Forklifts are pivotal in Toyota s own continuous improvement journey

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1 WHITE PAPER Innovative Applications for the Toyota Production System: Forklifts are pivotal in Toyota s own continuous improvement journey Sponsored by -1-

2 PLANT SERVICES: WHITE PAPER Innovative Applications for the Toyota Production System: Forklifts are pivotal in Toyota s own continuous improvement journey INTRODUCTION The Toyota Production System (TPS), developed by Toyota in the mid 1900s, is still a standard for companies worldwide and remains ingrained in Toyota s culture globally. The system was founded on pursuing the elimination of all waste from production processes, though other industries including service organizations are also benefiting from TPS. Material handling equipment plays a prominent role in supporting TPS. At Toyota s own manufacturing facilities, integrating forklifts into daily operations is proving to deliver efficiencies and enable quality, safety, productivity, and profitability improvements. A fleet of over 100 forklifts and order pickers manufactured by Toyota Material Handling North America currently serve the Toyota Industrial Equipment Manufacturing (TIEM) plant in Columbus, Indiana. The equipment and parts manufacturing and distribution campus includes more than one The Toyota Industrial Equipment Manufacturing (TIEM) plant in Columbus, Indiana, operates 88 forklifts, 16 stand-up riders, and 45 tuggers made by Toyota Material Handling North America. million square feet of facilities. The forklifts are instrumental in streamlining the site s operations, maintenance, inventory, and field service processes. Learn how TPS and Toyota s forklifts are enabling continuous improvements at Toyota, and how the value is extended to aftermarket services, fleet R&D, forklift acquisitions, and dealership. Toyota s practices are a model for achieving lean benefits enterprise-wide across many unique operations. WHAT IS TPS? TPS is based on two concepts: Just- In-Time (JIT) production (making only what is needed, when it is needed, and in the amount needed), and Jidoka ( autonomation with a human touch), which includes the development and use of intelligent machinery while allowing any associate to stop a process if they see a problem or opportunity for improvement. At the heart of TPS is Kaizen, or continuous improvement, where everyone in the organization -2-

3 PLANT SERVICES: SPECIAL REPORT continuously looks for waste and endeavors to remove it and improve the standard. Waste in this context is evidenced by product defects, excessive inventory, unplanned downtime, unnecessary tasks, overproduction, idle time, clutter in the work area, and any number of other issues. Since waste can never completely be eliminated, it is instilled in the culture to apply improvements on a daily basis. The Japanese phrase Monozukuri wa hitozukuri mean making things is about making people. This concept emphasizes a spirit of excellence and a culture of respect developed through the Toyota Production System, where people are the most important part of the process. They share responsibility for success, and each success boosts morale. TPS allows us to constantly evaluate our processes to identify and remove waste. The byproduct is more efficiency and productivity. This can offer a competitive advantage and, in some cases, make our work safer, says Bruce Marti, Aftermarket Delivery Manager for Toyota Material Handling. The different principles that support TPS all tell us to develop a culture of continuous improvement and allow us to quickly identify defects in the process. The essence of TPS is working for our customers and getting them what they need as soon as possible. This efficiency is ingrained into our people. It s ingrained in TPS culture, he adds. WHY KAIZEN FOR CONTINUOUS IMPROVEMENT? No process is ever perfect; it can always be improved. Performing Kaizen in Toyota s manufacturing operations allows optimization of everything from logistics to operator performance. Every individual is committed to improving quality, productivity, safety and on-time delivery on a daily basis. Small changes over time have a large, positive impact on the business and overall customer satisfaction. There is a natural tendency to have degradation over time. If you re not getting better, then you re getting worse. We can t just be satisfied with the status quo, explains Scott Redelman, Senior Manager of Production Control and Logistics at Toyota Industrial Equipment Manufacturing (TIEM). The TPS culture allows everyone to constant -3-

4 PLANT SERVICES: SPECIAL REPORT WHO ARE THE KEY STAKEHOLDERS AFFECTED BY TPS? TPS stakeholder teams span Toyota s entire forklift manufacturing operation, each with their own measures of success that are subject to continuous improvement. Every associate is empowered to help evaluate and answer questions like these in a TPS operation: R&D Will the forklift idea improve productivity, safety, efficiency, reliability, or costs? Has the idea been patented? What is the average time to market? PROCUREMENT Are the forklift parts and material suppliers delivering quality products on time? Can they be purchased at a lower cost elsewhere without sacrificing quality? Can the procurement cycle time be reduced? Is contact compliance as expected? OPERATIONS Are production schedules complete and accessible? Is the inventory and equipment available when needed? Is the production floor layout logical and efficient? Do the products conform to quality standards? MAINTENANCE AND RELIABILITY Are parts and components available when needed? Is the work planned and scheduled efficiently Is the equipment maintenance up to date? Did any accidents or injuries occur, and were they handled properly? WAREHOUSE AND SHIPPING Where can inventory stocking levels be reduced? Are production schedules and shipping orders complete and accessible? Is the warehouse layout logical and efficient? FIELD SERVICE Are the routes well defined and organized efficiently? Did the technician show up on time, with the right parts, and able to complete the repair? SUPPLIERS AND DEALERS Are we being as efficient as possible in product and service delivery? Are we taking steps to continuously improve? ly look for the next problem and eliminate it. It helps us to become a better organization and make a better product, adds Redelman. In daily management team meetings, KPI results for the biggest problems are compared against targets set the prior day. The team discusses what worked well, what didn t, and their commitments for the next day. Their hope is to learn which decisions and actions definitively improved processes and eliminated former problems. If something fixed reoccurs, it means the root cause has not been found, and the team evaluates it more deeply. Opportunities are great for Kaizen in forklift operations. Insufficient training or improper behavior can cause injuries or damage. Excessive stops in a run or bottlenecks in a process impact productivity and profitability. Many companies have dramatic gaps in operator efficiency, with operators sitting idle or moving sporadically rather than making fluid and efficient movements. Even Toyota s newer forklift operators begin by running at 60-80% efficiency. Example improvement considerations include: Are the forklifts fit for purpose, available, and in the right place when needed? -4-

5 PLANT SERVICES: SPECIAL REPORT Are the forklift operators trained, certified, and in the right place when needed? Are the routes well defined, organized efficiently, and clear and safe for passage? Are the loads secure, and the assignments completed in a safe, timely, and accurate manner? Did any impacts, accidents or injuries occur, and were they handled properly? Is there excessive idle time? Kaizen processes allow TIEM to optimize its processes by being open about potential difficulties and areas for improvement. In addition, once the materials are produced and shipped, Toyota s committment to TPS remains a strong guide throughout the products lifespan in spaces like forklift aftermarket services, forklift operation management, and forklift procurement. AFTERMARKET PARTS AND SERVICE OPTIMIZATION When a customer s forklift goes down, Toyota s goal is to fix it right the first time, every time. Toyota s Aftermarket Delivery organization continually strives for greater process efficiency to reduce the lead time for parts and services promised to the customer. Since we have done a good job of managing our parts inventory, planned an effective route to get to a customer, and provided good training for our technicians, then that customer can feel assured about their decision to partner with Toyota. When our technician shows up, they re going to be able to get the forklift fixed the first time, in the shortest amount of time, says Marti. This organization takes its lead from TIEM. We learn a lot from our Toyota plants, since they ve been using TPS from the beginning. They are our working laboratory; we can see the process in action, explains Marti. -5-

6 PLANT SERVICES: SPECIAL REPORT R&D OPTIMIZATION Modern telematics impact the single largest cost of material handling operation: operator behavior. For years, data has been collecting on the forklifts, but there was no way to listen to it or take meaningful actions. Toyota s T-Matics, a new cloud-based forklift vehicle management system, allows web-based monitoring and reporting of fleet performance and streamlined planned maintenance. Toyota has already rolled out T- Matics to all of its forklifts in its TIEM distribution center, and to all three-wheel electric trucks running product to the line, improving the flow of material around the plant. It provides real-time insight into GPS locations, utilization, fault codes and behavior patterns, revealing waste and bottlenecks that might otherwise have been missed and uncorrected. The system identifies the physical location of forklift operators, and who might be idle but near another job that needs to be done. This allows for maximized efficiency and eliminates idle time that can seriously slow down manufacturing speed. Remote measurement of the time to get to each point allows manufacturers to understand which operators are most efficient and possibly how to reorganize workspaces to maximize productivity. Tracking of impacts and damage also improve operator accountability. Ultimately, T-Matics can reveal long-term operating trends where low productivity is hurting the bottom line and where further efficiencies are possible. From a JIT standpoint, the biggest immediate benefit of telematics for Toyota is the reduction in forklift downtime. Before an operator even realizes their truck is having a problem, the technician is alerted to it by the truck itself, says Jeremy Sassatelli, Telematics Sales and Operations Manager for Toyota Material Handling. T-Matics promotes continuous improvement by automating the identification of forklift patterns in order to set new standards on a continual basis not necessarily in speed, but in how operators travel from one stop to another. With Jidoka in mind, personnel holding manual positions now automated by telematics are moved to more beneficial roles, such as process analysis positions. -6-

7 PLANT SERVICES: WHITE PAPER In the spirit of continuous improvement, Toyota envisions a future where telematics will allow forklifts to integrate and connect with other areas in a manufacturing facility or warehouse. This could include anything from connected machines and the entry levels of automation, such as pedestrian alerts and lighting, to fleet deployment systems where operators are messaged to pick up and deliver items via the optimal route. The integration of T-matics into business systems such as warehouse management and control systems also is on the table as Toyota pushes forward into the new technological era of TPS. FORKLIFT ACQUISITION OPTIMIZATION In addition to day-to-day manufacturing operation improvements, effective fleet acquisition planning and scheduling is crucial to operational efficiency. It begins with matching the lift to its purpose. Considerations include its capacity, mast type, tire type, electric or internal combustion (IC) engine, and the IC fuel type. Properly timed acquisitions ensure each forklift is used to its maximum capacity and not over-utilized or under-utilized. Companies typically buy and lease units sporadically throughout the year not a full fleet at once. As long as a JIT schedule is established and followed, they will avoid owning or paying for forklifts they don t need, says Jon Urbano, Product Development Manager for Toyota Industries Commercial Finance. The decision to lease, buy, or rent a forklift depends on what is good for the business. With a purchase or loan, the buyer pays the full price to own the forklift. For smaller shops, it may make sense to own the unit for as long as years. Leases provide access to newer units and fleets, for the payment and duration required. Commercial industries, particularly larger companies, tend to acquire new equipment and technology every few years and don t necessarily want old equipment. Deciding which of these options is correct for a unique manufacturing operation is a foundational step in TPS implementation. Toyota Industries Commercial Finance (TICF) offers a variety of lease types, including operating leases (lowest payment), capital leases (lease-purchase), one-pay leases (cash upfront), and flex leases (tailored to the customer s needs), in addition to a retail installment balloon loans. The choice depends on the length, payment amounts and payment spread wanted, and the residual value of the forklift. Competitive payments allow Toyota customers to benefit from a complete TPS-supported package of equipment and financing. Both Toyota dealerships and their customers work with TICF to achieve optimization in acquiring forklift fleets. DEALER OPTIMIZATION Toyota works closely with its dealers to help them implement lean processes and instill a lean culture. It strengthens their partnerships with the dealers, who can then -7-

8 PLANT SERVICES: WHITE PAPER strengthen their relationships with their customers. Toyota Material Handling dealerships are natural candidates for the TPS philosophy. The North American dealer network offers forklift equipment, parts, and service directly to end users in localized markets. The After Sales Service Evaluation and Certification (ASEC) program was designed by Toyota to ensure consistency in dealer practices globally. ASEC is intended as a tool that dealers can use to improve their own business processes. It begins with a survey of the dealership to set a performance benchmark, and follows with productivity, safety, and sustainability process improvements. The improvements are then tracked and follow-up surveys are performed, resulting in a cycle of continuous improvement. Respect for all people in the process is encouraged, including dealer, parts supplier, end user, and Toyota personnel. We practice that with our dealers because they drive the success of our company, being our front line to the customers. They are the ones taking service calls from customers, explains Marti. Toyota Material Handling s close engagement with its dealers leads to the implementation of Kaizen processes, meaning customers get the full weight of Toyota quality. CONCLUSION The TPS journey of continuous learning and improvement is applied in every corner of Toyota s business, and reflected in its safety, efficiency, quality, and profitability. The Toyota Production System has been proven to increase the production and efficiency across many different plant operations. The model can be deployed in any company committed to instilling its culture not just its tools and Toyota is eager to show the way. For Toyota, being a good global citizen means encouraging others to become lean. -8-