The Concept Of Toyota Production System Management Essay

The Concept Of Toyota Production System Management Essay This report briefly discusses the concept of Toyota Production System/ Lean manufacturing that Japanese Methodology introduced by Saichi Toyoda, the concept of value chain established by Professor Michael Porter in 1985 and lower waste and competitive advantages of the Lean Manufacturing. All through this report discus about the Toyota Company. In the first part of this report describe about the Lean Manufacturing of selected company. It is critically evaluate the Lean Production which is seeking a high level of production with minimum cost of the Toyota Company that originally Japanese Methodology. At the second this report is highlighting what the recommendations for managing wastes that associates with value chain of the Toyota Company. It is categorised in two categories that primary activities and supply activities in Value Chain. Thirdly discuss what are the implications of recommendation, which discussed before on organizational resources and justify those recommendations which effect on competitiveness sustainability and social responsibility of the company Finally this report describes the Porters Value Chain as a templates and a frame work which support to the front line managers in danger signals and how to face that Danger Signals and identifying wastes. 1) The critical evaluation of lean production in the Toyota Company. It is very important to overview what is the Lean Manufacturing and seeking higher level of output with minimum possibilities such as low labour cost, law material cost, low time and low inventory space, Lean manufacturing produce at a higher level by reducing wastes from the system and simplifying the methods. Toyota Production System is based on two concepts one is jidoka which can translate to automation with a mans touch. It can stop once avoiding the malfunctioning of products when problems arise in the equipment. Wastes can be occurred from several reasons such as, overproduction, waiting, transportation, inventory, defective units, motion and over-processing. Hence Lean Manufacturing in eliminating wastes. Toyota production system/ Lean Manufacturing is introduced by Toyota cooperation which is event of four gentlemen. Sakichi Toyoda, who is father of Toyota Group, Kiichiro Toyoda, son of Sahichi Toyoda, Eiji Toyoda, who was Managing Director from 1950 to 1981 and Taiichi Ohno the father of the Kanban System and chairman in 1981 to 1994. Toyota Use 7 techniques to attain Lean Manufacturing Reduction of set up times Set up activities are wasteful until they tie up labours and equipment with procedures by charts and training to employees and organizing activities. Toyota manages to avoid the setup times. Miner production The organization has to face higher cost on high capital, new machinery, more inventory, set up expenses, high lead times and defect costs when they manufacturing large quantities of products. But Toyota has turned towards low setup and it leads employees to produce in small quantities. Empowerment and Involvement of employees The Toyota Company organize the employees in the organization in to teams and appoint team leaders those having an authority to handle many specific tasks. The company provides training of minor equipment repair and housekeeping and leaders have to work with their teams in the lines 02. Quality at the source If there is some fault it should be able to identify immediately and need be corrected. Totoya has idoka and stop functioning. Equipment maintenance Toyota workers are more conscious about the failure, because they have been well trained to do basic maintenance. Employees have been trained to relevant to maintenance and enhance the quality of the equipment, so they need specialist fix only for complex problems. Pull production Pull production is always target on minimize cost of stock holding, this was introduced by Kotelnikov in 2001 and this is cause to minimize cost of stock holding and time saving. Next stage of materials demand lead to work performs at each step. kanban organize the movement of small containers of miner material between steps. Supplier involvement Toyota Company trains their suppliers to minimize the setup times, maintain stock and reduce failure. And also they consider their suppliers as their partners in the business. Source: Kotelnikov (2001) 2)Recommendations on the ways how waste is managed in Toyota company. The value chain is providing proper method to indicate the improvement of competive advantage in the business. There are number of stages in value chain process for make to value, these all steps are altogather effeted of company value delivering process. What is the way of basic activities can effect to reduce waste in operation process. Inbound logistics The good which needed for production buy from suppleirs and they are stored until they use for the prduction assembly line. Goods are tranfering all over the orrdanization. The Toyota company collect high quality rawmaterials from the best suppelirs in all over the world and keep countinously that quality. They purchase best quality rawmaterials to minimise the watages in prodution line. To handle rawmatrial, The Toyota company practice with JIT (Just In Time) and they keep close relationship with suppleirs to maximise the availability. Operations At this operational level raw materials used to manufacture and assemble. At every separate part of the assembling, includes producing new cars and modifying new cars engine. The Toyota use different and efficient methods for assembling and modifying the car manufacturing to reduce wastages. Outbound logistics They need to be sent to wholesalers, retailers or customers along the supply chain when production is finished. Toyota has opened their show rooms all over the world and made the products more quantifiable to reduce wastages. Marketing and sales They introduce some offers based on target customers. Toyota is true customer oriented company. The Toyota Company mainly focus on the Marketing and promotion Mix to minimize the wastages. Service Toyota provides training on final checking practices and after sales service to Toyota value customers to eliminate wastes from final delivery. Support activities to reduce wastes Procurement This is accountable for purchasing materials for Toyota. It is very important to make the transaction that is high quality product at the lowest price. The Toyota going with some activities such as, outsourcing and e-purchasing to make the effectiveness and free from wastes Development of Technology Technology is front-runners to competitive advantage, as manufacturer of vehicle Toyota is innovating to increase and sustain competitive advantage. Human resource management The Toyota considers their employees as the asset of company. Toyota practice with, recruitment and selection, Training and development, Maintenance and compensation to maintain their employees with higher satisfaction, 3) Recommendation for long term sustainability and corporate social responsibility. Toyota was number one and most admired car producer (Manufacture) in the world according to the annual rating of fortune published in 2001 included such as General motors and Ford .The umbrella policy of Toyota company is the reason and basic philosophy to success in global market environment and its lead to the make company decision and activities. Toyota has penetrated to USA market and invested there. Now they are well established in USA market it is match with its lean manufacturing system. Toyotas way encourages and motivates their employees and they consider it as capital, their main purpose is ultimately winning the employee motivation. All these empowering of employees are lead to more innovation and increase employee participation for manufacturing process and improve its productivity. Toyota way leads to product development and offer very friendly and loyal manner for their customers and they always target to be market oriented. Toyota use out sourcing and it plays a very i mportant part of their manufacturing process and it cause to reduce more direct cost and reduce market risk. Meanwhile Toyota has understood of the importance of engaging with particular specialized suppliers. Toyotas competitive advantage is mainly attributable to the schedule and the coordinate of activities among the network of 300 components suppliers. Toyotas competitive advantage was gained by a strategic commitment to produce exclusive automobiles. Toyota borrowed technology from established car manufacturers and made the procedures what effectively helped to regain customer demand. Customer demand has been the most important strategic initiate of the company. Behind the success of the Toyota Company there are three main components, A network of suppliers in Japan and in US which can be interpreted as world class. An effective Just in time system to manage inventory, which is dependent upon the activities of supplier network. Robot technology incorporated assembly system, the Japan and North America has both won the platinum plant quality award for this function. The processes and procedures sped up when the waste is eliminated from the companys main stream. Even the quality of the product increases when the waste is eliminated. This means the customer and the manufacturer are equally benefited by the Toyota production method. The company and the customer are in a win- win situation and the profits reflect the improvements. Toyota is famous for its innovations and became the largest manufacturer of cars in 2007 ahead of many leading car manufacturers achieving the competitive advantage by innovations. Toyota production system has given Toyota company competitive advantage on a global scale. This advantage is gained through elimination of waste by earlier recommendations by the combination of their human recourses management policies, their highly effective network of suppliers which provide them with raw materials whenever they need it and machine manufacturers that produce machines which are used in the product lines continuously. The management philosophy is more important for their long term sustainability, Toyota is known for its corporate culture which enhances the employee empowerment. According to Hub pages (2010) In an average year more than 700,000 improvement suggestions were submitted by Toyotas employees. That is an average of over 10 improvement suggestions per employee per year. What is perhaps most impressive is that over 99% of suggestions were implemented. This shows how employee centered the company is. Toyota knows that the employees are the key to continuous im provement, their ability and creativity leads to innovation in-house. When the employees are well looked after the company will earn their trust, their loyalty and they will work with an improved morale. Toyota Company has strived to with subsidiaries, suppliers to contribute towards a sustainable development of society making good quality automobiles. When lean manufacturing is used to eliminate waste and improve quality, as it is doing so it is effective to reduce the environmental impact as well. The ways in which Toyota has reduced environmental impact are Engaging in venture capital partnerships where the Toyota Company examines the innovator to establish a new technique to commercial development and success. Building working teams and groups of employees to research and development in sustainable practices in technology Bonding with community organizations which are environmental friendly and working in sustainable issues in order to support and help the community work. Toyota targets for growth that is in harmony with the environment by minimizing the impact which is causing by operational activities, For example reducing the impact on the climate change and biodiversity by vehicle emissions. Toyota is building a relationship between the environment and economic activities to coexist parallel. They create bonds between the individuals and the organizations that are involved in the environmental preservation. Toyota honors individualism by their philosophy of respect for people and concerns about the culture, customs, history, laws of each country which they are operating in. The evolving needs of sustainable mobility is achieves through continuous use of safe, clean and advanced technology. Illegal means are prohibited by the company to ensure long run sustainability with government and non-government agencies. The enrichment of the society is highly valued by Toyota when they are engaging in business with suppliers and customers. This will strengthen the community of the country which is involved. a) Identify the types wastes in both primary and support processes The processes Associated Wastes Primary Processes Inbound logistics Operations Out bound logistics Marketing and sales Services Support Activities Procurement Technology development Human resource management Motion Processing Transportation Inventory Waiting time Motion Defects Waiting time Transportation Inventory Transportation Inventory Defects Inventory Motion Processing Transportation Inventory Transportation Defects Inventory Processing Waiting time Processing Motion. Over production When demand reduces overproduction creates a huge problem with unsold stocks and wasted by products which include material handling inventory space, interest charges, machinery and equipment, and overhead expenses and costs. Manufacturing should be limited to only the adequate quantity with a quality standard, low cost and correct time Waiting time This is created due to worker idleness or due to employees who spend time not knowing the way to avoid the malfunctioning of the machines. When the work is specified for an assembly line the speed and volume of the work can be monitored. To reduce the waiting time only the machines and people that are needed to do the work itself can be hired. Transportation This occurs due to poor layout of the factory, basically within the assembly floor or storage facilities, which lead to over handling of goods. Long supplier lines will increase the transportation costs, while making higher fuel prices. Processing Using best practices to ensure the machinery and fixtures are undergoing regular maintenance. Inventory Stocks can be an excess charge to the company unless it is organized well. It has to be minimized to achieve higher level of standards in production. The things that should be avoided to removing unintentional inventory are Unavoidable and unreliable supply, forecasting errors, poor accuracy is the things that should be avoided to eliminate unintentional inventory. Motion This is the time spent without adding value to the product or the process. Even though there is a movement it does not indicate that the work is accomplished through it. The carefully planned layout and fixture selection can be used to eliminate this. Defects The company may lose customer satisfaction and demand for products if there is a defect of products it may reason for waiting time, material costs, labour costs in the long run. b) The danger signals of each waste Type of Waste The danger signals Faults or Defects Exceed the target production/Overproduction Stocks/ Inventories Over- Processing Human motion Transportation and Handling Waiting Confusion Unsafe or un-ergonomic Underutilized human potential Errors in Data entry errors at the office level activities Toyota company Errors on ordering and invoicing Error that can be gone to the assembly line that can be identified or corrected Change engineering orders Employee turnover Absenteeism Design flows Processing an order before it is needed. Any processes done base on routine with unpredictable demand. Producing products in advance they are needed. Any procedure of batch processing Generating processes for avoiding errors than depends on inspection Entering data into system several times by mistake Creating extra copies of unnecessary folders and providing un useful reports. Walking around production floor Walking around departments Inventories Movement Unnecessary attachments to the unpackaged to be delivered Distributing unwanted stocks to the people that are not needing them Reducing work speed because of the slow machinery. Waiting for approvals Waiting for customer and supplier information Waiting for confirmation from the management Missed data, any objectives, concepts that may reason the employees uncertainty as to what have to be done. The issues that may reasons the employees with health conditions such as back pain eye fatigue etc. This will reason because of the repetitive work they are involved in. Escaping the employees in taking regular decisions. They restrict the authority responsibility. Paying high amount of salary wages on routine tasks where their expertise is hidden in some other area. Business tools and Employees assigned work are not measured. Employees Not trusting the to perform jidoka which is to stop work to fix a problem. Employees not trusting to be clean and tiding up their work area. Employees not trusting the work for the continuous improvement. c) How Toyota Company respond to the danger signals To escape the danger signals in over production By using a sell one buy one method The Company can change their order replacement of repetitive stock. The Toyota planned Order cut-off times for delivery. When finished this process of order then selected filled and distributed. While improving performance of the delivery, smoothing demand increase significantly demands of the supplier and efficiency. By Eliminating or taking out the created demand the Toyota can cut its inventory and improve productivity. If they have surplus of the production The Toyota store, manage and protect them as inventory. As the key response of the worker have to think next step of the process as his/her own customer and provide the required quantity with excellence of quality at the lowest price and right time. To escape the danger signals in waiting The Toyota synchronize the production and distribution process with the cut-off time therefore distributors can avoid having their delivery of products or raw materials delayed cost and waiting for the next delivery by their logistics subordinate. Complete the volume of work required the capability- both speed and volume of each task can be inspected. This helps to utilise the machinery and people that wanted to minimize the method meeting the manufacturing the demands. To escape the danger signals in Transportation The system in Toyota and logistics of JIT minimized variation of demand significantly. In terms of minimization the waste have to be done in the areas of coordination of progress, layout and other general operations. To escape the danger signals in motion By carefully scheduled layout and the matched selection can eliminate this type of wastes. To escape the danger signals in inventory Inventory can be reduced to monthly supply by establishing small quantity of orders through the supply chain maintain at different order levels. The reacts to the wastes of inventory, Disposal of out-dated materials Produce the number of items required by the succeeding process Purchase the materials of required amount. Can achieve savings by volume discounts but must careful with inventory and storage cost. Produce only required quantity to achieve the most appropriate quantity, set up the measuring and measure set up and exchanges the inventory and carrying costs. To escape the danger signals in Product defects A comprehensive system should be established to reduce defect waste of products, therefore employees can get prior knowledge to recognize the defects and they can take prevention actions immediately. To escape the danger signals in processing The philosophies of design should be taken into consideration and should be employed for manufacturing. Before the production begins the processing should be reduced or removed. . Conclusion At the end this report says that The Toyota Company is succeeding their prospective through Lean Manufacturing. This Achievement is not happen coincidence but it continuing progress throughout the Lean Management and Waste Management. The employees those one of primary resources of the Toyota contribute for organizational Success. Understanding of Toyota Production System and achieving organizational gaols is very difficult to any company though it is possible to follow the Toyota Production System. The Toyota has a desire as the first organization which introduced Lean Manufacturing that eliminates wastes at any level of production process. At present many companies are following Toyota Production System and establishing Lean Manufacturing to their organizational system. They have increased the efficiency of work processes. The understanding and the application of Toyota Production System is essential stage of value chain is important.