Myth : Most of Managers think it can be applicable only in Automotive.

Fact : Toyota Production System can be Applicable in Any Industry

What is Toyota Production System ?

A production system which is steeped in the philosophy of “the complete elimination of all  8 Type of Waste imbuing all aspects of production in pursuit of the most efficient methods.

Eight Types of Waste Defined

Waste is any activity that does not add value to the product or service. The activity does not add value if the customer is not willing to pay more money for this activity. Waste can be viewed as the single hurdle that can limit a business over time, unless they are identified and systematically eliminated.

1: Overproduction:

Making more than is required by the next process.

2: Waiting:

Any idle time created when waiting.

3: Transportation:

Any movement of materials or people around a plant that does not add value to the product or service.

4: Non-Value-Added processing:

Any effort that adds no value to the product or service.

5: Inventory:

Any supply in excess of a one-piece flow through the manufacturing process.

6: Under Utilizing People:

The waste of not using people to the best of their unique abilities.

7: Defects:

Inspection and repair of materials in inventory.

8: Motion:

Any movement of people or machines that does not add value to the product or service.


“Making  Perfect Things” Just-in-Time

Toyota Motor Corporation’s production system is a way of “Making Things” that is sometimes referred to as a “lean manufacturing system” or a “Just-in-Time (JIT) system,” and has come to be well known and studied worldwide.

This production control system has been established based on many years of continuous improvements, with the objective of “making the Product ordered by customers in the quickest and most efficient way, in order to deliver the Product as quickly as possible.”

The Toyota Production System (TPS) was established based on two concepts: The first is called “jidoka” (which can be loosely translated as “automation with a human touch”) which means that when a problem occurs, the equipment stops immediately, preventing defective products from being produced; The second is the concept of “Just-in-Time,” in which each process produces only what is needed by the next process in a continuous flow.

Based on the basic philosophies of jidoka and Just-in-Time, the TPS can efficiently and quickly produce vehicles of sound quality, one at a time, that fully satisfy customer requirements.

TPS Concept

·         JIDOKA

Highlighting/visualization of problems

Quality must be built in during the manufacturing process!-

If equipment malfunction or a defective part is discovered, the affected machine automatically stops, and operators cease production and correct the problem.

For the Just-in-Time system to function, all of the parts that are made and supplied must meet predetermined quality standards. This is achieved through jidoka.

  1. Jidoka means that a machine safely stops when the normal processing is completed. It also means that, should a quality / equipment problem arise, the machine detects the problem on its own and stops, preventing defective products from being produced. As a result, only products satisfying quality standards will be passed on to the following processes on the production line.
  2. Since a machine automatically stops when processing is completed or when a problem arises and is communicated via the “andon” (problem display board), operators can confidently continue performing work at another machine, as well as easily identify the problem’s cause to prevent its recurrence. This means that each operator can be in charge of many machines, resulting in higher productivity, while continuous improvements lead to greater processing capacity.

Productivity improvement

– Making only “what is needed, when it is needed, and in the amount needed!”

Producing quality products efficiently through the complete elimination of waste, inconsistencies, and unreasonable requirements on the production line.

In order to deliver a vehicle ordered by a customer as quickly as possible, the vehicle is efficiently built within the shortest possible period of time by adhering to the following:

  1. When a vehicle order is received, a production instruction must be issued to the beginning of the vehicle production line as soon as possible.
  2. The assembly line must be stocked with required number of all needed parts so that any type of ordered vehicle can be assembled.
  3. The assembly line must replace the parts used by retrieving the same number of parts from the parts-producing process (the preceding process).
  4. The preceding process must be stocked with small numbers of all types of parts and produce only the numbers of parts that were retrieved by an operator from the next process


Until their most recent quality stumbles, Toyota’s production techniques were the darlings of the management consulting world.  The Toyota process is embodied by the concept of kaizen, a Japanese notion of continuous improvement. The latest gurus have even applied the production techniques to the health care arena.  A Health Affairs shows how Wisconsin has used Toyota-style production techniques to improve quality.

Some of the problems an improved production process could solve include:

  • A large fraction of steps in the health care process have no apparent value for the patient.  Touissaint estimates that this figure is currently 90%-95%.
  • A lack of trust of less-qualified peers.  Cardiologists often do not trust ED physicians to accurately diagnose a heart attack, resulting in a repetitious diagnosis process.
  • Most physicians are “…more loyal to their specialty than to the team with whom they work every day.”

Some of the solutions the Toyota production system offers include:

  • Decreasing wasted time can increase quality.  ”In 2002, for instance, our morality rate for coronary bypass surgery was nearly 4 percent.  After several kaizen projects in this area, typically removing 40 percent of the waste each time, mortality dropped to 1.4 percent in 2008 and has been 0 percent through six months of 2009.”
  • Making medical care more collaborative can improve care. For instance, in one hospital’s Collaborative Care wing, the nurse owns the care process. “The nurse remains in contact with the doctor but does not wait for instruction. Often, it is the nurse who instructs the physicians about a needed step or a critical time in the patient’s care.”

This quality improvements are sound good on paper, but take serious efforts to implement in practice.  In addition, current insurance payment schemes are not conducive to collaborative care.  Touissaint claims that Medicare pays $2,000 less per patient on average in Collaborative Care than in a traditional medical wing.

Next …with example in Pharma Industry. Continue…in……..Part II


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