Business Sustainability through

Process Operational Excellence

LEAN ENTERPRISE (= LEAN OPERATION):
A KEY STRATEGY TO BUSINESS
COMPETITIVENESS
MADE DANA TANGKAS, Director
TOYOTA MOTOR MANUFACTURING INDONESIA
Chairman of Indonesia Industrial Engineering Association
Chairman of ASEAN Automotive Federation Economic Committee

UNIVERSITAS GAJAH MADA FAKULTAS

TEKNOLOGI
Yogyakarta, 29 Oktober 2014

Page 1

OVERVIEW
1. WORLD CLASS INDUSTRY AND BUSINESS
CHALLENGES
2. LEAN ENTERPRISE :
- VALUE, SYSTEM & LEADERSHIP
(TOYOTA WAY, TPS, LEADERS)
3. IMPLEMENTATION AND BEST PRACTICES OF
LEAN ENTERPRISE (=OPERATION) IN
TOYOTA INDONESIA
Page 2

1. WORLD CLASS INDUSTRY & BUSINESS CHALLENGES

EEC

North America

NAFTA

Asia

APEC

Europe

GCC

APEC

AFTA+3

Africa

South America

MERCUSOR

COMESA

AFTA

Indonesia

INDONESIA

Australia

From Indonesia for Global Market

Page 3

Current Situation of Global Toyota

< World Class Enterprise : No. of Manufacturing companies & Distributors >

North
America
11

Europe
6

China
13
Middle
East
5

Central &
South
America
4

Asia
9

Africa
2
Oceania
1

51
51manufacturing
manufacturingcompanies
companiesin
in26
26countries
countries
170
170importers
importers//distributors
distributorsin
in140
140countries
countries

Page 4

THE CHANGE IN THE BUSINESS

PERFORMANCE ENVIRONMENT
3S factors :
SCALE

SPEED

: From steady to fast and flexibility

From national to global

The forces of democracy, trade
deregulation or free trade area,
and technology changed

Responsiveness and agility

STANDARD : From local to world class standard

Measurement is by globally and
be worlds best

- Increased competition

- Reduced timeline for all

activities

- Everyone must have

a world class
value - preposition

Page 5

COMPETITIVENESS ASPETCS
COMPETITIVE
ADVANTAGE

Value Cost
(v)

(c)

- Product quality meet with

Customer Requirement
(need & wants)

- Cost Reduction
- Cost Saving

- Competitive price/cost

- Tight Budget

- On Time Delivery

- VA/VE, etc

-After Sales Service,

-Safety,Prody,Env, HR, etc.

Page 6

2. LEAN ENTERPRISE : VALUE, SYSTEM & LEADERSHIP

(TOYOTA WAY, TPS, LEADERS)
The Toyota Way 2001 and Toyota Institute.

urgeevery
everyToyota
ToyotaTeam
TeamMember
Memberall
allover
overthe
theworld
worldto
totake
take
IIurge
Professionaland
andpersonal
personalresponsibility
responsibilityfor
for
Professional
Advancingthe
theunderstanding
understandingand
and
Advancing
Acceptanceof
ofthe
theToyota
ToyotaWay.
Way.
Acceptance
FujioCho,
Cho,Former
FormerPresident,
President,2001
2001
Fujio

Common Managerial Values and Business Methods

Page 7

G
Ge enchi
nb
uts
u

The 4P Model of Toyota Way

Re
s
Te pect
am
&
Wo
rk

Ka
ize
n

Toyota
s
Toyotas
Term
Term

PROBLEM
SOLVING
(Continuous
Improvement &
Learning)

PEOPLE & PARTNERS

(Respect, challenge
and grow them)

PROCESS
(Eliminate waste)

Ch
all
en
ge

The Toyota Way

Respect
for People

Respect
- Team Work
-

Continuous
Improvement

Challenge
- Kaizen
- Genchi
Genbutsu
-

PHILOSOPHY
(Long-Term

Thinking)

Page 8

Toyota Production System (TPS):

LEAN MANUFACTURING (= Lean OPERATIONS)

Corporate Objectives
Develop business while
keeping harmony with the
international communities
(through supply of automobiles
in the case of TOYOTA)

To Fulfill the social mission

Offer people more civilized and affluent life

Activate communities through corporate activities
Promise employees stable basis for life

To this end, it is essential for the

company to survive by securing profits

Page 9

Cost Reduction is Absolute

Requirement for Increased Profit
)1( Selling price = Cost + Profit
(2) Profit

= Selling Price - Costs

Cost Reduction
)2 (Cost Reduction

)1 (Cost + Profit

Profit
Profit
Cost

Methods for
increasing profit

Selling
Price

Raise the selling price

Reduce the costs

Cost

Selling
Price

Demand > Supply

Demand < Supply

Customers determine the selling price

Page 10

Productivity Labor Productivity

Labor Productivity

)with smaller man power)

Productivity

Equipment Productivity
)with smaller equipment investment)

Material Productivity
)with less costly materials and higher yield ratio)
The quality of design plays a decisive role. Still the costs vary
depending on the manufacturing method

Cost Dependent on Production

Method
Cost change depending on the production flow/method,
Component of COST

Other
Energy
Labor
Expense

Cost in
Common
between
companies

Raw
material
purchase

even with the same design, same equipment, and the

same material
2

Part
purchase

Cost caused by
difference in
production
method

Process Flow

1
Process Flow

Page 12

Work Concept (eg. Operators Motion)

MUDA : WASTE, UNNECESSARY WORK
MURA : UNEVERNESS, UNSTABLE, FLUCTUATIVE
THINGS
MURI : OVERBURDEN, OVERLOAD, OVERWORK
CONDITION

Net Work

]C]

Muda
]A]

Operators
motions

Non-Valueadding work

Work

]B]

]A] MUDA :

Motion no necessary for

production work

[B] Non-Value- Adding Work : Motion that are

necessary but do not add any value to the
product at the present work stage.
[C] Net Work : Motion that add values to the
product

Traditional Production vs CFP

Traditional Production
Operator A

Operator B

Material

Operator C

Material

Finished
production

Continuous Flow Production

Material

Operator A

Operator B

Operator C

Finished
production

Apparent Productivity Enhancement vs

true Productivity Enhancement
Apparent Productivity
Enhancement
Production of 100
units/day by 10 operator

Production of 120
units/day by 10 operator

True Productivity
Enhancement

Necessary
amount : 100
parts/day

Production of 120 units/day by 10

operator Over production 20 units
Production of 100 units/day by 8
operator (by KAIZEN)

Overall Efficiency is More Important Than

Individual Efficiency
Boat Race

Difference between Raising

Productivity & Forcing Work
Raising Productivity Against Sales
Change Muda into Work
Muda

Muda
Motion

Work

Muda

Motion

Motion
Muda

Work

Work

Work

Forcing Work
To make operators work harder
without implementing KAIZEN

Work

Muda

Muda

Muda
Motion

Work

Motion

Work

JIT

Just-In-Time
What is Just-In-Time production ?

Producing : What is needed

When it is needed
In the amount needed

Precondition Heijunka
JIT : Learning from Supermarket
11

Jidoka

Jidoka (Build In Quality)

Jidoka is the ability of production lines to be stopped in the event of
problems such as equipment malfunction, defects or work delay.
This is done either by machine which sense an abnormality and
self stop or by alerting team members who then push a line stop
button.
Defect again!

Jidoka

Pokayoke
Pokayoke is fail-safe device. Pokayoke devices helps prevent
defects, mistake by team members, machine damage, injury,
etc.
Production mistake
Part mistake

Before improvement

Injury
Malfunction devices
Etc

After improvement

Stopper as
Pokayoke

Standardized Work & Standardization

Standardized Work &
Safety,
Environment

COST
Quality

Standardization
(4M : Material, Machine,
Man and Method)
In Safety
In Quality

Productivity

In
Productivity

COST REDUCTION
MAKING PEOPLE before MAKING PRODUCT

3. IMPLEMENTATION OF LEAN ENTERPRISE IN TOYOTA-INDONESIA

Manufacturing Base & Domestic Market
Indonesia
IndonesiaPopulation
Population == ++250
250Million
Million
Jakarta
Population
=
+
13
Million
Jakarta Population
= + 13 Million
TMMIN
== 8400
TMMIN- -Employees
Employees
8400person
person
55Main
Dealers

A-2000
(
80
%
Main Dealers A-2000 ( 80 %) )

NRM
NRM( (6,5
6,5%%) )

HHKK( (55%%) )

AAM
AAM( (33%%) )

HHAA( (3,5
3,5%%) )
Component
Supplier
=
Component Supplier
= 107
107suppliers
suppliers

TERITORY
TERITORY OF
OF TOYOTA
TOYOTA DEALER
DEALER
(under
(under TAM
TAM as
as Distributor)
Distributor) ::

PHILIPINE

Aceh

MALAYSIA

1.
1. A-2000
A-2000
2.
NEW
2. NEW RATNA
RATNA MOTOR
MOTOR
3.
HADJI
KALLA
3. HADJI KALLA
4.
4. AGUNG
AGUNG AUTOMALL
AUTOMALL
5.
5. HASRAT
HASRAT ABADI
ABADI

BRUNEI

MALAYSIA

SINGAPORE
SUMATRA

KALIMANTAN

SULAWESI

JAWA
Manufacturing
Manufacturing Base
Base
In
In Jakarta
Jakarta &
& Karawang
Karawang

MALUKU

PAPUA

BALI
NUSA
TENGGARA

AUSTRALIA

Page 22

(JABOTABEK REGION)
T M M IN , A D M , S u g ity , H IN O & S U P P L IE R S M A P
T M M IN
V

AD M

V
V

T M M IN

40
V

70

Km

Km
V

12
12Suppliers
Suppliers
343.5
343.5m3/day
m3/day
5545
45Km
Kmto
toSunter
Sunter
70
70114
114Km
Kmto
toKarawang
Karawang

99Suppliers
Suppliers
70
70 m3/day
m3/day
66
6677
77Km
Kmto
toSunter
Sunter
4422
Km
to
22 Km toKarawang
Karawang

V
V
V

V
V

V
V

Sugity

55Suppliers
Suppliers
265.5
265.5m3/day
m3/day
60

108
60 108Km
Kmto
toSunter
Sunter
130

178
Km
130 178 Kmto
toKarawang
Karawang

14
14Suppliers
Suppliers
207
207m3/day
m3/day
40

56
Km
to
40 56 Km toSunter
Sunter
44

44 56
56Km
Kmto
toKarawang
Karawang

20

Km

T M M IN
AD M

13
13Suppliers
Suppliers
221.5
221.5m3/day
m3/day
50

52
Km
50 52 Kmto
toSunter
Sunter
22

35
Km
to
22 35 Km toKarawang
Karawang

H IN O

M AJALEN G K A

SU R AB AY A

55Suppliers
Suppliers
38.1
38.1m3/day
m3/day
66

71
Km
66 71 Kmto
toSunter
Sunter
102

107
Km
to
102 107 Km toKarawang
Karawang

Bandung

= D ire c t S u p p lie r

= M ilk ru n S u p p lie r

Page 23

Production Planning

Flow Parts

Yearly Production Planning

Flow Production
Information kanban

Monthly Production Planning

Flow signal kanban

Daily Production Planning

Heijunka

Body
No 3
No2
No1

Press
Parts
a
b

Daily Order System

Daily Order System

Sequential Planning

Flow part withdrawal

kanban

Information

Body
Prod.
Start

Welding
Forging

Starting work
Production
Sequential table

Body
Prod.
Finish

Painting

Final
Assembly

Painting
Finish

Machine
Process
assembly

Domestic
Overseas
Dealers

Line
Off

Casting

Part
Maker

Page 24

PART ORDER, PRODUCTION AND LOGISTIC SYSTEM

Parts
Parts procurement
procurement L/T
L/T (Timeline)
(Timeline)
[Flow image]
(1)Order

(2)Order
receiving

Assembler

Supplier
(3)Preparation
& Supply

(4)Transportation

(5)Yard
arrival

(6)Unload/
Rec. area

(7)Line side
(Parts Usage)

[Timeline image]
Order
Order
receive

Supplier L/T

Shipping
Yard arrival

External logistics L/T

Unload

Internal logistics L/T

Line side

L/T of External Log.

Page 25

e-Kanban Image
Next Order

VLT Release

SCRAP
Reflection

<D - 4>

Weld
Paint

ORDER

Monitor Scrap
For adjustment order

Veh. Flow = Parts Flow

X
Assembly

<Del Time>
Supplier

Physical
usage

Page 26

Summary of TOYOTA Production System

J.I.T

Realization embodying
Customer First
discipline

Providing customers
with well made
products at reasonable
price in a timely
manner

Taking back the

investigation promptly
in the limited capital
resource

Timely

Elimination of waste
Muda (Non-value Added )
Mura (Uneverness)
Muri (Overburden)

QCDSMPE

Well-made product
at reasonable cost

Standardized Work
Kaizen (incld. People,
5R)

Jidoka
Page 27

Page 28