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The Toyota Production System
High Quality and Low Cost
Readings;
James Womack, Daniel T. Jones and Daniel Roos, The Machine that Changed the World, 1990, Ch 3 and 4
Kenneth N. McKay, The Evolution of Manufacturing Control-
What Has Been, What Will Be Working Paper 03 2001Michael McCoby, Is There a Best Way to Build a Car?HBR Nov-Dec 1997
COST VS
DEFECTS
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Consumer Reports
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Gains of imports
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The Toyota Production System
!" Historical View#" Performance measures
$" Elements of TPS%" Difficulties with Implementation&" Six Eras of Manufacturing Practice
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Three Major Mfg Systems
from 1800 to 2000
1800 1900 2000
Machine tools, specialized machine tools, Taylorism, SPC, CNC, CAD/CAM
InterchangeableParts at U.S.
Armories
MassProductionat Ford
ToyotaProductionSystem
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Q. By what method did thesenew systems come about?
A. Trial and Error
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History of the Development of the ToyotaProduction System ref; Taiichi Ohno
1945 1975
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The Toyota Production System
!" Historical View#" Performance measures
$" Elements of TPS%" Difficulties with Implementation&" Six Eras of Manufacturing Practice
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J ap an es e J ap an es e i n m er ic an i n l l E ur op e
i n J apa n North merica North merica
Performance:Producvitity (hours/Veh.) 16.8 21.2 25.1 36.2Quality (assemblydefects/100 vehicles) 60 65 82.3 97
Layout:Space (sq.ft./vehicle/yr) 5.7 9.1 7.8 7.8Size of Repair Area (as %of assembly space) 4.1 4.9 12.9 14.4Inventories(days for 8sample parts) 0.2 1.6 2.9 2
Work Force:% of Work Force in Teams 69.3 71.3 17.3 0.6Job Rotation (0 = none,4 = frequent) 3 2.7 0.9 1.9Suggestions/Employee 61.6 1.4 0.4 0.4Number of Job Classes 11.9 8.7 67.1 14.8Training of New ProductionWorkers (hours) 380.3 370 46.4 173.3Absenteeism 5 4.8 11.7 12.1
Automation:Welding (% of direct steps) 86.2 85 76.2 76.6Painting(% of direct steps) 54.6 40.7 33.6 38.2Assembly(% of direct steps) 1.7 1.1 1.2 3.1
Source: IMVP World Assembly Plant Survey, 1989, and J. D. Power Initial Quality Survery, 1989
Summary of Assembly Plant Characteristics, Volume Producers,1989
(Average for Plants in Each Region)
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Cost Vs Defects Ref. Machine that Changed the World Womack, Jones and Roos
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Cost Vs AutomationRef. Machine that Changed the World Womack, Jones and Roos
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The Toyota Production System
!" Historical View#" Performance measures
$" Elements of TPS%" Difficulties with Implementation&" Six Eras of Manufacturing Practice
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How do you get this kind of
performance?!" Womack, Jones and Roos
#" J T. Blacks 10 Steps
$" Demand Flow Technologys 9 Points
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Womack Jones and Roos
New Technology? No silver bullet
Automation? Yes, but integrated with system
Standardized Production? Not in the usual dont stop the line sense
Lean Characteristics? Integration of Tasks (opposite of deskilling) Identification and removal of defects (stop the line!) kaizen institutionalizing change
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J T. Blacks 10 StepsRef; JT. Black Factory with a Future 1991
1. Form cells2. Reduce setup3. Integrate quality control
4. Integrate preventive maintenance5. Level and balance6. Link cells KANBAN7. Reduce WIP8. Build vendor programs9. Automate10. Computerize
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Demand Flow Technologys
9 Points1. Product Synchronization2. Mixed Model Process Maps3. Sequence of Events
4. Demand at Capacity5. Operational Cycle Time6. Total Product Cycle Time7. Line Balancing
8. Kanbans9. Operational Method Sheets
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Current Value Stream Map
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Future Value Stream Map
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J T. Black 1, 2
1. Form CellsSequentialoperations, decoupleoperator frommachine, parts infamilies, single pieceflow within cell
2. Reduce SetupExternalize setup toreduce down-timeduring changeover,increases flexibility
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TPS Cell
T o y o
t a C e
l l ,
o n e p a r t
i s p r o
d u c e
d
f o r e v e r y
t r i p a r o u n d
t h e c e
l l
J T. Black
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Standardized Fixtures
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J T. Black 3, 4
3. Integrate qualitycontrolCheck part quality atcell, poke-yoke, stopproduction whenparts are bad
4. Integrate preventivemaintenanceworker maintainsmachine , runs slower
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J T. Black 5, 6
5. Level and balanceProduce to Takttime, reduce batchsizes, smoothproduction flow
6. Link cells- KanbanCreate pull system
SupermarketSystem
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Balancing and Leveling
Balanced line: each process has the samecycle time. Match process time toassemble time, match production rate torate of demand (Takt time)
Leveled Line: each product is produced inthe needed distribution. The process must
be flexible to do this.
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J T. Black 7, 8
7.Reduce WIPMake system reliable,build in mechanismsto self correct
8. Build Vendor programPropagate low WIPpolicy to your vendors, reducevendors, make on-time performance partof expectation
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Some Basics Concepts of TPS
!" Smooth Flow and Produce to Takt Time
#" Produce to Order
$" Make system observable and correctproblems as they occur
%" Integrate Worker Skills
&" Institutionalize change
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Two Examples;
!" Takt Time
#" Pull Systems
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Takt Time:
demand time interval
DemandProduct
TimeAvailableTimeTakt =
Calculate Takt Time per month, day,year etc. Available time includes allshifts, and excludes all non-productive time (e.g. lunch, clean-upetc). Product demand includes over-production for low yields etc.
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Takt Time
Automobile Assembly Line; Available time = 7.5 hr X 3shifts = 22.5 hrs or 1350 minutes per day. Demand =1600 cars per day. Takt Time = 51 sec
Aircraft Engine Assembly Line; 500 engines per year.2 shifts X 7 hrs => 14 hrs/day X 250 day/year = 3500hrs .Takt time = 7 hrs.
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Engines shipped over a 3 month period
at aircraft engine factory B
0
2
4
6
8
10
12
7-Jun 15-Jun 23-Jun 30-Jun 7-Jul 15-Jul 24-Jul 31-Jul 7- Aug 15-Aug 24-Aug 31-Aug
k s
e
n
s
p
p
we
month 1 month 2 month 3
Factory B
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Engines shipped over a 3 month periodat aircraft engine factory C
0
1
2
3
4
5
6
7
may june july august
w s
engines
shippe
Factory C
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On-time performance of engine
plants
C
0%
20%
40%
60%
80%
100%
engines
elvere
C
ontime
late
on
time
on
time
late
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Push and Pull Systems
Machines
Parts Orders
1 2 3 4
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Push Systems Order (from centralized decision process) arrives at the front of the
system and is produced in batches of size B.Q. How long does it take to get one part out of the system?
1 2 3 N
Time = T 3
Time = T 2
Time = T N
Time = T 1
Time = 0
..
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Push Systems Time = 0
1 2 3 N
Time= T N
..
If the process time per part is t at each of
N processes, and the batch size is B,it takes t ime TN NBt to getone part through the system.
Comment; Of course, thispart can come from inventoryin a much shorter time, but thepoint is that the push systemis not very responsive.
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Pull Systems-The order arrives at the end of the line and is pulled out of the
system. WIP between the machines allows quick completion.
Q.How long does it take to pull outone part?
A.The time to finish the last opetration t.
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Comparison between
Push and Pull SystemsPush system characteristics: Centraldecision making, local optimization of equipment utilization leads to largebatches, large inventories and a sluggishsystem.
Pull system characteristics: Local decision
making, emphasis on smooth flow,cooperative problem solving.
See HP Video
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HP Video
Dots Tacks Tape Pack
Inventory in the system = L
Time in the system = W
Littles Law L = W
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0.210.120.15Production Rate
= L / W
VisibleVisibleHiddenQuality Problem
31026Rework Units!
WIP
0:191:403:17Cycle time = W
41230WIP = L
1 Table2 Tables2 TablesSpace
Pull (1)Pull (3)Push system (6)
HP Video Results
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Graphical Interpretation
0
50
100
150
200
250
0 2 4 6
Batch Size "B"
N u m
b e r o r
T i m e
[ s ]
Inventory, LTime in System, W
L = ! WL ! k 1 BW ! k 2 B
! = L / W = k 1 / k2
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So what are the advantages of
the pull systems? quick response low inventories
observable problems(if stopped = problem)
sensitive to state of the factory(if no part = problem)
possible cooperative problem solving
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The Toyota Production System
!" Historical View#" Performance measures
$" Elements of TPS%" Difficulties with Implementation&" Six Eras of Manufacturing Practice
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TPS Implementation
Physical part (machine placement,
standard work etc)
Work practices and people issues
Supply-chain part
Corporate Strategy (trust, job security)
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Work practices and people
issues Failed TPS attempts ; GM Linden NJ,
CAMI, GM-Suzuki, Ontario Canada.
Successes GM NUMMI, Saturn. ToyotaGeorgetown, KY
See MacCoby article
Other Ref: Just Another Car Factory Rinehart,Huxley and Robertson, Farewell to the Factory,Milkman
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Work practices and people
issues Innovative Work Practices Ref; C.Ichniowski, T. Kochan et al What Works at Work: Overview and Assessment, Industrial Relat ions Vol 35 No.3 (July 1996)
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Examples of Innovative Work
Practices Work Teams
Gain Sharing
Flexible Job Assignments
Employment Security
Improved Communications
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What Works at Work: Overview
and Assessment, Conclusion 1; BundlingInnovative human resource management
practices can improve business productivity,primarily through the use of systems of relatedwork practices designed to enhance worker participation and flexibility in the design of workand decentralization of managerial tasks and
responsibilities.
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What Works at Work: Overview
and Assessment, Conclusion 2; ImpactNew Systems of participatory work
practices have large economicallyimportant effects on the performance of the businesses that adopt the newpractices.
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What Works at Work: Overview
and Assessment, Conclusion 3; Partial Implementation A majority of contemporary U.S. businesses now
have adopted some forms of innovative work practices
aimed at enhancing employee participation such as workteams, contingent pay-for-performance compensation, or flexible assignment of multiskilled employees. Only asmall percentage of businesses, however, have adopteda full system of innovative work practices composed of
an extensive set of these work practice innovations.
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What Works at Work: Overview
and Assessment, Conclusion 4; Barriers to ImplementationThe diffusion of new workplace innovations is limited,
especially among older U.S. businesses. Firms face a number of obstacles when changing from a system of traditional work practicesto a system of innovative practices, including: the abandonment of organization change initiatives after limited policy changes have littleeffect on performance, the costs of other organizational practicesthat are needed to make new work practices effective, long historiesof labor-management conflict and mistrust , resistance of supervisorsand other workers who might not fare as well under the newer
practices, and the lack of a supportive institutional and public policyenvironment.
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Barriers to Implementation
Early abandonment
Costs (training, commitment, benefits..)
History of conflict and distrust Resistance of supervisors
Lack of supportive infrastructure
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The Toyota Production System
!" Historical View#" Performance measures
$" Elements of TPS%" Difficulties with Implementation&" Six Eras of Manufacturing Practice
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Six Eras of Manufacturing
Practice, Ken McKay!" Pioneering#" Systemization
$" Technology and Process%" Internal Efficiency&" Customer Service
'" Systems Level Re-engineering
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Ken McKay 1, 2
1. Pioneering - sellersmarket, competition isnot by manufacturing,
large marginsemphasizethroughput notefficiency
2. Systemization - firmgrows and system getscomplex, grossinefficiency becomes
apparent, competitionbegins to make itspresence felt. Need for standard operatingprocedures, demand stillhigh, inventory used tobuffer against instabilities.
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Ken McKay 3, 4 3. Technology and
Process competition isincreasing, sales aresoftening, manufacturing
is still in early maturityand competition is limitedto firms in similar situation. Product optionsgrow. Mfg focus shifts toefficiency.
4. Internal Efficiency -competition cherry pickersenter the market they dontoffer all of the options andparts service but focus on the20% which yields 80% of therevenue stream. Internal plantis put into order, problems arepushed outside to suppliers,best in class, bench markingidentifies the silver bullet. Still
using inventory to cushionproduction support variety, andmaintain functional features.
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Ken McKay- 5, 6
5. Customer Service -talk to the
customer, identify
core competency,outsource, beresponsive, reducelead time, eliminate
feature creep,focused factory etc.
6. System Level Re-engineering - firmshave addressed theinternal system andfactory no more tosqueeze out look toimproving indirect andoverhead, supply chaindevelopment.
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Toyota Summary
High quality and low cost Relationship to previous systems (see
McKay paper), yet new,. in factrevolutionary
Many elements Overall, see The Machine that Changed the
World Cells, next time People, see Maccoby Article
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Summary .. continued
Autonomation automation with a human
touch
Worker as problem solver
TRUST