05-11-2012, 05:05 PM
The Toyota Production System
TPS.ppt (Size: 258 KB / Downloads: 233)
Why study Toyota?
Total annual profit on March 2003 was $8.23 billion- larger than combined earnings of GM, Chrysler and Ford. Profit margin is 8.3 times higher than industry average.
Toyota shares rose 24% from their 2002 values. Market capitalization was $105 billion as of 2003 – higher than total of Big 3.
In 2002, Lexus outsold BMW, Cadillac and Mercedes Benz in the US for the third year in a row.
In 2003, sold more vehicles than Ford and Chevrolet.
The company has made profit every year over the last 25 years and has approximately $20-$30 billion in cash on a consistent basis.
How did it happen?
Incredible consistency comes from operational excellence.
The operational excellence is based on the quality improvement tools and methods developed by Toyota (under the TPS): such as JIT, kaizen, one-piece-flow, jidoka, and heijunka!
These technique triggered a “lean revolution” in the manufacturing sector.
Of course, Toyota system is much deeper and in fact is at a philosophical level!
Toyota Way – 14 principles which constitute this philosophy.
What is “Toyota” lean?
End result of applying the TPS to all areas of business. A five-step process:
Defining customer value
Defining value stream
Making it “flow”
“Pulling” from the customer and back
Striving for excellence.
Taiichi Ohno (founder of TPS) “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 waste.”
Story from the beginning
Starts with Sakichi Toyoda who grew up in predominantly farming community in late 1800s. Weaving was a major industry promoted by the Japanese government.
By 1894, Sakichi began to make manual looms that were cheaper but of better quality (more features and less failures).
Started working on his own to develop power-driven loom. This approach of learning and doing yourself became integral part of TPS (genchi genbutsu).
Among his inventions was a special mechanism to automatically stop a loom whenever a thread broke – building in quality as you produce the material (jidoka or poka-yoke).