In later years, Ohno often described his production system in terms of the American supermarket. Each production line arrayed its diverse output for the following line to choose from, like merchandise on supermarket shelves. Each line became the customer for the preceding line and the supermarket for the subsequent line. The downstream line would come and choose the items it needed and take only those items. Then the upstream line would produce only the items to replace those just selected. Thus Ohno’s industrial supermarket concept was a customer-driven system, activated and defined by the needs of the downstream process.
Ohno’s legacy: The Toyota Production System
Ohno developed a number of tools for operating his production format in a systematic framework. His disciples improved on and codified his contributions into what is now known as the Toyota Production System. The Toyota Production System is commonly represented as a house with a foundation and two pillars holding up a roof. Shingijutsu sensei adapted and expanded this model to what they call the Global Production System (see Figure 3.2), which can be applied to any organization’s efforts toward achieving world-class performance.
Figure 3.2: The Global Production System house
•The two pillars of the house, arguably the most important elements, are Just in Time and jidoka. The former emphasizes operating with the minimum resources to consistently deliver the product or service. The latter, which is also known as line-stop authority or inline quality assurance, is a system for confirming quality and detecting abnormalities before they can pass farther downstream in the process. I’ll discuss both of these pillars in more detail shortly.
•The foundation of a Global Production System incorporates the elimination of waste, which reduces costs and levels production. Leveled production is required to make just-in-time production possible.
•The house roof represents the system’s goals, the attainment of world-class performance: satisfying customers with high-quality, low-cost products or services that are provided by employees who work safely and enjoy high morale. In short: providing goods or services the right way.
In this two-pillared concept, other key aspects of the system, including people, teamwork, and continuous improvement, may be shown variously as part of the structure or inside of the house. But let me caution you regarding how you think about building this house with your company, because even with this blueprint, the order of construction often goes awry.
Too many corporate leaders who want to reengineer their organizations think they know how to go about it in traditional MBA fashion. Typically, driven by shareholder pressure, short-term thinking, and impatience, they focus on the foundation of cost reduction and then proceed to erect walls and a roof of technology. Somewhere in the structure, they may address people — but not too many people, because these leaders commonly assume that this cost-focused house won’t accommodate all the people the company now employs.
This is not my idea, nor Toyota’s, of the way to build for world-class performance. Instead of starting with the cost-reduction foundation, which is too often interpreted to mean layoffs, those in pursuit of world-class performance should begin with the roof supported by the two pillars. Clear goals and commitment right from the top will establish the direction and get the people inside, under cover. A solid roof that doesn’t leak in rough weather will encourage the workers to continue building the rest of the structure. Otherwise, the slowness of the building will discourage them, and even the leaders will get sidetracked.
You must be a leader and build a solid roof with your people, who then will work with you to build the remainder of the structure following your well-thought-out plan. The Global Production System is a people-based system with three operating philosophies: Just in Time, jidoka, and cost reduction through the elimination of waste. All decisions must be based on their consistency with these three philosophies. Let’s look at each in more detail.
Pull, don’t push
The first pillar of the Global Production System is just-in-time production, which starts with the customer. All production activity is linked to sales in the marketplace. At Toyota, for example, assembly plants make vehicles only in response to firm dealer orders. Each process arrays items for the subsequent processes to withdraw and use only as needed. Each process withdraws items from the preceding process only to make items to replace those that the next process has withdrawn.
This is what is known as a pull system. (See Figure 3.3.) Rather than manufacturing processes that push products out to buyers who may or may not exist, all pull-system production is linked to and prompted, or pulled, by real demand. Everything that happens is a response to fulfilling real orders from dealers. Inventory becomes unnecessary, because all supplies arrive and goods are manufactured just in time to fill customer orders.
Figure 3.3: Pull and push production
To communicate in a pull system, Toyota’s production lines operate using kanban, which are typically printed cards that are laminated or sleeved in clear plastics cases. Every item or set of items that flows through the production system carries its own kanban. Kanban cards are removed from items that have been used or transported and sent back to the preceding process as orders for additional items. (See Figures 3.4, 3.5, and 3.6.)
Figure 3.4: Kanban cards can be used for production and between a supplier and the factory, as well as between processes.
Kanban are the best-known of the tools developed by Taiichi Ohno for systematic operation of a just-in-time system. Toyota uses two kinds of kanban: one for parts withdrawal and one for production instructions. Withdrawal kanban communicate between processes. Production-instruction kanban communicate within processes. Employees use kanban to continuously monitor the material they withdraw from the preceding processes and the finished items they pass on to the next process. Every large assembly shop at Toyota has two or more kanban stations. Paperwork is minimized and efficiency is maximized.
Figure 3.5: Boxes containing parts can also be kanbans themselves; when they are empty, they are returned as a signal to make or provide more parts. Signal kanbans are especially useful for high-quantity parts.
Figure 3.6: Signal kanbans can also show the order point in stacks of containers. When the reorder box is reached, the kanban card comes off to signal the need for replenishment.
Leveled, continuous-flow production
To achieve just-in-time production, Toyota arranges equipment to ensure a single, smooth flow. Work within each process is arranged to flow evenly and directly from one step to the next. Logistics are devised to move the work on a precise schedule from raw materials plants, through machining plants, to assembly plants, and on to distributors, dealers, and customers.
Instead of grouping machines together by type of machine, with all the lathes together, all the milling machines together, and so on, Toyota arranges the machines in the sequence in which they are used in the manufacturing process. In-process goods move directly and in small quantities (if not one