TOYOTA MANUFACTURING APPROACH Company Profile: The automobile leader from Japan, Toyota Motor Corporation, manufactures a diverse

line-up of quality vehicles all over the globe. The company was founded by Sakichi Toyoda on August 28, 1937 and is currently headed by President & Representative Director, Akio Toyoda. As an innovative leader, Toyota is wellknown for its management philosophy and the world's first mass-market hybrids. Toyota has 51 bases in 26 different countries and regions. In addition, there are design and R&D bases in nine locations overseas, showing that from development and design to production, as well as sales and service, Toyota has now achieved consistent globalization and localization. Since its foundation, Toyota has been using its Guiding Principles to produce reliable vehicles and sustainable development of society by employing innovative and high quality products and services. Toyotas Manufacturing Philosophy The Toyota Way Toyotas Manufacturing Philosophy- The Toyota Way, is supported by two main pillars: "Continuous Improvement" and "Respect for People". Toyota is never satisfied with where it is and always works to improve its business by putting forward new ideas and working to the best of its abilities. It respects all Toyota stakeholders, and believes the success of its business is created by individual effort and good teamwork. Toyota is aiming for Global Quality Assurance which requires that no matter where Toyota vehicles are made, they must have the same high level of quality. Toyota doesn't put a label on vehicles which says "Made in The USA" or "Made in Japan", but instead opts for one label for all: "Made by TOYOTA." It shows that Toyota spreads its manufacturing philosophy to all of its overseas bases. Toyota believes that the way to achieve quality assurance and to spread the "Toyota Way" is by educating people. Toyota Production System The Toyota Production System (TPS), based on the complete elimination of all waste, imbues all aspects of production in pursuit of the most efficient methods. Toyotas vehicle production system is referred as a lean manufacturing system or a Just-inTime (JIT) system. This production control system has been established based on many years of continuous improvements, with the objective of making the vehicles ordered by customers in the quickest and most efficient way, in order to deliver the vehicles as quickly as possible. The Toyota Production System (TPS) was established based on two concepts: The first is called "jidoka" (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. Jidoka: Quality must be built in during the manufacturing process 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. 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. Since a machine automatically stops when processing is completed or when a problem arises and is communicated via 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. Just-in-Time and Kanban System: Just-in-Time means making only what is needed, when it is needed, and in the amount needed. For example, to efficiently produce a large number of automobiles, which can consist of around 30,000 parts, it is necessary to create a detailed production plan that includes parts procurement. Supplying "what is needed, when it is needed, and in the amount needed" according to this production plan can eliminate waste, inconsistencies, and unreasonable requirements, resulting in improved productivity. Kanban System: Toyota Production System has employed a unique production control method called the "kanban system". The kanban system has also been called the "Supermarket method" because the idea behind it was borrowed from supermarkets. Such mass merchandizing stores use product control cards upon which product-related information, such as a product's name, code and storage location, are entered. Because Toyota employed kanban signs for use in their production processes, the method came to be called the "kanban system." At Toyota, when a process refers to a preceding process to retrieve parts, it uses a kanban to communicate which parts have been used. By having the next process go to the preceding process to retrieve the necessary parts when they are needed and in the amount needed, it was possible to improve upon the existing inefficient production system. No longer were the preceding processes making excess parts and delivering them to the next process. Also, through continuous technological improvements, the kanban system has evolved into the "e-kanban" which is managed using IT methodologies and has increased productivity even further. Steps involved in Toyota Production System (The JIT system):

1. Product order information is communicated to the production line: To quickly incorporate the order information into the production line, the production plan is created in three phases: Monthly Production Plan: The number of vehicles to be produced (the total volume) is determined once a month. Detailed Production Plan: Details are determined four times a month based on the order received from dealers. Daily Production Plan: The daily production volume is established by incorporating final order changes. This production plan framework incorporates the latest orders into the production line.

Based on the confirmed daily production plan, the production sequence is determined to allow for the production of various vehicle series at a uniform pace throughout the day. As a result, the usage quantity of various parts is also leveled (which is the concept of heijunka sequence plan). 2. Timely Production: The process of efficiently producing vehicles with different specifications one at a time, in a timely manner while ensuring high quality vehicle production begins when the production instruction for an individual vehicle is issued to the first process step in the body plant. Toyota implements various innovative measures to efficiently and accurately produce individual vehicles with different specifications: The facility is capable of immediately accommodating vehicles with various specifications. Toyota uses welding robots that can weld several types of bodies with different shapes; and painting systems that can switch paint for individual vehicle in order to paint their bodies in different colors without creating any waste. Toyota enables its operators to correctly and smoothly assemble vehicles with different work details and assembly parts. A production instruction sheet is pasted on each vehicle and a lamp-based production instruction device, etc. are used to clearly indicate the work details and assembly parts, which allows accurate production of the vehicle according to the standard work procedure established for each process. To be able to accommodate dozens of different types of assembly parts of different vehicles with different specifications, TPS uses a system in which the assembly line is stocked with small number of all types of parts and only those parts that have been used up are replenished.

3. Replacement of parts used: Only those parts that have been used up are retrieved in a timely manner. To replenish parts that have been used up, replacement parts are retrieved without delay, using kanban cards in place of an order sheet. Method followed by TPS for retrieving parts: A parts retrieval kanban is attached to each box of parts on the assembly line. When an operator uses parts, he/she removes the parts retrieval kanban. The operator carries the parts retrieval kanban to the parts plant without delay to retrieve replacement parts.

The operator retrieves parts according to the parts retrieval kanban. When retrieving the parts, the operator attaches the parts retrieval kanban to the parts box.

4. Production of parts retrieved: This deals with efficiently producing and replenishing only those parts that have been retrieved. Using production instruction kanban card as a production instruction sheet, parts are produced without delay, replenishing the parts that have been retrieved. Steps involved are: All types of finished parts are stocked at the end of each process and a production instruction kanban is attached to each box. When the operator of the succeeding process retrieves finished parts, the production instruction kanban is removed. The production instruction kanban is returned to the parts production process without delay, and parts are produced according to the instructions therein. A production instruction kanban is attached to the box of produced parts, which is kept according to the type of parts it holds at the end of the process.

The key points in TPS for reducing finished product inventory: Parts are produced in a flow system, eliminating delays Parts are produced at a speed commensurate with the production volume In lot production processes, only the quantity of parts needed is produced, in small lots.