10 15 20 25 30 35 40 45 50 55

VA VA VA

NVA NVA NVA

60

65

70

75

80

85

90

95 100

Typical ApproachReductions Typical Approach Towards Typical Approach

VA VA VA

Typical Approach

NVA NVA NVA

Preferred Approach Towards Reductions Preferred Approach

Preferred Approach

VA VA VA

NVA NVA NVA

Preferred Approach

Types of Waste
Overproduction

Defects
Unnecessary inventory Inappropriate processing Excessive transportation Waiting Unnecessary motion

Waste Causes
Facility layout Excessive setup times Incapable process Poor preventive maintenance Uncontrolled work method

Lack of training
Boredom Production planning/scheduling

Lack of workplace organization

Lack of supplier quality and reliability Lack of concern (accountability)

TPS (Toyota Production System)

J I T

J I D O K A

Production Smoothing 5S Work Environment

JIT Principles
Pace to Takt time One piece flow operations

Incorporate pull systems

Takt Time
The word Takt is of German origin having its meaning most closely associated with musical rhythm Like a heartbeat it should not be arrhythmic Must have a couple of known paces, but these paces should not change every day

Takt Time Calculation

Available time/Demand = Takt Time
Example: 8 hour day - 2 (10) -minute breaks (15) minute clean up period = 445 minutes available If the customer demand in a peak season averages 800 units per day, then 445/800 = .55

We need one unit every .55 minutes or one unit every 33 seconds

Batch vs. Flow Production

Batch

Flow

1-Piece Flow

JIT Production Characteristics

Machines in the order of processes Small and inexpensive equipment U-shaped, counterclockwise work flow Multi-process (multi-tasking) workers

Ergonomically correct operations

Jidoka Principles
Separation of Machine and Operator
Stop the Line Authority

Mistake Proofing or Poka Yoke

Stop the Line Authority

Poke Yoke

Production Smoothing Is...

Customer Demand Average Daily Demand = Target Production

Quantity Time

Adapting production to variable demand:

Model Mix
Monthly Schedule (3200 units) Model A 1600 units
5 10

Model B 800 units Day

15

Model C 800 units

20

80 Daily Schedule (160 units)

A

80
A

80
A

80
A

40 40
B C

40 40
B C

40 40
B C

40 40
B C

20

Day

Production Leveling Benefits

Maintains a consistent, high quality product Minimizes finished goods inventory

Reduces the requirements for capital investment

Reduces costs due to rework and scrap

Ensures on-time delivery