The Toyota Production System

A Transition from Mass Production to Lean Manufacturing and Supply Chain

Management

Gunjan TiwariD-19SIMS

MBA 2015-17

TOYOTA

• Toyota Motor Corporation is a Japanese automotive manufacturer headquartered in Toyota, Aichi, Japan.

• In March 2014 the multinational corporation consisted of 338,875 employees worldwide and, as of November 2014, is the fourteenth-largest company in the world by revenue.

• Toyota was the largest automobile manufacturer in 2012 (by production) ahead of the Volkswagen Group and General Motors.

• Toyota is the world's first automobile manufacturer to produce more than 10 million vehicles per year.

• As of July 2014, Toyota was the largest listed company in Japan by market capitalization and by revenue.

Major Revolutions in Manufacturing• 1776, Adam Smith “The Wealth of

Nations”

• 1910, Henry Ford and Mass Manufacturing.

• 1980, The Toyota Production System.• Lean Manufacturing.• Supply Chain Management.

The Gestation of TPS

• Eiji Toyoda visit to Henry Ford’s factory in 1950.

• The SMED (Single-digit in Minutes Exchange of Dice) program at the stamping plant.

• Deming’s quality movement in Japan.

• The Engineers: Taiichi Ohno and Shigeo Shingo

• “Japanese” Manufacturing hits America in 1970

Main Features of TPS

• Greater Product Variety

• Fast Response (Flexibility)

• “Stable” Production Schedules

• Supply Chain Integration

• Demand Management

Elements of TPS

• The SMED Program.

• Highlight Problems (Jidoka).

• Gradual Elimination of Waste.• Continuous Improvement (Kaizen), Root-Cause Analysis (5-whys?) and Fool-proofing (Poka-Yoke).

• Cross-Trained Workers.

• Just-In-Time Production.

• Stable Production Schedules (Heijunka)

Traditional “Buffered” Supply Chain

Assembler

2nd Tier

1st Tier

Flow of Production

Flow of Information CustomerDemand

The Just-in-Time Supply Chain:“Look Ma” No Stocks!

Toyota

2nd Tier

1st Tier

Flow of Production

Flow of Information

CustomerDemand

Expectations from Suppliers

• Frequent deliveries.

• Hours (not days) lead time.

• Rapid response capability (not from stocks).

• Delivery to assembly line at the right time in the right sequence without inspection.

• Reliability (quality and timing).

Supplier Relationships• Long-term, steady relationships with a few

suppliers.

• Negotiation based on a long term commitment to productivity and quality improvement.

• Interested in supplier capabilities.• Continuous improvement.• Product/process technology.• Design for manufacturability.

What’s in it for a supplier?

• A Stable Manufacturing Environment.• Steady production volume.

• Leaner Processes.• Cost/Flexibility/Quality

• Profits.

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