Tag Archives: Manufacturing

The Toyota Production System: Beyond Large-Scale Production by Taiichi Ohno

Summary

  1. There is nothing very complex in the magic of Mr. Ohno’s teachings. In fact, it is often confusing listening to him because he talks so simply, often just saying to look for and eliminate waste. We cannot believe that it is that simple – but it is true. Just reduce the time line by removing any wastes…Manufacturing must be both efficient and also have respect for the person running the machine. The world owes a great deal to Mr. Ohno. He has shown us how to manufacture more efficiently, reduce costs, produce greater quality, and also take an important look at how we as people work in a factory

Key Takeaways

  1. Overview
    1. All we are doing is looking at the timeline, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value-added wastes. Simple, but brilliant
    2. The basis of the TPS is the absolute elimination of waste. The two pillars to support the system are Just in Time and Autonomation, or automation with a human touch. The tool used to operate the system is kanban
  2. Just in Time
    1. JIT means that, in a flow process, the right parts needed in assembly reach the assembly line at the time they are needed and only in the amount needed. A company establishing this flow throughout can approach zero inventory. From the standpoint of production management, this is an ideal state. However, with a product made of thousands of parts, like the automobile, the number of processes involved is enormous. Obviously, it is extremely difficult to apply JIT to the production plan of every process in an orderly way. 
    2. JIT is much more than an inventory reduction system. It is much more than reducing changeover times. It is much more than using kanban or jidoka. It is much more than modernizing the factory. It is, in a sense, making a factory operate for the company just like the human body operates for an individual. The autonomic nervous system responds even when we are asleep. The human body functions in good health when it is properly cared for, fed and watered correctly, exercised frequently, and treated with respect. It is only when a problem arises that we become conscious of our bodies. Then we respond by making corrections. The same thing happens in a factory. We should have a system in a factor that automatically responds when problems occur
    3. Kanban = sign board to communicate what and how much is needed
      1. Pickup information, transfer information, production information 
      2. The first rule of kanban is that later processes goes to the earlier process to pickup products
      3. Constant flow and leveling production, in according with standard work methods, is necessary for kanban to work well
  3. Autonomation
    1. Autonomation changes the meaning of management as well. An operator is not needed while the machine is working normally. Only when the machine stops because of an abnormal situation does it get human attention. As a result, one worker can attend several machines, making it possible to reduce the number of operators and increase production efficiency…Stopping the machine when there is trouble forces awareness on everyone. When the problem is clearly understood, improvement is possible. Expanding this thought, we establish a rule that even in a manually operated production line, the workers themselves should push the stop button to halt production if any abnormality appears – one operator, many machines in different processes
  4. Push and Pull
    1. In the pull method, the final process withdraws the required quantities from the preceding process at a certain time, and this procedure is repeated in reverse order up through all the earlier processes. Each method has merits and shortcomings. Choosing one or the other and applying it effectively depends on the philosophy and practical creativity of managers and supervisors 
  5. Other
    1. He would not allow anything to be recorded about his system for some time, for fear that it would crystallize it
      1. Organic, always evolving and iterating
    2. Asking “why?” five times helps get to the root of the problem
      1. 5 why’s
    3. Present capacity = work + waste
      1. Waste of overproduction, waiting, transportation, processing itself, inventory, movement, defective products
    4. The plant is the manufacturing’s source of major information. It provides the most direct, current, and stimulating information about management. A proper work procedure therefore cannot be written from a desk. It must be tried and revised many times in the production plant. 
      1. Touching the medium
    5. The standard work sheet includes cycle time (operating hours / quantity required per day), work sequence, and standard inventory
    6. In business, excess information must be suppressed. Toyota suppresses it by letting the products being produced carry the information 
    7. Understanding is my favorite word. I believe it has a specific meaning – to approach an objective positively and comprehend its nature
    8. Manpower reduction means raising the ratio of value-added work. The ideal is to have 100% value-added work. This has been my greatest concern while developing the TPS – eliminate overproduction and establish control measures
    9. Speed is meaningless without continuity – duration is the name of the game
    10. Management should not be done by arithmetic, but by ninjutsu, the art of invisibility
    11. I have said before that I calmly accept the words “slow growth.”
    12. People called the auto venture reckless. We were warned how difficult it was to operate an automobile business. However, we had known this for several years and had worked hard to prepare ourselves…So, for three years we managed the business under the guise of a hobby. – Toyoda Kiichiro 
      1. Toys & Hobbies
    13. Rapid changeovers are a necessity for the TPS. Teaching workers to reduce lot sizes and setup times took repeated on the job training
    14. Standard should not be forced down from above, but rather set by production workers themselves
    15. I have always tried to view things upside down. Reading ford, I was encouraged by the way he repeatedly came up with brilliant inverse conceptions
      1. Inversion 
    16. He would not read catalogues or books. He would not borrow from newspapers or magazines. He never asked for information or borrowed from others to help in an invention. He never studied mathematics or physics. His thinking and inventing were accomplished completely by himself. No mathematics teacher or mechanical expert could find fault with his inventions. His logic fit all scientific principles. Because his inventions sprang directly from actual practice, they did not always follow scientific principles. In application, however, his inventions produced better results. He put his ideas into actions, not words. He didn’t use consultants or assistants. He was independent and alone. He did not have a special research lab or any reference materials at his side. The living room in his home was his laboratory and office. He had no visitors and he wouldn’t call on anyone. From morning till night, he would sit in the room, looking up at the ceiling and down at the surface of the mattress, pondering things quietly. In this way, he generated over 100 patents. – On Toyoda Sakichi

What I got out of it

  1. Simple, but not easy. Some great frameworks to think through how and why a production process should be set up. systems thinking in action…

The Goal: A Process of Ongoing Improvement by Eliyahu Goldratt, Jeff Cox

Summary

  1. Using The Goal (understanding the world and the principles that govern it), thousands of corporations have increased profits through reducing inventory, eliminating bottlenecks, and applying the theory of constraints

Key Takeaways

  1. No exceptional brain power is needed to construct a new science or expand an existing one. What is needed is just the courage to face inconsistencies and to avoid running away from them just because that’s the way it was always done. This challenging of basic assumptions is essential to breakthroughs. Progress in understanding requires that we challenge basic assumptions about how the world is and why it is that way. If we can better understand our world and the principles that govern it, I suspect all our lives will be better. 
  2. I do not believe in absolute truths. I fear such beliefs because they block the search for better understanding. Whenever we think we have final answers, progress, science, and better understanding ceases. Understanding of our world is not something to be pursued for its own sake, however. Knowledge should be pursued, I believe, to make our world better – to make life more fulfilling
  3. Every action that brings a company closer to its goal is productive. Productivity is meaningless unless you know what your goal is
  4. The goal is making money but this can be expressed in many different ways (cash flow, ROI, net profit) and some measurements to help you track this include throughput, inventory and operational expense.
    1. Throughput is the rate by which money is generated through sales (finished product which isn’t sold is not throughput)
    2. Inventory is all the money the company has bought which it intends to sell
    3. Operational expense is all the money spent turning inventory into throughput.
    4. You must express the goal in terms of these measurements. Increasing throughput while simultaneously decreasing inventory and operational expense 
  5. Must consider the company as a whole, no local optimums
  6. A measurement not clearly defined is worthless, even dangerous. 
  7. Having people and machines working nonstop is inefficient 
  8. Dependent events and statistical fluctuations are incredibly important to understand and keep track of. Whatever is the slowest process or bottleneck of any sort is your limiting factor. You can sprint in every other area but if you don’t increase the throughput of the bottleneck, productivity won’t increase at all. The capacity of the plant is the capacity of the bottleneck. The actual cost of a bottleneck is the total operating cost / the number of hours the bottleneck produces. Make sure the bottleneck’s time is never wasted (idle, working on defective parts, working on parts you don’t need immediately) and, if you can, shift work from bottleneck to non-bottlenecks
  9. There must be a way to signal the bottlenecks with the release of material schedule – they must be at the “front” of the assembly process
  10. The amount of time material spends in a plant can be broken down into 4 parts
    1. Set up while the resource is being set up
    2. Process time
    3. Queue time for resources
    4. Wait time for another part.
    5. By reducing batch sizes you can decrease the amount of time parts spend in queue and wait time since you are no longer turning non-bottlenecks into bottlenecks 
  11. All of Rogo’s (the main character’s) suggestions make common sense but they flew in the face of everything he had ever learned and if he hadn’t taken the time to think and sweat through the problems himself, he would never have gained the conviction in them necessary to implement them and turn the plants around. What Alex really needs to learn from Jonah is not plant management practices but how to persuade people how to question common sense and common practice and how to overcome resistance to change
  12. Accounting’s true meaning is to keep control and see how much the company is spending, and helping to understand the process as a whole so that the best thing can be done for the organization. Financial metrics can be hurtful if they’re taken just for their own sake and looked at out of context
  13. Capacity constraint resources are one step below bottlenecks and have to be improved in lockstep or else you could get a wave of bottlenecks at the same time
  14. You have to shift from a cost-centered world to a throughput-centered one. You have to find the weakest link or the bottleneck first in order to increase throughput – not solely focused on cutting costs.
    1. Identify the bottlenecks
    2. Identify how to exploit the bottlenecks
    3. Subordinate everything to the above decision
    4. Increase the bottleneck
    5. If the bottleneck is still broken go back to step one, and don’t let company inertia stop you
  15. The more inventory, the less spare capacity you need and vice versa. As you take on more orders it might not create more bottlenecks but it drastically reduces your spare capacity which means you have to take on more inventory in order to compensate
  16. The first step must be to identify the week link as this is the bottleneck the areas you need to focus on first
  17. Three fundamental questions
    1. What to change
    2. What to change to
    3. How to go about making this change 
  18. A goal should not have a set final metrics – it should be something that triggers ongoing improvement and innovation 
  19. Toyota did away with economical patching and instead focused on the set up time trying to reduce that as much as possible. This allowed them to switch components of what the operator was doing quickly and efficiently
  20. Better production flow or shorter lead times creates incredible cost savings and efficiency savings for many reasons 
  21. A grave mistake by some top management is to layoff capacity – either people or machines – when throughput increases and efficiencies increase. This sends the signal to the company that if you become better and more efficient at your job, that you will lose it. Instead, encourage the sales team to go out and make more sales to take advantage of the increased capacity 
  22. Production’s biggest focus has to be improving flow. There are many other things that can be done but that ultimately lies with other departments. They must prevent overproduction (don’t produce unneeded product), condemn local efficiencies and focus on the global. Lastly, you must balance the flow after all these disruptions are mitigated 
  23. Small disruptions can become major ones but the most important disruptions are those which impact availability. Those are the ones you need to focus on and get rid of. In order to address, you should create a database of disruptions and whenever a major one which impacts availability occurs, it should be defined and described within the database

What I got out of it

  1. Goldratt did a great job of weaving in some valuable lessons in a story format. It was a production example but the ideas and the theory of constraint can be widely applied

Out of the Crisis by Edwards Deming

The Early Days of WL Gore and Associates by Bob Gore

Summary
  1. Bob Gore, son of founder Bill Gore, recounts the early days at WL Gore and what has made the company sustainable and successful
Key Takeaways
  1. Bill Gore was very enthusiastic and did not have a lot of patience for bureaucracy. He was an entrepreneur from a young age and loved to improvise, move quickly and always emphasized product development. He always was experimenting and he got the family involved by trying out new products or materials with them. He was always looking for the practical potential in new materials.
  2. Always believed in the idea of “value pricing” – price products for what they are worth, not what they cost to manufacture
  3. From DuPont he learned and enjoyed the task force approach and the fact that a group of people can come together without titles without a formal hierarchical position.
    1. People just just get the job done as well as working harder and more enthusiastically then when they were in their usual 9-to-5 jobs. This eventually led to the lattice business structure as opposed to the typical pyramid structure. He became wary of corporate structures and believed that standard accounting tended to make bad business decisions
  4. Another chemist at DuPont had a machine shop and Bill was jealous of that. He was not able to just go ahead and make what he needed to make and use it but had to fill in a request for shop work and would be processed according to its place in the queue. That kind of obstacle destroys momentum and destroys enthusiasm which is why Bill set up a shop in his own basement so that he could experiment and follow his passion
  5. My advice to the man who contemplated an individual enterprise is to carefully consider if he has a dream of compelling importance and to follow his dream
  6. Mother served as moral support and encouragement. Never complaining and keeping everyone happy
  7. The emphasis was always on building our own machinery rather than purchasing it
  8. The large order that forced us into a new facility finally came in the summer of 1960. It was for an application that was totally unforeseen and was never to be duplicated
  9. Our staff is unusual in that each member knows he is closely identified with the success of the enterprise. It is the realization of this that is unusual. This realization has been brought about by a carefully considered program Carried out by the officers, managers, and supervisors. Important in this program is the profit sharing policy established by the Board of Directors. In this plan a sum is appropriated by the Board from profits and distributed amongst all employers in proportion to their gross pay for the period. Neither the period nor the sum is specified in the plan, but the principle of rewards in proportion to contribution has been established. Profit sharing by employees amounted to about 5% of gross pay over the past fiscal year. Our pay scales are minimum and all employees look to profit sharing as an important source of future income. Your management believes that the success of our business rests inescapably on the competence, diligence and loyalty of our people. This is the resource that sets both the limitations and potentials of the enterprise.
  10. Hosted open houses to show visitors their new buildings and products
  11. Action was prized. Gores attitude is to encourage any idea that could be tried relatively quickly and inexpensively which did not have a downside
  12. There was considerable informality and this lead to enhanced communication. We tried hard to fit the organization around an individuals capabilities and needs rather than remake the individual to a predetermined slot in a predetermined organizational concept.
  13. 5-year service anniversary pins have been handed out since the early days
  14. Every associate learned to exercise extreme control over intellectual property and pricing. Manufacturing operations were off limits to visitors and pricing was a very serious area where Bill exercised personal control insofar as he was able. He developed a value pricing model where he would price products for what they were worth in the marketplace not what they cost to manufacture
  15. An early vision of Bill’s was that the enterprise would last far beyond his life. He set up a trust which he transferred a significant portion of his shares so that there would be no ruinous estate taxes upon his and his wife’s death
  16. Established a big office in Flagstaff, AZ, far away from customers, source of raw materials and eastern support. However, it was along the Route 66 and a railroad went through it, making LA just an overnight trip away. They didn’t like LA because of the environment – too much traffic, high taxes, and people continually switched jobs. They sensed there was no permanence and little loyalty of the workforce to a company or a community
  17. There was fear of unionization at one point but after a head of a union took a tour through the plant, he determined that they would not have any trouble with unionization. It was the cleanliness, the good order, the pictures of people’s kids on the machines – the whole atmosphere showed the community and loyalty fostered at Gore. Culture is not all written in words, nor is it all spoken in words, but it is also expressed by our facilities, by a walk through the plant.
  18. Troubles with counterparties often stem from a lack of alignment, enthusiasm, and trust
  19. The biggest benefit of thinking in leaps and not incrementally is that it’ll throw off tons of other ideas that you otherwise never would have had
  20. In the immediate aftermath of our founding back in 1958 our sales organization has been established as a collection of independent third-party sales companies who represented us, each with an exclusive sales territory. The use of independent sales companies have been a financial necessity in the early start up days. This was away for Gore to be sure it’s flow of cash was in balance at all times since we paid the independent sales representatives only one there was income from the sales they had made. To keep their cash flow and balance the sales representative Natalie took the opposite point of view. They only wanted to concentrate on producing near term sales to earn near term commissions. They were reluctant to finance long-term, time consuming, and risky sales development efforts in hopes of earning sales commissions I would pay off only far in the future. Unfortunately, many of our products requires long term efforts and this had to be us and so over a period of years, we replaced independent sales representative companies with full time Gore people
  21. Gore dreamed of an enterprise with great opportunity for all who would join in it, a virile organization that would foster self-fulfillment and which would multiply the capabilities of the individuals comprising it beyond their mere sum
  22. Bill Gore was more interested in the organizational and philosophical portions of the company and his son, Bob, was more product oriented
What I got out of it
  1. Passion, hard work, genuine interest, caring, and a win-win mindset has helped make Gore a durable and successful company
More links and info on Gore: