Toyota Production System

Beyond Large-Scale Production

Taiichi Ohno

• Publisher: Productivity Press
• Year: 2019
• ISBN:
  9781000056488
• Edition: 1
• Topic: Business
• Subtopic: Operations
• Index: Business

In this classic text, Taiichi Ohno--inventor of the Toyota Production System and Lean manufacturing--shares the genius that sets him apart as one of the most disciplined and creative thinkers of our time. Combining his candid insights with a rigorous analysis of Toyota's attempts at Lean production, Ohno's book explains how Lean principles can improve any production endeavor. A historical and philosophical description of just-in-time and Lean manufacturing, this work is a must read for all students of human progress. On a more practical level, it continues to provide inspiration and instruction for those seeking to improve efficiency through the elimination of waste.

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Starting from Need

The Oil Crisis Opened Our Eyes

THE OIL CRISIS in the fall of 1973, followed by a recession, affected government, business, and society the world over. By 1974, Japan’s economy had collapsed to a state of zero growth and many companies were suffering.

But at the Toyota Motor Company, although profits suffered, greater earnings were sustained in 1975, 1976, and 1977 than at other companies. The widening gap between it and other companies made people wonder what was happening at Toyota.

Prior to the oil crisis, when I talked to people about Toyota’s manufacturing technology and production system, I found little interest. When rapid growth stopped, however, it became very obvious that a business could not be profitable using the conventional American mass production system that had worked so well for so long.

Times had changed. Initially, following World War II, no one imagined that the number of cars produced would increase to today’s level. For decades, America had cut costs by mass- producing fewer types of cars. It was an American work style — but not a Japanese one. Our problem was how to cut costs while producing small numbers of many types of cars.

Then, during the 15-year period beginning in 1959–1960, Japan experienced unusually rapid economic growth. As a result, mass production, American style, was still used effectively in many areas.

We kept reminding ourselves, however, that careless imitation of the American system could be dangerous. Making many models in small numbers cheaply — wasn’t this something we could develop? And we kept thinking that a Japanese production system like this might even surpass the conventional mass production system. Thus, the principal objective of the Toyota production system was to produce many models in small quantities.

► Slow Growth Is Scary

In the periods of high growth before the oil crisis, the usual business cycle consisted of two or three years of prosperity with, at most, six months of recession. At times, prosperity lasted longer than three years.

Slow growth, however, reverses this cycle. An annual economic growth rate of 6 to 10 percent lasts at most six months to one year, with the next two or three years realizing little or no growth or even negative growth.

Generally, Japanese industry has been accustomed to an era of “if you make it, you can sell it,” and the automobile industry is no exception. I am afraid that, because of this, many business managers aim for quantity.

In the automobile industry, the Maxcy-Silberston¹ curve has been used frequently. According to this principle of mass production, although there are limits to the extent of cost reduction, the cost of an automobile decreases drastically in proportion to the increase in quantities produced. This was proved thoroughly in the era of high growth and the principle has become embedded in the minds of people in the automotive industry.

In today’s slow-growth era, however, we must downplay the merits of mass production as soon as possible. Today, a production system aimed at increasing lot sizes (for example, operating a die press to punch out as many units as possible within a given time period) is not practical. Besides creating all kinds of waste, such a production system is no longer appropriate for our needs.

► “Catch Up with America”

Imitating America is not always bad. We have learned a lot from the U.S. automobile empire. America has generated wonderful production management techniques, business management techniques such as quality control (QC) and total quality control (TQC), and industrial engineering (IE) methods. Japan imported these ideas and put them into practice. The Japanese should never forget that these techniques were born in America and generated by American efforts.

August 15, 1945, was the day Japan lost the war; it also marked a new beginning for Toyota. Toyoda Kiichirō (1894–1952), then president of the Toyota Motor Company,² said, “Catch up with America in three years. Otherwise, the automobile industry of Japan will not survive.” To accomplish this mission, we had to know America and learn American ways.

In 1937, I was working in the weaving plant of Toyoda Spinning and Weaving. Once I heard a man say that a German worker could produce three times as much as a Japanese worker. The ratio between German and American workers was 1-to-3. This made the ratio between Japanese and American work forces 1-to-9. I still remember my surprise at hearing that it took nine Japanese to do the job of one American.

Had Japanese productivity increased at all during the war? President Toyoda was saying that we should catch up in three years, but it would be very difficult to raise productivity by eight or nine times in such a time period. It meant that a job then being done by 100 workers had to be done by 10 workers.

Furthermore, the figure of one-eighth or one-ninth was an average value. If we compared the automobile industry, one of America’s most advanced industries, the ratio would have been much different. But could an American really exert ten times more physical effort? Surely, Japanese people were wasting something. If we could eliminate the waste, productivity should rise by a factor of ten. This idea marked the start of the present Toyota production system.

► Just-In-Time

The basis of the Toyota production system is the absolute elimination of waste. The two pillars needed to support the system are:

• just-in-time

• autonomation, or automation with a human touch.

Just-in-time means that, in a flow process, the right parts needed in assembly reach the assembly line at the time they are needed and only in the amount needed. A company establishing this flow throughout can approach zero inventory.

From the standpoint of production management, this is an ideal state. However, with a product made of thousands of parts, like the automobile, the number of processes involved is enormous. Obviously, it is extremely difficult to apply just-in-time to the production plan of every process in an orderly way.

An upset in prediction, a mistake in the paperwork, defective products and rework, trouble with the equipment, absenteeism — the problems are countless. A problem early in the process always results in a defective product later in the process. This will stop the production line or change a plan whether you like it or not.

By disregarding such situations and only considering the production plan for each process, we would produce parts without regard to later processes. Waste would result — defective parts on one hand, huge inventories of parts not needed immediately on the other. This reduces both productivity and profitability.

Even worse, there would be no distinction between normal and abnormal states on each assembly line. When there is a delay in rectifying an abnormal state, too many workers would make too many parts, a situation not quickly corrected.

Therefore, to produce using just-in-time so that each process receives the exact item needed, when it is needed, and in the quantity needed, conventional management methods do not work well.

► Using a Common-Sense Idea

I am fond of thinking about a problem over and over. I kept thinking about how to supply the number of parts needed just-in-time. The flow of production is the transfer of materials. The conventional way was to supply materials from an earlier process to a later process. So, I tried thinking about the transfer of materials in the reverse direction.

In automobile production, material is machined into a part, the part is then assembled with others into a unit part, and this flows toward the final assembly line. The material progresses from the earlier processes toward the later ones, forming the body of the car.

Let’s look at this production flow in reverse: a later process goes to an earlier process to pick up only the right part in the quantity needed at the exact time needed. In this case, wouldn’t it be logical for the earlier process to make only the number of parts withdrawn? As far as communication between the many processes is concerned, wouldn’t it be sufficient to clearly indicate what and how many are needed?

We will call this means of indication kanban (sign board) and circulate it between each of the processes to control the amount of production — that is, the amount needed. This was the beginning of the idea.

We experimented with this and finally decided on a system. The final assembly line is taken as the starting point. On this basis, the production plan, indicating the desired types of cars with their quantity and due date, goes to the final assembly line. Then the method of transferring the materials is reversed. To supply parts used in assembly, a later process goes to an earlier process to withdraw only the number of parts needed when they are needed. In this reverse way, the manufacturing process goes from finished product back to the earliest materials-forming department. Every link in the just-in-time chain is connected and synchronized. By this, the management work force is also reduced drastically. And kanban is the means used for conveying information about picking up or receiving the production order.

Kanban will be described later in detail. Here, I want the reader to understand the basic posture of the Toyota production system. The system is supported by the just-in-time system, already discussed, and autonomation, described in the next section. The kanban method is the means by which the Toyota production system moves smoothly.

► Give the Machine Intelligence

The other pillar of the Toyota production system is called autonomation — not to be confused with simple automation. It is also known as automation with a human touch.

Many machines operate by themselves once the switch is turned on. Today’s machines have such high performance capabilities, however, that a small abnormality, such as a piece of scrap falling into the machine, can damage it in some way. The dies or taps break, for instance. When this happens, tens and soon hundreds of defective parts are produced and quickly pile up. With an automated machine of this type, mass production of defective products cannot be prevented. There is no built-in automatic checking system against such mishaps.

This is why Toyota emphasizes autonomation — machines that can prevent such problems “autonomously” — over simple automation. The idea originated with the invention of an auto-activated weaving machine by Toyoda Sakichi (1867–1930), founder of the Toyota Motor Company.

The loom stopped instantly if any one of the warp or weft threads broke. Because a device that could distinguish between normal and abnormal conditions was built into the machine, defective products were not produced.

At Toyota, a machine automated with a human touch is one that is attached to an automatic stopping device. In all Toyota plants, most machines, new or old, are equipped with such devices as well as various safety devices, fixed-position stopping, the full-work system, and baka-yoke foolproofing systems to prevent defective products (see the glossary for further explanation). In this way, human intelligence, or a human touch, is given to the machines.

Autonomation changes the meaning of management as well. An operator is not needed while the machine is working normally. Only when the machine stops because of an abnormal situation does it get human attention. As a result, one worker can attend several machines, making it possible to reduce the number of operators and increase production efficiency.

Looking at this another way, abnormalities will never disappear if a worker always attends to a machine and stands in for it when an abnormality does occur. An old Japanese saying mentions hiding an offensively smelly object by covering it up. If materials or machines are repaired without the managing supervisor’s being made aware of it, improvement will never be achieved and costs will never be reduced.

Stopping the machine when there is trouble forces awareness on everyone. When the problem is clearly understood, improvement is possible. Expanding this thought, we establish a rule that even in a manually operated production line, the workers themselves should push the stop button to halt production if any abnormality appears.

In a product like the automobile, safety must always be of primary importance. Therefore, on any machine on any production line in any plant, distinctions between normal and abnormal operations must be clear and countermeasures always taken to prevent recurrence. This is why I made autonomation the other pillar of the Toyota production system.

► The Power of Individual Skill and Teamwork

Implementing autonomation is up to the managers and supervisors of each production area. The key is to give human intelligence to the machine and, at the same time, to adapt the simple movement of the human operator to the autonomous machines.

What is the relationship between just-in-time and automation with a human touch, the two pillars of the Toyota production system? Using the analogy of a baseball team, autonomation corresponds to the skill and talent of individual players while just-in-time is the teamwork involved in reaching an agreed-upon objective.

For example, a player in the outfield has nothing to do as long as the pitcher has no problems. But a problem — the opposing batter getting a hit, for example — activates the outfielder who catches the ball and throws it to the baseman “just in time” to put the runner out.

Managers and supervisors in a manufacturing p...