Linking the Vision Manufacturing Business Management: A Practical and Cohesive Perspective for Long Term Success

A Way of Managing the Whole Enterprise A System Focused only on the Production Process TPS IsTPS Is Not Applied Materials Confidential

Starting Point: A Way of Thinking! Phase I How to Think Phase II What to Do Phase III Implementation Consistent Philosophy Practical, Value Added Study Workplace Determine What to Do Implement Adjust

Impressions from My Transition: Traditional to Toyota Decision making Employee empowerment Focus at point of action Attention to detail Discipline Change Top down directive Minimal, labor is labor Minimal, rely on reports mostly Inconsistent depth People dependent Individual manager driven Situational, consensus as goal Maximum possible Drives all actions Consistently deep Consistently high level required Group controlled with consistent thinking Point Traditional Toyota

Linking the Vision I.Culture II.Management III.“Toyota Production System” IV.Summary

Problem Perpetual Living and Evolving Organized System Performance Time Standard (Capability) Actual (Performance) Kaizen Standard: Record of best known method to perform work repeatedly Problem: Actual performance has fallen below proven capability Kaizen: Develop a better method to perform work repeatedly People Direct Team Member Team Leader Group Leader Key: For problems and kaizen, an organized support system exists whereby people join as support to solve the problem or implement the kaizen.

Customer Focus Who is the customer? What is the customer’s expectation? “Work” is passed from supplier to customer with following expectations: 1. What is needed 2. Quantity needed 3. When it is needed 4. With Zero Defects Process Customer Supplier Process Customer Supplier Process Customer Supplier

Safe Environment for Team Members Problems = ? Problem Supervisor Negative Method Not again! Help! Team Member

Safe Environment for Team Members Surfacing Problems Receive Positive Recognition Positive Method Good job! How can I help? Help, please! Problem Tools Problem Supervisor Team Member Negative Method Not again! Help! Problems = Opportunities to Improve

Decision Making Methods Decision making is highly situational Philosophy is to seek maximum involvement for each situation Level of Involvement Time Decide and Announce Seek Individual Input, then Decide and Announce Seek Group Input, then Decide and Announce Group Consensus, Management Approval Group Consensus, with Full Authority Fallback (if consensus not achieved)

Strict adherence to plan Identify problems Adjust Continue implementation Strict adherence to plan Identify problems Adjust Continue implementation Discipline Everywhere PlanningExecution Individual Department Individual Department Company

All Team Members Respected Equally GOAL Management Technical SupportDirect Line Administration Supervisor

Simple Is Better NO

Choose most simple flow or method for each situation NO GO

The Snowman Instruction

Linking the Vision I.Culture II.Management III.“Toyota Production System” IV.Summary

Managing Philosophy Mgmt Management Supervision Indirect Support Team Members Direct Line Team Members Senior Coaching Solve Problems Developing

“Go See” Managing Principle Always “go see” the worksite to know the real problem Do not take action based upon reports Make frequent trips to worksite without specific problem Office Worksite

Management Team with Consistent Principles Establish process flow Coaching, developing style Asks questions to learn situation before action Encourages/teaches Kaizen Supportive, sees problems as opportunities Yes Manager AManager BManager C Yes Managing Principle Method to Practice PrinciplePersonality Dependent

Impacts Market Price and Sales Volume Quality Cost ProfitMarket Price Cost and Product Quality Is in Our Control Selling Price and Quality Expectation Is Market Driven A Cost Quality B Cost Quality C Cost Quality D Cost Quality E Cost Quality Market Sets Price and Quality Expectation Company

Focus on Change Only Throw Out the Old Bring in the New Bring in the New Error Margin Current Change N E W NO Error Margin GO

Linking the Vision I.Culture II.Management III.“Toyota Production System” IV.Summary

Toyota Production System Kaizen Flexible, Motivated Employees Maintenance of Standards Most Essential Element Critical Activities Goals/ Desired Outcomes Philosophies Customer First Respect for Humanity Elimination of Waste For the Customer For the Employees For the Company Highest Quality Lowest Cost Shortest Lead-Time Work Satisfaction Job Security Consistent Income Market Flexibility Profit (from cost reduction) Foundation JITJIT JIDOKAJIDOKA Standardization

Focus on JIT Building Blocks of Just-In-Time Just-In-Time Continuous Flow Processing Continuous Flow Processing Pull System (Kanban) Pull System (Kanban) Takt Time Level, Sequential Production Goal

Unleveled Production Preceding Process Part A Line Part B Line Storage Part C Line Following Process A A B B C C

Leveled Production Part A Line Part B Line Storage Part C Line Following Process A A B B C C

Separately Positioned Processing Materials A A Finished Products Inventory B B C C

Continuous-Flow Processing Materials A A B B C C Finished Products

Focus on JIDOKA Andon pull = opportunity to meet objective Team member must feel safe to pull andon Team Leader Andon Board Andon Cord Objective: Pass 100% Good Quality to Next Process 2 2

Quality Circles Study Analyze Plan Implement Check Adjust MeetingWorksite

Types of Waste Waste of Correction Waste of Correction Waste of Over- Production Waste of Over- Production Waste of Processing Waste of Processing Waste of Conveyance Waste of Conveyance Waste of Inventory Waste of Inventory Waste of Motion Waste of Motion Waste of Waiting Waste of Waiting Types of Waste Types of Waste

TPS: Myth vs. Reality A Tangible Recipe for Success A Management Project or Program A Set of Tools for Implementation A System for Production Floor Only Implementable in a Short or Mid-term Period Myth What TPS Is Not

TPS: Myth vs. Reality A Tangible Recipe for Success A Management Project or Program A Set of Tools for Implementation A System for Production Floor Only Implementable in a Short or Mid-term Period A Way of Thinking A Total Management Philosophy Focus on Total Customer Satisfaction An Environment of Teamwork and Improvement A Never Ending Search for a Better Way Quality Built in Process Organized, Disciplined Workplace Evolutionary Myth What TPS Is Not Reality What TPS Is

Linking the Vision I.Culture II.Management III.“Toyota Production System” IV.Summary

TPS Is a Managing Philosophy TPS Customer Focused Never ending Search for as Better Way Production Marketing Information Systems Accounting Human Resources Engineering Consistent Management, Positive Environment for Success Tools and Techniques – Developed and Evolving with Experience

Preconditions for Successful Change 1.Company-wide philosophy and mindset 2.Company-wide hunger for long-term success, from top down 3.Consistent company-wide management direction with patience

Points to Remember: As Management: 1.A managing philosophy and way of thinking is the key to unlock systematic success! 2.A world-class business is a living, evolving organized system! 3.Everyone should remain focused on their customer!

Points to Remember: As Management: 4.An environment of support from each indirect and management position with respect for all positions, and problems are welcomed as opportunities is essential! 5.The “production system” is critical as the foundation for executing the management philosophy!