Principle 3: Use "Pull" systems to Avoid Overproduction(Process - Eliminate Waste)

The more inventory a company has, ... the less likely they will have what they need.

Introduction

I am writing this blog while reading The Toyota Way by Jefferey Liker. I am planning to write some of the key points which I can use in my work and daily activities. To start with I would like to start with the words which Sakichi Toyoda[founder of Toyota Corporation] said to his son Kiichiro:

Everyone should tackle some great project atleast once in their life. I devoted most of my life to inventing new kind of looms. Now it is your turn. You should make an effort to complete something that will benefit the society.

The success of Toyota is a result of the operational excellence and they call it as the Lean Manufacturing. In Toyota they have founded a system called as Toyota Production System(TPS) and this system is based on 14 principles founded by Toyota. These principles are mainly categorized into 4P's i.e Philosophy, Process, People/Partners and Problem Solving.

TPS suggests to always look at any work based on what's exactly required for the end user or your customer. Any process which is not contributing to the end product is called as a non-value added time or process and is considered as waste. The first thing you should do in approaching any process is to map it with your end product and then try eliminating or reducing all the process which do not result in the product. You can achieve this by drawing a simple spaghetti diagram.
This diagram would have all the steps/process required to build a product right from the raw material(scratch) to the end product and all these steps are layed out in the form of blocks. Then you start identifying things which are directly impacting the end product and those which are not. Then start thinking on removing all those wastes which are not directly contributing to the end product. Below diagram is a sample representation of what a spaghetti diagram looks like.



The table below is what Toyota developed before building Lexus. They wanted to enter into the Luxary cars where Mercedes was dominating the area. They came up with a small benchmarking of the key areas which customers looked at for buying a luxary car. I think this could be applied anywhere where we do our work and first look at what our competitors are doing and how can we do better than them.

So much is covered with so few words. This is one of Toyota's Principles which says "Use visual controls so no problems are hidden"

Need to start from Chapter 5

Principle 2: Create Continous Process Flow to Bring Problems to Surface.(Process- Eliminate Waste)

If some problems occurs in one-piece flow manufacturing then the whole production line stops. When production stops everyone is forced to solve the problem immediately. So team members have to think, and through thinking team members grow and become better team members and people.
- Teruyuki Minoura, former President Toyota Motors.


Flow is at the heart of the lean message that shortening the elapsed time from raw materials to finished goods(or services) will lead to the best quality, lowest cost and shortest delivery time.

A lean expression is that lowering the "water level" of the inventory(of materials or information) exposes problems(like rocks in the water) and you have to deal with the problems or you will sink.

Eigth non-value adding wastes that Toyota continually seeks to remove from its processes:
1. overproduction.
2. waiting.
3. unnecessary transport.
4. overprocessing.
5. excess inventory.
6. unnecessary movement.
7. defects.
8. unused employee creativity.

An example of Batch processing vs Lean Production:
Batch Production:Consider a computer monitor maker organized into 3 departments(i.e batch production). One department makes computer bases, second makes monitors and attaches the base and the third tests the equipment. In this model the material handling department decided to move a batch on 10 units to market at a time. Each department takes one minute per unit to do its work, so it takes 10 mins for a batch of computers to move between departments, it would therfore take 30 mins to make and test the first batch of 10 to be shipped to the customer.
Lean Production would take 3 mins to get the first computer ready to ship, and 12 mins to get all the 10 computers ready. In lean thinking, the ideal batch size is always one.

Benefits of One-Pience Flow
1. Builds in Quality: Each operator is an inspector and works to fix the problems in station before passing them on. There is less scope of errors as the next step in the process gets hampered and due to this the problem gets fixed in the earlier stages(vs in batch process it would get noticed only when a batch is released for next processing).
2. Creates higher productivity: The above example of computer monitor manufacturing clearly states that creating one-piece flow would increase productivity.
3. Reduces cost of Inventory: Due to one-piece flow there are less pieces waiting for the next process thus reducing the cost of inventory.