SCM assignment

Toyota Production System:

Merits, Demerits and
Challenges
Submitted to:
Prof. A K Dey

By:
Adil Garg

15DM009

Aishwary Baheti
15DM011
Akhil Surendran
15DM015
Anish Patnaik
15DM025
Anshul Gupta
15DM033
Ayush Jain

15DM042

Table of Contents
Introduction

Toyota Production System

TPS concept

TPS objective

14 Principles of the Toyota way

Lean Manufacturing

Lean objectivity

Lean services

Waste reduction

Muda

Mura

Muri

Kaizen (continuous improvement)

Merits, demerits and challenges

9
11

Lean manufacturing

11

Continuous improvement

12

Introduction
Toyota Motor Corporation is a Japanese auto producer headquartered in Toyota, Aichi, Japan. Toyota is
the world's business segment pioneer in offers of crossbreed electric vehicles, and one of the greatest
associations to invigorate the mass-market choice of hybrid vehicles over the globe. The association was
set up by Kiichiro Toyoda in 1937, as a spinoff from his father's association Toyota Industries to make
vehicles. Three years earlier, in 1934, while still an agency of Toyota Industries, it made its first thing, the
Type A engine, and, in 1936, its first explorer auto, the Toyota AA.

Toyota Production System (TPS)

The Toyota Production System (TPS) is an arranged socio-specific structure, made by Toyota that
contains its rational soundness and practices. The TPS sorts out accumulating and logistics for the vehicle
creator, joining relationship with suppliers and clients.
Toyota Motor Corporation's vehicle period framework is a system for "making things" that is
recommended as an "evaluation fabricating structure" or a "Without a moment to spare (JIT) structure,"
and has come to be exceptional and considered far and wide.
This period control framework has been set up in context of different years of tireless changes, with the
goal of "making the vehicles requested by clients in the most skilled course."
The Toyota Production System (TPS) was set up checking two considerations: The first is called "jidoka"
(which can be generally deciphered as "robotization with a human touch"). The second is "Without a
moment to spare," in which every procedure passes on precisely what is required by going with strategy
in a constant flow.
Checking the focal theories of jidoka and Just-in-Time, the TPS can sufficiently and rapidly make
vehicles of sound quality that absolutely fulfil client essentials.

TPS Concept:
Jidoka Highlighting/Visualization of issue
In the event that apparatus glitch or a defective part is found, the affected machine in this manner stops,
and executives stop creation and right the issue.
For the Just-in-Time framework to confine, a large portion of the parts that are made and supplied must
meet ordained quality gages. This is refined through jidoka.
As a possible result of this method, just things fulfilling quality models will be passed on to the running
with frameworks on the creation line.
Since a machine really stops when an issue creates directors can surely keep performing work at another
machine, and also effectively perceive the issue's cause to avoid its repeat. This insures every official can
be accountable for a couple machines, accomplishing higher benefit.
At the last possible second Productivity Improvement
Passing on quality things helpfully through the complete exchange of waste, anomalies, and dazzling
necessities on the creation line.
Recollecting a definitive target to go on a vehicle inside the most succinct conceivable day and age:


On getting request, a period standard must be issued to the start of the vehicle creation line at the
most dependable open entryway

The mechanical creation structure must be supplied with required number of each obliged part to
gather any sort of sales.

The mechanical creation system must supplant the parts utilized by recovering the same number
of parts from the parts-passing on procedure.

TPS Objective:
The pivotal destinations of the TPS are to orchestrate out overburden (muri) and oddity (mura), and to
dispose of waste (muda). The most essential impacts on framework respect transport are master by laying
out a philosophy arranged for going on the required results easily; by masterminding out "mura"
(variation from the norm). It is additionally crucial to guarantee that the procedure is as adaptable as basic
without anxiety or "muri" (overburden) since this produces "muda" (waste). At last the key updates of
waste reduction or the end of muda are to a great degree productive.

14 Principles of the Toyota Way

The Toyota Way is called "a system designed to provide tools for people to regularly improve their work"

Principle 1
Base management decisions on a long-term time span, even if financial goals are not met short term.

Give purpose to find motivation for people and establish goals.

Principle 2
Create continuous flow in order to bring various problems to surface. Redesign work process to eliminate
waste (muda).

Principle 3
Make use of "pull" systems to avoid overproduction.
A method where the process itself signals its predecessor when more material is needed. The pull
produces only required material after the next operation signals for it. This is necessary to avoid
overproduction.

Principle 4
Level out the workload.
This helps the goal of minimizing waste, and not overburden people or the equipment, and not create
uneven production levels.

Principle 5
Building a culture, to get quality right the first time itself.
Quality matters the most. Any employee has the authority to stop the process to point to a quality issue.

Principle 6
Continuous improvement and employee empowerment are done through Standardized tasks and
processes.
Toyota has a bureaucratic system, but in that way that it allows for continuous improvement from the
people. It empowers employee to aid the growth and improvement.

Principle 7
Make use of visual control to reveal all the problems.
This principle has the 5S Program - steps that are used to make work spaces efficient and productive, help
share work stations, reduce time looking for needed tools and improve the environment.

Principle 8
Use only reliable technology that serves people and processes.

Technology must be pulled by manufacturing and not pushed to it.

Principle 9
Nurture leaders who fully understand the work, and teach it to others.
Without attention, the principles might fade. The principles have to be embedded, it must be the way of
thinking. Employees must be educated and trained to maintain a learning organization.

Principle 10
Develop people and teams of excellence who will follow company's philosophy.
Teams should consist of 4-5 people and contain numerous management tiers. Success is achieved through
the team, not individual.

Principle 11
Respect your network of partners and suppliers by helping them improve.
Toyota treats suppliers like they treat employees, challenging them to do better and helping to achieve it.
Cross functional team help to discover and fix problems so that they can become stronger, better supplier.

Principle 12
Go and see to understand the situation.
Toyota managers use "go-and-see" operations. Without experience of the situation, managers will not
understand of how it can be improved. Managers use ten management principles as a guideline:

Keep the final target in mind.

Clearly assign tasks.
Think and speak on verified information and data.
Take advantage of the wisdom and experiences of others.
Share information with others timely.
Always report, inform and consult time to time.
Analyze shortcomings in capabilities in a way that is measurable.
Relentlessly strive to improve kaizen activities.
Think "outside the box,"
Protection of safety and health should always be kept in mind.

Principle 13
Make decisions consensus, considering all options and then implement decisions rapidly.
The following are its parameters:
Find what is going on
Determine the cause
Consider a range of alternatives
Build consensus on the resolution
Use efficient tools to communicate

Principle 14
Become a learning organization through reflection and continuous improvement. The learning
organization involves criticizing every aspect.

Lean Manufacturing:
Methods to achieve Lean System:
1)

Design a clear gathering structure

A vital guideline of grade gathering is interest based stream delivering. In this sort of creation setting,
stock is just pulled through each era center when it is required to meet a customer's solicitation. The
benefits of this goal include:

Decreased process span

Less stock

Increased proficiency

Increased capital rigging utilization

2)

There is constantly chance to show signs of improvement

The focal point of grade is set up on the possibility of steady thing and methodology change and the end
of non-worth included activities. "The Value including activities are basically simply those things the
customer will pay for, everything else is misuse, and should be discarded, enhanced, diminished, or
consolidated". Improving the surge of material through new immaculate system groups at the customer's
required rate would diminish waste in material advancement and stock.
3)

Continuous Improvement

A perpetual change standpoint is vital to accomplish the association's targets. The expression "steady
change" suggests incremental change of things, strategies, or organizations after some time, with the
target of decreasing waste to improve working environment convenience, customer organization, or thing
execution.

Lean Objectivity:

Improve quality: To stay forceful in today's business focus, an association must grasp its
customers' needs and needs and plan systems to experience their yearnings and requirements.

Eliminate waste: Waste is any development that eats up time, resources, or space however does
not improve the thing or organization. See Types of waste, above.

Reduce time: Reducing the time it makes to finish a move the distance is a champion amongst the
best ways to deal with kill waste and lower costs.

Reduce complete costs: To minimize cost, an association must make just to customer demand.
Overproduction constructs an association's stock expenses because of limit needs.

Lean Services:
Slant, as a thought or brand, has gotten the innovative capacity of various in
different circles of activity. Instance of these from various portions are recorded
underneath.

Slant measures have been adequately associated with call center organizations to
upgrade live administrator call dealing with. By joining Agent-helped Automation
and grade's waste reducing practices, an association lessened handle time,
diminished between administrator variability, diminished accent obstacles, and
accomplished close perfect system adherence.
Slant models have moreover found application in programming application change
and bolster and distinctive scopes of information advancement (IT).

WASTE REDUCTION
Toyota Production Systems (TPS) focusses on 3Ms i.e. Muda, Mura and Muri. The 3Ms are considered to
be challenges to lean manufacturing which focuses on waste reduction so as to increase profitability for
the firm.

Muda means futility, uselessness, wastefulness. If any process consumes resources more than it
should then waste is bound to occur. Muda can be broken down into 2 categories

Type-1:non-value added activity for the end customer which is necessary

Type-2:non-value added activity for the end customer which is not necessary as it generates
wastes and incurs hidden costs.

There are 7 types of wastes included in Muda.

1. Overproduction- This refers to the product being produced more than or before its actual use. In
TPS overproduction is referred as just-in-case when it actually follows just-in-time
philosophy. This can create excessive lead time, increase storage cost and makes it difficult to
detect defects.
2. Waiting- This occurs when there is mismatch between lead times of two or more consecutive
process. This can happen due poor material flow, excessive distance between work centres or
production runs too long. Linking and coordinating processes together can reduce waiting time
significantly.
3. Transporting- The transportation of products between processes can incur unnecessary cost and,
in some cases, reduce product quality. Transportation can be very difficult to control as there are
perceived cost of moving larger equipment and plants. Designing process flow can give us visual
idea as to where the transportation can be reduced.
4. Inappropriate Processing Underutilisation of resources can be classified into this category like
use of high precision equipment when the same task can be done using simpler tools. Using
simpler well-maintained tools and older machines, along with proper process flows can greatly
reduce the waste of unnecessary processing.
5. Unnecessary Motion- Excess and unnecessary movement of goods and personnel can always
create problems. In case of personnel, it can create health and safety issue. Processes should be
redesigned so as to reduce unnecessary motion.

6. Unnecessary Inventory- Work-In-Progress (WIP) is the directly related to Overproduction and

Waiting. WIP causes consumes essential productive floor-space, inhibits communication and
prevents identification of problems.
7. Defects- Quality defects causes rework which again wastes time and incurs costs which could
include quarantining inventory, rescheduling, re-inspecting etc. through employee involvement
and continuous improvement, the problem of defects can be addressed.

Mura means unevenness, lack of uniformity, inequality. In TPS, it can be avoided through just-intime system. Here, the right parts are brought in right amount in right time into the production process,
using FIFO (First-in, First-out) principle. Mura is responsible for seven wastes observed in Muda. Hence,
essentially Mura drives Muda. In manufacturing, unlevelled demands and monthly targets leads to
overproduction at the end of the time period, which is followed by shortages and no focus on targets. This
creates the hockey-stick effect, where there is unevenness in performance and production of the
manufacturing unit.

Muri means excessive, unreasonable. In TPS, it creates unnecessary stress and over-burdens the
workers. This is in turn caused by Mura, wrong tools, improper training, unclear or undefined targets or
unclear ways of working. It can also be caused by improper parameters for measuring performance. Muri
is also responsible for Muda.
Hence, Mura and Muri are the root causes for Muda. Hence, by focusing on Mura and Muri we can
automatically eliminate significant part of Muda present in the system.

KAIZEN (CONTINUOUS IMPROVEMENT)

Kaizen is a Japanese term simply meaning Change for the better. In management terms, it is defined as
the practice of continuous improvement, which means the process of continuously making incremental
improvements, irrespective of how small they are, because ultimately, big results can be achieved through
all the small changes accumulated over time.
The process of improvement involves everyone in the organization, starting from the top management, the
managers, the supervisors and the workers. The logic behind it is that the person who performs a
particular task will be the one most familiar with it and can see the problems with it better than the
management. Thus the involvement of employees is essential to kaizen.
It is credited as being one of the fundamental principles behind the operational excellence of Japanese
manufacturing processes and is recognized globally as an important pillar of the long-term competitive
strategy of an organization.
Kaizen is based on the following guiding principles:

Good processes lead to good results

Go see for yourself to understand the current situation
Speak with data, manage by facts
Take action to identify and correct root causes of problems
Working as a team

Kaizen is everybodys responsibility

The kaizen mind-set aims to make improvements in processes without

adding more people to the process,

adding more space to the process,
spending additional money to implement the change

This kind of continuous improvement can be broken down into six steps:

Standardization: Identify a process for a specific activity that's organized and repeatable.
Measurement: Examine whether the process is efficient using process related data, like
completion time, man hours required, material consumed, etc.
Compare: Compare the measurements against requirements. Identify the waste in terms of excess
time, material or other resource being used.
Innovate: Search for new, better ways to do the same work or achieve the same result. Look for
smarter and more efficient methods that boost productivity.
Standardize: Create repeatable, defined processes based on the new, more efficient activities.
Repeat step one.

Kaizen for problem solving

Continuous improvement can take place only after a process has been standardized and stable, which
makes the inefficiencies visible. On identifying the apparent problem, the root cause of the problem is
found out using the 5-Why investigation technique.

Figure 1: 5-Why investigation questions

Countermeasures are taken at the deepest level of the cause that is feasible and at the level that will
prevent the problem from reoccurring again.
Kaizen for improving process
Kaizen workshops are an important tool towards implementing specific improvements in a process. It is a
remarkable social invention that frees up a cross-functional team to make changes in a week, known as a
kaizen blitz or kaizen event, that otherwise can drag on for months.

Figure 2: Flow of Kaizen workshop

A specific area or process of manufacturing is targeted for improvement and solutions are devised as a
team within the limited time. A supervisor, who acts as a coach or a mentor to the team, would guide them
on how to work on the problem and provide technical expertise, while overseeing the participation of the
team members.

MERITS. DEMERITS AND CHALLENGES

Lean Manufacturing

Merits

Cost Savings

These are the basic direct and indirect savings which affect the bottom line, the direct ones include less
material and worker time related costs, the indirect ones include space savings and efficient movement of
labour as well as materials.

Worker Satisfaction

For implementing lean principles in the production process requires input and suggestions from the
production staff. They are more knowledgeable about the process and in the best place to see where waste
and inefficiency are occurring. Not only can they serve as the source for valuable inputs, they usually
respond in a positive way when there is a sincere effort by the management to involve them in the
implementation process. When they see their ideas being implemented, there is a sense of empowerment
and ownership.

Just in Time

JIT is a strategy that suggests large inventories lead to wastage of company resources. Equity which is
tied up in inventories of raw and finished items interferes with the cash flows of the business. Money is
similarly saved through diminished warehousing needs. The perfect JIT system would have the raw
materials purchased and delivered only when the production unit requires them. Similarly the finished
product is delivered and sold immediately after it comes off line. Lean philosophy involves improvements
towards reaching this ideal state.

Competitive Advantage

Beyond basically diminishing expenses and improving efficiency, these methods present structures and
develop skills of your staff that support changes in the workplace that the new arrangements make. Space
savings on warehousing may be used to incorporate new product offerings. The same is legitimate for
time saves. Your staff can hold new work and react quickly to changes in client demand. Making work
quickly, in short emphases, without waste and passed on time enhances your influence over your
resistance.

Demerits

New Inefficiencies

The improvement techniques can be manhandled. When the process of tracking productivity and waste
starts to influence the time used for production process, the solution itself transforms into an issue.
Initially when lean principles are applied, the expected returns are higher compared to those obtained
later. It is tempting to push for more improvements, but the incurred cost must be evaluated against the
value of the benefits reaped.

Problems with JIT

JIT principle works best in a stable system environment in which the delivery times of raw materials and
finished goods are known, so the production process can be scheduled accordingly. Being over aggressive
with JIT leaves the process

Worker Frustration

After reaching a particular level of refinement through lean methods, further using the same to extract
more saving might actually lead to demotivated workers due to perception of negative leadership. Effects
of previous improvements might get reversed as a result. Therefore it is important to strike a balance
between stability and continuous improvement, which is a challenge while creating a lean environment.
Smaller business might find it easier because of their less complex nature.
Therefore it is important to keep track of the effects taking place on the staff and workers due to the
implementation of the changes.

Continuous Improvement

Merits
Less waste stock is used with higher efficiency.
People are more satisfied they directly impact the way things are done.
Improved obligation partners have to a more noteworthy degree a stake in their occupation and are
more focussed to concentrate on profiting a job.
Improved upkeep satisfied and associated with people will most likely sit tight.
Improved forcefulness increases in capability tend to add to lower costs and higher quality things.
Improved purchaser satisfaction starting from higher quality things with less defects.
Improved basic intuition looking from a courses of action perspective licenses specialists to deal with
issues tenaciously.
Improved bunches coordinating to deal with issues builds and strengthen existing relations.

Demerits

Difficult to enforce collaboration among multiple stakeholders

The continuous improvement process requires many stakeholders to be engaged. Such an extensive
number of accomplices ought to be possessed with persevering change: Process Owners and SMEs,
Process Analysts, Lean/Six Sigma experts, Quality Managers, IT, Training. On the off chance that you're
in an exceedingly regulated industry the summary of accomplices likely also includes Risk and
Compliance Officers as well. With each having multiple initiatives at different stages of lifecycle, it is a
challenge to get them to work in unison.

Difficult to recognize which processes to improve upon

There's no lack of ideas for what could be upgraded at any organization. Nevertheless, how might you
prioritize? For some, the corporate strategy may be clear, others may feel an overload of initiatives and
urgent priorities. How might you assess improvement exercises and evaluate them with respect to value
and priority to the corporate strategy and business objectives?
A vital supplier to such inconvenience in agreeing requirements for improvement is inclined to be
incorrect or Fuzzy KPIs. Can it be said that you are measuring the right things? Are the KPIs relevant to
the strategy? Would you be able to relate the KPIs to the processes? Do the right people look at the right
measures? Is it precise to say that they are empowered to do anything constructive as a result?
(Performance Management versus Performance Reporting.) Measuring too much and you could be stifled
by information overload? Then again perhaps you haven't got relevant and critical data you can trust to
base your decisions on. It's definitely not hard to see how recognizing what processes to prioritize for
improvement is referred to as a major barrier.

Governing/controlling change

In a significantly regulated industry you may be burdened with Standard Operating Procedures and
intensive document controls which make flexible analysis and implementation of change a real challenge.
Nevertheless, if you need to reliably exhibit to auditors that your methods, frameworks, controls and
compliance obligations are all under control, you have to deal with a constant governance overhead.

Lack of labour engagement

Staff engagement challenges can be considered from two perspectives. How might you achieve adoption
of change among the employees? How do you maintain sustained obligation to improvement from the
bottom-up? We ought to consider these hence.
Enforcing adoption of change by employees
The new and improved processes will deliver nothing if employees are not aware of them, forget them or
simply just fail to follow them. By definition continuous improvement means a non-stop drip feed of
changes and improvements. The risk is employees getting exhausted with change, and may soon become
sceptical or even hostile to further changes, if the same is not communicated with them consistently.
Gaining bottom up contribution and commitment
Empowering all of the employees to get involved in continuous improvement is a challenge. How do you
motivate them, not just informing them of change but ensuring that they can contribute to the
improvement process themselves? Are the methods used for this effective enough? Can you utilise new
technologies such as enterprise social platforms to facilitate this bottom up contribution, or are such tools
just likely to contribute to unstructured information overload?