Toyota Motor Corporation is considered as one of the worlds largest automobile manufacturers. Since this company established, Toyota has been working continuously contribute to the sustainable development of society through innovative and high-quality products and services that leads through the times. Toyota management leads business strategy and strategic management in many aspects of ways.
This company can be considered as a showcase company that shows total quality management (TQM) can be applied effectively at every stage of production process. Total Quality Management is an integrated management approaches that focusing on all functions and levels of an organization on quality and continuous improvement. Focuses of TQM is mainly on encouraging a continuous flow of incremental improvements from the bottom of the organization's hierarchy. In this study for Toyota quality management, we will be discussing about three of the principals involved in Toyota Production System which are continuous improvement, customer focus, and system approach to management. For Toyota, we will be discussing about the Toyota Production System (TPS) used by Toyota Company in their quality management.
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Toyota Production System
Total Production System (TPS) is adapted from TQM which developed by Taiichi Ohno of Toyota. TPS is also known as Lean Manufacturing in other quality management terms. TPS in Toyota is mainly involved in making profit, and satisfying the customer with the highest possible quality at the lowest cost in the shortest lead-time, while developing the talents and skills of its workforce by improving continually and solving problem.
The main goal of Toyota Production System (TPS) is to eliminate three broad type of waste. The three types of waste are Muri, Mura, and Muda. Three of these words are adapted from Japanese words. In translation, the word 'Muri' means inconsistency, 'Mura' means overburden, while 'Muda' means waste.
Muri is a key concept in the Toyota Production System that relates to being overburdened, unreasonableness and absurdity. Muri generally refers to the unreasonable work that management places upon their workers and machines. Some of the examples of Muri are the employees are forced to work at faster pace than the usual and performing dangerous task. Pushing a human to work beyond the limit will cause stress to them and thus will reduce the productivity. To avoid Muri, standardized work can be used in the organization. To achieve this standard condition or output must be defined to assure effective judgment of quality. Then every process and function must be reduced to its simplest elements for examination and later recombination. The process must then be standardized to achieve the standard condition. This is done by taking simple work elements and combining them, one-by-one into standardized work sequences. In manufacturing, this includes:
Mura stands for unevenness, inconsistency in physical matter due to human error. Mura can be avoided through Just In Time systems which are based on little or no inventory, by supplying the production process with the right part, at the right time, and in the right amount. Just in Time system creates a 'pull system' in which each sub-process withdraws its needs from the preceding sub-processes, and ultimately from an outside supplier. To overcome this problem, a standard procedure should be applied to the production system to allow every worker to have a clear guide to do their work. Everyone will be clear of their roles and able to do their job effectively.
Muda is a process where resources consumed and waste occurred are more than the necessary to produce the goods or provide the service that the customer actually wants. Waste can gives direct effects to the company. The 7 waste identified by Taiichi Ohno in Muda, which is Muda of Over-production, meaning producing too much than the demand in market, Muda of Waiting, meaning waiting for parts to arrive or for a machine to finish a cycle, Muda of Conveyance, meaning any conveyance is essentially be kept to a minimum, Muda in Processing, meaning over-processing, Muda of Inventory, meaning storing too much inventory and wasted the spaces available, Muda of Motion, making any motion or movement that are not necessary to the production, and lastly the Muda of Correction, meaning repairing any defected products and correct mistakes.
Always on Time
Marked to Standard
By eliminating the three wastes, the whole company operation will become smooth and eliminate cost. Every waste has a cost and it is a direct loss for company. There are two pillars in Toyota Production System, which are Just in Time and Jidoka.
JUST IN TIME System ( J.I.T )
Just in Time is a part of Toyota Production System (TPS) that was invented by Taiichi Ohno, a former Toyota executive. This philosophy has been existed since the early 1970's and became famous until recent years. This philosophy was made as a means of meeting customer demands with minimum delays. Just in Time's concept is all about making products which are needed, when it is needed and the amount needed. The main purpose of the concept is to reduce wastes, inconsistencies, improving product quality and efficiency of production. The theory of just-in-time is the basic principle for the majority of his manufacturing system (Beasley, J. E., n.d.). Stock is seen as unnecessary and a waste in the manufacturing system. An overall objective is to reduce and to limit resources which are used in the manufacturing system.
The key behind the successful implementation of JIT is to reduce inventory levels at the various stations of the production line to the minimum level. The good coordination between stations is important as every station produces only the exact volume that the next station needs. The JIT system consists of defining the production flow such that the flow of materials as they get manufactured through a smooth line and thereby reduced material waiting time. In JIT concept, timing is very important. The timing of production resources from one workstation to the next workstation must be accurate to ensure that the process flow will go smooth because if any problems occurred on one of the workstation, the whole chain process will come to a halt.
In JIT concepts, a unique production tool named 'Kanban' system is used. Kanban system is often associated with JIT concept but Kanban system is not a strict requirement for JIT implementation. This is a 'rectangular piece of paper within a transparent vinyl envelope', (Beasley, J. E., n.d.). Kanban system has another term which is also known as 'supermarket method'. This method borrows ideas from supermarket such that they apply products codes for every products produced. Kanbans, which contain information about the lots and quantities involved, are important to the production of 'pull' system. Kanban system is actually a scheduling system that's tells what to produce, when to produce and the amount to produce. A kanban is a card attached to every lot used to match what needs to be produced in a work station and what needs to be delivered to the next station. There are two types of Kanban in Kanban System which is the Production Kanban (P-Kanban) and Conveyance Kanban (C-Kanban) (Just In Time (JIT), n.d.). The main function of a P Kanban is to pass the authorization for the movement of parts from one workstation to another workstation. Once it gets the parts from the preceding process and moves them to the next process, remaining of the parts until the last part has been consumed by the next process (Just In Time (JIT), n.d.). The P-kanban denotes the need to produce more parts while the C-kanban denotes the need to deliver more parts to the next station. No parts can be produced unless authorized by P-kanban system. P-kanban is only used for processes that flow continuously one at a time. The Production card comes off and remains at the producing cell. The information that usually contained in P-kanban card is such as materials and parts required as inputs for the preceding stage. C-kanban usually contains information such as part name, part number, lot size, routing process, container capacity, number of containers released, and name of the location for the next process. C-Kanban is a system that withdraws the parts from the previous workstation.
Samples of Production Kanban ( P Kanban ) Cards :
The sample above shows the machining process SB-8 must produce the crankshaft for the car type SX50BC-150. The crankshaft produced should be placed at store F26-18.
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After the JIT system are used in the company's quality management system, a large amount of budget were saved as the inventory are cleared saved the spaces. Customer's satisfactions are improved and shipping delay problems are delayed too. The risk of vehicles not being able to sell out can effectively be reduced as the company only produce vehicles that were demanded by the consumers. This dramatically improved the company's return on equity by eliminating a major source of risk.
Samples of Conveyance Kanban ( C Kanban ) Card :
The C-Kanban illustrated above shows that the preceding process which makes this part is forging, and the person carrying this Kanban from the subsequent process must go to position B-2 of the forging department to withdraw drive pinions. Each box of drive pinions contains 20 units and the shape of the box is `B'. This Kanban is the 4th of 8 issued. The item back number is an abbreviation of the item.
Disadvantages of JIT System
JIT System does have a lot of advantages in implementation in Toyota manufacturing system, but they are vulnerable to unexpected disruptions in supply (Glenn, T. 2001). A production line can quickly come to a halt if certain essential parts are unavailable. No inventory meant that a line could not operate as a result of unavailable parts. With no stocks to fall back on, disruption of supplies will occurred and affects the whole company operations. For example, when a fire disaster destroyed a Japan's Aisin brake factory in year 1997, Toyota Company was seriously affected by it. The plant supplied Toyota with almost 90 percent of its major brake parts that were used in nearly all Toyota models. In overall, the fire cost Toyota to suffered losses of $15 million in sales and forced the car maker to shut its 18 assembly factories in Japan for almost a week due to lack of parts.
In conclusion, JIT system has both the advantages and disadvantages. To make this system work effectively, Ohno realized that another factor that had to be controlled is quality. Parts must be flawless and defects must be eliminated before progressing along the assembly line. Defect products which passed along the assembly line will not only affect the whole process and it will cause serious losses too. So, this is the time when 'Jidoka' System, the second pillar of Toyota Production System, plays the important roles in quality management.
Jidoka originally came from the Japanese term which means autonomation in Toyota Production System (TPS). Jidoka also called autonomation which bringing a meaning of 'automation with human intelligence', (MONDEN, YASUHIRO, Toyota Production System, Third Edition, Industrial Engineering & Management Press, Atlanta, Georgia, USA, 1998). Jidoka provides machines and operators the ability to detect when an abnormal condition has occurred and immediately stop work. This enables operations to work-in quality where each process and to separate men and machines for more efficient work. This concept also to authorize the machine operator and in any case if a problem occurs on flow line, operator can stop the flow line in a short time to prevent the problem become worse. By stopping the process line, defective pieces will not move to the next station. This concept minimizes the production of wasted defects, over production and minimizes wastes. Also its focus is to understand the causes of problems and then taking preventive measures to reduce them.
In the history of Jidoka concept, it start from the olden days when the back-strap looms, ground looms, and high-warp looms use manually in weave cloth manfacturing. In year 1896, Sakichi Toyoda is the first person invented Japan's first self-powered loom called the "Toyoda Power Loom', (Synerflex Consulting International). In time to time, he with numerous revolutionary inventions into his own looms, including the weft-breakage automatic stopping device, which automatically stopped the loom when the defect was detected. Finally in 1924, Sakichi successfully invented the world's first automatic loom, called the "Type-G Toyoda Automatic Loom' which with non-stop shuttle-change motion and could change shuttles without stopping operation, (Art Smalley, President Art of Lean, Inc).
As the Jidoka is the one concept of Total Quality Management, the example of the Jidoka concept is when a defective part were discovered, the machine automatically stops, and operators stop the process and immediately correct the problem. Some of the most common causes of defect are such as inappropriate operating procedures, excessive variation in operations, defective in raw material and human or machine error. Jidoka concept was invented and applied due to certain objective and aim such as overproduction of goods, wasted time during manufacturing at the machine, wastage of time during transportation of defected material from one place to other, and waste of time during defective piece re-processing and waste of inventory.
The example of applications of the Jidoka concept in the real worlds were involves numbers of process. In the normal condition, a machine safely stops when the processing is completed. But in other cases such as a quality or equipment problem arise, the machine will detects the problem by its own and stop which preventing defective products from being produced. (Alabama Department of Postsecondary Education). As a result, only products satisfying the quality standards will be passed on to the next processes. As a machine automatically stops when processing is completed or when a problem arises it is communicated via the "andon' (problem display board). This allows the operators continue performing work at another machine, as well as easily identify the problem cause and prevent its recurrence. This means that each operator can be in charge of many machines, resulting in higher productivity, while the continuous improvements lead to greater processing capacity.
As the Jidoka concept focus and aim towards a Total Quality Management, it brings an advantage to the Toyota Production System in effectiveness and efficiency of production and quality. Common advantage of implantation of Jidoka concepts are helps in detection of problem at earlier stages, it helps in becoming world class organization, human intelligence is integrated into automated machinery, defect free products are produced and enhances substantial improvement in productivity of the organization.
In conclusion, Jidoka concepts in the Toyota Production System (TPS) aim towards the quality production of automobile and minimize the defect in production which results to quality management. Some of common goal and benefit in apply the Jikoda concepts are effective utilization of manpower, top quality of production, shorter delivery time of products, reduction in equipment failure rate, improve level of customer satisfaction, increase quality of final product and lower costs. This concept has proven bringing a quality management towards the successful of Toyota Motor Company in the automobile sector.
Other than the two pillars stated above which are emphasized by Toyota Production System, the tools named 'Kaizen' is also one of the important tools in Toyota Production System. Kaizen is a philosophy which is focusing on continuous improvement. In Japanese terms, Kaizen means change (kai) and good (zen). The main strategy of Kaizen is to implement continuous improvement in the manufacturing system. In Kaizen principle, employees' involvement is very important. Kaizen can only be effective when all the employees are involved in the process. Kaizen was invented by two pioneers from Toyota which are Taiichi Ohno and Shigeo Shingo. Kaizen is going for the standards that have been set and then continually improving those standards because continuous improvements are important for gaining long-term profits.
There are five primary elements in Kaizen which are Quality Circles, Improved Morale, Teamwork, Personal Discipline and suggestion for improvement.
1. Quality Circles
Quality Circles is a concept where groups of people in the organization meet with each other to discuss about the quality levels concerning all aspects of a company's running. The group can be consists of all employees from different hierarchy to express out their opinions, comments, about the current working condition. This can helps in knowing where the company goes wrong and actions can be taken to solve and improve it. Typical topics are improving occupational safety and health, improving product design, and improvement in manufacturing process. The ideal size of a quality circle is from eight to ten members.
2. Improved Morale
One of the biggest aspects of Kaizen is the employee. The element focuses on keeping the employees happy and satisfied with their jobs. The workstation environment is very important in making the employees happy. Improved employee morale is essential because it improves productivity and efficiency for a long time.
Kaizen is based on the employees and their ability to consider themselves part of a team instead of as individuals. If everyone can get in the mindset, the company will run more efficiently and effectively.
4. Personal Discipline
To build a strong company, every employee must have their personal discipline. Personal discipline is very important as this can helps them to remain focused and strong in doing their job. Any employee that does not have good personal discipline will not able to do their work effectively.
5. Suggestions for improvement
This principle involves reviewing suggestions from employees. These suggestions should identify some of the common problems within the company so the managers can look for ways to improve them. The problems need to be addressed before they become a large concern for the company and affects the whole operations.
In Conclusion, by using only Kaizen is not enough for quality improvement. The job of Kaizen is simply to identify the problem and make steps toward solving it. Without any proper planning of Kaizen, the company will also be suffering from losses and fail. Therefore, Kaizen is not all about incentives and reward but it is about the support given to higher management to help them improve the way work is done.
Basically, the elements of 5S are all Japanese words beginning with the letter S. The 5 S are Seiri, Seiton, Seiso, Seiketsu, and Shitsuke. The Toyota 5 S system is a tool used to create organisation's housekeeping by using the 5 cross functional teams. By applying 5 S to the quality management system, quality of the products and the safety of workplace are greatly improved. Cost of the company is significantly reduced and profit are started to rise.
Japanese Term English Translation Equivalent 'S' term
Seiri Organization Sort
Seiton Tidiness Systematize
Seiso Cleaning Sweep
Seiketsu Standardization Standardize
Shitsuke Discipline Self - Discipline
SEIRI - Sort out :
This means sorting items into different categories to make it easy to search. All the items can be categorized into several types such as critical, important, frequently used items, useless, or items that are not needed. Unwanted items can be eliminating. Critical items should be kept for use nearby and items that are not be used in near future, should be stored in some place which are less reached. The worth of every item should be decided based on utility and not the cost. As a result, the search time is reduced.
Priority Frequency of Use How to use
Low Less than once per year Throw away, Store away from the workplace
Average At least 2/6 months, Once per month, Once per week Store together but offline
High Once Per Day Locate at the workplace
SEITON - Organize:
The concept here is that "Each item has a place and only one place". The items should be placed back to the same place after being used. To identify items easily, name plates and colored tags can be used. Vertical racks can be used for this purpose, with light items being put on the top position and heavy items occupy the bottom position in the racks.
SEISO - Shine the workplace:
This involves cleaning the work place free of grease, oil, waste, scrap etc. No loosely hanging wires or oil leakage from machines.
SEIKETSU - Standardization:
Employees have to discuss together and decide on standards for keeping the workplace, equipment, and workplace's pathways to be neat and clean. These standards are implemented for whole organization should be inspected from times to times.
SHITSUKE - Self discipline:
5S is considered as self-discipline among the employees of the organization. This includes wearing badges, following work procedures, punctuality, and dedication to the organization.
In daily production there are 7 wastes that need to be treating well in order to achieve maximum profit and high productivity. In Lean manufacturing or Toyota Production System the 7 wastes are:
This waste occurs when the production amount of product, service, documentation or facilities is more than the demand in market. It costs the company money to produce it and lowers the quality of its products. It usually occurs because of these factors such as high changeover times, unreliable equipment, or the unreliable process. However, overproduction is seldom occurs seems most of the employee are very busy.
2. Waiting time
Waiting time can be defined as the waste of goods or human resources that are not moving. The not moving goods have to wait for next phrase. This waste is due to the poor material flow, long production runs or travel distances. The sales of the company can't achieve the maximum profit.
Searching for files or documents will cause waiting time. The waiting time is one of the waste which will cause time consuming. To reduce waiting time for searching a folder, a colored slant line can be drawing on the back of the folders to allow easier searching for folders. When a folder is not arranged in the right place, the colored slant line will not be perfect as below:
But looking at the improper colored slant, it can be easily identified that the folders are not well arranged. So it is very easy to rearrange back the folders to the correct place.
Transportation waste is considered as any movement or motion from one place to another that adds no value to its products. Some of the products may have damaged during the moving process, this causing the waste of money. If the products are not well placed, they can be hard to find it.
4. Inventory ' over stock (unnecessary stock)
Excessive stock is a direct effect of overproduction and waiting. This waste will causes the limited time, limited floor space, and poor communication among the employee and manager.
5. Excess motion
This waste is an unnecessary bending, stretching, walking, lifting, and reaching of an employee during working hour.
6. Inappropriate Processing
Inappropriate processing can be explained as company purchasing high precision equipment for a simple process in production. High precision equipment usually causes overproduction of product. This also includes using wrong supplier or applying the wrong process on job.
7. Defective parts or unit also known as rejection.
Defective parts also known as a tremendous cost to a company. Any small defect will affects the company's inventory, scheduling, inspection and upset a synchronized set of processes. Therefore, a minor defect that made by company can cost it more than the entire manufacturing cost to begin with.
By evaluating the seven wastes, the company can whether its operation is lacking or not. Through these 7 wastes, it can also find out where it can reduce or eliminate waste altogether. Toyota have implemented their TPS program and reduced costs and lead-time and improved the quality of their products. Now, Toyota is one of the world's largest companies.
7 principles of Toyota Production System
In order to eliminate these wastes, there are 7 principles developed by Toyota which is also known as the 7 principles of Toyota Production System.
1. Reduce setup times.
All setup process that is implemented is considered as waste because they tie up to labor and equipment. By organizing procedures, using carts and highly skill workers to do their own setup (self management), Toyota managed to reduce setup times.
2. Small Lot Production:
Producing products in a big lots result in a high setup cost, high capital cost of high speed machinery, larger inventories, long lead time, and thus will cause large defect cost.
3. Employee Involvement:
Toyota organized their workers by forming teams and gave them the responsibility and training to do many specialized tasks. Teams are also given responsibility for housekeeping and to repair defected machines and equipment. Each team has a leader who also works as one of them on the line.
4. Top Quality Control:
Quality is well controlled at each station of production line. The concept of not passing the defective product to the next workstation is controlled by the operator. Any defective product found must be discovered and repaired as soon as possible and therefore to achieve the objective responsibility is given to the owner of that process. If the problem cannot be fixed, the process line will be stopped.
5. Equipment Maintenance:
One of the major contributors to the stopping of production line and defective products are come from failed equipment. Therefore, maintenance of the machines and equipment are important to reduce the risk of producing the low quality products. Most importantly, the machine operator should be assigned to detect any abnormality of the equipment and do more maintenance on it. An early step could help to prevent the total malfunctions of any equipment which might cause a large amount of losses for repairing. This is also known as Total Productive Maintenance.
6. Pull Production.
To reduce inventory holding costs and lead times, Toyota developed the pull production method where the quantity of work performed at each stage of the process is depending on the demand of materials from the subsequent stage. Toyota only produces demanded products. Any unnecessary production will be stop to maintain minimum inventories which can greatly helps to reduce cost.
7. Supplier Involvement.
Suppliers who are the partner of Toyota shall involve and train together with Toyota to achieve target for both side. To maintain a good relationship between the supplier and Toyota, both sides should always have total information between each other. Any problems, dissatisfaction, and even ideas should be exchanged between both parties will encouraged to solve problems effectively and even improving.
Comparison between JIT and Traditional System of Stock Inventory
The traditional management approach of organization is designed to reduce cost of manufacturing but only for certain components in the production system. JIT system responds directly to demands from later stages of production. This distinction can be referred to as the difference between 'cost-push' and 'demand-pull', (Edmond D'Ouville T. Hillman Willis; C. Richard Huston).
In traditional manufacturing, inventory lot sizes are often very large and often will cause longer set-up times. Large lot sizes will cause long lead times which are relate to lower quality of the products, longer delivery time, large work in inventory process, and unable to respond quickly to shifting in market demand.
In contrast to traditional manufacturing, JIT manufacturing requires production of
small lot-sizes. Production of small lot-sizes also requires reduction of the set-up
times. It is well documented that production of small lot-sizes in JIT manufacturing is
closely associated with improved quality, reduced inventory, faster delivery, and is
more responsive to market demands, (Billesbach, 1991; Cook and Rogowski, 1996;
Hobbs, 1994; Payne, 1993; Temponi and Pandya, 1995; White, 1993; Deshpande
and Golhar, 1995; Handfield, 1993; Lawrence and Hottenstein, 1995).
As a conclusion, JIT system is more systematic and efficient compare to the traditional system of stock inventory.
JIT (Wong, S.) Traditional System of Inventory
Toyota Recent News
1. Latest Toyota recall covers 8,000 Tacoma pick-ups
Problem in US
Toyota has recalls on 8,000 Tacoma pick-ups four-wheel-drive (4WD) pick-ups over the possibility of defective front drive shafts. The recall covers 2010 model year units. The problem involves two specific front drive shaft production lot numbers. According to Toyota, the front shaft may include a component that contains cracks, which developed during the manufacturing process. As these affected pick-ups are used, the cracks may eventually lead to the separation of the drive shaft at the joint portion.
To fix the problem, Toyota will have to perform an inspection thoroughly to identify specific lot numbers. This is located on the front drive shaft. The component come under the same lot numbers must be re-inspecting, and the shaft may need to replace. This is to ensure that the shafts under the same lot are all in the good conditions.
2. Toyota Corollas have steering problems.
'Toyota Corolla is set to join in adding to Toyota's misery after it was reported that the National Highway Traffic Safety Administration is looking into a number of complaints filed by motorists over a supposed electric steering problem among 2009 and 2010 Corollas. So far, Toyota has received 83 complaints regarding the steering problems of the Corolla, which, according to the complainants 'has the tendency to steer right or left at speeds of over 40mph', making it hard to stay in one lane and forcing drivers to over-compensate their grips on the steering wheel. According to Automotive News, the steering defect of the Corolla has already caused 10 accidents and six injuries.
As you may know, the Corolla is already one of the eight models that Toyota has recalled over those sticky accelerator pedals and if the NHTSA does find merit to the increasing number of complaints regarding the 'twitchy' steering wheels, then Toyota's problems just a got a whole lot messier.'
Toyota Company should retrieve all the cars with the same problems and spread the news to inform the customers about the problem so that the customer who encounters the same problem can avoid any tragedies from happening. Toyota should detect the problem from the production lot to ensure that the production for the following steering parts will not have the same problem. The steering parts which are found defective should be eliminated as soon as possible and find the causes to reduce the problems.'
Toyota Motor Corporation (TMC) had become one of the leading global car manufacturers as a result of successful implementation of Toyota Production System (TPS) in their quality management. Apart from that, Toyota dominates the global auto market due to their ability to quickly have suppliers respond to the demands they are under for fulfilling production levels based on unique customer requirements.
This related to the collaborative aspects of the globally deployed Toyota Production System make it possible for Toyota to maintain a consistently high level of supplier quality throughout the production processes of dozens of models globally. Whereas, Toyota is like other automotive company that cycle the important part in quality at the source is another key element to TQM.
Besides that, Toyota is credited with several innovations in automotive manufacturing including supply chain management and inventory control, including just-in-time management as well as quality processes including total quality management, which has been heralded as one of Toyota's keys to success. This system eliminates waste and creates more products in a shorter time as demand requires.
After applying TPS, it focuses on efficiency lowers the amount of mistakes made so that company money is not wasted on trying to do tasks more than once. The company becomes more flexible and able to switch between different goals or plans as required. Results of the TPS are improvements in reliability, flexibility, safety, and efficiency.
TPS system has increased the overall productivity in company and reduced the amount of floor space required and manufacturing lead time. Improve in quality and flexibility to response to change in Toyota management. However, this system also gets harm to this company. Difficulty involved with changing process to implement TPS principals has occurred. This system is a very risky process which expects supply chain issues while changing over to lean. And its ability to react quickly to new market trends make TPS an ideal system in today's rapidly changing global business environment.