This book analyzes the purpose and relationship between the different elements of the Toyota Production System (TPS) and how they add up to an economic system rather than just a production system that brings engineering and managerial solutions to businesses. It argues how TPS can be viewed as a science as opposed to a tool-based technique.
Our society faces unprecedented economic, social, and environmental challenges. Thankfully, TPS offers solutions. These solutions are born out of Toyota's dissatisfaction with simple cost-benefit analyses and trade-offs. It challenges the antiquated model of economies of scale and radical individual asset efficiency. The Toyota Production System offers technical and managerial innovations that eliminate pre-existing financial, socio-economic, and environmental contradictions. The result is congruency between several factors and agents of our society that have conflicted in the past.
Specifically, TPS does the following
Financially, TPS creates congruency between the Income Statement and the Statement of Cash Flow by pursuing total instead of individual efficiency.
Socio-managerially, TPS reconciles the creative nature of people with the mundane requirements of modern industrial work by re-introducing craftsmanship into industrial operation.
Economically, TPS lessens the conflicts between economic growth and environmental stewardship by eliminating, unevenness, overburden, and waste instead of only chasing economies of scale.
These innovations bring financial benefits to the corporation, social benefits to the workers, and economic and environmental benefits to society at large. Each benefit supports the others as opposed to itself individually. The result is true instead of apparent efficiency. This is measurable, repeatable, and worth making into a scientific discipline, which can be taught and applied more widely not just to business haphazardly, but systematically to the broader aspects of our economies.
Author(s): Olivier Larue
Publisher: Routledge/Productivity Press
Year: 2023
Language: English
Pages: 290
City: New York
Cover
Half Title
Title Page
Copyright Page
Table of Contents
Acknowledgments
About the author
Introduction
Section 1 Philosophy, principles, and goals: Beyond tradeoffs by aiming for total instead of individual efficiency
Chapter 1 Production systems’ contribution to human progress
Initial condition: Craftsmanship
Current condition: The great mass production system
Inflexibility in producing customized goods makes profit conflict with cash flow
Dehumanization of work
Singular dependence on economic growth and environmental pollution (Myopic dependency of singular performance metrics)
Target condition: The Toyota Production System
Technical innovation: Reconcile profit with cash flow
Labor relation innovation: Re-humanization of work
Economic innovation: Congruence between economic growth and environmental stewardship
A new economy paradigm
Chapter 2 Toyota Production System (TPS) as a system
The three elements of TPS: What TPS does
The philosophical element
Customer focus philosophy
“People are the most important asset” philosophy
Kaizen philosophy
Shop floor focus philosophy
The technical element
The managerial element (expertise with a framework)
The unity of the three elements displayed in the house of TPS
The house of TPS: A holistic framework from which to think
The roof of the house: The goals of TPS
The pillars of the house: The technical methods of TPS
The foundation of the house: The managerial methods of TPS
The house of TPS as a system
Section 2 Technical innovation: Congruency Between profit and Cash Flow
Chapter 3 As a system of economies of scale based on individual efficiency the traditional mass production system has inherent contradictions
Batch of conveyance to reduce cost conflicts with quality and lead-time
Batch of production to reduce cost conflicts with quality and lead-time
Batch processing means relying on a long-range forecast
Long lead-time of supply against production starts
Long lead-time against equipment design
Trading-offs factors instead of innovating
Chapter 4 The Toyota Production System and its inherent harmony: Approach to reconciling income and cash flow financial statements
Stop and notify, the first element of jidoka
Stop-and-notify
Stop-and-notify via poka-yoke or failsafe process
Stop-and-notify via Andon
Final manual inspection station
Stop-and-notify: Conclusion
Continuous flow as the first element of Just-in-Time
The mass production system: Isolated and functionally organized assets and processes
The issue with terminology
Lead-time
Clarification of terms and process characteristics
Process design for continuous flow
Continuous flow requires each process to have the same cycle time
Continuous flow and proximity of processes
Continuous flow and eliminating changeover time between product variety
Summary of process design for continuous flow
Design for a batch size of production as a result of changeover time and cost
The economic order quantity (EOQ)
Lot size calculation based on demand
Summary of batch size of production
Production lead-time versus the rate of supply under different conditions
Discrete mass production system conditions
Continuous flow conditions
Conclusion of production lead-time calculation
Summary of continuous flow
Takt time is a new datum with which to calculate and organize resources
Calculation for labor needed
Calculation for machine and equipment needed
Calculation for material and component inventory needed
The difference between takt time and the rate of pull
Takt time summary
Separate Man and machine work
Automation and production lead-time
Automation and lead-time of equipment design
Automation to cut the cost of labor rather than boost the value of labor
One worker, one machine
Conclusion of “separate man from machine work”
Pull system, the second element of Just-in-Time
Elements of the pull system
Authorization to work, produce, and convey
The store and the stock
Types of pull system
A-type or replenishment pull system
B-type or sequential pull system
C-type (combined) pull system
Practical application of the pull system
Pull system conclusion
Jidoka and Just-in-Time conclusion
Heijunka: Leveling work by varieties
Heijunka and cash flow
Heijunka and efficiency of assets
Heijunka and machine efficiency
Heijunka and labor efficiency
Heijunka illustration
A new look at labor requirements
A new look at machine and equipment capacity requirements
A new look at inventory requirements between the component process and the assembly line
A new look at labor requirements
Building the heijunka sequence
How many orders to consider for the sequence
Building the heijunka sequence
Conclusion to heijunka
Standardized work
Purpose of work standards
Purpose and benefits of standardized work
Standardized work as an instrument
Approach to implementing standardized work
Role of the team leader
Role of the environment
Elements of standardized work
Sequence of operation
Takt time
Standard in-process stock
Different types of standardized work based on varying cycle times
Type one standardized work
Type two standardized work
Type three standardized work
Standardized work forms
Machine capacity sheet
Standardized work chart
Standardized work combination table
Conclusion on standardized work
Heijunka and standardized work: Craftsmanship in an industrial setting
Conclusion on the technical element of TPS
Note
Section 3 Managerial innovation: Industrial craftsmanship by reconciling the creative nature of people with the mundane requirements of industrial work
Chapter 5 Management based on a vision of the ideal—true north
The purpose of the ideal
Application of the ideal
Focused attention
Grasping the gap between the current and the target condition
Images of the ideal
Characteristic of the ideal condition
Technical characteristics of the ideal condition
Zero defect (highest quality)
100% value-added, (lowest cost)
On-demand and in sequence, (lowers cost and shortest lead-time)
One-by-one (shortest lead-time)
Human characteristics of the ideal condition
Physical safety
Mental safety
Human development
Note
Chapter 6 Kaizen, a scientific problem-solving activity
Observation (plan)
Using our senses
Grasping point-of-cause and root-cause deeply
Cultivate expertise at all levels
Hypothesizing (do)
Testing (check)
Draw a conclusion (act)
Chapter 7 Institutionalization of problem-solving by developing experts: Learning problem-solving and solving learning-problems
Humility
Management shares in success and failure with others
No problem is too small to solve
Confirm by yourself
“Go-see”
Reach for the standard and the standardized work
An intimate relationship between learning new tasks and scientific problem-solving
Progressive learning
Types of excess capacity to mitigate learning risk
Teamwork
Demonstrate results by realizing true efficiencies
Chapter 8 Practical principle-based performance indicators
Managing by total efficiency through the elimination of unevenness, overburden, and waste to achieve true efficiency
Total versus individual (independent) efficiency
Eliminating waste, unevenness, and overburden versus forcing work
Waste or “Muda”
Waste of overproduction
Waste of waiting
Waste in conveyance
Waste in processing
Waste of inventory
Waste of motion
Waste of correction
Unevenness or “Mura”
Equal capacity
Simple flow
Bends
Tributaries
Kanban size
Overburden or “Muri”
Safety
Cycle time
Overtime
Mental burden
Machine overburden
True versus apparent efficiency
Congruency between profit and cash flow
Re-humanization of labor
Economic and environmental benefits
Summary of managing efficiency
TPS metrics: Measuring and managing the 4M of the shop floor
Rate of operation
Overtime
Less expensive, more reliable, and flexible equipment
Operational availability: A keystone operational measure
What counts as output toward operational availability?
Late delivery doesn’t count as output toward operational availability
Relationship between RO and OA
Labor efficiency
∑ cycle time also called total cycle time
Demand
Number of people and time worked
Lead-time/inventory
First design and specify the process and then measure the performance
Separate rate of operation from operational availability
Notification and categorization of performance indicators
Notification of ahead or behind schedule?
Categorization of behind-schedule conditions
People
Best repeatable manual cycle time too long?
Manual cycle time fluctuates
Machines and equipment
Machine cycle time too long
Unplanned downtime
Quality defects and categorization
Categorization of ahead of schedule condition
Chapter 9 Managing human development with “A4 and A3”
Using material and information flow A3 to manage total efficiency and achieve true efficiency through the elimination of unevenness, overburden, and waste
Material information flow of current condition: A diagnostic tool
Grasping the organization’s capability to design TPS operation
Grasping the organization’s capabilities to manage the operation
Gather facts yourself
Correcting some misconceptions and pitfalls of value stream mapping
Material information flow versus value stream mapping
Value stream mapping and inventory
Make a diagnosis by drawing a story
Material information flow of target condition: A prescription (Rx)
Designing the target condition based on the ideal state
Determine the pace of work:
Consider continuous and simple material flow versus discreet and complex material flow
Consider pull system type
Standardized work
TSSC Metalsa reflection case example 2009–2010
Material and information flow conclusion
Section 4 The broader socio-economic benefits of the TPS method: Beyond the appearance of efficiency
Chapter 10 Reconciling economic prosperity with environmental stewardship
The asset-driven mass production system is a push system
The customer-driven Toyota Production System is a pull system
Economic innovation
Notes
Index
