Introduction

The Toyota Production System (“TPS”) is a precursor to the concept of “lean management”. It was codified by Taiichi Ohno (1912-1990), who joined Toyota’s textile operations before moving to the automotive operations, where he worked his way up from shop-floor supervisor to Vice President.

The focus of TPS is to produce many models, in small quantities, and at a reasonable price. Cost reduction is achieved not by mass production but rather by the identification and relentless elimination of waste (muda) – including overproduction, defects, excess people, non value-added work, motion, equipment, and inventory – using the following tools and principles:

• Just In Time (JIT): Produce only what is needed, when it is needed, and in the amount needed.
  • The amounts produced should be determined by the market, based on demands or actual orders.
  • Production flow: Machines need to be arranged in the sequence of production.
  • Kanban: A later process should pick up only the amounts needed from the previous process. An earlier process should produce only the amounts ordered by the subsequent process. Pick up orders and production orders are conveyed through pieces of paper (kanban), starting from the final assembly line.
  • Production leveling: Fluctuations in quantity picked up should be muted to avoid excess capacity at an earlier process.
  • Products should be made in small batches, with an alternating sequence, and with quick setup times.
• Jidoka (autonomation): Machines must have built-in devices to stop production when work is finished or when they sense an abnormality.
  • Only when the machine stops because of an abnormal situation does it get human attention.
• Workers should look after several machines and processes.
• Standardization. Standard work procedures must be set by workers themselves and adhered at all times.
• Teamwork: Workers should assist each other.
• Poka-yoke: Fool-proofing devices must incorporated to avoid defects.
• Maintenance: Machine maintenance must be constant and preventive to achieve 100% operable rate.
• Work improvement should be conducted before equipment improvement.
• Make problems visible: Issues should be brought to the surface in order to immediately take countermeasures.
  • Visual control: Indicators should be installed that highlight problems as they occur.
  • Line stopping: Employees should be empowered to call for help or stop the line if issues occur.
• Five why’s: The real root cause behind a problem should be uncovered by asking “why” five times, in order to prevent re-occurrence.

Detailed concepts

Below are some of the concepts found in Taiichi Ohno’s book Toyota Production System: Beyond Large-Scale Production 

Andon

• Concept: Andon (sign or signal) is a line-stop indicator board hung above the production line that highlights a problem as it occurs in order to immediately take countermeasures and prevent re-occurence. The trouble indicator light works as follows: (1) When operations are normal, the green light is on, (2) When a worker wants to adjust something on the line and calls for help, he turns on a yellow light, (3) If a line stop is needed to rectify a problem, the red light is turned on. To thoroughly eliminate abnormalities, workers should not be afraid to stop the line.
• Benefits: Andon (1) empowers frontline workers, (2) prevents the production of defective products, and (3) allows the situation to be investigated and fixed swiftly.
• Applications: At Amazon, the concept was applied as follows: customer service agents noticing recurring after-sales issues with a product were given the ability to disable the “buy now” or “add to cart” button from the website.

Poka-yoke (foolproofing)

• Concept: Poka-yoke are defect-prevention devices installed on tools and equipment, that help operators avoid (yokeru) mistakes (poka). The following are examples of poka-yoke devices: (1) When there is a working mistake, the material will not fit the tool. (2) If there is irregularity in the material, the machine will not start. (3) If there is a working mistake, the machine will not start the machining process. (4) When there are working mistakes or a step left out, corrections are made automatically and machining continues. (5) Irregularities in the earlier process are checked in the later process to stop the defective products. (6) When some step is forgotten, the next process will not start. In a wider sense, the term can refer to any behaviour-shaping constraint designed into a process to prevent incorrect operation by the user.
• Benefits: Poka-yoke prevents defects, thus helping produce quality products 100% of the time.

Baton passing (mutual assistance)

• Concept: In a swimming relay, each teammate must swim the same fixed distance, and a swimmer cannot dive before the previous swimmer’s hand touches the wall. In a track relay, the rules are different: teammates do not have to run the same distance so that a faster runner can make up for a slower runner in the baton passing zone. On a production line, the track relay method should be preferred and the supervisor must install a baton-passing zone: if an operator in a later process is delayed, others should help set up his machine.
• Benefits: The baton-passing system is a mutual assistance campaign which improves the efficiency of the line through more powerful teamwork (if the baton is passed well, the team’s total time can be better than the individual times of all workers). It is particularly useful with new employees not familiar with the work.

Clear purpose

• Concept: Set ambitious goals and a clear purpose.
• Benefits: After World War II, when Toyoda Kiichirō, father of Japanese car production, advocated catching up with America in three years, this became Toyota’s goal. Because the goal was clear, activity at Toyota became focused and vigorous.

Cost reduction

• Concept: Cost reduction must be the goal of consumer products manufacturers, and a total management system is required to achieve this in a low growth period.
• Benefits: (1) In competitive industries, the cost principle (selling price = profit + actual cost) has no place, and profit can be obtained only by reducing costs. Products are scrutinized by cool-headed consumers, and if a high price is set because of the manufacturer’s cost, they will turn away. (2) During a period of high economic growth, any manufacturer can achieve lower costs with higher production. In a low-growth period, a system is needed to enhance creativity and fruitfulness, utilize facilities and machines well, and eliminate waste.

Efficiency

• Concept: There are two ways to increase efficiency: (1) increase the production quantity or (2) reduce the number of workers.
• Benefits: Suppose that, on a production line, efficiency improvements are introduced so that 10 workers can produce 120 pieces per day compared to the previous 100 per day. If market demand rises to that level, production can be increased without having to increase manpower. If market demand stays at 100 pieces per day, workforce should be reduced to 8.

Experimenting

• Concept: Use trial and error.
• Benefits: Some problems are best solved step by step, by trial and error.

Five why’s

• Concept: Ask “why” repeatedly (five times) until the root cause of a problem is understood.
• Benefit: By asking why five times and answering it each time, you can get to the root cause of the problem (which is often hidden behind more obvious symptoms) and its solution. Thus, “Five Why’s equal One How” (5W = 1H).

Heijunka (production leveling)

• Concept: Monthly production should be leveled throughout the month and within the day, and the same model should not be allowed to flow in a batch. If a plant needs to make 10,000 Coronas (5,000 sedans, 2,500 hardtops, and 2,500 wagons) per month, with 20 working days, this means that 250 sedans, 125 hardtops, and 125 wagons must be made daily,  arranged on the production line as follows: one sedan, one hardtop, then a sedan, then a wagon, and so on.
• Benefits: Production leveling (1) avoids waste (fluctuations in product flow increase waste, as the equipment, workers, inventory, and other elements required for production must always be prepared for peak production), and (2) facilitates response to diverse demands.

Industrial engineering (IE)

• Concept: IE is the production management technique that attempts to reduce costs by harmonizing quality, quantity, and timing throughout the production area.
• Benefits: IE is a profit-making production management technique directly to cost reduction.

Isolated islands 

• Concept: Work flow should be properly studied and laid out so that workers do not form small isolated islands.
• Benefits: If workers are isolated, they cannot help each other. But if work distribution enables workers to assist each other, the number of workers can be reduced.

Jidoka (automation with a human touch)

• Concept: Jidoka (“Autonomation”) means transferring human intelligence to a machine, by enabling it to automatically stop production.
• Root: The concept originated with the auto-activated loom invented by Toyoda Sakichi, which stopped instantly if abnormal conditions were detected (e.g., one of the threads broke), preventing defective products from being produced.
• Benefits: With standard automated machines, a small abnormality can lead to mass production of defective products as there is no built-in automatic checking system. Jidoka (1) prevents the production of defective products, (2) allows operators to attend several machines, thus reducing worker numbers, and (3) forces awareness on everyone, thus allowing the situation to be investigated.

Just-in-time

• Concept: The right parts needed in assembly should reach the assembly line at the time they are needed and only in the amount needed. To achieve this, (1) the machines should be rearranged in the actual sequence of the manufacturing processing to establish a flow, (2) the production flow should be looked at in reverse, (3) the priority to produce as much as possible should be eliminated, and (4) setup times and batch sizes should be reduced.
• Benefits: The conventional system in which a large quantity of the same part is machined in one process and automatically forwarded to the next process leads to waste: (1) Mountains of parts may pile up, and workers spend their time looking for storage space and hunting for parts, (2) Countless problems may happen in one process, leading to defective parts later in the process and excess inventories of other parts not immediately needed, (3) Abnormalities in a given process may go undetected for too long.

Kanban

• Concept: A kanban is a card (inserted in a vinyl envelope) containing pickup, transport, or production information that is sent from workers of one process to workers of the preceding or subsequent process (within Toyota, between Toyota and cooperating firms, and within cooperating firms). Every item or box of items that flows through the production process carries its own kanban. A production-ordering kanban shows the quantity which the preceding process must produce, while a withdrawal kanban shows the quantity which the subsequent process must withdraw. Production kanbans come off items that have been used and go back to the preceding processes as orders for additional items. The rules for the effective application of kanban are the following: (1) Take only what is needed: the later process must withdraw at the store of the earlier process the precise number of items indicated by the withdrawal kanban; (2) Produce the exact quantity required: the earlier process must produce items in the precise quantity and sequence indicated by the production kanban; (3) No production or transport without a kanban: no items should be made or transported without a kanban, and a kanban should always be attached to the goods; (4) Never pass on defective products: defective products should not be sent to the subsequent process.
• Root: The idea of kanban came from the supermarket. In a supermarket, operators make sure a customer can get what he needs, at the time he needs, and in the amount he needs: commodities purchased by customers are checked out through the cash register, and information about the types and quantities of commodities bought are then forwarded to the purchasing department (using cards at the time), which swiftly replaces them. From the supermarket, Toyota got the idea of viewing the earlier process in a production line as a kind of store: the later process (customer) goes to the earlier process (supermarket) to acquire the required parts (commodities) at the time and in the quantity needed. The earlier process immediately produces the quantity just taken (restocking the shelves).
• Benefits: Kanban (1) assures that the right parts are available at the time and in the quantity needed by functioning as the withdrawal or transport information, an order for conveyance or delivery of the goods, and a work order, (2) makes clear what must be done, and (3) eliminates waste (defects, excessive production, inventory and transport).

Maintenance

• Concept: Machine maintenance must be constant.
• Benefits: Adequate maintenance (1) enables the ideal 100% operable rate and (2) is cheaper than replacement. A machine’s value is indeed not determined by its years of service, its age, or its book value, but by the earning power it still retains (if a machine purchased a long time ago is kept up, can guarantee an operable rate close to 100% and can bear the production burden placed on it, its value has not declined; whereas if a machine purchased last year has been poorly maintained and produces at only half its operable rate, its value has declined 50%).

Moving vs working

• Concept: Turn workers’ movements into working.
• Benefits: Moving does not mean work has been done. Working means that progress has been made, that a job is done with little waste and high efficiency.

Muda (waste)

• Concept: (1) All sources of muda (waste) should be identified and relentlessly eliminated, including (i) waste of over-production, (ii) waste of time on hand (waiting), (iii) waste in transportation, (iv) waste of over-processing, (v) waste of stock on hand (inventory), (vi) waste of motion, (vii) waste of making defective parts and products (defects). (2) Improving efficiency makes sense only when it is tied to cost reduction. To achieve this, start producing only the things you need using minimum manpower, (3) Look at the efficiency of each operator and of each line, of the operators as a group, and of the entire plant (all the lines). Efficiency must be improved at each step and, at the same time, for the plant as a whole. (4) Present capacity = work + waste. True efficiency improvement comes when you produce zero waste and bring the percentage of work to 100%.
• Benefits: Eliminating waste completely can improve the operating efficiency by a large margin.

Multi-process system 

• Concept: Rather than having one worker per machine, rearrange the machines and adopt a multi-process system that assigns one operator to several machines.
• Roots: Taiichi Ohno took this concept from textile plants and applied it to automobile plants.
• Benefits: A multi-process system (1) directly reduces the number of workers, and (2) shifts workers from single-skilled to multi-skilled.

Necessity

• Concept: Let the plant people feel the need for improvement.
• Benefits: Necessity is the mother of invention.

Operable rate

• Concept: Maximize the operable rate (a machine’s availability in operable condition when operation is desired) rather than the operating rate (current production level of a machine based on its full-time operating capacity), by constant maintenance and rapid setup times.
• Benefits: The ideal operable rate is 100%, while the ideal operating rate  is not necessarily 100%.

Production flow

• Concept: Put a flow into the manufacturing process, by placing machines in the actual sequence of the manufacturing processing, rather than having each type of machine in a separate area.
• Benefits: (1) Enables one worker to operate many processes (instead of having one worker per machine), which improves productivity, (2) Value is added to the product in each process while the product flows along, (3) If goods are carried by conveyor, this is not work flow, but work forced to flow.

Production quantity = market demand

• Concept: Production quantity should equal market demand or actual orders, and  manufacturing should not arbitrarily change production quantities. At Toyota, car dealers around the country send their orders daily to the main office ; these orders are classified as to car type, model, fuel discharge rate, style, transmission, color, and so forth, and the resulting data serve as the basis for production requirements.
• Benefits: Avoids overproduction.

Reverse thinking

• Concept: Look at things in the reverse order (i.e., start from the end and work backwards).
• Benefits: This method helps solve complex problems.

Small batches

• Concept: Batches should be made as small as possible (in contrast to traditional mass production, where bigger is considered better).
• Benefits: Allows production leveling, which (1) avoids waste (fluctuations in product flow increase waste, as the equipment, workers, inventory, and other elements required for production must always be prepared for peak production), and (2) facilitates response to diverse demands.

Standard work procedures

• Concept: Each process should have a clear and concise standard work sheet, tried and revised many times in the plant, listing (1) the length of time in which one unit is to be made (“cycle time”), (2) the sequence of operations a worker must follow (“work sequence”), and (3) the minimum WIP inventory needed (“standard inventory”) — ideally, only the items mounted on the machines.
• Roots: During World War II, skilled workers were being transferred from the production plant to the battlefield and more and more machines were gradually being operated by inexperienced men and women. This increased the need for standard work methods.
• Benefits: Enables “just in time” and worker harmony.

Stopping the line

• Concept: The line should be set up so that it can be stopped when necessary, with no reason to fear such a stop.
• Benefits: A production line that does not stop is either perfect or has big problems which are not surfacing. The ability to stop the line (1) prevents defective products, (2) enables to make improvements with only a few workers, and (3) develops a line that is strong and rarely needs to be stopped.

Takt time

• Concept: Determine the appropriate takt time (length of time it takes to make one piece of the product) by dividing the operable time (length of time that production can be carried out) per day  per day) by the required number of pieces per day.
• Benefits: To prevent overproduction and make items as they are needed, you have to know when they are needed.

Visual control (management by sight)

• Concept: Visual control must be enforced, with applications to machines, the line, the arrangement of goods and tools, inventory, circulation of kanban, standard work procedures, etc.
• Benefits: This enables to (1) clarify what is normal and what is abnormal, and (2) force defective products to surface.

Work improvement before equipment improvement

• Concept: To improve production, work improvement (such as establishing work standards, redistributing work, and clearly indicating the places where things are to be placed) should be done before equipment improvement (such as buying equipment and making machines autonomated).
• Benefits: (1) If equipment improvement comes first, most problem areas can be eliminated or improved, whereas if equipment improvement comes first, manufacturing processes will never be improved. (2) Equipment improvement takes money and cannot be undone.

Worker saving

• Concept: How to produce more with fewer workers should be considered in terms of number of workers (“worker saving”), not worker days (“labor saving”). This starts by work improvement — having operators care for several machines of different types — and is followed by equipment improvement — autonomation.
• Benefits: Saving 0.9 of a worker means nothing: at least one person must be saved before a cost reduction results.

Other related concepts

Below are other concepts inspired by the Toyota Production System:

Five S (houskeeping)

The “5 S” methodology for good housekeeping was formalized by Hiroyuki Hirano (among others):

Seiri (sort)

• Concept: Remove all items from the workplace that are not needed for current operations. If you are unsure, put a “red tag” to assess the necessity of an item: Is it needed? If not, it should be disposed of (i.e., returned to the vendor, sold, lent out, given, or thrown). If so, is it needed in this quantity? Excess quantities can be disposed of or stored away. And does it need to be located here? Items needed infrequently can be stored away. Red tag items may be disposed of, relocated, left where they are, or, if they need further evaluation, held in a “red tag holding area” for a period of time.
• Benefits: Inventory and equipment tend to accumulate and get in the way, which results in (1) the factory getting crowded and hard to work in, (2) lockers, shelves, and cabinets for storage getting in the way of communication, (3) time wasted in searching for parts and tools, (4) inventory and maintenance costs, (5) excess stock hiding production problems, (6) unneeded items making it harder to design layouts and improve the process flow.

Seiton (set in order or straighten)

• Concept: Arrange needed items so they are easy to use and label them so that anyone can find them and put them away.
  1. Decide on the most appropriate locations for parts, tools, equipment and machinery.
     1. Principles of storing tools: (1) Place frequently used items near the place of use, and infrequently used items away. (2) Store items together if they are used together, and in the sequence in which they are used. (3) Suspend tools from a retractable cord so they go back into their correct storage position. (4) Make storage places larger than the items, so the items are easy to remove and put back. (5) Eliminate variety by creating tools that serve multiple functions. (6) Store tools according to function (job-shop production) or product (repetitive production).
     2. Principles of motion economy: Remove waste from human motions: (1) Start and end each motion with both hands moving at once. (2) Both arms should move symmetrically and in opposite directions. (3) Keep trunk motions to a minimum. (4) Use gravity instead of muscle. (5) Avoid zigzagging motions and sudden changes in direction. (6) Move with a steady rhythm. (7) Maintain a comfortable posture with comfortable motions. (8) Use feet to operate “on and off” switches where practical. (9) Keep materials and tools close and in front. (10) Arrange materials and tools in the order of their use. (11) Use inexpensive methods for feeding in and sending out materials. (12) Stand at a proper height for the work to be done. (13) Make materials and parts easy to pick up. (14) Make handles and grips in efficient, easy-to-use shapes and positions.
     3. Using the 5S map to decide the best locations for parts, equipment, and machinery: (1) Make a floor plan of the workspace. (2) Draw arrows to show the work flow between items. (3) Examine the resulting “spaghetti diagram”. (4) Make a new map with a better layout. (5) Analyze the efficiency of the layout using the principles above. (6) Experiment with other layouts until you find one you think will work well. (7) Implement the new layout. (8) Continue to evaluate and improve the new layout.
  2. Label such locations so everyone know what goes where and how many of each item belong in each location, using signboards, painting, a 5S map, color-coding, or outlining.
• Benefits: Seiton (1) ensures there is a place for everything and everything stays in its place and the flow of the workplace is adequate, (2) avoids several types of waste: motion, searching, human energy, excess inventory, defective products, and unsafe conditions, (3) is a prerequisite for standardization, and (4) relies on visual controls.

Seiso (shine, sweep or scrub)

• Concept: Sweep the floors, wipe off the machinery, and make sure that everything in the factory stays clean. Assign areas for cleaning using a map or schedule. Once daily cleaning and major periodic cleanups become a habit, incorporate systematic inspection procedures so that cleaning turns into cleaning/inspection. Operators should use all senses to detect abnormalities (sight: oil leakage, debris, deformation, wear, warping, mold, missing items, lopsidedness, inclinations, color changes; hearing: sporadic or odd sounds; smell: burning rubber, cleansing agents; touch: strange vibrations, wobbling, loosenes, excessive heat, shifting), fix the issues or, if they are too difficult to handle alone or immediately, attach a maintenance card to make the problem visible or issue a maintenance kanban to request help.
• Benefits: Seiso (1) turns the workplace into a clean, bright place where people enjoy working, (2) keeps everything in top condition and ready to be used, (3) enables inspection, (4) avoids morale, defect, maintenance, and injury-related issues (dirty, sunlight blocking windows and filthy environments lead to poor morale; defects are less obvious in dark and messy factories; puddles of oil and water cause slipping; machines do not receive sufficient check-up maintenance and break down frequently; cutting shavings get mixed into production or blow into peoples’ eyes )

Seiketsu (standardize)

• Concept: Design procedures to prevent setbacks and maintain the first three pillars as a daily habit: (1) Assign 3S responsibilities, using maps, schedules or job cycle charts, (2) Integrate 3S maintenance duties into regular work duties, (3) Check on how well 3S conditions are being maintained, using a checklist. When the same problems keep happening, ask “why” repeatedly to find the source of the problem and design a fundamental improvement.
• Benefits: Avoids the following pitfalls: (1) conditions go back to their old undersirable levels, (2) pile of unneeded items from the day’s production lie scattered, (3) tool storage sites become disorganized, (4) cutting shavings fall on the floor and must be swept up, (5) workers accumulate stationary supplies.

Shitsuke (sustain or self-discipline)

• Concept: Create the appropriate conditions for the proper maintenance of correct procedures: (1) Awareness of the content and importance of the 5 pillars, (2) Time in the work schedule to perform 5S implementation, (3) Structure for how and when 5S activities will be implemented, (4) Support from management, (5) Rewards and recognition for efforts, (6) Satisfaction and excitement.

Genba (real place)

• Concept: Walk around in the workplace, where all actions and processes must be as transparent as possible.
• Benefits: This enables to identify areas for improvement and understand your colleagues’ workload.

Genchi Genbutsu (go see for yourself)

• Concept: Go see for yourself when an abnormality occurs of when you wish to know the current state of operations.
• Benefits: The best way to make sure a production line is working at maximum efficiency or to correctly understand a problem is to go and see it for yourself.

Hansei (self-reflection)

• Concept: Recognize mistakes and take appropriate action.
• Benefits: Avoids reoccurrence.

Kaikaku (radical change)

• Concept: The radical transformation of a business is sometimes required.
• Benefits: By focusing only on small improvements, a company may miss a big leap and be left behind.

Kaizen (continuous improvement)

• Concept: Improve the working standards through small, gradual improvements, Empower all functions and employees to continuously identify areas for improvement and suggest practical solutions.
• Benefits: This enables to identify problems promptly, ensure quality, and eliminate waste.

Nemawashi (building consensus)

• Concept: Before submitting or making a formal decision, share information and seek opinions informally.
• Benefits: Nemawashi lays the groundwork to build a consensus.

Rapid setup

• Concept: (1) Document setup events: sequence, time, required motion, and nature, (2) Convert serial events (activities that require the operator to interrupt value-added work) to parallel events (activities that can be performed while the equipment is producing parts or the operator is conducting other value-added work), (3) Make serial events more efficient (e.g., redesign the workplace, link databases so information is automatically filled), (4) Eliminate adjustments and standardize work (mistake proofing, visual controls).
• Benefits: Eliminate wasted time.

Three Ms (Muda, Mura, Muri)

• Concept: Muda (waste), Muri (overburden), and Mura (irregularity) should be eliminated.
• Benefits: (1) Waste consists of activities that add costs but do not add value, (2) Production should be evenly distributed to allow sufficient time to achieve the correct standard of work. (3) Variations in the process or the output show areas for improvement.