1) The document discusses Toyota's production system (TPS) implemented at its Georgetown, Kentucky plant in the 1980s. It focuses on the operations of assembly, production control, quality control, and purchasing using TPS principles like just-in-time, jidoka, heijunka, and kanban. 2) Quality control played an important role in providing instant feedback on assembly quality and preventing problems by working with design and suppliers. Production control coordinated closely with sales and suppliers to deliver the right cars just in time. 3) Through intensive training and coaching, Toyota successfully transplanted its production system principles and culture to its American plant while ramping up production slowly to develop the necessary "human

2. How shall we move forward?
1. Background
• Introduction
• Toyota Production System
• The Georgetown Ramp Up
2. Operations
• Assembly
• Production Control
• Quality Control
• Purchasing
3. The Seat
• Manufacturing & Installation
• The Supplier
• Signs of Problem

3. 1. Background

4. • In the early 1980s Japanese auto makers contemplated of
opening new factories in North America.
• Japan’s huge trade imbalance had caused political pressure to
mount, while the economic feasibility of such investments had
improved with a rapidly rising yen.
• However it was unclear whether cars produced outside Japan,
could live up to its reputation.
• This issue was settled when TMC unveiled its $800 greenfield
plant in Kentucky.
Introduction

6. • In July 1988, TMC USA began volume production on a 1300
acre site in Georgetown.
• The plant had an annual capacity of 200,000 Toyota Camry
sedans which would replace the similar bulky Japanese
models.
• The new Camry joined the rank of mid-size family sedans
which constituted 1/3rd of total American car market &
returned an average 17% Pre-Tax profit margin price on a
sticker price averaging $18,500.
Introduction

7. Toyota Production System (TPS)
Toyota strived for
‘Better Cars for More People’
• After 2nd World War
• Affordability of Japanese people reduced dramatically
• Also, Labor productivity in Japan was 1/8th of that of US
• Hence Toyota didn’t have scale of economies like American firms
• Challenge: Finding a new source of economies to satisfy customers with
Variety, Quality and Timeliness
• Solution: Toyota Production System

9. Q1.) Aim of TPS?
A1.) Cost Reduction
Q2.) How?
A2.) By Thoroughly Eliminating: ‘MUDA’
Q3.) What is Muda?
A3.) Waste
Q4.) What is waste?
A4.) Waste of Overproduction
Q5.) How?
A5.) Working Capital gets tied up in Inventory, Warehouse
storage space, Forklift trucks to move goods, Material
handlers to operate trucks, Computers to keep track of
inventory locations, staff to maintain these systems, etc.
A Quick Q&A

10. The 2 Main Pillars of TPS:
1.JIT (Just-In-Time)
2. Jidoka
The Base of TPS:
1. Heijunka
2. Kaizen
Remember this House?

11. JIT (Just-In-Time)
‘Produce only what is needed, only how much is needed,
and only when it is needed.’
Any deviation from ‘true production needs’ = Waste
Jidoka (Humanized Automation/Intelligent Automation)
‘Make any production problems instantly self-evident
and stop producing whenever problems are detected.’
Any deviation from ‘value addition’ = Waste

12. Toyota employed a variety of ‘Tools’ to implement these principles (JIT & Jidoka)
For JIT Production, these tools were used to keep information flow as close to the
physical flow of parts as possible.
Thus, parts were pulled from downstream, based on actual usage, rather than
pushed from upstream based on a planned schedule remote from the shop floor.
For Jidoka, the tools were used to aid immediate problem detection and facilitate
visual control.
For this, it was necessary to standardize the processes and procedures of how
these tools will be used.
Tools

13. instilled ‘Good Thinking’
In all it’s employees through senior management coaching and internal
training programs .
“Good Thinking, Good Products”
TPS depended on Human Infrastructure (symbolized in above slogan)
Plants practicing JIT and Jidoka principles were extremely prone to shutdowns, and
would be paralyzed without people capable of solving exposed problems promptly,
completely, and systematically.
Hence 2 strong attitudes were cultivated in Toyota
1. Stick to the facts
2. Get down to the root cause of the problem
Problem?
“Hey! Let’s go see it”
‘Five Whys’

14. The Five Whys
• The technique was originally developed by Sakichi Toyoda and was used
within the Toyota Motor Corporation during the evolution of its
manufacturing methodologies. It is a critical component of problem-solving
training, delivered as part of the induction into the Toyota Production
System.
• The 5 Whys is an iterative question-asking technique used to explore the
root-cause and effect relationships underlying a particular problem.

15. Example:
The vehicle will not start. (The problem)
1. Why? - The battery is dead.
2. Why? - The alternator is not functioning.
3. Why? - The alternator belt has broken.
4. Why? - The alternator belt was well beyond its useful service life and not
replaced.
5. Why? - The vehicle was not maintained according to the recommended service
schedule. (The Root Cause)
The Five Whys

16. The Georgetown Ramp Up
Developing Human Infrastructure - TMC’s foremost priority was transplanting TPS to Georgetown,
as evidenced by several decisions made early on:
• First, TMC assigned to TMM, the 1987 Camry that was already being mass-produced in its
Tsutsumi plant in its Tsutsumi plant in Japan.
• Second, It replicated the Tsutsumi line as closely as possible at TMM.
• And Third, It set a deliberately slow ramp up schedule.
In the early 1986, while construction was underway, TMM initiated a hiring and training program.
It began with top managers and proceeded to core operations personnel; these people primarily
came from within the industry and formed the nucleus of TMM operations.
Their first encounter with TPS occurred during a month-long trip to Tsutsumi, to which Doug
Friesen’s reaction were:
“I built cars at Tsutsumi, and couldn’t believe 60% of what I saw there. The line was unbelievably
fast-paced, the plant was kind of run down, and the American company I left had more
automation. The good things I saw were just common sense and no big deal at all. My eyes
weren’t open back then.”

17. The Georgetown Ramp Up
Next, TMC sent Tsutsumi people to Georgetown in huge numbers, who coached TMM
supervisory personnel one-on-one and reinforced TPS basics. Every TMM manager was also
paired with a coordinator from TMC, who remained in Kentucky for a few years.
This intensely personal approach brought an “eye-opening” moment to most of the TMM
people.
Everyone converged on one point “TPS isolates problems from people and thereby enables
people to focus on solving problems.”
Fujio Cho, President of TMM and TPS evangelist, described his vision in terms of
consideration of standards, what they focused on. It can be described via the following
pyramid.

18. Safety
Quality
Productivity
Cost
TPS spread to Suppliers
Considerations during development of TPS at
Georgetown
In early 1992, Georgetown’s huge complex employed over 4000 people, representing $150
Million in annual payroll.

19. 2. Operations

20. TPS was deployed as a set of management tools to be practiced daily. Mike DaPrile
commented:
“TPS Highlights problems so that people can see them easily. The hard part is teaching it so
that people practice it because they want to, rather than because they have to…”
Now we will see:
I. Assembly
II. Production Control
III. Quality Control
IV. Purchasing

21. (I) Assembly
• Assembly operations were performed along 353 stations on a conveyor
line, over 5 Miles in length and consisting of several line segments: the
trim lines, chassis lines, and final assembly lines.
• Assembly & Part Handling – 769 Team members
• Total 2 shifts
• 10 assistant managers and 46 group leaders, under Doug Friesen
• A regular shift – 525 minutes (including 45 minutes lunch break and two
15-minute breaks)

23. • Every station on the assembly line embodied Jidoka and Kaizen tools.
• Colored tape marked out areas of the floor to specify where just about everything in
sight belonged, and promoted the ‘5Ss’:
– Sift (to separate/retain important parts)
– Sort (to arrange)
– Sweep (to clean / remove dust)
– Spic-and-Span (well looked after)
– Sustain (keep it up)
• In the resulting environment, any deviations from normal conditions stood out visually.
(I) Assembly

24. (I) Assembly
Production Line
Workstation 1
Workstation 2
Green Line --- Beginning of Workstation
Red Line --- End of Workstation
Yellow Line --- A line by which 70% work had to be completed
If a team member was behind at this yellow line or found any other problem, he/she
pulled the Andon cord. So now what is Andon?

26. Andon
Andon is a manufacturing term referring to a signboard incorporating signal lights, audio alarms,
and text or other displays installed at a workstation to notify management and other workers of
a quality or process problem.
 Andon Cord: A rope running along the assembly line over the work area
 Andon Board: A signboard that showed work station’s ‘address number’
Whenever a team member pulls Andon Cord, it turned on a flashing light, triggered loud music,
and lit up the work station’s ‘address number’ on the Andon Board.
The team leader than rushed to workstation and
Pulled cord again (to Turn Off) – if problem is correctable
Left it as it is (to Keep it On) – if he/she could not resolve the problem, allowed the line
segment to stop at the red line. This stoppage instantly attracted the group leader’s attention.
A team member, on an average, pulled the Andon Cord nearly 12 times per shift and typically 1
of these pulls resulted in an actual line stoppage.

27. Andon Cord
Andon Boards

28. Andon
Doug Friesen explained:
“In our system,
every team member is focused on building quality in through Andon pulls, we then call
on team leaders to respond quickly, and group leaders to take counter measures to
prevent the reoccurrence of the problem. Our job as managers is to keep the line going,
and that means developing people.
It’s easy to say ‘do this and do that’ but nothing happens unless we follow through
because people fall back into old habits.
Leadership means standing by people for hours to help them acquire the new way. It
takes patience.”

29. Kaizen
Methodological thinking enabled people to seek Kaizen.
Q.) Kaizen?
A.) ‘Change for the better’ – “Continuous Improvement”
In Chinese and Japanese Kaizen literally means ‘Improvement’.
At Toyota, as soon as anyone established a standard way of doing a job, that person set out to
demolish it proactively, to install an even better way.
By ‘improving’ standardized activities and processes, Kaizen aims to eliminate ‘Waste’.
Kaizen is a daily process, the purpose of which goes beyond simple productivity improvement. It
is also a process that, when done correctly, humanizes the workplace, eliminates overly hard
work ("muri"), and teaches people how to learn to spot and eliminate waste in business
processes.
“Continuous improvement is better than delayed perfection”

30. Jidoka
Autonomation / Intelligent Automation / Humanized Automation / Automation with
Human Touch
‘Make any production problems instantly self-evident and stop producing
whenever problems are detected.’ Any deviation from ‘value addition’ = Waste
Toyota this means that if an abnormal situation arises the machine stops and the
worker will stop the production line. It is a quality control process that applies the
following four principles:
1. Detect the abnormality
2. Stop
3. Fix or correct the immediate condition
4. Investigate the root cause and install a countermeasure

31. Jidoka
A machine detects a
problem and
communicates it
A situation deviates from
the normal workflow
Improvements
incorporated into the
standard workflow
The line is stopped
Manager/Supervisor
removes cause of the
problem.
Daily Improvement
“Good Products
Can
Be Produced”

32. Jidoka
Category Automation Autonomation (Jidoka)
Machines Machines run to end of cycle or
until stop button is pushed
Machine can detect errors
and stop autonomously
Quality Machine crashes and mass
production of defects can occur
Defects and machine crashes
are prevented by auto-stop
Response to Problems Errors are found later, root cause
correction takes longer
Errors cause machine to stop
and root cause can be found
quicker

33. • Mission: To feed necessary parts into TMM operations, so that the right number of
cars in the right mix could be delivered to the sales company just-in-time.
• PC‘s task involved co-ordination with TMC, the sales company and local suppliers.
• Although TMM made only Camrys whose destinations were limited to North America
and Europe, in May 1992, there were 23 sedan and wagon models, 11 exterior
colors, 29 interior variants, and 30 other options like moonroof. Thus the number
of combinations actually produced reached several thousand.
• PC relied on extensive forecasting and planning that TMC performed for worldwide
markets.
E.g.: For May Production, PC first received, in January, a Production Planning
Order (PPO) for key specifications from the Sales Company. In February, this PPO was
revised & after one more update, was fixed as Total Vehicle Order (TVO) by the
end of March.
(II) Production Control (PC)

34. Just-In-Time (JIT)
• Produce only what is needed, only how much is is needed , and only when it is
needed. Any deviation from true production needs = Waste.
• Reduce the WIP inventory drastically.
• At its core, JIT is a waste-elimination philosophy.
• JIT principles used:
– Heijunka
– Kanban Cards
To accomplish the mission of eliminating waste.
Customer
places the
order
Order
entry
Engineering
design Scheduling
Purchasing lead
times
Manufacturing
lead times Distribution and
customer service

35. Heijunka called for evening out (balancing) the total order in daily production sequence.
e.g. A monthly order (having 20 working days) of 20,000 sedans, equally divided between a
base model and a luxury model.
Conventional Auto Manufacturing Operations:
• Orders gets broken into several production runs, each run dedicated to just one model
(at a time). Daily volume varies due to line changeovers between runs.
• Heijunka practice, however, would call for 500 base models and 500 luxury models every
single day and also that a base model and a luxury model be made alternately.
Heijunka practice achieved two purposes:
• Spreading out the demand for parts as evenly as possible relieved suppliers of a surge of
workload and facilitated their JIT production.
• It also prevented a particular workstation from becoming a severe bottleneck or
remaining reasonably idle.
Heijunka

36. Heijunka Process

37. Heijunka
Predictability
StabilityFlexibility

38. Kanban
• Kanban (Literally a Signboard) is a scheduling system for Just-In-Time (JIT)
production.
• Kanban is a system to control the logistical chain from a production point of view,
and is an inventory control system.
• Kanban was developed by Taiichi Ohno, an industrial engineer at Toyota, as a
system to improve and maintain a high level of production.
• A Kanban card includes a part code number, its batch size, its delivery ‘address’,
and other related information.
• Although all production plans were shared with suppliers to ease their planning,
only Kanbans triggered part production. When and only when the supplier
received Kanban, they began making that part in the stated quantity, and shipped
a container full of that part to the proper ‘address’ on the assembly line.
• Assembly group leaders adjusted the number of circulating Kanbans for each part
within a set range, determined by the PC department, to avoid having teams run
out of parts OR containers overflowing onto the plant floor.

40. (III) Quality Control

42. (III) Quality Control
• The quality control department pursued a mandatory routine of:
1. Setting tough quality standards and inspecting every vehicle against
those and
2. Following through on the customer’s experience with shipped vehicles.
• QC engineers were called on by assembly group leaders to help them
solve assembly quality problems and work out part quality problems
with suppliers.
• 20 Patrol inspectors on each shift observed problematic items that they
had been notified about.

43. (III) Quality Control
• QC served 2 other functions as well;
1. The first was providing instant feedback to direct operations including final
assembly. QC checked assembly quality before cars went off to elaborate shipping
inspection, and it ‘returned’ problematic cars immediately to an assembly group.
This group then diagnosed the causes of the problems with QC and, while repairing
the cars in the clinic area, fed the information back to the appropriate teams.
When eight cars filled up this limited clinic space, the assembly line was shut
down under “Code 1” status and Friesen and his assistant managers gathered to
discuss counter measures.
2. The second unique function was proactive: preventing problems from occurring in
the first place. They built quality in cars, before cars came to the factory i.e., QC
provided their inputs to Design people on their designs to which designers paid
heed and considered QC’s inputs as blessings. QC also tried to get suppliers go
beyond Toyota’s engineering drawings to preempt problems.

44. • Because TMM’s PC & QC departments engaged in solving delivery and quality
problems directly with part suppliers, the purchasing department was freed to
concentrate on managing costs over the long haul.
• Toyota did not go after low price suppliers but emphasized more on low cost
suppliers. Without low cost, it’s logically impossible for any supplier to offer low
price consistently.
• TMM encouraged suppliers to share their cost data with them. With cost data on
table, they discussed with suppliers how they can improve their manufacturing
process by taking help from Kaizen experts of TMM.
Consider two suppliers SA and SB who want to supply to TMM.
SA quotes Rs.110/unit and SB quotes Rs.100/unit to TMM.
But Cost of Production for SA is Rs.80/unit and that for SB is Rs.95/unit.
So here ‘Low Price’ supplier is SB but ‘Low Cost’ supplier is SA.
(IV) Purchasing

45. 3. The Seat

46. • A Camry seat consisted of several pieces:
1. The Front Left and Right assemblies
2. The Rear seat bench and backrests, and
3. The Rear side bolsters
• To Final Assembly, the seat was a soft part prone to damage and by far
the bulkiest of all the installed parts.
• To QC, on the one hand, it was a safety item because it had to meet
rigorous standards for the car’s crash performance, while on the other
hand, the seat was a sensory item because the feel of its surface finish
had to satisfy customers.
• To Purchasing, the seat set was the most expensive of all the purchased
parts.
The Seat - Background

47. • TMM’s sole seat supplier was Kentucky Framed Seat (KFS), with whom
it operated on a system of ‘Sequential Pull’.
• Due to this system, every 57 seconds, as a Camry passed through one of
the final assembly work stations, a seat set exactly matching its model
type and interior color popped up by the side of the line, all just-in-time.
– E.g. When a blue DX sedan arrived, so did the seat set with blue
fabric covering, for next black XLE sedan, came a power seat set
with gray leather covering.
• As body shells emerged from paint line, a small transmitter which was
attached to each body sent information to printers at both TMM and
KFS (for printouts) due to which the whole assembly sequence of KFS’s
& TMM’s operations were finalized beforehand.
Manufacturing & Installation

48. • As cars traveled down TMM’s 5 mile long assembly line, so did all the seat assembly
pieces travel down KFS’ own lines. All the matching pieces then merged at the end
of the KFS lines to be strapped together, 100% inspected, and loaded onto a trailer
in the same order.
• A truckload consisted of 58 seat sets and arrived at TMM in about ½ hour after
leaving KFS factory. At receiving dock, the seats were unloaded directly from the
trailer to the staging line, where they waited in the exact sequence of printouts
until they were hoisted on the overhead conveyor.
• After traveling 250m or so on this conveyor, the sets reached the rear seat loading
workstation on the final assembly line segment called ‘Final 1’. The appropriate
seat set was then lowered to the side of the Final 1 line every 57 seconds. This is
where the seat met the matching car for the first time.
• The front seat slid automatically to make space for the next set and were moved to
the assembly line few stations downstream where the team members guided the
front seat assemblies into car and fixed 4 bolts. The rear seat pieces were bolted in
next line segment called ‘Final 2’.
Manufacturing & Installation

49. • TMM managers marveled at KFS’ ability to keep up with ‘Sequential Pull’ system.
• KFS had been a rare exception to Toyota’s multi-vendor policy.
• TMM and KFS were located in close proximity which benefited both the parties in
operating the sequential pull system.
• TMC’s kaizen experts helped KFS install visual controls, slash work-in-process
inventory, reduce assembly labor content, and master quick changeovers. Despite
this thorough preparation, the startup phase was not problem-free; however TMM’s
slow ramp-up schedule enabled KFS and TMM to send QC troubleshooters back and
forth, and substantial progress was made.
• Fall 1991 model change – The challenge: Although TMC was careful not to make the
process too hard for TMM and its suppliers, it did introduce many challenges.
• KFS had to keep up the sequential pull system until the very last day of the old
model production. Then, it had only 10 days to change over its process and 10
weeks to build up to full capacity for the new model. Nonetheless, according to
TMM managers, the model changeover process was uneventful.
The Supplier

50. • Wagon models destined for North America had 8 seat variations, that for
Europe had 10 variations and that for Japan and Middle East were supposed
to have 18 seat variations.
• The impact of the wagons for Europe was apparent to Doug Friesen.
• The run ratio went down to 85% from 95% which meant shortfall of 45 cars
per shift.
• Run ratio measured the number of cars actually assembled in proportion to
the number of cars that could have been assembled with no line stoppages.
• Too many cars started needing off-line operations before they could go on to
shipping, which means the sales company TMC did not receive cars on time
as promised. One of the main culprits was the seat.
Signs of Problems

51. • The cars with seat problems accumulating off-line reflected TMM’s choice for
handling occasional glitches.
• Q.) What if a seat set and car did not match at the magic moment? What if a
matching set arrived with defects?
• A.) TMM standardized its response as follows:
• First, a team member pulled the Andon cord to report the problem to the
team leader before installing the defective seat. The team leader then
pulled the Andon cord again to signal okay, and tagged the car to alert QC
inspectors to the seat problem. The car then went through the rest of the
assembly line as usual with the defective seat in it. Upon line-off, the car was
driven to the Code 1 clinic area to see if the problem was correctable there. If
the problem called for a replacement seat, the car was moved to the
overflow parking area where the replacement seat was ordered and the car
waited for KFS’ special delivery. Defective seats were returned to KFS.
Reasons behind the Seat problem

52. • This routine was made an exception to the standard practice of
investigating problems on the line, even at the expense of shutting
down the line, for three reasons:
1. The final assembly people already knew of the problem,
2. It was possible to finish building the car without seat assemblies,
3. It was felt that stopping the line was too expensive given how long it
took to obtain the replacement seat.
‘The main problem behind this seems to be of cultural differences in
dealing with problems. The American work culture and philosophy
were quite different than the Japanese ones. In America, they did not
apply the concept of ‘Jidoka’ to the fullest, they did not go to the root
cause of the problem. Instead, they chose to ignore finding out the
root cause and took the problem for granted.’
Reasons behind the Seat problem

53. • The root cause of the problem was: a hook had been changed from metal
to plastic.
• The group leader of ‘Final 2’, Shirley Sargent, drew Friesen’s attention to
an ongoing problem since the past fall: during rear side bolster
installation, a hook protruding from the back of that part was to be
snapped into the ‘eye’ of the body, but the hook sometimes broke off. She
suspected its sharp edge made it brittle, and was curios about the status of
an engineering change request she had filed several months ago.
If proper care would have been taken, and this problem addressed then and
there, ‘seat problem’ would never have occurred.
‘It is very important to learn how work culture and work methodology
differences between two countries can create problem in application of
principles like Jidoka.’
The Root Cause