Toyota Production System

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1 Toyota Production System

2 Toyota Production System An Integrated Approach to Just-In-Time Second Edition Yasuhiro Monden Institute of Industrial Engineers CHAPMAN &. HALL London Glasgow New York Tokyo Melbourne Madras

3 1994 Yasuhiro Monden Softcover reprint of the hardcover 1 st edition 1994 ISBN-13: e-isbn-13: DOl: /

4 Contents Toyota Production System Japanese Tenns... xi Foreword to the First Edition... xiii Preface... xv Acknowledgments... xvii PART I TOTAL SYSTEM 1. Total Framework of the Toyota Production System... 1 Primary Purpose... 1 Kanban System... 6 Production Smoothing... 8 Shortening Setup Time... 9 Process Layout for Shortened Lead Times Standardization of Operations Autonomation Improvement Activities Summary PART II SUBSYSTEMS 2. Adaptable Kanban System Maintains Just-Io-Time Production Pulling System for JIT Production What Is a Kanban? Kanban Rules Other Types of Kanbans v

5 vi 3. Supplier Kanban and the Sequence Schedule Used. by Suppliers Monthly Information and Daily Information Later Replenishment System by Kanban Sequenced Withdrawal System by the Sequence Schedule Table problems and Countermeasures in Applying the Kanban System to Subcontractors Guidance by the Fair Trade Commission Based on the Subcontractors Law and the Anti-Monopoly Law Supplier Kanban Circulation in the Paternal Manufacturer Structure of the Supplier Kanban Sorting Office Smoothed Production Helps Toyota Adapt to Demand Changes and Reduce Inventory Smoothing of the Total Production Quantity Smoothing Each Model's Production Quantity Comparison of the Kanban System with MRP The Information System Between Toyota, Its Dealers, and Parts Manufacturer-s The Order Entry Information System The Information System Between Toyota and Parts Manufacturers Production Planning System in Nissan Computer Control System in an Automobile Factory Centralized Control System and Decentralized Control System Structure of a Hierarchical Decentralized Control System New ALC System at Toyota How Toyota Shortened Production Lead Time Four Advantages of Shortening Lead Time... /05 Components of Production Lead Time in a Narrow Sense Shortening Processing Time through Single Production and Conveyance Shortening Waiting Time and Conveyance Time Broad Approach to Reducing Production Lead Time... I I 6 8. Reduction of Setup Time-Concepts and Techniques Setup Concepts

6 vii 9. Practical Procedure for Reducing Setup Time Analyzing Setup Actions Procedure for Setup Improvements Informing Operators of Improvements Organization Structure for Promoting Setup Time Reduction Standard Operations Can Attain Balanced Production with Minimum Labor Determining the Components of Standard Operations Proper Training and Follow-Up: The Key to Implementing a Successful System Machine Layout, Multi-Function Workers, and Job Rotation Help Realize Flexible Workshops Shojinka: Meeting Demand through Flexibility Layout Design: The U-Turn Layout Attaining Shojinka through Multi-Function Workers Improvement Activities Help Reduce the Work Force and Increase Worker Morale Improvements in Manual Operations Reduction of the Work Force Improvements in Machinery Job Improvements and Respect for Humanity The Suggestion System Kanban and Improvement Activities QC Circles S-Foundation for Improvements Visual Control Practical Rules for Seiton Seiso, Seiketsu, Shitsuke Promotion of5s System "Autonomous Defects Control" Assures Product Quality Statistical Quality Control Autonomation Autonomation and the Toyota Production System Robotics Company-Wide Quality Control

7 viii 15. Functional Management to Promote Company-Wide Quality Control and Cost Management Quality Assurance Cost Management Organization of the Functional Management System PART III QUANTITATIVE TECHNIQUES 16. Sequencing Method for the Mixed-Model Assembly Line to Realize Smoothed Production Goals of Controlling the Assembly Line New Sequence Scheduling Method for Smoothing Basic Logic of Sequence Scheduling Sequence Scheduling Using Artificial Intelligence Diminishing Differences Between the Product Lead Times Determining the Number of Kanban Pertinent to the Alternative Withdrawal Systems Constant Quantity, Nonconstant Cycle Withdrawal System Constant Cycle, Nonconstant Quantity Withdrawal System Changing the Cycle Time of Standard Operations Routine Instead of the Number of Kanban The Influence of the Supervisor on the Total Number of Kanban Constant Withdrawal Cycle System for the Supplier Kanban Computer System for Kanban System Support Technology Data Base Subsystem Kanban Master Planning Subsystem Actual Peiformance Collection and Transition Subsystems Numerical Analysis for Productivity Improvement Analysis Method for Work Place Improvements Performance Analysis of Facility and Worker Evaluation of Overall Production Performance after Improvement

8 ix PART IV IMPLEMENTATION 21. Review of Kanban System Principles Functions of a Kanban Controlling Production-Ordering Kanbans Control of Tools and Jigs through the Kanban System Sequenced Withdrawal and the Later-Replenishment System Withdrawal Prerequisites to Implementing the Toyota Production System Introductory Steps to the Toyota Production System Introduction of llt at Toyo Aluminum-A Case Study Applying the Toyota Production System Overseas Conditions for Internationalizing the Japanese Production System Advantages of the Japanese Maker-Supplier Relationship Reorganization of External Parts Makers in the United States Solution of Geographical Problems Involving External Transactions External Transactions of NUMMI Industrial Relations Innovations Conclusion Appendix 1: JIT Delivery System Can Ease Traffic Congestion and the Labor Shortage JIT Will Contribute to Rationalization of Physical Distribution Genuine llt System Has Prerequisite Conditions External Environmentfor Physical Distribution Should Be Rationalized Appendix 2: Goals Coordination Method Experiment Outline Conclusion Appendix 3: Quantitative Analysis of Stocks in a JIT Multistage Production System Using the Constant Order Cycle Withdrawal Method Introduction Hypothetical Production System Analysis of the Hypothetical System Using the Simulation Approach

9 x Appendix 4: Quantitative Analysis of Lot Size in a JIT Production System Using Constant Order Quantity "Tithdra.wal Method Introduction Hypothetical Production System Modeling the Hypothetical lit System Epilogue Bibliography and References Index

10 Toyota Production System Japanese Terms Andon - a lighted sign giving information about work being done; for example, progress Ato-Hoju -later replenishment system Bakayoke - see Pokayoke Five S - Seiri, Seiton, Seison, Seiketsu, Shitsuke Heijunka - smoothing Ikko-Nagashi - single-unit production and conveyance Jidoka - autonomation; autonomous defect control Junjo-Biki - sequenced withdrawal Kaizen - improvement Kanban - tag-like card that communicates product information Kinohbetsu Kanri - functional management Mizusumashi - whirligig Muda - slack or waste of resources Ninben-no-aru Jidoka - see Jidoka Pokayoke - foolproof Ringi - circulation among top executives Seiketsu - maintaining Seiri, Seiton, and Seison Seiri - identifying & separating necessary items from unnecessary items Seiso - maintaining a clean workplace Seiton - neat placement and identification of needed work items Shitsuke - instilling Seiri, Seiton, Seison, and Seiketsu in workers Shojinka - flexible work force Shoninka - reduction in the work force Shoryokuka - reduction in work hours required to produce a unit xi

11 xii So-ikufu - creative thinking or inventive ideas Te-i-in-se-i - quorum system Yo-i-don - ready, set, go

12 Foreword to the First Edition The technique we call the Toyota production system was born through our various efforts to catch up with the automotive industries of western advanced nations after the end of World War II, without the benefit of funds or splendid facilities. Above all, one of our most important purposes was increased productivity and reduced costs. To achieve this purpose, we put our emphasis on the notion of eliminating all kinds of unnecessary functions in the factories. Our approach has been to investigate one by one the causes of various "unnecessaries" in manufacturing operations and to devise methods for their solution, often by trial and error. The technique of Kanban as a means of Just-in-time production, the idea and method of production smoothing, and Autonomation (Jidoka), etc., have all been created from such trial-and-error processes in the manufacturing sites. Thus, since the Toyota production system has been created from actual practices in the factories of Toyota, it has a strong feature of emphasizing practical effects, and actual practice and implementation over theoretical analysis. As a result, it was our observation that even in Japan it was difficult for the people of outside companies to understand our system; still less was it possible for the foreign people to understand it. This time, however, Professor Monden wrote this book by making good use of his research and teaching experiences in the United States. Therefore, we are very interested in how Professor Monden has "theorized" our practice from his academic standpoint and how he has explained it to the foreign people. At the same time, we wish to read and study this book for our own future progress. At no other time in history has the problem of productivity received so much discussion. No longer is it solely an economic problem; now it presents a serious political problem in a form of trade frictions. At such a time it would be our great pleasure if the Toyota production system we invented could be of service to the problem of American productivity. Although we have a slight doubt whether our Just-in-time system could be applied to the foreign countries where the business climates, industrial relations, and many other social systems are different from ours, we firmly believe there is xiii

13 xiv no significant difference among the final purposes of the firms and people working in them. Therefore, we hope and expect that another effective American production system will be created utilizing this book for reference. TAIICHO OHNO FORMER VICE PRESIDENT, TOYOTA MOTOR CORPORATION FORMER PRESIDENT, JAPAN INDUSTRIAL MANAGEMENT ASSOCIATION FORMER CHAIRMAN, TOYODA SPINNING AND WEAVING CO. LTD.

14 Preface The Just-in-time (JIT) manufacturing system is an internal system in use by its founder, Toyota Motor Corporation, but it has taken on a new look. Toyota Production System, Second Edition systematically describes the changes that have occurred to the most efficient production system in use today. Since the publication of the first edition of this book in 1983, Toyota has integrated JIT with computer integrated manufacturing technology and a strategic information system. The JIT goal of producing the necessary items in the necessary quantity at the necessary time is an internal driver of production and operations management. The addition of computer integrated technology (including expert systems by artificial intelligence) and information systems technology serve to further reduce costs, increase quality, and improve lead time. The new Toyota production system considers how to adapt production schedules to the demand changes in the marketplace while satisfying the goals of low cost, high quality, and timely delivery. The first edition of this book, Toyota Production System, published in 1983, is the basis for this book. It was translated into many languages including Spanish, Russian, Italian, Japanese, etc., and has played a definite role in inspiring production management systems throughout the world. In parallel with the distribution of the first edition of this book, the Toyota production system (also known as Just-in-time) has been applied throughout the world. This is evidence that the JIT concept within the Toyota production system is applicable to any country regardless of location, economic, and civil development. Additionally, this production system can be utilized in any size company in any industry. Although this book is based on my previous work, Toyota Production System, it was written as an entirely new book. Nine chapters have been added, and chapters from the first edition have been revised or enlarged. Written for practitioners and researchers alike, this new book will provide a balanced and broad approach to the Japanese production system. xv

15 xvi The major differences between the Toyota production system of a decade ago and the current system are twofold: (1) computer integrated manufacturing and strategic information systems have been integrated into the JIT approach to facilitate flexibility in responding to customer demand; and (2) continuous improvement activities ("kaizen") have been incorporated to maintain the integrity of the overall process and to increase worker morale. Strategic Information System and elm Linkage of marketing, production (manufacturing), and suppliers through an information network (Toyota Network System) allows each component of the company to make timely decisions concerning volume and variety of end products. Changes in consumer preferences and sales trends for certain product types can be swiftly conveyed to the people in product development, sales, production, and parts manufacturing, who can quickly respond to the data. The end result is a more responsive company. Within the Toyota Network System is a subsystem for in-house production information called the Assembly Line Control System (ALC). The ALC includes information used in computer-aided manufacturing and computer-aided planning systems. In the development of this strategic information system, Toyota used the basic premises found in the JIT production system. The ALC works as a pull system in which each line and process in each plant requests, receives, and uses only the information it needs at the moment. This book will show in detail how the above approaches are harmoniously integrated into JIT and how Toyota's new approach can be useful in many ways to a variety of industries. YASUHIRO MONDEN PROFESSOR, PH.D. INSTITUTE OF SOCIO-EcONOMIC PlANNING UNIVERSITY OF TSUKUBA TSUKUBA, JAPAN

16 Acknowledgments This book is the fruit of much guidance and cooperation of many people to whom I am very grateful. Above all, I am grateful to the original founder of the Toyota production system, the late Mr. Taiichi Ohno (former vice president of Toyota). Mr. Ohno shared generously his concept for the system and he authored the foreword to the first edition of this book. He was also my co-editor for a Japaneselanguage book titled New Development of Toyota Production System. Mr. Joji Arai, executive directorofinternational Productivity Service (former director of U.S. office of Japan Productivity Center) kindly arranged the publication and authored the introduction to the first edition of this book. The generosity of these two men will never be forgotten. Further, I am indebted to the kind guidance of many manufacturing managers within and outside of Japan. It was these people that provided me with the most important information for this book. They allowed me opportunities to observe their manufacturing plants and to consult with many others. From my research office at Tsukuba University in Japan, Ms. Waka Katagiri contributed to data collection and Ms. Masako Yoshinari contributed greatly to the preparation of the English draft. Thanks also go to Dr. Mohammad Aghdassi, my graduate student at the University of Tsukuba, who collaborated on the quantitative analysis to evaluate the usefulness of the JIT system described in Appendices 3 and 4. The English language version of this book was prepared while I was serving as a visiting professor of the School of Management and Economics, California State University, Los Angeles, during my sabbatical year from September 1991 to August I am indebted to Dr. John Y. Lee for arranging that opportunity. Also, I wish to thank the Institute of Industrial Engineers. The contribution of Ms. Maura Reeves is greatly appreciated. Through the network of communication and collaboration among all of these people, this book was born. I feel that the greatest pleasure in life lies in this kind of collaboration. Finally, I would like to dedicate this book to my wife Kimiko whose daily support is the basis for my work in both Japan and in the United States. xvii

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