TOYOTA…

• TOYOTA MOTOR CORPORATION :

Japanese multinational automotive
manufacturer headquartered in Toyota, Aichi,
Japan
• FOUNDER : KIICHIRO TOYODA
• HEADQUARTERS : TOYOTA, AICHI, JAPAN
• DATE FOUNDED : August 28, 1937
• Number of employees : 364,445
(as of March31, 2017)
 TILL 2004

CURRENT
TOYOTA : HEADQUARTERS
TOYOTA, AICHI PREFECTURE,JAPAN
Most valuable brands within the automotive sector worldwide
as of 2017, by brand value (in billion U.S. Dollars)
 History From the Very Beginning ......
• Began as a textile company in 1926(Toyoda
Automatic Loom Works)

• In 1933 an automobile department was

established within Toyoda Automatic Loom
Works.

• In 1937 Toyota Motor Co. was established as

an independent company by Kiichiro
“MR. SAKICHI”
Invented Japan's first power
loom

KIICHIRO TOYODA
TOYOTA'S FOUNDER
• Toyota has become the largest vehicle
manufacturer in Japan with over 40% market
share

• Toyota began to make inroads into foreign

markets in the late 1950s.

• The company was renamed as The Toyota

Motor Co. in 1937.
In 1951 Toyota first introduced the now world famous
Land Cruiser model

Toyota focused on the quality of vehicles and gave

importance to keep the production costs as low as
possible.
• One of the greatest legacies left by Kiichiro
Toyoda:
The Toyota Production System.
Kiichiro's "just- in-time" philosophy -
producing only precise quantities of already
ordered items with the absolute minimum of
waste - was a key factor in the system's
development.
• Progressively, the Toyota Production System
began to be adopted by the automotive
industry across the world.
 TOYOTA PRODUCTION SYSTEM
• Toyota Production System (TPS) is one of the
most productive, efficient and beautiful
management systems ever designed.
• It is a socio technical system developed by
Toyota which integrates theory with practice.
• TPS is one of the most successful production
system (or methodology).
 THE MAIN OBJECTIVES OF THE TPS
• 1) To reduce waste

• 2) To have minimal inventory through

JIT(just-in-time)

• 3) To have lean manufacturing system

TOYOTA PRODUCTION
SYSTEM HOUSE
• Just In Time (JIT) -
Making only what is needed, when it's
needed, and only as much as is needed.
• Jidoka -
Building quality into the production system
and ensuring damaged parts do not proceed
to the next stage.
TOYOTA’S OPERATIONS
MANAGEMENT
 DESIGN OF GOODS AND SERVICES
The operational process of Toyota
The operational processes of Toyota can be
categorized into four categories : 4 Vs

VOLUME OF OUTPUT

VARIETY

VARIATION

VISIBILITY
 Quality Management
• Toyota adopts a flexible capacity production
approach in its TPS to achieve efficiency across
its supply chain.
• This is considered to be a global methodology
benchmark of efficiency.
• This method is based on the concepts of
Jidoka and JIT.
• Both are focused upon meeting demand
through perfect quality while lowering
inventories and waste elimination.
• Toyota uses TQM for improving the quality of
work and processes and to support people
working for the organization
• Toyota’s quality control in production ensures
that right materials and parts are used and also
ensures that parts are fitted with precision and
accuracy.
• This effort is combined with many other
rigorous inspections which are performed by
team members in the production process.
Experiencing extreme heat and cold in a day

REFREEZING INSOLATION TEST

 Collision tests
Vehicle Inspection Under The
Glass Pit Dummy Setting
 For every road in the world
Flooded Road Driving Test Rubblestone Road Test
 Process and Capacity Design
OPERATION DESIGN
PROCESS ANALYSIS
Toyota uses segmented assembly lines with one
piece flow production workstations and as a
result delivery times have been shortened.
LAYOUT DESIGN
Work cell layout is used by Toyota for production
efficiency. They focus on assembling of parts so
that the layout assembles fabricated parts
together suing many different machines that are
arranged around the production line).
 CAPACITY PLANNING
• Capacity means ability to fulfill the demand of
customers
• Toyota set its production capacity at the
minimum demand levels and meet the
increase in demand through overtime and
through the use of excess machine capacity
and hiring of temporary workers
 LOCATION STRATEGY OF TOYOTA
• Toyota is a global producer of automobiles
and their components.
• Toyota has positioned itself at the most
central locations .
• In next three years Toyota Company aims to
achieve the 35% of market share.
• Toyota uses global, regional and local
strategies. For example, the company has
localized manufacturing plants in the United
States, China and Thailand, as well as official
dealerships in all markets except Mongolia
and some countries in the Middle East and
Africa.
• Thus, Toyota addresses this strategic decision
area of operations and management through
a mixed set of strategies
• Toyota's overseas business has evolved
through three stages:
 efficient global production and supply.
increasing investment so as to boost
production capacity.

They began production of the Fortuna in India

in 2009, followed by the diesel Corolla and the
Etios in 2010, and expanded investment in
factories accordingly.
• In Brazil, production of the Corolla FFV
began in 2007, and sales have steadily
increased since then.

• As a result of such efforts, production

capacity in emerging markets is forecast to
reach approximately 3.1 million vehicles in
2013
 Localization Initiatives
• Toyota believes that ensuring cost
competitiveness by achieving thorough
localization is necessary to making further
progress in intra- and extra-regional exports.
Therefore they are maximizing local R&D
functions, and seek to achieve local/ regional
procurement rates of 100% at the earliest
possible stage.
 LAYOUT DESIGNB AND STRATAGIES
OLD STANDARD LAYOUT FOR TOYOTA PLANTS
• Traditionally, Toyota assembly lines consisted of three to four sub-
lines, each about 300 meters in length. The trim line is for the
installation of electrical parts. In the chassis line, the drive train,
motor, exhaust, etc., are added. During the final line, bumpers,
window glass, wheels, etc., are attached.
LAYOUT EXPERIMENTS AT THE KYUSHU PLANT 1992
• For the new Kyushu plant constructed in 1992, this division was
increased significantly. The line was split into a total of eleven
self-contained subsections. Each section is about 100 meters long.
 Changes in the Motomachi Plant
1994
• In 1994, the Motomachi line was also renovated. While not as radical
as in Kyushu, some of the longer segments were split into smaller
parts (one trim, two chassis, two final). Below is the 1994 layout of
the Motomachi line:
 New Layout Motomachi Plant
• Below is the current (2014) layout of the Motomachi
plant. Compared to the previous layout from 1994, this
one contains many more individual segments divided by
small buffer stocks (green boxes).

• With eight line segments, the plant still has less than
Kyushu in 1992 (eleven segments), but more than in the
1994 renovation (six segments) and much more than
before 1994 (three to four segments).

• Each small blue box below represents one station along

the line or, in most cases, approximately one worker (not
counting team and group leaders).
• The exact number of people in the line depends
also on the customer demand. One of the methods
to adjust the output of the line is by adding or
removing workers.
• When I observed the line, I measured a cycle time
of 2:20 minutes per vehicle. The highly automated
welding line was much faster, being able to
produce one chassis in just over one minute.
• Interestingly, rather than cramming the line
full with chassis (the Western way), Toyota
used a pull system.

• New chassis were released only at the speed

at which the assembly line could take them,
hence there were always idle stations without
any chassis in the welding line.
CURRENT LAYOUT OF TOYOTA
MOTOMACHI PLANT
 JOB DESIGN AND HUMAN
JOB DESIGN
RESOURCE
• Job Design is the process of structuring work and designing work
for the specific job in Toyota. Job design gives the answers to basic
questions of how the job is performed, who is to perform.

• In Toyota's working environment most jobs have high job scope. In

a job with less scope, jobholder has to performed few tasks.

• Job depth refers to the freedom of the job holders to plan and
organize their own work.
How Toyota can maintain employee's satisfaction
and low employee's turnover

There are different techniques which are used to make

employee satisfied and ultimately low employee's
turnover which are:

• HR Development

• Career Development

• Motivation
 HR DEVELOPMENT
• Skills and knowledge of staff is crucial for Toyota's
innovation process. Most of the innovation ideas
are come through the employees of the Toyota
Motor.
• But the time is changing so quickly that every
technology and change becomes obsolete in no
time.
• It is important for the Toyota that its employees
remain up-to-date with the knowledge and
changes to compete in the industry
 CAREER DEVELOPMENT
• It is the duty of the Toyota's management to
provide the growth opportunities to its
employees. It is also the responsibility of the
Toyota's employee himself to think about his
career development.
• Toyota also helps, guide and provides
opportunities to its employees.
 MOTIVATION
• Motivation is a feeling of satisfaction and
commitment towards its goals and objectives.
• This is an internal psychological state which
determines the action of the person. Toyota
enhances its employee's motivation through
two basic ways:
1. Financial: salary system, bonuses, and
allowances etc.
2. Non- financial: honors, self respect
 SUPPLY CHAIN MANAGEMENT
• Supply-chain management at Toyota is an element of
company’s operations strategy which is thoroughly
based on the Toyota Production System (TPS).
• It was developed in the 1940’s by Shigeo Shingo and
Taiichi Ohno.
• The principles of which is expressed by the term of
“lean manufacturing”
• Lean Concept” Lean philosophy aims to elimination of
all waste, superior customer care and Lean is based on
pull system where the elimination of waste seen as a
primary objective.
LEAN MANUFACTURING
The concept of lean manufacturing originates in the Toyota Motor
Corporations; resulted from scarcity of resources and intense
domestic competition in automobile market in Japan.
The lean philosophy incorporated the JIT production system and
the Kanban method of pull production
• Studies show that lean manufacturing reduces
human effort by 50% along with the manufacturing
space, tool inventory and improved financial
performance

• The lean production system requires rapid flows of

information along the value chain.

• Toyota uses the Kanban system to achieve this

along with computerised information that can be
exchanged with the suppliers to reduce lead times
 KAIZEN
• A central tenet of lean production is the concept of
kaizen that is continuous improvement in the
production process
• The concept of Kaizen seeks to remove all activities
that do not add value, referred to as “waste” or
“muda” in Japanese.
• The concept of Kaizen ensures that all employees are
quality conscious and focuses on quick problem
solving.
• The Kaizen empowers the employees and seeks new
methods of work.
• All employees have are trained to develop the
knowledge and skills needed for quality production
Toyota’s seven major types of non-value-adding waste in
business and manufacturing business is shown by Liker
(2004, pp.28-29) in he suggests eighth’s type as well
 THE SEVEN WASTE
1. Overproduction: Producing more than the
demand for customers resulting in unnecessary
inventory, handling, paperwork, and warehouse
space.
2. Waiting Time: Operators and machines waiting
for parts or work to arrive from suppliers or other
operations.
3. Transportation: Double or triple movement of
materials due to poor layouts, lack of
coordination and workplace organization.
4. Processing: Poor design or inadequate
maintenance or processes requiring additional
labour or machine time.
5. Inventory: Excess inventory due to large lot
sizes, obsolete items, poor forecasts or
improper production planning.
6. Motion: Wasted movements of people or
extra walking to get materials.
7. Defects: Use of materials, labour and
capacity for production of defects, sorting
our bad parts or warranty costs with
customers.
 OBJECTIVES OF LEAN ARE:
• To have only the required inventory when needed
• To improve quality to zero defects
• To reduce lead times by reducing setup times, queue
lengths, and lot sizes.
• To incrementally revise the operations themselves
• To accomplish these things at minimum cost”.
• Identifying and eliminating non-value-adding activities,
• Employing teams of multi-skilled workers,
• Using highly flexible, automated machines”
• To do more & more with less & less – Less men, less
equipment, less time, less space, less material
 DRIVERS OF SUPPLY CHAIN
FACILITY
• Vehicles coming out of assembly line are moved into
warehouse called “Marshaling yard” .
• Fitting accessories, price tag and final quality assurance
takes place here.
INVENTORY:
• Just-in – time based inventory method.
• Pull based system and kanban methods are followed.
TRANSPORT:
Majority of transport of raw material through truck ,
since suppliers stay close to plant.
Finished products transported through truck or rail for
transport within the country and ships for export.
Road transport is provided by third party logistic
providers.

INFORMATION:
Parts and master database is maintained for part
name, supplier, lot size information. 13 week
forecasting is given to suppliers to provide them with
guidance.
SUPPLY CHAIN OVERVIEW
SUPPLIERS :
• Suppliers provide thousands of parts and components that go into the
vehicle.
• Toyota organized its suppliers into functional tiers.
• The first tier suppliers worked together in a product development team
and the second tier suppliers made individual parts.
• The first tier suppliers were highly co-operative. There is a high degree
of co-operation and information exchange between them.
• Since Toyota relies on JIT it has fewer but reliable tier 1 suppliers. Eg :
Denso, Bridgestone etc

INBOUND LOGISTICS :
• Company establish partnership with third party logistic providers
• Company organizes many of its suppliers into clusters based on
geographic location.
• Parts are picked up from those suppliers by trucks on a milk route and
delivered to regional cross dock
• At cross dock, parts are unloaded and staged for each
assembly plant and then loaded to trucks which take
parts directly to each plant.
• After the parts are unloaded, the truck is reloaded
with the corresponding empty returnable
containers.
• Returnable containers flow in reverse route

INBOUND LOGISTICS PLANNING –STEPS

PRODUCTION
• Vehicles are produced at the final assembly plant
from the parts provided by hundreds of suppliers.
• The plant is subdivided into shops. The vehicle is born
in the body shop where the frame and body are
formed.
• The body parts are stamped in the stamping shop by
presses.
• The body shop is where numerous robots are used to
weld the body parts together.
• After body being assembled, it moves to paint shop
• After painting ,it moves to final line where supplier
parts are installed to make finished vehicle.
• Final Inspection is done and moved to yard.
 Outbound logistics

Dealers :
• responsible for selling the vehicles
produced by the manufacturer to the
retail customers.
• Toyota s sales model is designed so
that a high percentage of vehicles is
sold from a relatively low level of dealer
stock.
 JIDOKA(MEANING ‘AUTONOMATION’)-
• Jidoka (meaning ‘autonomation’)-a term used in Lean
manufacturing meaning "automation with a human touch."
• Toyota has deployed the “Semi Automation” Jidoka that
maintains a balance between the machines and humans.
• The automation in this production system is in line complies
with the continuous improvement paradigm that constantly
identities and eliminates any problems in the production
process.
• This is more economical and makes the production process,
more flexible.
• The lean approach for automation includes low cost
equipment and tools that are reused for new models
 JUST-IN-TIME (JIT) INVENTORY
MANAGEMENT
• Just In Time is a management strategy based
on planned elimination of all waste and
continuous improvement of productivity. That
is “the right material, at the right time, at
the right place, and in the exact amount”.
• A production process is said to be Just-In-
Time when it uses the raw materials to make
the good or service after the product has been
ordered.
• Actually it is pioneered by Toyota. In fact, a
Toyota engineer coined the term itself.
 JUST-IN-TIME BENEFITS
• This strategy helps companies lower their inventory carrying
costs, increase efficiency and decrease waste.
• Employees who possess multiple skills are utilized more
efficiently.
• Total Quality Management, elimination of waste,
• Reducing inventory through involving suppliers in planning
process,
• continuous improvement, improving machinery and focusing on
co-operation.
• The JIT systems become more efficient and used the Kanban as
an information exchange tool for different production lines
• In 1959 Toyota dramatically increased its productivity and
produced 100,000 cars for the first time
 KANBAN
• Kanban “sign board" or “bill board," is a concept
related to lean and just in time (JIT) production.
• Kanban is not an inventory control system; it is a
scheduling system that helps determine what to
produce, when to produce it, and how much to
produce.
• The need to maintain a high rate of improvement
led Toyota to devise the Kanban system.
• Kanban became an effective tool to support the
running of the production system as a whole.
 Kanban System
• The Kanban system uses simple cards or signals to
strictly control production .Kanban each part travels
with a card.
• New stock will only be required when that part has
been used, the card is removed, using signals to re-
stock this part.
• Kanban is well integrated in Toyota’s production
system, because in Toyota there are limited number of
parts with stable demand for them.
• The Kanban system ensues that there is no waste of
overproduction and the inventory costs are reduced
• https://www.youtube.com/watch?v=FkVJ5no4
UlA
 TOYOTA PRODUCTION SCHEDULING
• The production schedule is created once a month
from the sales order and forecast.
• sales divisions submit a rolling three-month order
and forecast each month.
• The Production Control division must create a daily
production plan to execute the agreed-upon
schedule.
 SCHEDULING PROCESS
• The first step in creating the production
schedule is to use the sales order and forecast
data to create individual records for each
vehicle and assign a unique reference number.
• This step is necessary because each vehicle
has to be assigned to a production slot.
• The Vehicle Identification Number (VIN) can
be used to identify a unique vehicle, the VIN is
not assigned until the vehicle is started in the
body shop.
• Therefore, a Unique Reference Number (URN)
is assigned to identify vehicles prior to
production line-off.
 HEIJUNKA (OR SMOOTHING)

• Heijunka (or smoothing) is a technique to

avoid supply chain congestion, workload
imbalance, inventory batching, and the like.
• A Heijunka process is used to schedule the
vehicles by day, by line, by plant
• Some sales orders have specific build dates
requested, so those orders need to be scheduled
first
• The remaining orders are grouped by build
combinations and spread throughout the month so
that the number of identical orders will be evenly
distributed across the month.
• The destination of vehicles is also considered as one
of the heijunka factors because it is important to
have an even flow of vehicles to each region
• The heijunka process is completed, then each order
is assigned the scheduled production day.
• This production schedule is then sent back to the
sales division to advise its members of each vehicle’s
Unique Reference Number.
 TOTAL PRODUCTIVE MAINTENANCE
• Total Productive Maintenance A main pillar of
the Toyota Production System (TPS) is Total
Productive Maintenance (TPM).
• The essential strategy is to eliminate the
potential of a problem.
• That is, eliminate a problem before it occurs.
 TOTAL PRODUCTIVE MAINTENANCE
Basic Elements:
1. Maximizes equipment effectiveness.
2. Establishes a through system of preventative
maintenance (PM) for the equipment`s entire life
span.
3. Implemented by various departments (engineering,
operations, maintenance).
4. Involves every single employee- from top
management to workers on the floor.
5. Based on the promotion of productive maintenance
through workforce motivation management via
autonomous small group activities.
 THE GOAL OF TOTAL PRODUCTIVE
MAINTENANCE
• To achieve overall equipment effectiveness,
TPM works to eliminate the six big losses that
are formidable obstacles to equipment
effectiveness:
• DOWN TIME:
1. Equipment failure - from breakdowns.
2. Setup and adjustment - from exchange of die
in injection molding machines, etc.
SPEED LOSSES:
3. Idling and minor stoppages - due to the
abnormal operation of sensors, blockage of work,
etc.
4. Reduced speed - due to discrepancies between
designed and actual speed of equipment.
Defects:
5. Process defects - due to scraps and quality
defects to be repaired.
6. Reduced yield - from machine start-up to
production stability.