The credit of developing Toyota Production System goes to Taichi Ohno, former VP, Toyota Motor Corp and Shingo Shigo. Shingo was a thinker, who had the basic framework in his mind, and Ohno was implementer, who actually executed Shingo’s ideas. The system was developed and promoted by them while working for Toyota Motor Corporation. It is being adopted by many Japanese companies in the aftermath of 1973 oil shock. Though the main purpose of the system is to reduce costs, the system also helps increase the capital turnover ratio and improves the productivity of a company as a whole.
Even during period of slow growth, the TPS could make a profit by decreasing costs in unique manner that is, by completely eliminating excessive inventory or workforce. It would probably not be overstating our case to say that is another revolutionary production system. It follows the Taylor system (scientific management) and the Ford system (mass assembly line).
Basic Idea and Framework
Its major focus is on completely eliminating unnecessary elements of production system, in order to reduce costs and to increase productivity.
However cost reduction is the system’s major goal, but the other three it is ought to satisfy are :
- Quantity control- this arms the system to effectively deal with the fluctuations in demand.
- Quality Assurance- this ensures that each process supplies only good part to next process
- Respect for humanity- the most important element in the system is human being. Happy Worker = Happy Machine = Happy Factory = Happy Company = Increased Profit.
As can be seen in the diagram, the major pillars of this system are JIT and Autonomation. The other two key concepts to the TPS include Flexible Workforce that is multiskilled workforce, and Creative thinking or inventive ideas or capitalizing of worker suggestions.
To realize these four concepts, Toyota has established the following systems and methods:
- Kanban system, which act as enabler for JIT
- Production smoothing method to adapt to demand changes
- Reducing Set up time in order to reduce the production lead time
- Standardization of operations to attain line balancing.
- Machine Layout and the multi-function worker for the flexible workforce concept
- Small group improvement activities to reduce the costs and improve the worker’s morale
- Visual control system to achieve Autonomation concept
- Functional Managements system to promote company wide quality control.
I have myself worked on the few concepts like Kanban, Set up Time reduction, Standardization of operations, Small group improvement activities, Machine Layout, small lot production. I will discuss all the elements of the diagram, in my series of coming articles. My suggestion is just click on the picture to see the full size image and understand the framework.
Though while reading this article and seeing the diagram, you may think that this system is only relevant to manufacturing and specifically to assembly line. But, it is nowadays being used even in services and software companies. Only the names are different. Some know it as Lean Manufacturing System. Then most of the companies, while adopting this methodology and customizing it, gives it own name like Maruti calls it MPS ( Maruti Production System) and Subros calls it SPS (Subros Production System).
Actually, I came in touch with this methodology in rookie year of my job. I was so fascinated by it, that I kept on bugging my HR and Top Management guys, till they didn’t sent me to actually see it happening in Toyota. And it was, simply mind blowing system. They actually practice, what we read. So, friends that’s all for now, keep reading for my next article on the critical elements of this System.