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Category Archives: Lean Manufacturing

Toyota’s in house development

“SATOSHI OGISO was 32 in 1993 when he took on the task of building what Toyota, his employer, vaguely thought of as the car of the future. The deadline was the start of the 21st century. In America at that time car designers were sketching gas-guzzlers or sport-utility vehicles. But Mr Ogiso’s team, mostly in their early 30s, wanted to create something that would “do the Earth good”, as he puts it. Within two years they had come up with Toyota’s hybrid technology, in which a battery powers the car for short distances and a petrol engine kicks in at higher speeds, recharging the battery. Within four years they had their first Prius on the road.

Now there are 2m of them and Toyota has a prototype plug-in version that can be charged at home, like other electric vehicles, but has a petrol engine for long distances. In Toyota’s more distant vision, the home (built, of course, by Toyota’s housing division) will be solar-powered, which will cut emissions even further. And at night, when demand is low, the home may even be plugged into the hybrid car, which will have recharged its battery from the engine.

This is the kind of thing you would expect from Japanese manufacturing, with its focus on craftsmanship, or monozukuri. Mr Ogiso’s project exemplifies some of the strongest traits: teamwork, in-house development and a desire to earn glory for the company. What was different was the engineers’ ages. All young, they were given the freedom to follow their instincts, with no middle managers to second-guess them. “The senior engineers could not understand the hybrid engineering,” chuckles Mr Ogiso.

The tradition of in-house innovation runs deep in Japan, and some of the resulting products may help the country to adapt to an ageing society. Bill Hall at Synovate, a market-research company, reels off a list of new products that are already available, or will be soon: the Toto intelligent toilet that can detect the level of sugar in urine; Panasonic’s robotic bed that turns into a wheelchair; Toyota’s battery-powered individual three-wheeler, with built-in sensors to avoid collisions.”

The Economist Nov 18th 2010 | from PRINT EDITION Pp.10; Read full article here

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The Beer Game as explained in Lean Thinking; How to promote flow

“The Beer Game or JIT Game is a simple exercise in which 5 people take roles in a four-stage production process folding and packing three colors of paper boxes. (See figure below)

Beer Game or JIT MIT game

The first person is asked to bundle up and deliver quantities of unfolded boxes in three colors to the two pre-assembly stations. The quantities are in response to a customer order. One pre-assembly station folds the large boxes while the other pre-assembly station folds the small boxes and both stations secure their boxes with a rubber band. The boxes are then passed ahead to the assembly station where the fourth player opens the large box and places the small box inside. The player writes out a ticket, folds it, places it on topof the small box, and then closes the large box and secures it with a rubber band. The box is then passed to quality control/dispatch where the fifth player opens the large box and checks to see that the ticket is present and properly written. This player signs and stamps the ticket before placing it back on top of the small box. The large box is then closed, secured with a rubber band, and delivered to the customer.

The players are told to work at their own pace to produce the three colors of box in response to the customer order. Soon every player is trying furiously to complete his tasks, first for one color of box, then for the next. However, a huge mountain of boxes quickly builds up in front of the fourth player, who has a bigger job than the others. In addition, the customer announces that he wants to change his order, to receive first whichever color of box the team has left till last. This quickly produces even more of a pile-up as the wrong color boxes are pushed to the side so the right color can get through.

The team of five is then asked what’s wrong and what could be done about it. The answer is always the same: “The fourth player is the bottleneck so we need to add another worker to the assembly step and build a storage area between steps two and three”.

The game coordinator then suggests that instead the five players should try a pull system by making only five boxes at a time and only when asked (pulled) by the next player downstream. To the player’s amazement, the whole activity proceeds smoothly, with oly a tiny buildup of boxes between steps two and three. They then play two more rounds, reducing the lot size to three and then to one, eventually achieving perfectly smooth flow and no buildup of boxes at all.

Next the game coordinator says the customer is going to vary his orders at random between the three colors of boxes and asks what will happen. The supplier executives recognize this situation as the key headache in their lives and predict chaos. But, of course, with no boxes piled up in inventory, it’s a simple matter to switch from one color to the next.

As the supplier’s managers are scratching their heads, the team moves from games to reality by suggesting that the exact same techniques should be introduced in the shop floor activities.”

Womack, James P. and Jones, Daniel T. Lean Thinking. Banish waste and create wealth in your corporation. Pp 208-209. Ed Simon & Schuster UK, Ltd. 2003. London, UK.

More resources on the beer game:

The Beer Distribution Game:    http://www.beergame.lim.ethz.ch/

The BeerGame Portal:    http://www.beergame.org

 

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Lean programming (the fridge vs the radiator)

Lean programming (the fridge vs the radiator) – Jason Yip

by ignitesydney on February 23, 2010
 
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Posted by on March 20, 2010 in Lean Manufacturing

 

Is it time for TPS II?

What the world’s biggest carmakers can learn from other corporate turnarounds.

“Less than two years ago Toyota swept past an ailing General Motors (GM) to become the world’s biggest carmaker. Now its newly installed boss, Akio Toyoda, the 53 year old grandson of the founder, says that the firm could be locked in a spiral of decline. Toyota is still a hugely formidable company, and some within the industry (and inside Toyota itself) believe that Mr Toyoda may be overstating the case. Yet there is no shortage of signs that all is not well.

Toyota’s story has implications beyond the motor industry, for it is not just a car company; it is the model for manufacturing excellence whose “lean” techniques have been copied by countless firms. How it slipped up –and how it may right itself –carries lessons for others.

Falling giants.

Althought some of its rivals, notably Volkswagen of Germany and Hyunday of South Korea, have come through the terrible past year relatively unscathed. Toyota’s market-share has either fallen or been flat in every region in which it operates except Japan—a market that was shrinking well before the crisis struck.

In America, its biggest and normally most profitable market, Toyota has been plagued by highly publicised recalls that have raised embarrassing questions about the safety of its vehicles. In China, India and Brazil, the big emerging markets that will provide nearly all the industry’s future growth, Toyota has been slow of the mark. Its lead in hybrid technology is under threat as other big carmakers scramble to bring low –and zero –emission vehicles to market before low –carbon legislation bites. Astonishingly, in the first three months of 2009 it made an even bigger loss than GM, which was then on the verge of bankruptcy. Underlying all these problems is an uncomfortable truth: Toyota’s rivals have now caught up. They now offer cars that are just as reliable but far more exciting than the rather dull vehicles Toyota has concentrated on producing in ever –larger numbers.

A bit of vroom needed.

Toyota can also learn from the woes of other carmakers. A decade ago Ford thought it had found a saviour in the dynamic Jac Nasser, who declared his intention to transform the firm from an old –economy carmaker into a nimble, internet-savvy, consumer powerhouse that managed brands and sold services. He also went on a wild acquisition spree, paying huge sums for Volvo and Land Rover. Unfortunately, amid Mr Nasser’s cultural revolution, Ford lost sight of its main purpose: building decent vehicles as efficiently and profitably as possible. That is what Ford is reaping the rewards for doing now, under the less exciting but steadier leadership of Alan Mulally.

Toyota, too, has a good chance of putting things right. It is no GM, which had far deeper structural problems before it used bankruptcy to off-load some of them. It has a boss who understands what has gone wrong –namely, that it has jeopardized its formerly stellar reputation for quality by pursuing volume at all costs and by failing to put the needs of its customers first. It has started to sort out some of its problems. Quality and reliability are getting back up to the mark. Now it needs to make more exciting and innovative cars.

Mr Toyoda’s approach is not visionary. It is simple, incremental and requires painstaking attention to what the customers want. That is its virtue.”

Extracted from: The Economist December 12th-18th 2009. Pp 69-71. The Economist Print Edition

 
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Posted by on December 16, 2009 in Lean Manufacturing, Toyota

 

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The machine that changed the world…… 20 years ago!!

“ So far we’ve talked about innovations that involve the introduction in production vehicles of ideas already fairly well understood on the technical level. We’ve listed a number of advances of this type in the 1980s, and many more will be available in the 1990s -in particular, the application of electronics to mechanical vehicle systems such as vehicle suspension and the availability of mobile communications at lower cost in a much wider variety of vehicles. But what about epochal innovations– really big leaps in technological know-how such as would be entailed in workable fuel-cell power units or all-plastic body structures or sophisticated navigation and congestion-avoidance systems? As we will see, the 1990s may prove a time for such innovations. Can lean producers respond to these much more daunting challenges?

In fact, the world auto industry has lived during its first century in a benign environment -demand for its products has increased continually, even in the most developed countries; space has been available in most areas to expand road networks greatly; and the earth’s atmosphere has been able to tolerate ever-growing use of motor vehicles, with minor technical fixes in the 1970s and 1980s designed to solve smog problems in congested urban areas. Shortly, the environment for operating motor vehicles may become much more demanding.

Demand for cars is now close so saturation in North America, Japan, and the western half of Europe. A small amount of incremental growth will be possible in the 1990s, but by the end of the century producers in these markets will need to provide consumers with something new if they want to increase theirs sales volume (measured in dollars or marks or yen rather than units). Moreover, the growth of vehicle use and increasing resistance to road building have made the road systems of these regions steadily more congested, gradually stripping motor-vehicle use of its pleasure…” Pp135-137

Lexus Hybrid Drive Car

The Luxury Hybrid machine from Toyota

“ …Our goal is to specify the ideal enterprise in much the way buyers of such a craft-built cars as the Aston Martin used to specify the car of their dreams. Unfortunately, no such dream machine currently exists, so we will create it: Multiregional Motors (MRM).

The management challenge, we believe, is simple in concept: to devise a form of enterprise that functions smoothly on a multiregional basis and gains the advantage of close contact with local markets and the presence as an insider in each of the major regios. At the same time, it must benefit from access to systems for global production, supply, product development, technology acquisition, finance, and distribution…

…The key features of what we call Multiregional Motors are as follows:

An integrated, global personnel system that promotes personnel from any country in the company as if nationality did not exist. Achieving this goal obviously will require great attention to learning languages and socialization and a willingness on the part of younger personnel to work for much of their career outside their home country. However, we already see evidence that younger managers find career paths of this type attractive….

A set of mechanisms for continuous, horizontal information flow among manufacturing, supply systems, product development, technology acquisition, and distribution. The best way to put these mechanisms in place is to develop strong shusa-led teams for product development, which brings these skills together with a clear objective…

Teams would stay together for the life of the product, and team members would then be rotated to other product-development teams, quite possibly in other regions and even in different specialties (for example, product planning, supplier coordination, marketing). In this way the key mechanism of information flow would be employees themselves as they travel among technical specialties and across the regions of the company. Everyone would stay fresh and a broad network of horizontal information channels would develop across the company…

A mechanism for coordinating the development of new products in each region and facilitating their sale as niche products in other regions -without producing lowest-common denominator products. The logical way to accomplish this goal is to authorize each region to develop a full set of products for its regional market. Other regions may order these products for cross shipment as niche products wherever demand warrants…” Pp 223 – 227

Womack P. James,  T. Jones Daniel &  Roos Daniel (1990) The machine that changed the world. How Lean Production revolutionized the Global Car Wars. Ed. Simon & Schuster UK, Ltd. UK.

 

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Is a Lean cup of coffee what you are looking for in Starbuks?

Can Starbucks employ lean manufacturing techniques used by fast-food rivals without becoming a fast-food joint itself?

That question was raised by a Wall Street Journal story highlighting how Starbucks is trying to deploy “lean thinking.” In a nutshell, Starbucks has a lean team that times baristas and teaches them aspects of Toyota’s production system. There are even Mr. Potato Head assembly drills.

The conundrum: Lean techniques are great for manufacturing, but not non-repeatable human tasks. What business is Starbucks in? You’d have to argue both. Starbucks workers manufacture coffee and tea drinks, but really sell a vibe. Needless to say, this movement, which could ruffle a few old school baristas, has its risks. It has helped the bottom line though.

Starbucks reported a solid third quarter. On the company’s earnings conference call, Starbucks CEO Howard Schultz said:

The majority of cost reductions we’ve achieved come from a new way of operating and serving our customers. Over the quarter, we began to roll out our better way initiatives, a series of process improvements in our stores using lean principals.

We’ve been seeing encouraging results over the past couple of quarters, not just improving efficiency and reducing costs but most importantly we are improving customer engagement.

Even as we make considerable progress in improving our bottom line, we remain as focused as ever on initiatives that will remind our customers what sets Starbucks apart. We are doing this through immediate traffic driving strategies and enhanced customer experience, and longer term brand-building.

Indeed, the Journal story focuses on how Starbucks has moved ingredients around to save an extra few seconds here and there. Rivals such as Dunkin Donuts already deploy such techniques. Manufacturing and Business Technology highlighted Starbucks’ lean manufacturing experiments in March.

If Starbucks can become more productive and free folks up to chat with customers then the idea is smart. If Starbucks just becomes another fast food joint perhaps it isn’t such a bright idea. Overall, Starbucks has to adapt and lean manufacturing can help. Thus far, the company’s menu, manufacturing and service tweaks appear to be on the right path.

Extracted from SmartPlanet

 
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Posted by on August 11, 2009 in Lean Manufacturing

 

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Was Henry Ford a true Lean thinker?

Do not forget that Today and Tomorrow was written in the 1920s, over a half century ago when Ford’s career was at its peak.  Shortly, he would face his first failure and discouragement even though the Ford Motor Company ultimately survived.

As I said earlier, I have long doubted that the mass-production system practiced in America and around the world today even in Japan, was Ford’s true intention. For this reason, I have constantly sought the origin of his ideas. For example, take a look at the American social environment of the 1920s when Ford was prospering

“But are we moving too fast – not only merely in the making of automobiles, but in life generally? One hears a [great] deal about the worker being ground down by hard labour, of what is called progress being made at the expense of something or other, and that efficiency is wrecking all the finer things of life.

It is quite true that life is out of balance – and always has been. Until lately, most people have had no leisure to use and, of course, they do not know how to use it. One of our large problems is to find some balance between work and play, between sleep and food, and eventually to discover why men grow old and die. Of this more later.

Certainly we are moving faster than before. Or, more correctly, we are being moved faster. But is 20 minutes in a motor car easier or harder than four hours solid trudging down a dirt road? Which mode of travel leaves the pilgrim fresher at the end? Which leaves him more time and more mental energy? And soon we shall be making an hour by air what were days journeys by motor. Shall we all then be nervous wrecks?

But does this state of nervous wreckage to which we are all said to be coming exist in life – or in books? One hears of the workers nervous exhaustion in books, but does one hears it from workers?…

The very word “efficiency” is hated because so much that is not efficiency has masqueraded as such. Efficiency is merely the doing of work in the best way you know rather than in the worst way. It is the training of the worker and the giving to him of power so that he may earn more and have more and live more comfortably. The Chinese coolie working through long hours for a few cents a day is not happier than the American worker with his own home and automobile. The one is a slave; the other is a free man.”

There have been many changes in the last half century. Circumstances in China have changed drastically, for instance. Recently, between September 1977 and September 1978, I visited many Chinese industries trying hard to promote modern industrialization.

From the Ford’s time to the present, through our postwar period when we began work on the Toyota production system, and within the industrialization that China is trying to achieve, there is one universal element – and Ford called it a “true efficiency”. Ford said efficiency is simply a matter of doing work using the best methods known, not the worst.

The Toyota production system works with the same idea. Efficiency is never a function of quantity and speed. Ford raised the question: “Are we moving too fast?” In connection with the automobile industry, it is undeniable that we have been pursuing efficiency and regarding quantity and speed as its two major factors. The Toyota production system, on the other hand, has always suppressed overproduction, producing in response to the needs of the marketplace

In the high-growth period, market needs were great and losses caused by overproduction did not appear on the surface. During slow growth, however, excess inventory shows up wether we like it or not. This kind of waste is definitely the result of pursuing quantity and speed.

When describing the characteristics of the Toyota production system, we explained the concept of small lot sizes and quick setup. Actually, at the heart of this is our intention to reform the existing and deeply rooted concept of “faster and more” by generating a continuous work flow.

To be truthful, even at Toyota, it is very difficult to get the die pressing, resin modelling, casting, and forging processes into a total production flow as streamlined as the flows in assembly or machine processing. For example, with training, setup of a large press can be accomplished in three to five minutes. This is shorter than that of other companies by a surprisingly large margin. In the future, as work flow is perfected, we could slow down and still keep it under 10 minutes.

This explains why the Toyota production system is the opposite of America’s system of mass production and quantity sales – the latter system generates unnecessary losses in pursuit of quantity and speed.

Ohno, Taiichi. 1988. Toyota Production System. Beyond large-scale production. Pp 107-109. Productivity Press. New York.

 

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