Lean production system is the western term for Toyota Production System. This production philosophy is now widely used in auto industry around the world. This system has been modified everywhere in the auto industry, adapted to some extent on the local industrial situation or practices, however its core principles remain the same. This system is not only used in auto industry but also in other non-auto industries involved in assembling process.
In order to understand lean production system, it is important to understand it in its historical perspective first. If we study the history of automobile industry, it can be separated in three eras, which can be termed as milestones of automobile industry. These milestones are:
- Invention of Automobile (1880)
- The Henry Ford’s Mass Production System (1910)
- The Toyota or Lean Production System (1933)
1. Invention of Automobile in 1880
Their names were Gotlib Daimler and Karl Benz. However, Carl Benz is generally given credit to develop world’s first automobile in 1885. Both of them were Germans and later their companies were merged, in 1926, to appear as one of the greatest names in automobile Industry, called Daimler Benze-AG. Other contemporaries were Wilhelm Maybach and Seigfried Marcus who were also known for developing automobile later during the same period.
2. Henry Ford’s Mass Production System
In 1910 Henry Ford laid the foundation of first highly organized assembly line system of automobile manufacturing. He organized all the elements of a manufacturing system-people, machines, tooling, and products– and arranged them in a continuous system called conveyor belt system.
Ford was so incredibly successful that he quickly became one of the world’s richest men and put the world on wheels.
Ford Motor Company also assembled aircraft using mass production techniques. This mass production success was known as “A-Bomber an Hour” production during WWII when Henry Ford, upon request from US government, produced bomber air crafts for USAF. Before Henry Ford’s take over, the same plant was producing only one bomber a day.
Here is a video clip of how Henry Ford and his engineers perform something unthinkable in the history of air craft assembling:
Here is another video clip that shows the historic footage of how mass production of famous Model T was done there:
3. Toyota’s Lean Production System
The Allied victory and the massive quantities of material behind it (“A Bomber an Hour” success) caught the attention of Japanese industrialists. Toyoda family were among those Japanese industrialists who were observing American industrial strength and wanted to emulate it by investing in Automotive Industry. Toyoda family, during that period was in loom manufacturing business and was known as Toyoda Automatic Loom Company.
Under the encouragement of the Japanese government (which needed domestic vehicle production partly due to the worldwide money shortage and partly due to the war with China) Toyoda family embarks upon the ambitious project of auto-manufacturing business. It was in September 1933 when Toyoda Automatic Loom created a new division devoted to the production of automobiles under the direction of the founder’s son, Kiichiro Toyoda.
Toyoda changes its name to Toyota
The reason is described by Toyota Motor Corporation as follows:
Ever since its humble beginnings in Japan almost 70 years ago, Toyota has recognized how important it is to have a meaningful visual identity with strong visual impact.
Back in 1936, to coincide with the launch of its eagerly awaited first passenger car, Toyoda Automatic Loom Works Ltd. held a public competition to establish a new symbol mark to promote its vehicles. The company indicated that the new design should convey the feeling of speed. Twenty-seven thousand entrants answered the call and submitted their ideas to Toyoda.
The winning design led to a change in the name of the automobiles and plants from “Toyoda” to “Toyota.” The name change made the Japanese lettering more streamlined and was also chosen because the number of strokes to write Toyota in Japanese (eight) was thought to bring luck and prosperity. The sound of the word “Toyota” was also deemed more appealing. The Model AA, Toyota’s first passenger car, became the first automobile to use the Toyota name and new mark. Although no longer used on the product, the mark is still used today as the corporate emblem of Toyota Motor Corporation.
Toyota Learns From the Ford Motor Company
Toyota when entered in auto manufacturing, was naturally interested in learning from Ford Motor Company’s methods of assembling who pioneered conveyor belt system. Initially, Toyota found it quite difficult to emulate Ford Motor Company’s Mass Production System. Post WWII Japanese economy was in shambles and Toyota could not afford Mass Production of vehicles due to smaller market size. The greatest problem was huge inventory requirement, which was a prerequisite for Mass Production System.
Toyota could not afford to tie up capital in huge inventories. Thus, Toyota’s top bosses began to design a whole new concept of Production System which was based on producing automobile without maintaining safety stock of huge inventories in order to avoid “just-in-case” or (JIC) situation i.e. shortage of parts for producing automobiles.
The new concept was based on total elimination of inventory and arranging for parts just-in-time, in other words, directly from the vendors. This could result in eliminating the need of safety or buffer stock. Toyota decided to lean-off “fat” or huge safety stocks from its system. This whole new concept was later known as Just-in-Time or JIT system, an alternative name of Lean Production System.
The highly venerated names who are credited for inventing this complex, yet highly efficient system were Taichii Ohno and Shigeo Shingo. Taichii Ohno was Production Boss and Shigeo Shigo was Industrial Engineer and consultant of Toyota Motor Corporation.
These two gentlemen were the brains behind transforming Ford production and other techniques into an approach called Toyota or now widely known terminology called Lean Production System. This system is also known as Just-in-Time system because of its fundamental philosophical difference from Just-in-Case system that is based on mass production philosophy.
What are the elements of Lean Production System?
There are two major pillars of lean production system. One is Just-in-Time system and other is Kaizen. Just-in-Time System was developed as a result of adoption and adaptation of Mass Production Techniques. Taiichi Ohno and his associates had been successful to tailor Ford Production system according to the Japanese market and economic constraints of that time.
As discussed earlier, JIT is basically based on the concept of total elimination of inventories or safety stocks during the production of automobile. The same could not be possible without putting certain techniques and related philosophies into action. Here is the list of those elements that make this system run:
- Levelled Production
- Pull System
- Continuous Flow Processing
- Takt Time
- Flexible Work Force (Shojinka)
- 3 Ms (Muda, Mura, Muri)
- 5Ss (Sifting, Sorting, Sweeping, Spick-n-Span and Sustenance)
Let’s discuss each one of them:
1. Levelled Production
Levelled production means producing various models on the same production line to cater the customer demand. See the following diagram. The various products are shown in the form of different geometrical shapes. Assume they are different models of vehicles being produced on the same production line.
Production levelling is done by finding the ratio of demand of various models. Instead of producing batches of the same model, mix models are produced on the same production line according to the ratio of their demand in the market.
This is how customers do not have to wait for long and throughout the month all the customers are served equally well.
2. Pull System
Pull system is the corner stone of JIT. The whole concept is based on customer demand. This demand is known as “Pull” that runs in backward direction. In other words, production activities begin as a result of the pull generated by the customers in the form of order confirmation by them.
Let’s understand this concept using the analogy of McDonald’s Burger. When you visit McDonald’s you do not find meal (the product) ready for you. You order your meal and production starts in a just-in-time manner. Why this happens? The answer is simple. McDonald’s cannot afford to produce burger without knowing the various combinations in the demand of its customers. The production of burger begins in the reverse direction. You, as a customer, pull or trigger this burger production chain.
Same holds true in case of auto manufacturing. The customer demands can vary given the intense competition in the auto-market. An auto-manufacturing company cannot afford to produce vehicles without incorporating customers’ demands as quickly and efficiently as possible.
The Pull System, although, simple to explain in terms of customer demand; is however, not so easy to explain in terms of production system.
When customer demand is established in the form of confirmed order, the organization begins production by sending signals in the backward direction. All the preceding processes send signals to the following processes. These signals come in the form of a “card” called Kanban. Kanban is a Japanese word meaning signboard.
Kanban is a reverse production order signal that guides every preceding process to produce what is needed, in necessary quantity and at necessary time for the next process. This Kanban works not only within different production departments of the assembly plant, but also between its vendor supplying parts to it. Here is a diagram that shows how it works in assembling process:
Why Toyota calls Kanban System based on “Supermarket Concept”?
Again this concept stems from customer picking product from the shelves of a shop. A supermarket stocks the items needed by customers when they are needed in the quantity needed, and has all of these items available for sale at any time.
Taiichi Ohno (a former Toyota vice president), who promoted the idea of Just-in-Time, applied this concept, equating the supermarket and the customer with the preceding process and the next process, respectively. By having the next process (the customer) go to the preceding process (the supermarket) to retrieve the necessary parts when they are needed and in the amount needed, it was possible to improve upon the existing inefficient production system in which the preceding processes were making excess parts and delivering them to the next process.
3. Continuous (Smooth) Flow Processing
Producing just-in-time is not possible until the organization ensures smooth flow processing. Continuous or smooth flow processing means arranging work inside each process to flow smoothly from one step to other. Why is it necessary? The answer is simple. You cannot maintain buffer or safety stocks in JIT system if it is to run efficiently. Keeping buffer or safety stock in between production process is the part of Just-in-Case system. The term JIC itself indicates fear of parts shortages that can ultimately affect production.
In continuous flow production you cannot maintain inventory. You pass through all your work in a continuous manner so that there is no chance of inventory management. If any defect occurs and remain undetected, it will remain limited to the same or very few components.
If defect occurs in the system based on JIC having huge safety stocks, the losses will be much higher and difficult to manage. Here is a diagram that illustrate the difference between both the systems:
Now compare above JIC based illustration with the JIT based continuous flow production system shown below:
4. Takt Time
Takt is a German word meaning “meter.” It is the time to finish given amount of work-doing a single operation, making one component, or assembling an entire car. It can be explained by the formula
Using the above formula the pace of work is set according to the market demand. For example there is a pull or market demand of 100 vehicles per day, this demand if divided by 480 minutes available in a day, will give you the number of units you can produce to serve your customers. This means that time available to produce parts or sub-assemblies of parts on each station or each assembly process is 4.8 minutes.
5. Flexible Workforce (Shojinka)
Flexible workforce or shojinka means to alter (increase or decrease) the number of operators within a shop or production department so that the same could be used according to variation in production demand.
Flexible workforce can be developed through continuous training and development. The training should be imparted in a manner that it could develop an employee as a multi-process handler rather than multi-machine handler. The concept can be understood with the help of following illustrations:
6. Three Ms (Muda, Mura, Muri)
3Ms are the irritants that simply prevent JIT operation from running effectively. They are constantly searched and eliminated from the system.
These are Japanese words and all of them start from English letter M, i.e. Muda, Mura and Muri. There meanings are:
Muda (non-valued added)
Let’s understand it with the help of an illustration. Assume that you have to carry 12 tons of load in a truck having capacity of 4 tons maximum. You can take this load in either of the following ways:
Five S’s (Seiri, Seiton, Seiso, Seiketsu and Shitsuke)
This concept was evolved and developed in Toyota Motor Corporation. It is basically combination of five Japaese words that starts from English alphabet letter S
Seiri (Sifting): This `S’ lays emphasis on the importance of sorting out what is necessary and what is unnecessary and consequently discarding the unwanted items.
Seiton (Sorting): This `S’ has its foundation in the idea that “A place for everything and everything in its place”. The underlying concept of this is to maintain an atmosphere of easy accessibility where everything of importance can be located with the least difficulty.
Sweeping and cleaning means surface and other areas free from oil and chemicals that may or may not cause slippage, fire or any other possible hazard.
There are several steps in the cleaning process:
- Increase the lighting in the work area
- Divide the area into zones
- Define responsibilities for cleaning
- Repair any leaks on machines
- Identify proper methods and tools for cleaning
- Provide protection for the persons doing the cleaning (gloves, face-masks)
- Clean machines, floors, walls and ceilings
- Paint machines, floors, walls and ceilings
- Identify the sources of dirt
- Try to eliminate the need to clean inspect machines and tools while cleaning
- If possible, perform some preventive maintenance while cleaning and inspecting (example tightening hydraulic hoses)
It is important to note that Seiso is cleaning, but also inspecting and simple repair and preventive maintenance.
Seiketsu (Spic and Span): This `S’ is exactly what the literal translation means.
It stresses on the importance of keeping one’s area of work or studies clean and that the continual cleaning of the environment minimises and finally eradicates the source of dirt.
Shitsuke (Sustenance): The continued employment of the first four S’s leads to their unconscious implementation and in turn causes them to become a part of our day to day life. This `S’ is self-explanatory and stresses the need for discipline in every sphere of life.
It can be done through continuous training, organizing competition and full support from top management.
What are the benefits of implementing Just-in-Time system?
JIT is world’s one of the best proven production systems. If implemented according to its core principles and lessons learnt through its theory and practice, a company can successfully achieve the following benefits:
Reduction of direct and direct labor by eliminating non-value added activities.
Reduction of floor space and warehouse space per unit of output.
Reduction of setup time and schedule delays as the factory becomes a continuous production process.
Reduction is waste, rejects, and rework by detecting errors at the source.
Reduction of lead time due to small lot sizes, so that downstream work centers provide feedback on quality problems.
Better utilization of machines and facilities.
Better relations with suppliers.
Better integration of and communication between functions such as marketing, purchasing, design, and production.
Quality control built into the process.
Here is a documentary that would help you understand all these concepts easily:
Source of above content: The information mentioned in above post is taken from various sources including the book, Total Quality Management by Joel E. Ross, Official website of Toyota Motor Corporation, etc.