The Toyota Production System A Transition from Mass Production to Lean Manufacturing and Supply Chai

1
The Toyota Production SystemA Transition from
Mass Production to Lean Manufacturing and Supply
Chain Management

• Genaro J. Gutiérrez
• McCombs School of Business
• The University of Texas at Austin

Greater San Antonio Chamber of Commerce San
Antonio, Texas April 15, 2003
2
Major Revolutions in Manufacturing

• 1776, Adam Smith The Wealth of Nations
• 1910, Henry Ford and Mass Manufacturing.
• 1980, The Toyota Production System.
• Lean Manufacturing.
• Supply Chain Management.

3
The Gestation of TPS

• Eiji Toyoda visit to Henry Fords factory in
  1950.
• The SMED (Single-digit in Minutes Exchange of
  Dice) program at the stamping plant.
• Demings quality movement in Japan.
• The Engineers Taiichi Ohno and Shigeo Shingo
• Japanese Manufacturing hits America in 1970

4
Main Features of TPS

• Greater Product Variety
• Fast Response (Flexibility)
• Stable Production Schedules
• Supply Chain Integration
• Demand Management

5
Elements of TPS

• The SMED Program.
• Highlight Problems (Jidoka).
• Gradual Elimination of Waste.
• Continuous Improvement (Kaizen), Root-Cause
  Analysis (5-whys?) and Fool-proofing (Poka-Yoke).
• Cross-Trained Workers.
• Just-In-Time Production.
• Stable Production Schedules (Heijunka)

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Traditional Buffered Supply Chain
2nd Tier
Flow of Production
1st Tier
Customer Demand
Flow of Information
Assembler
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The Just-in-Time Supply ChainLook Ma No
Stocks!
2nd Tier
Flow of Production
1st Tier
Toyota
Flow of Information
Customer Demand
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Expectations from Suppliers

• Frequent deliveries.
• Hours (not days) lead time.
• Rapid response capability (not from stocks).
• Delivery to assembly line at the right time in
  the right sequence without inspection.
• Reliability (quality and timing).

9
Supplier Relationships

• Long-term, steady relationships with a few
  suppliers.
• Negotiation based on a long term commitment to
  productivity and quality improvement.
• Interested in supplier capabilities.
• Continuous improvement.
• Product/process technology.
• Design for manufacturability.

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Whats in it for a supplier?

• A Stable Manufacturing Environment.
• Steady production volume.
• Leaner Processes.
• Cost/Flexibility/Quality
• Profits.