Industrial Blitzkrieg

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Industrial Blitzkrieg
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Dr. C. W. Richards 1/12/99
John Boyd and the Toyota Production System

This might seem like and odd topic. After all, nowhere in the many descriptions of the TPS are OODA loops mentioned, and I dont think John ever even owned a Toyota. On the other hand, he did devour the translations of Taiichi Ohno and Shigeo Shingo and freely acknowledged that they drew from many of the same sources as he didthe strategic tradition that includes Sun Tzus Art of War and Musashis Book of Five Rings. Most important, the TPS represents a spectacularly successful confirmation of the preeminence of time, a fact explicitly recognized by Toyota itself and a main theme of Boyds theory of competition.
The Goal
To paraphrase Tom Peters Turn Manufacturing into a Marketing Weapon, a chapter in Thriving on Chaos
Manufacturing as a Competitive Weapon
Shorter throughput (order to delivery) Lower costs Higher quality More flexibility
The Strategy
Toyota Motor Company, Toyota Production System, p. 2
The Plan
Why Toyota?
Cost reduction is the goal
Cost Reduction Is the Goal Cost Reduction Is the Goal There are two ways to increase efficiency: 1) increase production quantity or 2) reduce the number of workersTaiichi Ohno.
Why?
In the short term, you may need to

Reduce people at all levels in the organization
Over time, lower costs, higher quality, and faster development & production times will increase sales.
Manufacturing as a Competitive Weapon
A Lean Paradox
(Just One of Many)
Reducing costs means reducing people, but if you eliminate people Reducing costs means reducing people, but if you eliminate people as aaresult of improvement, you will get no more improvement. as result of improvement, you will get no more improvement. The Toyota Production System clearly reveals excess manpower Managements responsibility is to identify excess manpower and utilize it effectively. Hiring people when business is good and production high just to lay them off is a bad practice. On the other hand, eliminating wasteful and meaningless jobs enhances the value of work for workers. Taiichi Ohno.
Resolve how to maintain mutual trust while reducing people
Implementing the TPS
All activities must support the goal of shortening the time it All activities must support the goal of shortening the time it takes to convert customer orders into deliveries. Toyota takes to convert customer orders into deliveries. Toyota Motor Corporation, 1992 Motor Corporation, 1992 Develop A Lean Strategy Create a sense of urgency Throughout the enterprise, sell lean/TPS as the solution Hire a sensei & retain design talent Establish targets Resolve how to maintain mutual trust while reducing people Give preliminary thought to supplier issues Consider the competitive environment Design The Manufacturing System Identify the customer base and product range Identify takt time & its range Apply axiomatic design axiomatic Apply to create the basic factory design to create system factory the basic system Eliminate nonessential infrastructure and layers above the factory floor Establish Flow Establish Flow Within Cells Within Cells Form cells based on takt time Define standard work content for each operation to be < takt time Separate worker from machine (jidoka) Develop quick setups & standard WIP (SMED) Standardize operations Establish Pull Establish Pull Between Cells Between Cells Design an information system to produce only the products required by the downstream cells Incorporate takt time to drive flows Institute leveled production (heijunka) Use visual control systems Implement total productive maintenance Strive For Perfection Institute kaizen & institutionalize 5Ss throughout organization Transfer ownership of all processes to work force Push lean down to suppliers Integrate product development Reduce people at all levels in the organization Manufacturing as a Competitive Weapon
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A TPS Glossary
Hot Button Excursions
All activities must support the goal of shortening the time it All activities must support the goal of shortening the time it takes to convert customer orders into deliveries. Toyota takes to convert customer orders into deliveries. Toyota Motor Corporation, 1992 Motor Corporation, 1992 Develop A Lean Strategy Create a a sense of urgency Create sense of urgency Throughoutthe enterprise, Throughout the enterprise, sell lean/TPS as the solution sell lean/TPS as the solution Hire a sensei & retain design talent Establish targets Resolvehow to maintain Resolve how to maintain mutual trust while reducing mutual trust while people reducing people Give preliminary thought to supplier issues Consider the competitive environment Design The Manufacturing System Identify the customer base and product range Identify takt time & its range Apply axiomatic design principles Apply axiomatic to create the basic design to create factory system the basic factory system Eliminate nonessential infrastructure and layers above the factory floor Establish Flow Within Cells Form cells based on takt time Define standard work content for each operation to be < takt time Separate worker from machine (jidoka) Develop quick setups & standard WIP (SMED) Standardize operations Establish Pull Between Cells Design an information system to produce only the products required by the downstream cells Incorporate takt time to drive flows Institute leveled production (heijunka) Use visual control systems Implement total productive maintenance Strive For Perfection Institute kaizen & institutionalize 5Ss throughout organization Transfer Transfer ownership of all ownership of processes to work all processes to force force work Push lean down to suppliers Integrateproduct Integrate product development development Reduce people at all levels in the organization Manufacturing as a Competitive Weapon
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A TPS Glossary Industrial Blitzkrieg
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We strive continuously to find and implement ways to shorten that (order-to-delivery) sequence and to make it flow even more smoothly. A smooth flow of production and continuing improvements can support tremendous gains in productivity and product quality. Toyota Motor Corporation Success in war depends on the golden rules of war: Speed, simplicity, and boldness. Patton
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We strive continuously to find and implement ways to shorten that (order-to-delivery) sequence and to make it flow even more smoothly. A smooth flow of production and continuing improvements can support tremendous gains in productivity and product quality. Toyota Motor Corporation Success in war depends on the golden rules of war: Speed, simplicity, and boldness. Patton
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The End
Foundations:
Zen and the TPS The Toyota Production System follows The Tao (The Way), the ancient Eastern concept of harmony, flow, and power
Home Dr. C. W. Richards 1/12/99
A TPS Glossary
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Create a Sense of Urgency

Create a Sense of Urgency. title of a chapter in Tom Peters Thriving on Chaos Companies that are making even a modest profit never use the Toyota Production SystemCompanies that are doing fairly well become selective (i.e., in what measures they are willing to take)Taiichi Ohno Only the Paranoid SurviveTitle of Andy Groves (Chairman of Intel) book Windows (and Microsoft) can be replacedBill Gates
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Eliminating Non-Essential Layers

Question: Who were the people in those six management layers Mike Walsh eliminated? Answer: The railroad's (and the nation's) best and brightest. (Tom Peters, Crazy Times Call for Crazy Organizations, p. 33, refering to Union Pacific and its president, the late Michael Walsh) Neutron Jack nickname for GE Chairman John E. Welch. Early in his tenure as chairman, he had eliminated so many layers and positions that people said the place looked like it had been hit by a neutron bomb - the buildings were standing but the people were gone. Excessive layers are: expensive, slow, and rob subordinates of initiative. With one-third the volume and three times the variety, the Japanese company has only one-eighteenth the number of overhead employees. (Stalk & Hout, 53) Elimination of these layers gives an immediate boost to your efforts to create a sense of urgency. Ideally, this should done in one fell swoop, before other improvements are well underway. Otherwise, you may be seen as eliminating people as a result of improvements. Back
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Maintaining Mutual Trust

The most important factor is maintaining a relationship of trust between labor and managementShigeo Shingo If you dont trust the people, you make them untrustworthyTao Te Ching. Implies that the company system needs to reinforce improvements, including cost savings: Need to reward people for reducing the number of people at all levels of the organization. Toyota has created a way to do this. For example, when a team reduces the number of people it needs, the top member of that team is removed and promoted or sent for special training, etc.
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Selling theTPS
The message: As of this writing (1998), the TPS is the only system that can make major improvements in throughput time and cost and quality and flexibility, simultaneously The TPS is the only production system with the stated goal of both reducing costs and increasing sales Sales strategy:
If your employees dont have an opportunity to test your thinking in live If your employees dont have an opportunity to test your thinking in live sessions or electronically, your message will seem like so much hot air sessions or electronically, your message will seem like so much hot air Resist the temptation to do whats easy here. Communicating strategic Resist the temptation to do whats easy here. Communicating strategic change in an interactive, exposed fashion is not easy. But it is absolutely change in an interactive, exposed fashion is not easy. But it is absolutely necessary. (Andy Grove, Paranoid, 157.) necessary. (Andy Grove, Paranoid, 157.)
Back
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Transferring Ownership
Writing the standard worksheet yourselftitle of a section in Ohnos book An especially important aspect of standardized work at Toyota is that the employees who implement its guidelines are the same people who establish those guidelinesTMC, Toyota Production System, p. 40 Experience has proven that the more authority employees have to manage their own work, the more inclined they are to pursue improvements in that workibid, p. 7
Back
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Axiomatic Design I
Based on the decomposition of the TPS by Professor David Cochran of MIT
It all starts with our understanding of what the customer will buy (wants) Wants define functional requirements (FR)the business objectives and whatswhich are then satisfied by design parameters (DP), the hows. Rule: one DP for each FR Two major axioms:
Independence: Strive for an uncoupled design (maintain independence in the design matrix), which 1) minimizes the opportunities for unexpected system behavior and 2) eliminates need for the extensive optimization required by coupled designs Information: roughly, minimize the information content.
AD II Dr. C. W. Richards 1/12/99
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Axiomatic Design II
Using the axioms, one can develop a production system design hierarchy that proceeds down several levels to the actual machine and operation design The Toyota Production System guides the decomposition and provides the DPs. For example, the following are meant to satisfy the high level FR, Increase Sales Revenue:
Mass Production DP: Maximize Production Output Lean DP: Maximize Customer Satisfaction
AD I Dr. C. W. Richards 1/12/99 Why AD
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Why Axiomatic Design?

Using axiomatic design we can create a topdown blueprint for the factory, including
cell layouts (number, composition, arrangement) integration of subassembly flows into final assembly information systems to link components Most important, when the components are completed Most important, when the components are completed and linked, we can be confident that they will work and linked, we can be confident that they will work together harmoniously to produce our products at the together harmoniously to produce our products at the rate we specified and reap the benefits of the TPS. rate we specified and reap the benefits of the TPS.
AD II Dr. C. W. Richards 1/12/99
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Toyotas own development system is matched to the TPS. It is Toyotas own development system is matched to the TPS. It is not aacase of removing non-value-added activities from aa not case of removing non-value-added activities from conventional design process.* conventional design process.*
Toyota uses a relatively unstructured development process: its multidisciplinary teams are neither collocated nor dedicated While conventional concurrent engineering (CE) reduces the number of prototypes, Toyotas suppliers seem to multiply prototypes, to an apparently absurd degree While in most cases, CE seeks to freeze specifications quickly, Toyotas engineers and managers try to delay decisions and provide suppliers with hard specifications very late in the process. Toyotas development process seems to require about 50% fewer person-years than Chryslers LH.
* From The Second Toyota Paradox: How Delaying Decisions Can Make Better Cars Faster, by Allen Ward, Jeffrey K. Liker, John J. Christiano, and Durward K. Sobek II, Sloan Management Review, Spring 1995, pp. 43ff. Dr. C. W. Richards 1/12/99
Back
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Zen and the Art of Implementing the TPS

As educated Japanese, the creators of the TPS were followers of the philosophy/religion known in the West as Zen The fundamental ideas of the TPS have immediate roots in Zen/Taoism e.g.,
Total elimination of waste: When people practice an art, they always think they will have another chance to try again, so they are not aware of the slackness in their minds at the moment. Each time, determine that you will settle the matter with this one arrow. The Japanese Zen classic, Tsurezuregusa Flow: Zen Master Takuans instructions to the martial artist Yagyu Munenori all hinge on the central principle of fluidity Thomas Cleary, The Japanese Art of War. TPM: He who excels at resolving difficulties does so before they arise.Tu Mu, canonical commentator on the Taoist classic, Sun Tzus Art of War
We seek the Way and study it devotedly.Taiichi Ohno

The End Dr. C. W. Richards 1/12/99 More Zen
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Implications
You dont need to be a Zen master to implement TPS. * However, The whole of the TPS reflects a coherent philosophy about the way the world works. So, pieces of the TPS taken out of context may not produce the results we want. For example, kanban are generally considered just a control mechanism. But compare: The paperwork is minimal. The efficiency is maximal. And the employees themselves are completely in charge. Toyota Motor Corporation, Toyota Production System, 1992, p. 29 The Master does not talk, she acts. When her work is done, the people say, Amazing: We did it, all by ourselves! Tao Te Ching, c. 500 B.C., 17.
*On the other hand, it couldnt hurt
Dr. C. W. Richards 1/12/99 The End
Zen/ TPS
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Zen and Taoism in The TPS

Although this presentation tends to use the labels interchangeably, Zen and Taoism are actually different things (with Zen borrowing heavily from the indigenous Taoism). Zen is a school of Buddhismoriginally from Indiathat arose in China in the 7th Century A.D. and came to Japan starting in the 13th Century. Among its fundamental ideas, as applied to the TPS, are the mind that does not stick, objective perception of the world, and implicit communication among individuals. The samurai Miyamoto Musashis classic, Book of Five Rings (1645 A.D.), which is widely studied in Japanese business schools, embodies a Zen approach to competition. Taoism is an ancient Chinese philosophy dating back (according to legend) to the Yellow Emperor in the 3rd millennium B.C. It stresses harmony and flow and recommends a minimalist approach to management. The ideal Taoist doctor has no reputation as a healer because there is no disease in his or her area. Perhaps the best known Taoist texts to westerners are the Tao Te Ching, c. 500 B.C., and Sun Tzus Art of War, from c. 400 B.C. More info? The introductions to Thomas Clearys The Japanese Art of War and his translation of Sun Tzus Art of War (both from Shambhala Press), and, of course, Robert M. Pirsigs Zen and the Art of Motorcycle Maintenance and Lila. Back
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Cost vs. Vitality & Growth

As you reduce costs, you create options:
Lower prices, which often lead to higher market share More R & D Growth through acquisitions or diversification Higher investment in training and equipment Greater profitability, which rewards shareholders, including employees
Options give the company the means to survive on its own terms, even in slow economic times, and grow as the economy recovers
Back
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A TPS Glossary
5Ssfive Japanese words, all beginning with an s sound, which establish the cultural environment for continuous improvement Cycle timefor a machine or cell, time from completion of one item to completion of the next. Cycle times must harmonize with takt time (which defines balanced production). Often confused with throughput time, which is the length of time a part is in the cell (also, factory throughput time, from the start of production to delivery). Heijunka(fm. Japanese*, smoothing, making level) production leveling. Involves producing in sequences like abacababac rather than aaaaabbbcc (where a, b, and c are models or products). Solves problems inherent in the TPS that can cause queuing and line stoppages. Jidoka(fm. Japanese, automation with human characteristics) separation of worker and machine. Implies that machines will stop if an error occurs. Alternative is people watching machines work. Allows manning of cell to vary with demand. Encourages teamwork and facilitates kaizen.
*Many thanks to Lennart Kampman of the Copenhagen Business School for his translations and interpretations.
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A TPS Glossary, II
Just-in-timeIn a flow process, the right parts needed in assembly reach the assembly line at the time they are needed and only in the amount needed. (Ohno, p. 4). As Ohno explains, this does not imply that the parts must arrive exactly when needed. Instead, a pull (kanban) system is used. Toyota explains that the goal of JIT is to translate each order into a delivery of a finished, quality vehicle as quickly and efficiently as possible. Kaizen(fm. Japanese kai, change, modify, improve and zen, goodness, virtue - not the zen in Zen, which comes from the original Chinese, Chan) continuous improvement. Activities carried out by the members of a cell or other unit in order to improve production within that unit. May involve work process or machines. Ultimate goal is to shorten throughput times and increase the ratio of processing (value added) time to total time, leading to an eventual reduction in manpower. Other improvement efforts are kaikaku, or radical change, carried out under the direction of sensei.
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A TPS Glossary, III

Kanban(fm. Japanese for signboard) Primary means for controlling production in the TPS. Kanban are usually cards that the downstream cells take to the upstream cells in order to withdraw (pull) parts. The upstream cell then uses the kanban as shop orders to replenish just the parts taken. Lean productionproducing with a shorter delivery span, at lower cost, with greater quality, and with more flexibility (variety on the line; quicker introduction of new models) Senseiteacher, commonly of the martial arts; used to denote an expert with a track record of implementing the TPS SMEDsingle minute exchange of dies. Very rapid set-ups so that heijunka sequences can be produced economically
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A TPS Glossary, IV
Takt time(fm. the German for meter or measure, as in music) pace of customer demand. Time to produce one item sold, e.g., a car every 2 minutes or an aircraft every 8 days. Cycle times of all components of the factory must harmonize with takt time (axiomatic design ensures this), or shortages & build up of inventory will occur. Toyota Production System (TPS)only known example of a lean production system. Pillars of the TPS are just-in-time (pull) and jidoka. These rest on leveled (heijunka) & balanced production, and lead time reduction, which depends on reducing set-up times to under 10 minutes (ideally less than 1). The basic form evolved at Toyota from 1948 to 1973, largely under the guidance of Taiichi Ohno.
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A TPS Glossary, V
Total Productive Maintenanceensuring that machines are 100% available during the production period. Generally requires operating machines at well under full utilization to allow time for maintenance & modification Value addeda term used by Toyota only in connection with kaizen, where it is generally synonymous with processing (see Ohno, p. 57) Visual controlmanagement by sight. The TPS arranges the factory so that abnormalities stand out and so can (and will) be eliminated.
More info? Most of these terms are well defined and illustrated in Lean Thinking, by James P. Womack and Daniel T. Jones (New York: Simon & Schuster, 1996)
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Whats So Great About Toyota?

Spurred by the mid-1970s recession, other Japanese companies began installing the TPS, achieving gains in labor productivity in the 150% range, and increasing net asset productivity by an average 50% (Stalk and Hout, Competing Against Time, 152) By the mid-1980s, the International Motor Vehicle Program at MIT documented that Toyota was building cars in roughly half the time, at roughly 2/3 the manhours, and with one-fifth the defects. IMVP researchers coined the phrase lean production to describe the TPS and compiled their findings in the book The Machine that Changed the World. Further, it could develop cars in half the time required in Europe or Detroit. Companies using the TPS consistently provide fresher product offerings that have a higher degree of technological sophistication. (Stalk & Hout, 30) Despite the current Asian economic troubles, which caused a 14.4% drop in Toyotas Japanese car sales, its automobile operations actually increased in profitability, and continued to gain market against rivals in Back North America (New York Times, November 21, 1998)
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Slide Show/ View Show

Hot buttons generally look like this. Click to jump.

(These buttons are just examples)

Dr. C. W. Richards 1/12/99

John Boyd and the Toyota Production System

Manufacturing as a Competitive Weapon

Toyota Motor Company, Toyota Production System, p. 2

Dr. C. W. Richards 1/12/99

Dr. C. W. Richards 1/12/99

Cost reduction is the goal

In the short term, you may need to

Manufacturing as a Competitive Weapon

Resolve how to maintain mutual trust while reducing people

Implementing the TPS

(Hit any key/left mouse button to continue)

Hot Button Excursions

A TPS Glossary Industrial Blitzkrieg

Dr. C. W. Richards 1/12/99

Create a Sense of Urgency

Eliminating Non-Essential Layers

Maintaining Mutual Trust

Implementing the TPS

Why Axiomatic Design?

Implementing the TPS

Zen and the Art of Implementing the TPS

We seek the Way and study it devotedly.Taiichi Ohno

Zen and Taoism in The TPS

Cost vs. Vitality & Growth

Dr. C. W. Richards 1/12/99

A TPS Glossary, III

Dr. C. W. Richards 1/12/99

Dr. C. W. Richards 1/12/99

Dr. C. W. Richards 1/12/99

Whats So Great About Toyota?

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