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LEAN GLOBAL
                                        NETWORK




Michael Kazoglou
Lean Management Instituut - Netherlands
Lean Global Network

Teamwork within Toyota and with its
Suppliers, and methods to satisfy multiple
customers during New Vehicle Development
Journée Lean en ingénierie
Paris, 9th Avril 2013
kazoglou@leaninstituut.nl
Who is your   Engineering is the Customer ?
Customer?
              Production is the Customer ?
              Supplier is the Customer ?
              Supplier Contribution
              65%
Why focus
   on
Suppliers?
                    Manufacturing
                     Contribution
                                                  P
              Total Product Cost              D       Q
Teamwork within Toyota and with its Suppliers,
and methods to satisfy multiple customers                  LEAN GLOBAL


during New Vehicle Development
                                                             NETWORK




 Why Europe, Why The Netherlands?
 Background – Toyota in Australia (18 years experience)
 Agenda:
        1. Toyota’s Supplier Management Process
        2. Toyota’s Supplier Development
        3. Toyota Engineering – Product to Process
        > Techniques: VAVE, PPC, Obeya/SPTT, Lean in Design
 Questions
My ‘Toyota Way’ challenge in 2013

The Toyota Way 2001:
Lean Values & Behavours



• Challenge : Move to The Netherlands – NEW EXPERIENCE

• Kaizen : Learn from LMI & Our Clients (& European Operations)

• Genchi Genbutsu : European Workplace, in Dutch, French,….

• Respect : Share (both ways) & Teach / Develop People & Process

• Teamwork : LMI, Lean Global Network, LMI Clients & Practitioners
About Toyota Australia….




AMI/Toyota Assembly Line
         ca.1963             2006-2013
                           Camry / Aurion
Organisational Structure

                              Manufacturing &
                                Purchasing

Manufacturing   Production          Purchasing             Product           Quality
                Engineering                               Engineering         Prod Control



                Direct Purchasing   Indirect Purchasing   Supplier Prep. &
                                                           Development
Teamwork within Toyota and with its Supplier,
and methods to satisfy multiple customers               LEAN GLOBAL


during New Vehicle Development
                                                          NETWORK




 Why Europe, Why The Netherlands?
 Background - Toyota in Australia
 Agenda:
        1. Toyota’s Supplier Management Process
        2. Toyota’s Supplier Development
        3. Toyota Engineering – Product to Process
        > Techniques: VAVE, PPC, Obeya, SPTT, Lean in Design
 Questions
About Toyota Purchasing….
1. Open Door Policy:
   Based on Quality, Technological Capabilities, Reliability & Delivery
2. Mutual Benefit Based on Mutual Trust:
  They Believe in Developing Mutually Beneficial,
   Long-Term Relationships Based on Mutual Trust
3. Localisation:
  Purchase Parts & Materials from Local Suppliers


   The ‘Tough Love’ approach:

   •   They understand how their suppliers work

   •   They supervise their vendors

   •   They develop their supplier’s technical capabilities

   •   They share information intensively but selectively

   •   They conduct joint improvement activities
Managing Supplier Relationships

                                  SUPPORT:

                                  •    TPS / Technical Consultation
                                  •    Staff Secondment
                                  •    Supplier Parts Tracking Team
                                  •    Project Conferences
                                       (Communications Strategy)
                                  •    Benchmarking Study Tours
                                  •    Technical Agreements
                                  •    Toyota Institute

                                      Performance Outcomes
Supplier Opportunities:
                     (Customer always pays whether it is Quality, Delivery, Cost)
                     •    Raw materials (2nd – 3rd tier suppliers)
                     •    Product unit cost :
                                       »    O/heads, energy, head-office, consumables, tooling,
                                            Capital/depreciation, Maintenance costs
Can we make it                         »    R/materials, internal & externals components
less expensive?                        »    Processing costs – efficiencies, rates, waste?
                                       »    Labour – efficiencies?
Can we use less                        »    Wastage – allowances, best practice?
expensive product?   •    Supplier Inventory costs
                     •    Logistics costs / efficiencies . Shipping/storage methods
Can is perform
better?              •    Inventory costs / waste / storage / Handling-Mngt
                     •    Production Plant Impacts:
                                       »    Delivery, Quality, Wastage, Downtime, efficiencies, overtime etc

                     •    Product variation – in-plant / field / customer etc
                     •    New Product Development – total process
                     •    Projects / support / responsiveness
                     •    Value adding opportunities?
Supplier Opportunities:
                         (Customer always pays whether it is Quality, Delivery, Cost)

                     Product design opportunities:
                     •     Recycle, substitute, thinner, lighter, smaller,
Can we make it       •     Shape, surface, materials, no. of sites, no. of parts/skus,
less expensive?
                     •     Excessive quality, difference b/n skus,
Can we use less      •     Next NPD opportunity, suitable for plant, function,
expensive product?   •     Technical complexity, use, legals etc?
Can is perform
better?              Toyota Process:
                     •     Cost Structure / Biggest Gap / Priority / Activity Action Plan
                     •     Benchmarking – Target, Gaps, Breakdown costs, pareto/priority
                     •     Understand Cost elements – Processing costs, material costs, overheads
                     •     Competitor Cost elements – identify breakdown costs/gaps (Pareto/Top 1-3)
                     •     VAVE analysis – design for purpose/manufacture/customer need (O/process)
                     •     Production process costs – compare operations vs lean organisation, CI/Lean
                           process improvement opportunity review (lean assessment/gap analysis)
Teamwork entre conception et méthodes
chez Toyota pour satisfaire plusieurs clients           LEAN GLOBAL
                                                          NETWORK




 Why Europe, Why The Netherlands?
 Background - Toyota in Australia
 Agenda:
        1. Toyota’s Supplier Management Process
        2. Toyota’s Supplier Development
        3. Toyota Engineering – Product to Process
        > Techniques: VAVE, PPC, Obeya, SPTT, Lean in Design
 Questions
Toyota Supplier Development
Objective:
The overall goal of the program is to strengthen the capability and cost competitiveness
of Toyota’s local supply base and ensure achievement goals beyond next New Model
Introduction.
           By Supplier              By Supplier
            Numbers                  $ VOB
  Image
             LOCAL                                              SUPPLIERS SELECTION CRITERIA:
                                      LOCAL
                                                  CORE FOCUS    1. VOB / COLOR / LOGISTICS
  50%       GLOBAL                                 SUPPLIERS:   2. COST GAP (Next Model)
                                     GLOBAL
Coverage                  > 80%                    SUPPORT      3. LEAN SUPPORT ATTITUDE
Supplier   JAPANESE       $ VOB                    REQUIRED
                                                                4. LEAN LEVEL(OPPORTUNITY)
                         Coverage                               5. ACCESS TO ADEQUATE SUPPORT
                                    JAPANESE
             OTHER                                              RISKS to Toyota:
                                                                1. TIMING (Next Model UP TO SVP)
                                     OTHER                      2. COST TARGET ACHIEVEMENT
Teamwork entre conception et méthodes
chez Toyota pour satisfaire plusieurs clients          LEAN GLOBAL
                                                         NETWORK




 Why Europe, Why The Netherlands?
 Background - Toyota in Australia
 Agenda:
        1. Toyota’s Supplier Management Process
        2. Toyota’s Supplier Development
        3. Toyota Engineering – Product to Process
        > New Vehicle, VAVE, PPC, Obeya/SPTT, Lean in Design
 Questions
New Product Development Process
          Concept to Vehicle Production Launch


Release
Drawing                                  Volume
            Drawing                      Production

                      Tooling

                                Tuning

                                          Prod Ready
Design Process
             “Value Analysis / Value Engineering Launch

                   1. Gather information
Continuous         2. Function/Performance analysis
                    3. Creation innovation
Consensus           4. Analyze ideas
 Building           5. Presentation




              Get agreement and proceed to development of parts!

                                 Create Design!
Previous Problem Check
Problem Area          Problem Lists            Make PPC          C/M Process

Vehicle                                          NPD Design
concerns                                                              Check
Plant                                            NPD Process
                                                                      Final
concerns                                                              Outcome
Supplier                                         NPD Parts
concerns

 Key Point: Make a product problem history list
    Include ALL GLOBAL HISTORY / Knowledge of Company
    Internal Quality / Workability Problems
    Previous Customer Impact Concerns Quality tracking systems etc
     (Not just within your organisation)
Obeya – Visual Project Management



 •   Visualisation – Everyone can share
     Progress
 •   Inform Bad News First – Reporting,
     Informing, Consulting
 •   Practice Worst Case Scenario Activity
LEAN IN DESIGN STAGE
Opportunities
 for Process
                (Pre-production, Process, Production)
Improvement     Pre- Production:
at the Design
                •   Product Design/Raw Materials
    Stage
                •   Tool Design/Manufacture (Jidoka + QDC)
                •   Equip. / Tool Trial (SOP/STD. Work/Training)
                •   Production Proto-type trial (Die / Equip./Assy.)
                Process
                •   Equip./Process integration
                •   Lay-out
                •   Mat. Handling/Conveyance
                •   Ergonomics/Safety
                •   Labour Req.& Training
                Production
                •   Total work contents (Process c/time)
                •   Efficiency (Change over/Down time/Op.Efficiency/Rejects)
                •   Takt time
                •   Confirmation of Mass production(HVPT)
LEAN IN DESIGN STAGE
    (Pre-production, Process, Production)
•      Production Preparation Parts / Process Summary.
•      Part Specific Value Stream Map.
•      Plant/Process layout to show material Flow.
•      Man / Machine loading and Capacity estimates
       (Std Work Charts).
Respect the Production Operator, while
              making improvement to Quality, Delivery & Cost
               1. Minimise No. of equipment    (More than one function)

               2. Avoid secondary process
Focus          3. Consider handling problems
points for     4. Consider / use gravity force   (Avoid complex motions)

New Process    5. Consider self locate jigs/fixtures
Design         6. Integrate “Pokayoke” functions
               7. Simplify or eliminate packaging      (container size / Wrapping / Access)

               8. Minimise variations if possible
               9. Enhance ergonomic conditions
               10. Eliminate Movements, adjustments and Reorientations
               11. Floor space reduction
               12. Overall focus on all relevant non value adding operations
Michael Kazoglou
                            Teamwork within Toyota and with its Supplier,
                            and methods to satisfy multiple customers                      LEAN GLOBAL


Paris,   9th   Avril 2013   during New Vehicle Development
                                                                                             NETWORK




kazoglou@leaninstituut.nl
                               Agenda themes:
                                     1. Toyota’s Supplier Management Process
                                     2. Toyota’s Supplier Development
                                     3. Toyota Engineering – Product to Process
                                     > Techniques: VAVE, PPC, Obeya/SPTT, Lean in Design

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Teamwork within Toyota by Michael Kazoglou

  • 1. LEAN GLOBAL NETWORK Michael Kazoglou Lean Management Instituut - Netherlands Lean Global Network Teamwork within Toyota and with its Suppliers, and methods to satisfy multiple customers during New Vehicle Development Journée Lean en ingénierie Paris, 9th Avril 2013 kazoglou@leaninstituut.nl
  • 2. Who is your Engineering is the Customer ? Customer? Production is the Customer ? Supplier is the Customer ? Supplier Contribution 65% Why focus on Suppliers? Manufacturing Contribution P Total Product Cost D Q
  • 3. Teamwork within Toyota and with its Suppliers, and methods to satisfy multiple customers LEAN GLOBAL during New Vehicle Development NETWORK  Why Europe, Why The Netherlands?  Background – Toyota in Australia (18 years experience)  Agenda: 1. Toyota’s Supplier Management Process 2. Toyota’s Supplier Development 3. Toyota Engineering – Product to Process > Techniques: VAVE, PPC, Obeya/SPTT, Lean in Design  Questions
  • 4. My ‘Toyota Way’ challenge in 2013 The Toyota Way 2001: Lean Values & Behavours • Challenge : Move to The Netherlands – NEW EXPERIENCE • Kaizen : Learn from LMI & Our Clients (& European Operations) • Genchi Genbutsu : European Workplace, in Dutch, French,…. • Respect : Share (both ways) & Teach / Develop People & Process • Teamwork : LMI, Lean Global Network, LMI Clients & Practitioners
  • 5. About Toyota Australia…. AMI/Toyota Assembly Line ca.1963 2006-2013 Camry / Aurion
  • 6. Organisational Structure Manufacturing & Purchasing Manufacturing Production Purchasing Product Quality Engineering Engineering Prod Control Direct Purchasing Indirect Purchasing Supplier Prep. & Development
  • 7. Teamwork within Toyota and with its Supplier, and methods to satisfy multiple customers LEAN GLOBAL during New Vehicle Development NETWORK  Why Europe, Why The Netherlands?  Background - Toyota in Australia  Agenda: 1. Toyota’s Supplier Management Process 2. Toyota’s Supplier Development 3. Toyota Engineering – Product to Process > Techniques: VAVE, PPC, Obeya, SPTT, Lean in Design  Questions
  • 8. About Toyota Purchasing…. 1. Open Door Policy: Based on Quality, Technological Capabilities, Reliability & Delivery 2. Mutual Benefit Based on Mutual Trust: They Believe in Developing Mutually Beneficial, Long-Term Relationships Based on Mutual Trust 3. Localisation: Purchase Parts & Materials from Local Suppliers The ‘Tough Love’ approach: • They understand how their suppliers work • They supervise their vendors • They develop their supplier’s technical capabilities • They share information intensively but selectively • They conduct joint improvement activities
  • 9. Managing Supplier Relationships SUPPORT: • TPS / Technical Consultation • Staff Secondment • Supplier Parts Tracking Team • Project Conferences (Communications Strategy) • Benchmarking Study Tours • Technical Agreements • Toyota Institute Performance Outcomes
  • 10. Supplier Opportunities: (Customer always pays whether it is Quality, Delivery, Cost) • Raw materials (2nd – 3rd tier suppliers) • Product unit cost : » O/heads, energy, head-office, consumables, tooling, Capital/depreciation, Maintenance costs Can we make it » R/materials, internal & externals components less expensive? » Processing costs – efficiencies, rates, waste? » Labour – efficiencies? Can we use less » Wastage – allowances, best practice? expensive product? • Supplier Inventory costs • Logistics costs / efficiencies . Shipping/storage methods Can is perform better? • Inventory costs / waste / storage / Handling-Mngt • Production Plant Impacts: » Delivery, Quality, Wastage, Downtime, efficiencies, overtime etc • Product variation – in-plant / field / customer etc • New Product Development – total process • Projects / support / responsiveness • Value adding opportunities?
  • 11. Supplier Opportunities: (Customer always pays whether it is Quality, Delivery, Cost) Product design opportunities: • Recycle, substitute, thinner, lighter, smaller, Can we make it • Shape, surface, materials, no. of sites, no. of parts/skus, less expensive? • Excessive quality, difference b/n skus, Can we use less • Next NPD opportunity, suitable for plant, function, expensive product? • Technical complexity, use, legals etc? Can is perform better? Toyota Process: • Cost Structure / Biggest Gap / Priority / Activity Action Plan • Benchmarking – Target, Gaps, Breakdown costs, pareto/priority • Understand Cost elements – Processing costs, material costs, overheads • Competitor Cost elements – identify breakdown costs/gaps (Pareto/Top 1-3) • VAVE analysis – design for purpose/manufacture/customer need (O/process) • Production process costs – compare operations vs lean organisation, CI/Lean process improvement opportunity review (lean assessment/gap analysis)
  • 12. Teamwork entre conception et méthodes chez Toyota pour satisfaire plusieurs clients LEAN GLOBAL NETWORK  Why Europe, Why The Netherlands?  Background - Toyota in Australia  Agenda: 1. Toyota’s Supplier Management Process 2. Toyota’s Supplier Development 3. Toyota Engineering – Product to Process > Techniques: VAVE, PPC, Obeya, SPTT, Lean in Design  Questions
  • 13. Toyota Supplier Development Objective: The overall goal of the program is to strengthen the capability and cost competitiveness of Toyota’s local supply base and ensure achievement goals beyond next New Model Introduction. By Supplier By Supplier Numbers $ VOB Image LOCAL SUPPLIERS SELECTION CRITERIA: LOCAL CORE FOCUS 1. VOB / COLOR / LOGISTICS 50% GLOBAL SUPPLIERS: 2. COST GAP (Next Model) GLOBAL Coverage > 80% SUPPORT 3. LEAN SUPPORT ATTITUDE Supplier JAPANESE $ VOB REQUIRED 4. LEAN LEVEL(OPPORTUNITY) Coverage 5. ACCESS TO ADEQUATE SUPPORT JAPANESE OTHER RISKS to Toyota: 1. TIMING (Next Model UP TO SVP) OTHER 2. COST TARGET ACHIEVEMENT
  • 14. Teamwork entre conception et méthodes chez Toyota pour satisfaire plusieurs clients LEAN GLOBAL NETWORK  Why Europe, Why The Netherlands?  Background - Toyota in Australia  Agenda: 1. Toyota’s Supplier Management Process 2. Toyota’s Supplier Development 3. Toyota Engineering – Product to Process > New Vehicle, VAVE, PPC, Obeya/SPTT, Lean in Design  Questions
  • 15. New Product Development Process Concept to Vehicle Production Launch Release Drawing Volume Drawing Production Tooling Tuning Prod Ready
  • 16. Design Process “Value Analysis / Value Engineering Launch 1. Gather information Continuous 2. Function/Performance analysis 3. Creation innovation Consensus 4. Analyze ideas Building 5. Presentation Get agreement and proceed to development of parts! Create Design!
  • 17. Previous Problem Check Problem Area Problem Lists Make PPC C/M Process Vehicle NPD Design concerns Check Plant NPD Process Final concerns Outcome Supplier NPD Parts concerns Key Point: Make a product problem history list  Include ALL GLOBAL HISTORY / Knowledge of Company  Internal Quality / Workability Problems  Previous Customer Impact Concerns Quality tracking systems etc (Not just within your organisation)
  • 18. Obeya – Visual Project Management • Visualisation – Everyone can share Progress • Inform Bad News First – Reporting, Informing, Consulting • Practice Worst Case Scenario Activity
  • 19. LEAN IN DESIGN STAGE Opportunities for Process (Pre-production, Process, Production) Improvement Pre- Production: at the Design • Product Design/Raw Materials Stage • Tool Design/Manufacture (Jidoka + QDC) • Equip. / Tool Trial (SOP/STD. Work/Training) • Production Proto-type trial (Die / Equip./Assy.) Process • Equip./Process integration • Lay-out • Mat. Handling/Conveyance • Ergonomics/Safety • Labour Req.& Training Production • Total work contents (Process c/time) • Efficiency (Change over/Down time/Op.Efficiency/Rejects) • Takt time • Confirmation of Mass production(HVPT)
  • 20. LEAN IN DESIGN STAGE (Pre-production, Process, Production) • Production Preparation Parts / Process Summary. • Part Specific Value Stream Map. • Plant/Process layout to show material Flow. • Man / Machine loading and Capacity estimates (Std Work Charts).
  • 21. Respect the Production Operator, while making improvement to Quality, Delivery & Cost 1. Minimise No. of equipment (More than one function) 2. Avoid secondary process Focus 3. Consider handling problems points for 4. Consider / use gravity force (Avoid complex motions) New Process 5. Consider self locate jigs/fixtures Design 6. Integrate “Pokayoke” functions 7. Simplify or eliminate packaging (container size / Wrapping / Access) 8. Minimise variations if possible 9. Enhance ergonomic conditions 10. Eliminate Movements, adjustments and Reorientations 11. Floor space reduction 12. Overall focus on all relevant non value adding operations
  • 22. Michael Kazoglou Teamwork within Toyota and with its Supplier, and methods to satisfy multiple customers LEAN GLOBAL Paris, 9th Avril 2013 during New Vehicle Development NETWORK kazoglou@leaninstituut.nl  Agenda themes: 1. Toyota’s Supplier Management Process 2. Toyota’s Supplier Development 3. Toyota Engineering – Product to Process > Techniques: VAVE, PPC, Obeya/SPTT, Lean in Design