Kejian 168
Business & Management Resources
Archive for May, 2008
In the 1950s, Ohno returned to the place he understood best, the shop floor, and went to work to change the rules of the game. He did not have a big consulting firm, Post-it® notes, or PowerPoint to reinvent his business processes. He could not install an ERP system or use the Internet to make information move at the speed of light. But he was armed with his shop-floor knowledge, dedicated engineers, managers, and workers who would give their all to help the company succeed. With this he began his many “hands-on” journeys through Toyota’s few factories, applying the principles of jidoka and one-piece flow. Over years and then decades of practice, he had come up with the new Toyota Production System.[3] Of course, Ohno and his team did not do this alone.
Along with the lessons of Henry Ford, TPS borrowed many of its ideas from the U.S. One very important idea was the concept of the “pull system,” which was inspired by American supermarkets. In any well-run supermarket, individual items are replenished as each item begins to run low on the shelf. That is, material replenishment is initiated by consumption. Applied to a shop floor, it means that Step 1 in a process shouldn’t make (replenish) its parts until the next process after it (Step 2) uses up its original supply of parts from Step 1 (that is down to a small amount of “safety stock”). In TPS, when Step 2 is down to a small amount of safety stock, this triggers a signal to Step 1 asking it for more parts.
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When Eiji Toyoda and his managers took their 12-week study tour of U.S plants in 1950, they were expecting to be dazzled by their manufacturing progress. Instead they were surprised that the development of mass production techniques hadn’t changed much since the 1930s. In fact, the production system had many inherent flaws. What they saw was lots of equipment making large amounts of products that were stored in inventory, only to be later moved to another department where big equipment processed the product, and so on to the next step. They saw how these discrete process steps were based on large volumes, with interruptions between these steps causing large amounts of material to sit in inventory and wait. They saw the high cost of the equipment and its so-called efficiency in reducing the cost per piece, with workers keeping busy by keeping the equipment busy. They looked at traditional accounting measures that rewarded managers who cranked out lots of parts and kept machines and workers busy, resulting in a lot of overproduction and a very uneven flow, with defects hidden in these large batches that could go undiscovered for weeks. Entire workplaces were disorganized and out of control. With big forklift trucks moving mountains of materials everywhere, the factories often looked more like warehouses. To say the least, they were not impressed. In fact, they saw an opportunity to catch up.
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Toyota Motor Corporation struggled through the 1930s, primarily making simple trucks. In the early years, the company produced poor-quality vehicles with primitive technology (e.g., hammering body panels over logs) and had little success. In the 1930s, Toyota’s leaders visited Ford and GM to study their assembly lines and carefully read Henry Ford’s book, Today and Tomorrow (1926). They tested the conveyor system, precision machine tools, and the economies of scale idea in their loom production. Even before WWII, Toyota realized that the Japanese market was too small and demand too fragmented to support the high production volumes in the U.S. (A U.S. auto line might produce 9,000 units per month, while Toyota would produce only about 900 units per month, and Ford was about 10 times as productive.) Toyota managers knew that if they were to survive in the long run they would have to adapt the mass production approach for the Japanese market. But how?
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The story begins with Sakichi Toyoda, a tinkerer and inventor, not unlike Henry Ford, who grew up in the late 1800s in a remote farming community outside of Nagoya. At that time, weaving was a major industry and the Japanese government, wishing to promote the development of small businesses, encouraged the creation of cottage industries spread across Japan. Small shops and mills employing a handful of people was the norm. Housewives made a little spending money by working in these shops or at home. As a boy, Toyoda learned carpentry from his father and eventually applied that skill to designing and building wooden spinning machines. In 1894 he began to make manual looms that were cheaper but worked better than existing looms.
Toyoda was pleased with his looms, but disturbed that his mother, grandmother, and their friends still had to work so hard spinning and weaving. He wanted to find a way to relieve them of this punishing labor, so he set out to develop power-driven wooden looms.
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When I first began learning about TPS, I was enamored of the power of one-piece flow. The more I learned about the benefits of flowing and pulling parts as they were needed, rather than pushing and creating inventory, the more I wanted to experience the transformation of mass production processes into lean processes first hand. I learned that all the supporting tools of lean such as quick equipment changeovers, standardized work, pull systems, and error proofing, were all essential to creating flow. But along the way, experienced leaders within Toyota kept telling me that these tools and techniques were not the key to TPS. Rather the power behind TPS is a company’s management commitment to continuously invest in its people and promote a culture of continuous improvement. I nodded like I knew what they were talking about and continued to study how to calculate kanban quantities and set up one-piece flow cells. After studying Toyota for almost 20 years and observing the struggles companies have had applying lean manufacturing, what these Toyota teachers (called sensei) told me is finally sinking in. As this book attempts to show, the Toyota Way consists of far more than just a set of lean tools like “just-in-time.”
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