Toyota Automotive Co.

Founded by Kiichiro Toyoda (1937)

Toyota needed to adapt Ford´s manufacturing process to achieve simultaneously high quality, low
cost, short lead times, and flexibility.

Taiichi Ohno studied the American manufactures again in 1950 finding opportunities areas inside
these companies.

He studied Henry Ford´s book “Today and Tomorrow”

Henry Ford´s principles

 Continuous flow
 Standardize process
 Elimination of waste

The company has made a profit every year over the last 25 years

LEVEL 1: Philosophy

Principle 1. Base your management decisions on a long-term philosophy, even at the expense of
short-term financial goals.

 A Mission Greater than Earning a Paycheck

 Doing the Right Thing for the Customer
 Don t Let Business Decisions Undermine Trust and Mutual Respect
 Use Self-Reliance and Responsibility to Decide Your Own Fate

LEVEL 2: Process

Principle 2. Create continuous process flow to bring problems to the surface

 Redesign work processes to achieve high value-added, continuous flow.

Principle 3. Use pull systems to avoid overproduction.

Principle 4. Level out the workload (heijunka).

 Eliminating overburden to people and equipment and eliminating unevenness in the

production schedule

Principle 5. Build a culture of stopping to fix problems, to get quality right the first time.

 Quality for the customer drives your value proposition.

 Use all the modern quality assurance methods available

Principle 6. Standardized tasks are the foundation for continuous improvement and employee
empowerment.

 Use stable, repeatable methods everywhere to maintain the predictability, regular timing,
and regular output of your processes.

Principle 7. Use visual control so no problems are hidden.

 Use simple visual indicators to help people determine immediately whether they are in a
standard condition or deviating from it.

Principle 8. Use only reliable, thoroughly tested technology that serves your people and processes.

 Use technology to support people, not to replace people.

 New technology is often unreliable and difficult to standardize and therefore endangers
flow.

LEVEL 3: People & Partners

Principle 9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to
others.

 Grow leaders from within, rather than buying them from outside the organization.

Principle 10. Develop exceptional people and teams who follow your company´s philosophy.

 Create a strong, stable culture in which company values and beliefs are widely shared and
lived out over a period of many years.
Principle 11. Respect your extended network of partners and suppliers by challenging them and
helping them improve.

LEVEL 4: Problem Solving

Principle 12. Go and see for yourself to thoroughly understand the situation (genchi genbutsu).

 Solve problems and improve processes by going to the source and personally observing
and verifying data rather than theorizing on the basis of what other people or the
computer screen tell you.

Principle 13. Make decisions slowly by consensus, thoroughly considering all options; implement
decisions rapidly (nemawashi).

Principle 14. Become a learning organization through relentless reflection (hansei) and continuous
improvement (kaizen).

 Once you have established a stable process, use continuous improvement tools to
determine the root cause of inefficiencies and apply effective countermeasures.

What is value?

A measurement of the worth of a product or service.

An activity that changes the product or service from one form to another in order to get it closer
to the customer’s specifications.

It is something that the customer is willing to pay for

Definition Of Waste

“Anything other than the minimum amount of equipment, space and worker´s time, which are
absolutely essential to add value to the product” Fujio Cho (President, Toyota)

Types of waste: Muda, Mura, Overburden

What is waste (Muda)?

Any activity that adds cost and time but does not add value.
Consuming more resources (people, time, space, etc) that are necessary to produce the goods or
services that the customer wants.

Waste elimination is one of the most effective ways to increase the profitability of any business.
Processes either add value or waste to the production of a good or service.

Lean Manufacturing is a manufacturing philosophy, which shortens the time between the
customer order and the product build / shipment by eliminating sources of waste.

Seven Wastes:

An easy way to remember the 7 wastes is

TIMWOOD:

T: Transportation // Unnecessary movement of parts between processes

I: Inventory

M: Motion // Jobs with excessive motion should be analyzed and redesigned for improvement
with the involvement of plant personnel.

W: Wait

O: Over-processing // Processing beyond the standard required by the customer

O: Over-production

D: Defect

What is 5S?

5S is a systematic approach to workplace, organization and housekeeping. Encouraging ownership

and self-discipline to sustain and develop working practices.

It aims to:

 Improve safety
 Remove waste from the workplace
 Increase quality
 Provide an environment where continuous improvement is embraced.
 Makes abnormalities immediately visible.

Benefits of 5S

 5S provides a firm foundation on which to build other Lean improvements.

 It is about organizing your workplace in an efficient manner not just Housekeeping
 Standardized operations lead to repeatable and predictable processes.
 5S makes abnormalities immediately obvious.
5S Efficiency gains

 5S removes instances of the seven wastes within your working environment,

 Typically in the order of 10% to 30%
 Workspace more ergonomic
 Items located in easy reach
 No clutter to cause delays
 Visual management shows when products and tools are missing.
 Problems highlighted
 Materials out of place
 Leaks and other machine problems.

Reduce Setups

 Set up time reduced through the same process as increasing production efficiency
 All tools to hand
 Standardized process.

Improved Quality

 The right tools and equipment available

 Standardized processes
 Improved handling so less damage
 Improved reliability of equipment.

Marketing

 A visual and tidy workplace can give a great impression to a current or potential customer.

Morale and motivation

 Less stress for operators

 Safer work environment
 Involvement in making own improvements
 Empowerment to make changes

Continuous improvement and problem solving.

 Implemented correctly 5S will drive continuous improvement of your products and

processes.
 Abnormalities are immediately visible allowing action to be taken.