Business Management M o A bestseller for almost three decades, Toyota Production System: An n d Integrated Approach to Just-In-Time supplies in-depth coverage of Toyota’s e production practices, including theoretical underpinnings and methods for n implementation. Exploring the latest developments in the Toyota Production T System (TPS) framework at Toyota, this new edition updates the classic with new material on e-kanban, mini-profit centers, computer-based information o systems, and innovative solutions to common obstacles in TPS implementation. y Yasuhiro Monden, instrumental in introducing the JIT production system to o the United States, explains the logic and methodologies of the TPS. Extending the humanized aspect of production introduced in the third edition, Toyota T Production System: An Integrated Approach to Just-In-Time, Fourth a Edition explains how to cultivate the culture and way of thinking needed to establish the TPS holistically across your organization. Exploring the link between kaizen methods and calculation methods in TPS, this edition includes P new chapters on: r o • The goal of TPS d • One-piece production in practice u • Kaizen costing c • Material handling in an assembly plant t • Smoothing kanban collection i o • Determination of the number of kanban n • New developments in e-kanban • Cultivating the spontaneous kaizen mind S y Following in the footsteps of its bestselling predecessors, the fourth edition s provides easy-to-follow guidance for implementing the TPS in your organization. t e It explains how Toyota has adapted and reacted to recent fluctuations in demand, m quality problems, and recalls. It also includes an appendix that considers the recent tsunami in Japan and investigates how to reinforce the JIT system to ensure supply chain flow during sudden stoppages at individual locations within the chain. EF do iu t ir ot nh K11111 ISBN: 978-1-4398-2097-1 90000 www.crcpress.com 9 781439 820971 www.productivitypress.com K11111_COVER_final_revised.indd 1 9/13/11 6:01 PM TOYOTA Production System An Integrated Approach to Just-In-Time Fourth Edition TOYOTA Production System An Integrated Approach to Just-In-Time Fourth Edition Yasuhiro Monden CRC Press Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 © 2012 by Taylor & Francis Group, LLC CRC Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Version Date: 2011919 International Standard Book Number-13: 978-1-4665-0451-6 (eBook - PDF) This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. 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Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the CRC Press Web site at http://www.crcpress.com Contents Foreword to the First Edition ..........................................................xxiii Preface to the Fourth Edition ............................................................xxv Preface to the Third Edition .........................................................xxxvii Preface to the Second Edition ..............................................................xli Acknowledgments .............................................................................xliii About the Author .................................................................................xlv Section 1 total System and implementation Steps chapter 1 Total Framework of the Toyota Production System ........3 § 1 Primary Purpose ...................................................................3 Profit through Cost Reduction .............................................3 Elimination of Overproduction ............................................4 Quantity Control, Quality Assurance, Respect for Humanity .................................................................................6 Just-in-Time and Autonomation ..........................................6 Flexible Workforce and Originality and Ingenuity ...........8 JIT Production ........................................................................8 § 2 Kanban System ......................................................................9 Maintaining JIT by the Kanban System ..............................9 Information via Kanban ......................................................10 Adapting to Changing Production Quantities .................10 § 3 Production Smoothing .......................................................11 Production in Accordance with Market Demand ...........11 Determining the Daily Production Sequence ..................12 Adapting to Product Variety by General-Purpose Machines ................................................................................13 § 4 Shortening Setup Time .......................................................13 v vi  •  Contents § 5 Process Layout for Shortened Lead Times and One-Piece Production ...............................................................14 § 6 Standardization of Operations ..........................................15 § 7 Autonomation ......................................................................16 Autonomous Defects Control System ................................16 Visible Control System .........................................................17 § 8 Improvement Activities ......................................................17 § 9 The Goal of TPS ...................................................................18 The Ultimate Goal of TPS ...................................................18 To Improve Margin Ratio, Costs Must Be Reduced, since Profit = Revenue – Costs ......................18 To Improve Turnover Ratio, Lead Time Must Be Reduced ........................................................................19 Another Measure of the Integrated Goal: “JIT Cash-Flows” ..................................................................20 Motivational Effects of the JIT Cash Flow Measure ........21 Control Measure at the Top Management Level of the Whole Supply-Chain ............................................21 Control Measure at the Level of Plant Managers and Supervisors ................................................................22 Control Measures at the Level of Shop Floor Operators ..........................................................................23 § 10 Summary ............................................................................23 chapter 2 Implementation Steps for the Toyota Production System ...............................................................................25 § 1 Introductory Steps to the Toyota Production System ....25 Step 1: Upper Management Plays a Key Role ....................25 Step 2: Establish a Project Team .........................................26 Step 3: Prepare an Implementation Schedule and Set Goals to Be Achieved within the Schedule .................26 Step 4: Introduce a Pilot Project .........................................26 Step 5: Move from a Downstream Process to an Upstream Process .................................................................26 Application Order of JIT Techniques ................................27 § 2 Introduction of JIT at Toyo Aluminum— A Case Study ..............................................................................29 Contents  •  vii Section 2 Subsystems chapter 3 Adaptable Kanban System Maintains Just-In-Time Production ........................................................................35 § 1 Pull System for JIT Production .........................................35 § 2 What Is a Kanban? ..............................................................36 How to Use Various Kanban ...............................................41 Two Methods of Utilizing Production-Ordering Kanban ..................................................................................43 § 3 Kanban Rules .......................................................................45 Rule 1—The Subsequent Process Should Withdraw the Necessary Products from the Preceding Process in the Necessary Quantities at the Necessary Point in Time ...................................................................................45 Whirligig ..........................................................................46 Constant-Cycle and Round-Tour Mixed- Loading System ...............................................................46 Rule 2—The Preceding Process Should Produce Its Products in the Quantities Withdrawn by the Subsequent Process ...............................................................47 Rule 3—Defective Products Should Never Be Conveyed to the Subsequent Process ................................48 Rule 4—The Number of Kanban Should Be Minimized ............................................................................48 Rule 5—Kanban Should Be Used to Adapt to Small Fluctuations in Demand (Fine-Tuning of Production by Kanban) ...................................................49 § 4 Other Types of Kanban ......................................................51 Express Kanban ....................................................................51 Emergency Kanban ..............................................................53 Job-Order Kanban ................................................................53 Through Kanban ...................................................................53 Common Kanban ................................................................54 Cart or Truck as a Kanban .................................................54 Label .......................................................................................55 Full-Work System .................................................................55 viii  •  Contents chapter 4 Supplier Kanban and the Sequence Schedule Used by Suppliers .......................................................................59 § 1 Monthly Information and Daily Information ...............60 § 2 Later Replenishment System by Kanban .........................61 How the Supplier Kanban Should Be Applied to the Supplier .......................................................................61 How the In-Process Kanban Will Circulate in the Supplier’s Plant ...........................................................63 § 3 Sequenced Withdrawal System by the Sequence Schedule ......................................................................................65 Store Space and a Variety of Products ...............................67 How the Sequence Schedule Is Used in the Assembly Lines of a Supplier ..................................68 § 4 Problems and Countermeasures in Applying the Kanban System to Subcontractors ....................................70 Criticism by the Communist Party against the Toyota Production System ...................................................70 § 5 Guidance by the Fair Trade Commission Based on the Subcontractors Law and the Anti-monopoly Law .........72 How Toyota Is Coping with Criticism ...............................74 § 6 Supplier Kanban Circulation in the Paternal Manufacturer ..................................................79 Inventory Quantity of Purchased Parts .............................82 § 7 Practical Examples of Delivery System and Delivery Cycle ............................................................................83 Number of Supply Runs and Delivery Schedule of Each Plant ..........................................................................83 Kanban System and Adaptation to Emergency ...............86 chapter 5 Smoothed Production Helps Toyota Adapt to Demand Changes and Reduce Inventory .......................89 § 1 Smoothing of the Total Production Quantity .................89 Demand Fluctuation and Production Capacity Plan ......92 Adapting to Increased Demand .....................................92 Adapting to Decreased Demand ...................................93 § 2 Smoothing Each Model’s Production Quantity .............93 Sequence Schedule for Introducing Models......................94 Sequence Schedule Sheet Sample........................................97 Contents  •  ix Sequenced Withdrawal of Engines ....................................97 Two Phases of Production Smoothing ..............................99 Flexible Machinery Supporting Smoothed Production ...99 § 3 Comparison of the Kanban System with MRP.............101 § 4 Summary of the Concept of Production Smoothing ...102 chapter 6 The Information System for Supply Chain Management between Toyota, Its Dealers, and Parts Manufacturers ................................................................105 § 1 The Order Entry Information System ............................105 Monthly Production System .............................................105 Master Production Schedule and Parts Requirement Forecast ....................................................105 Daily Production System ...................................................106 The Product Delivery Schedule and Sequence Schedule ..........................................................................106 The Sequenced Production Schedule ...............................109 Online System at the Distribution Stage .........................109 § 2 The Information System between Toyota and Parts Manufacturers ...............................................................110 Parts Requirement Forecast Table ....................................110 Network System within Toyota Group Using VAN .......112 The Parts Distribution System ..........................................113 § 3 New Toyota Network System (TNS) ...............................114 Establishment of Type II Carrier by Toyota ....................114 Toyota’s New TNS (Toyota Network System) .................116 Parts Procurement Networks: JNX and WARP .............117 § 4 Production Planning System at Nissan ..........................118 Nissan’s Ordering Systems from Parts Suppliers ...........121 Daily Order .....................................................................121 10-Day Order ..................................................................121 Synchronized Order .....................................................122 Special Order .................................................................122 chapter 7 How Toyota Shortened Production Lead Time ............123 § 1 Four Advantages of Shortening Lead Time ..................123 § 2 Components of Production Lead Time in a Narrow Sense ..........................................................................124