Lean Production Systems

Learning Outcomes

• Discuss the historical evolution of lean production and the TPS

• Identify the seven different types of Waste (non-value adding activities)

• Explain the 4Ps of the Toyota Production System

• Describe the 14 Principles of the Toyota Production System (TPS)

 Lean Production

“All we are doing is looking at the time line from the moment the customer
gives us an order to the point when we collect the cash. And we are
reducing that time line by removing the non-value-added wastes”
(Ohno, 1988)

• The removal of muda!

– Muda: Japanese word for waste
– Waste: any activity that absorbs resources and creates no value!

• Approaches to removing Muda:

– Kaikaku: radical improvement
– Kaizen: continuous incremental improvement

• Toyota Way: (Lean) is a philosophy (Liker, 2004)

• Toyota Production System (TPS): is the application of the Toyota Way in

manufacturing and the supply chain (see Liker, 2004)

• Lean Production is the Western interpretation and description of the

Toyota Production System (TPS) (see Womack et al., 1990)
 History of Lean

Further Reading: See Holweg (2007) Lean Genealogy, Journal of Operations Management
 Overproduction

Over Processing 1 Inventory

7 2

Rework
Waiting
6 3

Transportation 5 4 Motion

5
 Example: Product Lead Time
• Most business processes are 90% Waste (NVA), 10% Value Added work (VA).

• Value Added (VA) time is often only a very small percentage of the lead time.

• Traditional cost savings focus on value added items (e.g. Optimization Methods).

• Lean focuses on removing and eliminating Non-Value Adding (NVA) activities.

 Toyota Production System (TPS)

Best Quality – Lowest Cost – Shortest Lead Time –

Best Safety – High Morale
Through shortening the production flow by eliminating waste

People & Teamwork

 Selection
 Common Goals
 Ringi Decision Making
Jidoka (In-station quality)
 Cross-Trained
Just-In-Time Make Problems Visible
Right part, right amount,
right time  Automatic stops
 Andon
 Takt time planning Continuous Improvement  Person-machine
 Continuous flow seperation
 Pull system  Error proofing
 Quick chageover  In-station quality control
 Integrated logistics  Solve root cause of
Waste Reduction
problem (5-whys)
 Genchi Genbutsu
 5 Why抯
 Eyes for Waste
 Problem Solving
Leveled Production (Heijunka)
Stable & Standardized Processes
Visual Management
Toyota Way Philosophy

Video about the different principles of the Toyota Production System:

[Link]
 The Toyota Way
• Represents the 14 principles that underlie the Toyota Production System (TPS)
• Characterized by “4Ps” (Philosophy, Process, People/Partners, Problem
Solving).

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The 14 Principles of the Toyota Way
• Principle 1: Base your management decisions on a long-term philosophy, even
at the expense of short-term financial goals

• Principle 2: Create continuous process flow to bring problems to the surface

• Principle 3: Use “pull” systems to avoid overproduction

• Principle 4: Level out the workload (Heijunka)

(Work like the tortoise, not the hare)

• Principle 5: Build a culture of stopping to fix problems, to get quality right the
first time

• Principle 6: Standardized tasks are the foundation for continuous improvement

and employee empowerment

• Principle 7: Use visual control so that no problems are hidden

Source: Liker (2004) The Toyota Way

 The 14 Principles of the Toyota Way
• Principle 8: Use only reliable, thoroughly tested technology that serves your
people and processes

• Principle 9: Grow leaders who thoroughly understand the work, live the
philosophy, and teach it to others

• Principle 10: Develop exceptional people and teams who follow your
company’s philosophy

• Principle 11: Respect your extended network of partners and suppliers by

challenging them and helping them improve

• Principle 12: Go and see for yourself to thoroughly understand the situation
(genchi genbutsu)

• Principle 13: Make decisions slowly by consensus, thoroughly considering all

options; implement decisions rapidly

• Principle 14: Become a learning organization through relentless reflection

(hansei) and continuous improvement (kaizen)
Source: Liker (2004) The Toyota Way
 Principle 1: Long-Term Philosophy
Base your management decisions on a “Long-Term Philosophy”,
even at the expense of short-term financial goals

“The most important factors for success are patience, a focus on long term rather than
short term results, reinvestment in people, product and plant, and an unforgiving
commitment to quality”
(Robert B. McCurry, former Executive VP of Toyota Motor Sales)

• Have a long term philosophical purpose that supersedes short term financial
decision making.

• Work, grow and align the whole firm towards a long-term philosophy.

• The philosophical mission is the foundation for all the other TPS principle.

• Evaluate every function in in terms of its ability to achieve the longterm philosophy
 Principle 2: Continuous Process Flow
Create “Continuous Process Flow” to bring problems to the surface

• Often we think that increasing the speed of a process means compromising

quality, that faster is sloppier. But continuous process flow achieves the
opposite – it generally improves quality.

• Redesign process to achieve high value-added, continuous flow.

• Reduce and remove waste, quality defects, and inventory.

• Create flow to move materials, products and information rapidly.

• Link processes and people together so that problems surface right away.

• Make continuous process flow evident throughout the firm’s organizational

culture
 Benefits of One-Piece Flow
• When you try to achieve one-piece flow, you are also setting in
motion numerous activities to eliminate waste (Muda). Some of the
benefits of one-piece flow include:

(1) Builds in quality

One-Piece Flow Description
(2) Creates real flexibility “If some problem occurs in one-piece flow
manufacturing then the whole production
line stops. In this sense it is a very bad
(3) Creates higher productivity system of manufacturing. But when
production stops everyone is forced to
(4) Frees up floor space solve the problem immediately. So team
members have to think, and through
thinking team members grow and become
(5) Improves safety better team members and people”

(6) Improves morale Teruyuki Minoura

Former President of
(7) Reduces cost of inventory Toyota Motor Manufacturing
 Principle 3: Pull Systems
Use “Pull Systems” to avoid overproduction

• Develop production processes and supply chains that are “pull led” systems.

• Material and product replenishment initiated by consumption is the basic

principle of JIT.

• Use Just In Time (JIT) delivery systems and Kanban Cards to initiate
production.

• Minimise work in progress (WIP) and inventory by stocking small amounts of

each product and frequently restocking based on what the customer actually
takes away.

• Be responsive to day-to-day shifts in customer demand, rather than relying on

computer schedules/systems that track inventory (i.e. the ERP approach).

• Use Takt time to set the pace of production (i.e. the heart beat).
 Source: [Link]

Toyota Production System (TPS)

Toyota Kanban System

Source: [Link]
 Toyota Electronic “Kanban” Card System

PARTS TOYOTA
SUPPLIER (TMCA)
Material Requirements Forcast
Orders
Planning ANSI X12 830 Planning Forecasts

Kanbans
Kanban
Delivery Docket
Sorting Production
Line

Despatching Goods

Kanbans

Delivery Docket Receiving

Accounts Remittance Advice Accounts

Receivable EDIFACT REMADV Payable

EFT EFT

Example: Electronic Toyota Kanban Card

BANKING
SYSTEM
 Principle 4: Heijunka
Level out the workload (“Heijunka”)
(i.e. Work like the tortoise, not the hare)
• Eliminate overburden (Muri) to people and equipment and reduce unevenness
(Mura) in the production schedule.

• Level out the workload (Heijunka) of all processes as an alternative to stop/start

approach of working on products in batches.

• Toyota uses a Fixed Repeating Schedule (FRS), which is a production

schedule that is unchanging (i.e. low variability) but is repeated frequently (e.g.
every week, every two weeks, each month) and contains a variety of products
(i.e. mass customisation).

• FRS helps to smooth the production flow within the firm, helping to reduce
Muda, Muri and Mura.

• FRS generates economies of repetition and lower costs for the firm, and
provides suppliers and customers with a certain production schedule and
delivery requirement.
 Heijunka Example: Toyota Prius
The Toyota Production System (TPS) is NOT a Build To Order (BTO) system, it
is a Change To Order system (CTO).

The Toyota Prius Range

Toyota Prius T 3 Toyota Prius T4 Toyota Prius Spirit

Innovative features: Innovative features: Innovative features:

-Head Up display -17-inch Alloy Wheels - Satellite Navigation
- Touch Tracer controls - Full Smart Entry and Start - 10 GB music hard drive
- 7 airbags - Rain sensing wipers - Intelligent parking assist
- VSC+ - Cruise control - Rear camera
- Auto Air Conditioning - Leather steering wheel - Optional Solar Roof
- Smart Entry and Start - CD player with 8 speakers £24,045
- Drivers electric lumbar support - Bluetooth
- Electric heated mirrors £22,545
- 15-inch Alloy Wheels
- Front Fog Lamps
- Front and Rear electric windows
- CD player with 6 speakers
£20,845
 Traditional Production (unlevelled)
Toyota Prius T3 Toyota Prius T3 Toyota Prius T3 Toyota Prius T3 Toyota Prius T3 Toyota Prius T3
Monday
Production

Toyota Prius T3 Toyota Prius T3 Toyota Prius T3 Toyota Prius T3 Toyota Prius T3 Toyota Prius T3
Tuesday
Production

Toyota Prius T3 Toyota Prius T3 Toyota Prius T3 Toyota Prius T4 Toyota Prius T4 Toyota Prius T4
Wednesday
Production

Toyota Prius T4 Toyota Prius T4 Toyota Prius T4 Toyota Prius T4 Toyota Prius T4 Toyota Prius T4
Thursday
Production

Toyota Prius T4 Toyota Prius Toyota Prius Toyota Prius Toyota Prius Toyota Prius
Friday Spirit Spirit Spirit Spirit Spirit

Production

= Traditional long machine setup and changeover time

 Problems with the unlevelled production approach
• Problems with the traditional “unlevelled” production approach:

(a). Customers usually do not buy products predictably.

(b). There is a risk of unsold goods.
(c). The use of resources in unbalanced.
(d). Placing an uneven demand on upstream processes and suppliers
(e). Can accentuate the “bullwhip effect”

• Note: Most mass production departments will try to minimise the

number of equipment changeovers that are necessary for making
different types of products.

• Large time losses due to setup changes are generally accepted by

mass production firms (i.e. large batch production processes)

• However, long machine changeover times can cause production lot

sizes to increase.
 Heijunka Production Levelling
(Fixed Repeating Schedule, FRS)
Toyota Prius Toyota Prius T4 Toyota Prius T3 Toyota Prius T3 Toyota Prius T4 Toyota Prius T3
Monday Spirit

Production

Toyota Prius Toyota Prius T4 Toyota Prius T3 Toyota Prius T3 Toyota Prius T4 Toyota Prius T3
Tuesday Spirit

Production

Toyota Prius Toyota Prius T4 Toyota Prius T3 Toyota Prius T3 Toyota Prius T4 Toyota Prius T3
Wednesday Spirit
Production

Toyota Prius Toyota Prius T4 Toyota Prius T3 Toyota Prius T3 Toyota Prius T4 Toyota Prius T3
Thursday Spirit

Production

Toyota Prius Toyota Prius T4 Toyota Prius T3 Toyota Prius T3 Toyota Prius T4 Toyota Prius T3
Friday Spirit

Production

= Single Minute Exchange of Dies (SMED) (i.e. quick changeover time)

 Advantages of Heijunka
• Five key benefits of levelling the schedule using Heijunka:
(a). Flexibility to make what the customer wants when they want it.
(b). Reduced risk of unsold products.
(c). Balanced use of labour and machines.
(d). Smoothed demand on upstream processes and suppliers.
(e) Helps suppliers to level their production schedule and synchronise
production along the supply chain.

Question: How to level schedules in service operations?

• Answer: Follow a similar Heijunka approach!

(i) Fit customer demand into a levelled schedule;
(ii) Establish standard times for delivering different types of service.

(e.g. Doctor schedules, dentist schedules, hairdresser schedules).

 Quick Changeover
(i.e. Single Minute Exchange of Dies, SMED)
• Heijunka requires firms to use Single Minute Exchange of Dies (SMED) to
rapidly change a manufacturing process from one product type (e.g. Prius T3)
to another product type (e.g. Prius T4).

• Set up times can be reduced by converting work which was previously

performed while the machine was stopped (i.e. Internal Work) to work that is
performed when the machine is working (i.e. External Work).

• Set up time reduction can be achieved via a number of methods, such as

cutting out time taken to search for tools, the pre-preparation of tasks which
delay changeovers, and the constant practice of set up routines.

• Examples: - Use videotapes to record and then analyze setup procedures

- Use offline time as maintenance time
- Use roller conveyers to move tools, equipments and dies quickly.

• E.g. Airlines such as SouthWest Airlines / Ryan Air use “Quick Changeover”
when aircraft arrive and depart from airport terminals.
 Benefits of Quick Changeover (SMED)
• Reduced setup time

• Higher efficiencies

• Increased capacity

• Reduced Work In Process (WIP)

• Lower batch sizes

• Increased safety

• Increased flexibility

• Elimination of waiting

• Operators preference

• Stockless production
 Principle 5: Jidoka
Build a culture of stopping to fix problems,
to get quality right the first time

• Quality for your customer drives your value proposition.

• Use all the quality practices available (e.g. SPC, PDCA cycle, 0 Defects, TQM).

• Build into your equipment the capability of detecting problems & stopping itself.

• Develop a visual system to alert a team or project leaders than a process needs
assistance (Andon systems).

• Andon: “A light above a workstation that indicates its state, whether working,
waiting for work, broken down, etc. Andon lights may be used to stop the whole
line when one station stops” (Slack et al., 2010).

• Jidoka (machines with intelligence) is the foundation of “building in” quality.

• Build into the firm support systems to quickly solve problems and implement
countermeasures and get quality right “first time” to enhance long run productivity.
 Jidoka
(i.e. The “fixed position line stop system”)
• Traditional mass production approach encourages managers not to stop
or halt production and maximise output. Jidoka is the opposite approach!

• Build devices into machines which detect abnormalities and automatically

stop the machine when they occur.

• Give employees the empowerment to pull “andon cords/signals” when a

fault/defect is detected, which can stop the assembly line.

How Toyota uses Andon Cords along the assembly line, video example:
[Link]

• Toyota also uses Poka-Yoke devices. These focus on mistake proofing a

process to make it near impossible for a employee to make a mistake.

• E.g. Toyota has 27 poka-yoke devices for the assembly of the front axle
of a car, each with its own standardized work form.
 Principle 6: Standardisation
Standardized tasks are the foundation for continuous improvement
and employee empowerment

• The foundation of continuous flow and pull systems: Use stable, repeatable
methods everywhere to maintain the predictability, regular timing, and regular
output of your processes.

• Standardise best practice to capture and accumulate learning about a process.

• Allow creative and individual expression to improve that standards. Then

incorporate it into the new standard.
Standardised Work Chart Work Element Sheet
(detailing each process step) (provides details of the elements of each process step)
 Toyota Standardisation
• Standardisation at Toyota consists of three elements:

(1) Takt time (i.e. Time required to complete one job at the pace of
customer demand)

(2). The sequence of doing things or sequence of processes.

(3). How much inventory the individual worker needs to accomplish

their standardised work.

• “One must standardize, and then stablise the process, before

continuous improvement can be made”. (Liker, 2004)

• Standardization helps to ensure zero quality defects.

 Principle 7: Visual Controls
Use “Visual Control” so that no problems are hidden

• Visual control is any communication device used in the work environment that
tells us at a glance how work should be done and whether it is deviating from
standard.

• Use simple visual indicators to help people determine immediately whether they
are meeting or deviating from a required standard.

• Avoid using a computer screen when it moves the worker’s focus away from the
workplace.

• Design simple visual systems at the place/location where the work id done.

• Visual controls help to improve process flow.

• Many TPS tools are “visual controls” (e.g. Kanban cards, andon signals, Obeya
Rooms, etc) that help to generate a “Visual Control System”
 5S Program
• Implement 5S Programs throughout the firm:

(1) SORT: Sort through items and keep only what is needed while
disposing of what is not;

(2). STRAIGHTEN (orderliness): “A place for everything and

everything in its place.”

(3). SHINE (cleanliness): The cleaning process often acts as a

form of inspection that exposes abnormal and pre-failure conditions
that could hurt quality.

(4) STANDARDISE (create rules): Develop systems and

procedures to maintain and monitor the first three S’s.

(5) SUSTAIN (self-discipline): Maintaining a stablised workplace is

an ongoing process of continuous improvement.

e.g. Create “Shadow Tool Boards”, where each tool is painted on

the board in the place that tool should be hung.
Lean 5S, Video Example:
[Link]
 Visual Control Example: Obeya Rooms
Obeya means “Large Room” in Japanese

• New communication and program

management method developed by Toyota

• Used to facilitate communication, especially

during new product development.

• All information (technical, financial, timing,

progress, problems, countermeasures)
displayed on boards in the room, often using
visual charts and graphs.

• Regular meetings are held with Chief

Engineer & staff in the room

• Each section of the room is maintained by

the appropriate discipline
Video Example of Obeya Room and Supplier Involvement in NPD at Toyota
[Link]
 Chrysler assembly plant
Example: Visual Controls at a

Problem Solving Board 5 Why’s Analysis Kaizen PDCA cycle

Source: Liker (originally developed by Toyota Motor Corp.)
 Principle 8: Technology
Use only reliable, thoroughly tested technology
that serves your people and processes
• Use technology to support people, not replace people.

• Work out a process manually before adding technology.

• New technology is often unreliable and difficult to standardise, which limits “flow” (e.g.
Compatibility of different MRPII / ERP systems).

• Conduct actual tests before adopting new technology in business processes, manufacturing
systems, or products

• A proven process that works “generally” takes precedence over new and untested
technology.

• Reject or modify technologies that might disrupt stability, reliability or predictability.

• Create work cells that are grouped by “product” rather than “process”

Technology example: Lean Assembly Line at Hyundai’s Assembly Plant:

[Link]
 Group Technology
One-Worker, Multiple-Machines (OWMM) Cell

Lean Manufacturing Cell, video example:

[Link]
 Group Technology Cells
(a) Jumbled flows in a job shop without Group Technology cells
Lathing Milling Drilling

L L M M D D

D D
L L M M

Grinding

L L M M
G G

L L Assembly
G G
A A

Receiving and A A G G
shipping

Note: factory layout organised by ‘process’, leads to a jumbled flow of products

 Group Technology Cells

(b) Line flows in a job shop with three Group Technology cells

L L M D G Assembly
area
Cell 1 Cell 2 A A

Receiving L M G G

Cell 3

L M D
Shipping

Factory layout organised by “Group Technology Cells”

(i.e. layout arranged by ‘product’ rather than by ‘process’)

Layout also uses ‘one-piece flow work cells’

 Principle 9: Leadership
Grow leaders who thoroughly understand the work,
live the philosophy, and teach it to others
• Grow leaders from within, rather than buying them from outside the firm.

• Leaders must be role models of the company’s philosophy and way of doing
business.

• A good leader must understand the daily work in great detail so they can be
the best teacher of your company’s philosophy.

• Leaders, executives, directors and managers must practice Genchi Genbutsu

(i.e. Going to see where processes and problems are by deeply observing the
actual situation in detail).

• Create “Chief Engineers” (i.e. Heavyweight Project Managers) within the

company who have total responsibility for a new product development project.

• Use a matrix organization structure for new product development.

 Example: Toyota President’s Management Role
Toyota President’s Management Philosophies:
(Mr. Yamashina, Toyota Technical Center)
• Always keep the final target in mind
• Carefully plan for your final target
• Have a clear purpose for meetings
• Clearly assign tasks to yourself and to others
• Think and speak based on verified, proven information and data
• Go and confirm the facts for yourself ( “Genchi Genbutsu” )
• You are responsible for the information you are reporting to others
• Take full advantage of the wisdom & experience of others to send, gather or discuss information
• Share your information with others in a timely manner
• Always consider who will benefit from receiving the information
• Always report, inform and consult ( “Hou” / “Reng” / “Sou” ) in a timely manner
• Analyze and understand shortcomings in your capabilities in a measureable way
• Clarify the skills and knowledge that you need to further develop yourself
• Relentlessly strive to conduct “Kaizen” activities
• Think “outside the box”, or beyond common sense and standard rules
• Always be mindful of protecting your safety and health
 Center III Center II Center I
(utility vehicles/vans) (front wheel drive cars) (rear wheel drive cars)

Program
Planning
Division

= Center Head
Cost
Management
Division

Body
Engineering

= Chief Engineer
Division

Chassis
Engineering
Division

Powertrain
Engineering
Division

Vehicle
Evaluation
= Functional / General Manager

Division

Component and System Development

Toyota’s product development matrix organization
 Principle 10: Teams
Develop exceptional people and teams
who follow your company’s philosophy

• Create a strong, stable culture in which company values and beliefs are widely
shared and lived out over many years.

• Train exceptional individuals and teams to reinforce the company culture.

• Use Cross Functional Teams (CFT) to improve quality, productivity and flow
by solving technical problems

• Empower people to use the company’s tools and practices to make continuous
improvements to processes and products
 Typical Management Structure of a Toyota Plant
TEAM SIZE

Team Member
(5 – 8)

Team Leader
(3 – 4)

Group Leader
(5– 8) Smallest Group Largest Group
4TLs 5TLs
18TMs 23Ms

Assistant
Manager
(4– 10)

Manager
 Example: Toyota Management Roles
Team Member (TM):
Group Leader (GL):
• Perform work to correct standard.
• Maintain 5S in their work area. • Manpower/vacation scheduling
• Perform routine minor maintenance. • Monthly production planning
• Look for continuous improvement opportunities. • Attendance / corrective actions
• Hoshin planning
• Support problem-solving small group activities.
• Team morale
• Confirm routine quality and TL checks
• Shift to shift coordination
Team Leader (TL): • Process trials (changes to process)
• Process start-up and control. • Manager development and cross-training
• Report/track daily production results
• Meet production goals.
• Cost reduction activities
• Respond to andon calls by TM. • Process improvement projects
• Confirm quality – routine checks. • Co-ordinate major maintenance
• Cover absenteeism. • Coordinate support from outside groups
• Training and cross-training. • Coordinate with up / down stream processes.
• Group safety performance
• Work orders for quick maintenance.
• Help cover TL absence
• Insure standardised work is followed. • Coordinate activities around model changes
• Facilitate small group activities.
• On-going continuous improvement projects.
• Insure parts/materials are supplied to process.
 Principle 11: Extended supply network
Respect your extended network of partners and suppliers
by challenging them and helping them improve

• Build long-term collaborative partnerships with suppliers and customers.

• Example: Toyota outsources 70% of its components to suppliers

• Use Just In Time (JIT) Delivery systems with suppliers and customers.

• Supplier Development: Implement Supplier Development Programs

• Supplier Involvement: Involve suppliers early and extensively in new product

development

• Allow suppliers to have greater responsibility for design activities and

production during new product development.

Video Example of Supplier Development at Toyota:

[Link]
 Toyota Supply Chain Management
• Toyota relies on four inter-firm processes / organisational innovations to
manage its supply network:

(1). Supplier Association (Kyohokai): A network-level forum for creating a shared

social community, establishing network rules, and sharing knowledge;

(2). Operations Management Consulting Division (OMCD): A network-level

business unit given accountability for knowledge acquisition, storage, and diffusion
within the network (especially of the TPS);

(3). Voluntary Learning Teams (Jishuken): A sub-network forum for knowledge

sharing that creates strong ties and a shared community among a small groups of
suppliers, and

(4). Inter-Firm Employee Transfers (Shukko) of key employees, engineers and

managers between Toyota and the suppliers within its supply network.

• Toyota also uses Network Rules to govern the use of Proprietary Knowledge and
Value Appropriation within the Toyota Supply Network
(Dyer and Nobeoka, 2000)
 Principle 12: Genchi Genbutsu
Go and see for yourself to thoroughly understand the situation
(i.e. “Genchi Genbutsu”)
• Genchi Genbutsu interpreted at Toyota as “going to the place to see
the actual situation for understanding”.

• Helps to identify the “root cause” of production problems and quality

defects.

• Solve problems and improve processes by going to the source and

personally observing and verifying data rather than theorising on the
basis of what people or the computer tells you.

• Even high-level managers and executives go and see things for

themselves, to understand the situation (e.g. walking the assembly line)
Ohno Circle
 Principle 13: Nemawashi
Make decisions slowly by consensus, thoroughly considering all
options; implement decisions rapidly

• Effective decision making at Toyota includes five main elements:

(1) Finding out what is really going on (e.g. use Genchi Genbutsu).

(2) Understanding the underlying causes that explain surface

appearances – asking “Why?” five times (i.e. Five Why Analysis)

(3) Broadly considering alternative solutions and developing rationale

for the preferred solution.

(4) Building consensus within the team, including Toyota employees

and outside partners

(5) Using very effective communication to perform steps (1) to (4),

preferably on a A3 report.
 Example: Toyota team meeting guidelines

• Prerequisites for an efficient meeting:

(1) Set clear objectives prior to the meeting;

(2) Invite the right people at the meeting;

(3) Prepare participants;

(4) Effective use of visual tools (e.g. A3 Reports)

(5) Separate information sharing from problem solving;

(6) The meeting starts and ends on time.

 Example: Toyota A3 Reports
• A3 Reporting: A way of communicating visually on one piece of paper to
arrive at decisions

• Reduce your reports to one piece of paper whenever possible (i.e. A3

reports).

• People find it hard to understand complex ideas when they have to

decipher a lengthy report.

• A visual approach is more effective: “a picture is worth a thousand words”

• Embedded in a A3 Report is Toyota’s problem solving process, which is

based on Deming’s PDCA cycle.

• Deming highlighted that all problem solving processes should include all of
the elements of Planning, Doing, Checking, and Acting.
 Toyota A3 reports: problem solving
• Reduce reports to one piece of A3 paper whenever possible to improve communication.
A3 PROBLEM SOLVING REPORT
Company: Best Products Inc. Department: Fabrication Date: 6/9/2004 Prepared by: David Meier
1. DEFINE THE PROBLEM SITUATION: 3. ACTION PLANS TO CORRECT PROBLEMS:
Monthly Units per hour Fabrication Line Overtime $ per month

90
Action Item Short/Long Person Schedule
40 Target = 36 Term Responsible Week 1 Week 2 Week 3 Week 4
80
35
70 Temporary cleaning during breaks and lunch ST Scarpello ∆
30
Units per hour

60
25 Tape boxes to machine to collect dirt ST Danis ∆

$ 000's
50
20
40 Reduce walk time: relocate material and inspection LT Spiess O--∆
15 Reposition start button LT Kissel O--∆
30
10
20 Build skirt around tables to reduce cleaning LT Nicholson O--∆
5
10
0 Add dust collection bin to machine LT Kenrick O------X-- .-------∆
0
Jan Feb Mar Ap r May Jun Jul Aug Sep Oct Nov Dec Modify 4 machines to catch dirt (1 per week) LT Constantino O------X-- .---------X- .----------X- .--------∆

Oct
Feb

Nov
Jul
Mar
Jan

Apr
May
Jun

Aug
Sep

Dec
KEY: Start: O Finish: ∆ Progress Check: X

Monthly Late Shipments

70
60
50

Quantity
Problem Summary Statement: 40
30
Units per hour is consistently below goal
20
Condition is worsening 10
Overtime costs are increasing 0

Feb

Nov
Mar
Apr

Jul

Oct
Jan

May
Jun

Dec
Aug
Sep
Number of late shipments are increasing

2. PROBLEM ANALYSIS: 4. RESULTS OF ACTIVITY:

Production Losses per Category Problem Cause: Weekly units per hour Overtime $ per month
80 75 Loss of production capability due to losses of cycle Fabrication Line
90
70 time, run time, and scrap 38 80
60 37 70

Units pe hour
60 36 60
Minutes per Shift

Reduction of Cleaning Time Per Shift

$ 000's
50 35 50
40 34 40
40 30 33 30
30 32 20
30
Minutes

20 31 10
20 20 15
26th 4th 11th 18th 25th 1st 8th 15th 0
10 10 Feb Mar Mar Mar Mar Ap r Apr Ap r Jan Feb Mar Ap r
0 0 Summary of Results:
Cycle Run Time Setup Monthly late shipments
Befo re After Reduced walk ing by 5 sec / cycle = 7 Units / Hr
80
Reduced cleaning 15 minutes / shift = 2.5 Units / Hr
Units per hour are consistently above goal 60

Quantity
Work Cycle Analysis (for Operator 1)
Process is stable 40
25 Overtime costs decreasing 20
20 Number of late shipments decreasing
0
Seconds

15 Floor space reduced

Jan Feb Mar Apr
10
5 5. FUTURE STEPS:
0 Continue improving dirt containment and control activities
Root Causes: Develop automatic unloading device to further reduce cycle time
Excessive walking due to poor layout Improve handling to further reduce cycle time
Excessive cleaning time due to poor containment and Begin activity to correct other causes of late shipments
cleaning methods

Lean Visual Management and A3 Reports at Lantech (video example):

[Link]
 Principle 14: Continuous Improvement
Become a learning organization through relentless reflection
(“Hansei”) and Continuous Improvement (“Kaizen”)
Kaizen Continuous Improvement Approach:
“The key to the Toyota Way and what makes Toyota stand out is not any of the individual
elements... But what is important is having all the elements together as a system. It must
be practiced every day in a very consistent manner – not in spurts”.
(President of Toyota Motor Company)

• To remove waste, and improve flow, Toyota’s approach is to focus on

Kaizen (i.e. Making continuous incremental improvements over time),
rather than Kaikaku (i.e. focusing on short term radical improvement).

• Taiichi Ohno emphasised that true problem solving requires identifying

“... ‘root cause’ rather than ‘source’; the root cause lies hidden beyond
the source”. (Ohno, 1988).

• Asking “Why?” five times helps to identify the root cause of a problem
(i.e. Toyota’s practical problem solving process)
Toyota’s practical STEP 1. Initial Problem Perception
(large, vague, complicated problem)
problem-solving
process STEP 2. Clarify the Problem

Grasp the Situation The “Real” Problem

STEP 3. Locate Area

/ Point Of Cause

Point
Cause Investigation Why? Of Cause
Why? Direct Cause Basic
STEP 4. Conduct “Five-Why?”
Why? Cause Cause and Effect
Investigation of the Root Cause
Cause Investigation
Why? Cause
Why? Cause
Root Cause

STEP 5. Countermeasures

Standardization STEP 6. Evaluate

STEP 7. Standardise
 Source: Adapted from Schonberger, R. J. (1982) Japanese
The TPS System Manufacturing techniques, New York, Free Press (p.26).

Problem Solving
(by workers and managers)

Ideas for Ideas for Ideas for

improving reducing changing the process
quality setup times (e.g. equipment, training)

Stable Equipment
Small lot Multifunctional
master and
production worker
schedule layout
Reduces
inventories
Kanban Supplier
pull system participation

Companywide
Quality Control Just In Time (JIT) production

Cost reduction by eliminating waste

Increase of Less
revenue Return On Investment (ROI) increases investment
 Conclusion
• History of Lean production and the Toyota Production System

• Identify the seven different types of Waste (non-value adding activities)

(i.e. Overproduction, inventory, waiting, motion, transportation, rework, overprocessing)

• The 4Ps of the Toyota Production System:

P1: Philosophy
P2: Process
P3: People/Partners
P4: Problem Solving

• The 14 Principles of the Toyota Production System (TPS)