Learning From Toyota:

Some key points from history and implementation

Art Smalley
President
Art of Lean, Inc.

Art of Lean, Inc.

TPS/Lean is a widely accepted improvement program

Starting from simple roots in Toyota in the 1950s TPS has

spread around the world to become a dominant improvement
methodology
Annually for the several years Toyota has earned in excess of
$10 Billion in profits
Toyota will overtake GM in a year or two as the automotive
industry leader in volume and add this to their already
dominant positions in quality and profitability Triple Crown
TPS has been discovered by multiple people over the years
and identified as various different items such as:
QC circles
Kanban system
Kaizen events
Value stream mapping
Whats next?
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The parable of the elephant and the blind men

It is not what you call it
that counts but why
and how you do it that
really matters!

1970s
QC
circles!

1980s
Its Kanban!

TPS
2000
Its all about
flow and the
Value Stream!

1990s
Its Kaizen!
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However

Despite all this discovery and wealth of information no one

has been able to consistently copy this elusive system and
produce the same type of results

Additionally as Lean/TPS spreads I am starting to see more

implementation instances with either limited or poor results to
show for all the hard workin several cases it has even
somehow added cost.

Why is this proving so difficult?

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Multiple possible explanations exist

Toyota took about 20 years or so between 1950-1970 to build

up the system and implement it across several plants. Most
practitioners are in about year five or less
TPS in Toyota is fairly different from Lean programs I observe
in North America (I dont know as much about here!)
There is a shortage of talented TPS implementation
leadersMost of us dont have Taiichi Ohno for example (and
for the record Toyota struggles sometimes overseas as well).
Perhaps creating this new system in companies with an
established culture and old way of doing things is just
inherently very difficult(i.e. we are fighting some form of
invisible law of change / gravity?)
Other reasons as well
Note: With todays time limit I can
only touch briefly on these two items
as time allows
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1) TPS development timeline

Influences
Mass Production
moving conveyor lines
Scientific Principles
Of Management

TPS Development

1937

2006

Standardization
Of Parts

Guess what it did not just happen overnight!

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Before Toyota there was Toyoda

Low capital cost
Automated machine
Jidoka stoppage features
1 person ran 24-36 machines
Zero shuttle change over time
24 technical patents
Magic loom

Sakichi
Toyoda
Inventor

1890
Wooden
Loom

1896
Auto
Loom

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1924
Type G
Auto Loom

Sakichi provided the original spirit of Toyota

Managers, staff, and employees must all work together
Lets give it a try
Dont be afraid of mistakes

5 Main Principles of Toyoda

1. Always be faithful to your duties, thereby contributing to the Company and to
the overall good.
2. Always be studious and creative, striving to stay ahead of the times.
3. Always be practical and avoid frivolousness.
4. Always strive to build a homelike atmosphere at work that is warm and
friendly.
5. Always have respect for God, and remember to be grateful at all times.

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TAL* Factory and Type G Auto Looms Influence

Jidoka concept

Flow concept

Toyoda Looms were built in a factory designed

by Sakichis son Kiichiro in 1927 using the
basic principles of Henry Ford.
-Flow production in assembly (moving
conveyor line)
-Scientific principles of management (Taylor)

Sample layout of the 1924 Type G Loom in

usage by customers.
-One employee tended 24-36
machines (separate man from machine)
-They also automatically stop when a
thread breaks (defect occurs)

*Toyoda Auto Loom Works

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1933 to 1945 - The Start Up of Toyota

1933 Early Auto

Department in TAL*

1935 A Type Vehicle

built as a prototype

1937 Started the Toyota Motor Corporation

Open Koromo (Honsha) Plant for vehicle mass production of vehicles
Organized new factory production for flow and eliminated intermediate storage
10 centimeter thick document regarding operations and flow production
Decreed that production and procurement but be done JIT in 1937
Unfortunately World War II disrupted operations
The Japanese economy weakened in 1950 and sales sagged
One third of the company (2,146 employees) were let go
Kiichiro stepped down to take accountability

*Toyota Auto Loom

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1945 to 1955 Mr. Ohnos Line

Eiji Toyoda

Taiichi Ohno

1945-1955 Machine Shop Experiments by Mr. Ohno and his staff

One person operates two machines, three machines and then four, etc.
Re-organize processes from process to product flow (Grinders to Cam Shafts)
Pace production to an average (i.e. takt time)
Level production volume of time and mix of items
Standardized work routines and methods
Implement replenishment style production and kanban
Invent simple Jidoka devices to stop the line when there is a problem
Utilize visual control and other workplace organization methods
Observe processes to find problems and then make improvements

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1955 to 1960 Beyond the Machine Shops

Honsha
Plant
Machine
Shops
-Engine
-Transmission
-Chassis

Casting &
Forging

Stamping &
Body Weld

Paint
Dept.

Final
Assembly

1950 Production volume of 10,000 units

1960 Production volume of 100,000 units

1950 Mr. Ohno was a 38 year old

manager of the machine shop
1955 The machine shop had 500
employees and 3,500 machine tools

1955 Mr. Ohno had about 5 main

disciples in the machine shops (and Eiji
Toyoda covering his back)
-Yukio Arima
-Itsuo Mamiya
-Kikuo Suzumura
-Takeo Watanabe
-Masanobu Morita

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1960 to 1970 Beyond Honsha Plant

Motomachi
Plant
Exec VP
Manufacturing

Honsha
Plant

1960
President
Chairman

Kamigo
Plant

1965

Takaoka
Plant

1966

Manufacturing

Quality
Miyoshi
Plant
Tsutsumi
Plant

1968

1970

Product
Development

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1970 to 1980 TPS External Spread to Supply Base

Aishin

Denso

Kanto
Auto

Central
Auto

Koito
Seisaku

Toyoda
Gosei

Toyoda
Boshoku

Tokai
Rika

Aisan
Kogyo

Taihou
Kogyo

OMCD*
-Kikuo Suzumura
-Fujio Cho
-Others

Jisshuken Activities
1.
2.
3.
4.
5.

Flow production
Standardized work
SMED
JIT/Pull/Kanban
Kaizen

*Operations Management Consulting Division (Seicho-bu)

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1980 to 2000 Exporting TPS Beyond Japan

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Long period of consistent profitable growth

Ranking by Sales (Million units sold)
Rank

Market cap (April 2002)

(USD billions)

1950

1970

2003/4

GM

GM

GM

(8.60)

Ford

Ford

Toyota

(7.20)

Chrysler

Chrysler

Ford

(6.72)

Studebaker

VW

VW

(5.11)

Nash

Fiat

Renault*

(4.98)

Kaiser

Toyota

Daimler**

(4.50)

Morris

Nissan

Honda

(2.88)

Hudson

Renault

Hyundai

(2.65)

Austin

BL

Fiat

(2.37)

Renault

Peugeot

Mitsubishi (1.44)

10

...
* Renault/Nissan
** DaimlerChrysler
Source: [Link]

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34
101
27
18
14
44
20

Aspiration:
By 2010
Global
No. 1 with
Market share
Of 15%

TPS Summary* 1945-1965

Topic / Dates

1945-55

1955-65

50 Machining and Assembly Line Flow

Process flow

50 Machine Shop Flow

60 Intra Plant Flow

53 1-4 Material Handling Call System

JIT

Conveyance
Set up Reduction

60 Intra Plant Time Delivery

55 Fixed quantity unfixed time based system

50 1-4 Hour Set Up Time

62 15 Minute Average C/O

(New Technology Danly Stamping Presses)

48 Replenishment pull pilot

Kanban

55 Engine to Vehicle Plant Flow

62 Company wide pull established

53 Machine shops implement pull & level scheduling

55 Fixed quantity delivery control system

Purchase Parts Management

Ordering System

65 Adoption of supplier kanban

55 Monthly Production Plans
57 Adoption of Sequence List

Jidoka

Production Instruction
Multi-Process Handling
& Standardized Work

63 JIT Production Instruction Signals

47 1 Man 2 Machines
53 Standardized Work
49 1 Man 4 Machines

Visual Control &

In Process Control

55 1 Man 7 Machines (average in machine shop)

50 Andon lights on engine assembly line

62 Full work control system / Pokayoke

*Source: . Toyota 50 Year History Published 1987

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TPS Summary* 1965-1985

Topic / Dates

1965-75

1975-85

75 Synchronization of Flow Between Plants

Process flow

75 Development of Equipment for Flow Production

70 All Plants on Call Conveyance Method

JIT

Conveyance
Set up Reduction

71 3 Minute Average C/O Press Machines

75 Single Minute C/O Machines at Suppliers

Kanban

77 Kanban Auto Sorting and Reading

77 Bar Code Reader for Supplier Kanban

Purchase Parts Management

65 10 Day Order Entry System

Ordering System

83 Review from Sales to Manufacturing

77 Cross Docking Methods

74 New Order System

70 Daily Order Entry System

85 Lead Time Reduction Project

71 Development Plant Production Instruction Signals

Jidoka

Production Instruction
Multi-Process Handling
& Standardized Work

Visual Control &

In Process Control

80 Adoption of Automatic Signals

86 New Technology System

75 Company Wide Standardized Work

66 Full Automated Machining Lines

(JIT & Jidoka Fulfilled Kamigo Model Plant)

*Source: . Toyota 50 Year History Published 1987

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2) TPS in Toyota versus Lean in most companies

Typical Questions for a Value Steam
1.
2.
3.
4.
5.

6.
7.

8.

What is takt time?

Where can you use continuous
flow?
What is the pacemaker?
Where will you need a
supermarket pull system?
Will you build to a finished
goods supermarket or to
customer order?
How will you level production
mix at the pacemaker?
What increment of work will you
consistently release and take
away at the pacemaker?
What process improvements will
be necessary for the value
stream to flow as your future
state design specifies?

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Any lens affects how well and what you see

Eye Glasses

Microscope

Telescope

Blurred image

Small image

Distant image

Clear image

Magnified image

Closer image

But no one lens can do everything!

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TPS Framework
Customer satisfaction
& Company profit
Cost
Lead time
Quality

LTS* - Map the value stream

1.
2.
3.
4.
5.
6.
7.
8.

Takt time?
Continuous flow?
Pacemaker?
Supermarket pull system?
MTO/MTS?
Level production?
Pitch increment?
Process improvements for flow?
(Add in CCF, MMF, CLP, etc.)

Just-in-time

Jidoka

-Flow production
-Takt time
-Pull system
-Level production

Where is the
focus?
Standardized Work & Kaizen
Equipment Stability

*LTS - Learning to See, followed by CCF - Creating Continuous Flow, MMF - Making Materials Flow, & CLP Creating Level Pull

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TPS Framework
Customer satisfaction
& Company profit
Cost
Lead time
Quality

LTS* - Map the value stream

1.
2.
3.
4.
5.
6.
7.
8.

Takt time?
Continuous flow?
Pacemaker?
Supermarket pull system?
MTO/MTS?
Level production?
Pitch increment?
Process improvements for flow?

Just-in-time

Jidoka

-Flow production
-Takt time
-Pull system
-Level production

Most of the Lean focus in

the U.S. today is on just
a part of overall TPS
mainly JIT, inventory and
lead-time reduction

Standardized Work & Kaizen

Equipment Stability

*LTS - Learning to See, followed by CCF - Creating Continuous Flow, MMF - Making Materials Flow, & CLP Creating Level Pull

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JIT/VSM focus is necessarybut not sufficient

Process A

Availability = 65%
Capability = .8 Cpk
Flexibility = 1 Hr. C/O

+ Supervisors
inundated with
other problems
(First 20 years of TPS)

Sometimes the process is

what needs to be fixed and
not just the JIT flow across
the process
In other words truly learning
to see certain problems
involves crawling under the
hood and getting the 1 foot
view and not the 10,000 foot
VSM view
Companies wont improve quality,
cost, and delivery significantly
until all these types of problems
are addressed better than today.
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TPS is built on the scientific way of thinking

1.
2.
3.
4.
5.
6.
7.

General Scientific Method

Define the question / make observations
Gather information and facts
Form Hypothesis
Perform experiment and collect data
Analyze data
Interpret data and draw conclusions
Summarize results

1.
2.
3.
4.
5.
6.

TPS Basic Thinking Pattern

Define the problem
Analyze the causes
Set a goal
Implement the action items
Verify the results
Follow up / Standardize

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Observation of actual situation (facts not opinions!)

Estimated lost production

Lathe area

1920

40

500
100
40

40

Big
Problem!

Major
Break
Down

1 hour observation

Tool
Minor
Change Stops

CT
Loss

Scrap

Yield

Results extrapolated to 1 machine 8 hours

Problem: Machine not producing 1580 parts per shift to meet takt time
Goal:
We must improve 380 parts (1200 to 1580) per shift.

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1200

Why all the minor stops? (Invisible problems)

1) Operators point of view: This is my daily grind
it is entirely normal(abnormal has become
normal).
2) I have to clean the machine constantly as there
are cutting chips that accumulate everywhere.
The chips stop the parts from rolling down the
chute and auto loading time and time again so I
have to un-jam the machine. I know that I am
told not to break standardized work but unless I
do the area will not run.
3) Also I have to gauge parts carefully even more
that the quality check interval calls
forotherwise bad parts are found down stream
and I get in trouble.
4) And I have to constantly adjust the tooling offsets
at the control panel of the machine as this helps
me keep the parts within specification (0.1mm
tolerance)
5) No one will help me out on this sort of stuffthey
are too busy doing lean or chasing other
problems.
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What are the root causes? (1/2)

1.

Parts jamming problem (minor stops)

Why do the parts jam in the loader?

2.

The cutting chips fly up in the auto loading chute inside the machine

6. Tank too small

3. Insufficient
internal
guarding

4. Incorrect coolant 5. Insufficient

nozzle position
coolant flow
7. Pump too small

None of this was adequately

considered in design and
procurement of the machine.
Long term this is what must be
standardized and fixed

Action Items: #3, 4, 5, and 7,

must be fixed tonightno
exceptions.

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What are the root causes? (2/2)

Operator adjusting offsets (quality problem & minor stops)
1. Why does the operator adjust the offsets?
2.

He was compensating for something wrong in the machine

3.

What is the process capability? (It was .8 Cpk) Why?

4. The fingers on 5. The spindle had 7. Guide rails for

the chuck device too much play or run slide unit were
were worn down out in the unit
worn as well.
(Adjust the gibs)

8. Negative rake
angle on the cutting
tool (generates
excessive cutting
force)

6. Bearings worn
Action Items: #4, 6, 7, must be
fixed tonightno exceptions.
#7, #8 investigate further
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Check Results and Follow Up: Good News

Test Results (1 machine)

Capacity = 1920
Demand = 1580
Actual

= 1680

Remain =

240

The process averaged closer to

87.5% uptime during the shift
Only one minor stop for cutting chips
blocking auto loader was reported
The quality of the parts was 100%
right the first time
Spread to other machines ASAP

Still more room to improve. Further study required.

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Check Results and Follow Up: Bad News

2-3 Year Superficial Effort:

1 Week TPS Effort Uncovered:

Heavy VS Mapping and material

flow emphasis

$500K in wasted capital identified on two

lathes

8 Kaizen events conducted but

mainly flow or assembly related

6 lathes at 85% uptime possible (saved

$4-500K of overtime in 2 departments)

Good visual impact. At least

things were cleaner.

Scrap will be reduced as well ($150200K estimate)

No real impact on quality and

cost however for all the effort that
was put into the project

Probable annual savings in the area of

$6-800K just by looking in more detail
the lathe department. Other areas?

Operators dismayed with lean

seen as a burden

Operators thought this was the greatest

thing ever their job got easier, and
someone finally listened.

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Reflection Points: Learning from Toyota

Some companies just seem have the wrong framework for doing
lean (multiple examples)
When the emphasis is to apply the tools then rigorous thinking is
not required. Law of least mental effort is followed
In TPS leaders must see that practitioners solve the real problem
and apply the scientific method. This will wont happen naturally.
TPS at its essence is developing a way to surface problems right
now, and respond right away, not just building a tool kit.
The real issues in this case were 1) up front mistakes in engineering,
2) inability in the lean group to even see the problem, and 3)
abnormal situations had become normal. No one took action.

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Lets revisit some basic TPS questions

Typical Problems

Countermeasures
or analysis tools

3. How will you

achieve 100% JIT?

On-time delivery
Inventory
Lead-time

VS Mapping
Flow of product
Pull system / kanban

4. How will you

build in 100%
quality?

Customer defects
Scrap
Rework

Abnormality detection
Stop the machine
Process Cpk

5. How will you

stabilize the
availability to
100%?

Capacity losses
Downtime
Scrap & Rework

6 losses
OA / Maintenance
Problem solving

6. How will you

standardized work
100?

Labor productivity
Scrap & rework
Safety

Job Instruction
Standardized work
Motion analysis

Key TPS Questions

1. How will you

satisfy the
customer and
obtain a profit?
2. What are
your main
problems in
production?

= Enough done already?

7. How will you

Team morale
develop natural
Skills development
work team leaders? Small improvements
8. How will you
sustain and
improve?

Recurring problems
Firefighting
Poor problem solving

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TWI/JR
TWI/JI
TWI/JM
PDCA
Root cause analysis
Recurrence prevention

TPS Vision of Ideal State: True North

Customer Satisfaction
0 defects
100% value added
1x1, in sequence, on
demand

Human Development
Physical & Mental Safety
Job Security
Professional Challenge

EVERYONE
every minute
every day

Current Actual Condition

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Thank you for your kind attention!

Questions?
Comments?
Ideas?

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at [Link]

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Appendix

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Early training courses in Toyota

Training Within Industry (TWI) Courses - Started in 1951 continues today

1. Job Instruction
2. Job Relations
3. Job Methods -- Replaced in 1955 by the P-course training
4. Job Safety -- Added by Toyota to the above courses
P-Courses taught by Mr. Shingo Started in 1955 and continued until 1980
1. Motion analysis
2. Time study analysis
3. Operational analysis
4. Process analysis
TQC related courses (Starting around 1962 with the TQC program)
1. QC Circle activity
2. Basic problem solving
3. Statistical quality control
Standardized work established in the early 1950s and refined up until1978
Kaizen training course formalized in 1978 and replaced the P-course
Role of a Supervisor formalized in 1970 and continues today
1. Role of a Team Leader
2. Role of a Group Leader

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