LEAN Principles

(Toyota Production System)

Dr. David Holman

david.holman@hof-university.de
 SCM Module Weekend detailed schedule
14:00 15:30 Supply Chain Management Principles
19.4. 15:45 17:15 BEER Game (team 6 - 10) / Self-study SCM becomes DCM (team 1-5)
17:30 19:00 Self-study SCM becomes DCM (team 6-10) / BEER Game (team 1-5)

9:00 10:00 Self-study results, NLK Game (team 1-5)/ Team Self-study_Case Study The role of waste in Inbound logistics (Team 6-10)
10:45 12:15 NLK Game (team 1-5) / Team Self-study_Case Study The role of waste in Inbound logistics (Team 6-10)
12:15 13:15 Lunch
20.4.
13:15 14:45 Team Self-study_Case Study The role of waste in Inbound logistics (Team 1-5) / Self-study results, NLK Game (Team 6-10)
15:00 16:30 Team Self-study_Case Study The role of waste in Inbound logistics_(team 1-5) / NLK Game (Team 6-10)
16:45 18:00 Preparation of self-study presentation
Systems thinking development

3
Wholeness Synthesis and Analysis in Understanding
of Wholeness
The art of doing things not only right, but also doing the right things, right.

Systems Thinking in Wholeness

Purpose
Purpose
Superior
System
(relevant
externa
environment) 3 steps 3 steps
Wholeness Wholeness
Synthesis Analysis

3D thinking Doing right things, right.

PURPOSEFUL
Mindset
Analysis Synthesis
2D thinking

Purpose
Studied
MAXIMIZATION
system Mindset
Thinking

Purpose
Inside
the Egg.

Doing things right.

4
Disconnected and integrated systems in SCM
Search a truth in thought not in books decomposing.
If you want to see the moon, you should look into the sky
not in to the splash.

Persian proverb
TPS - Toyota Production System

Mio
Sold
Cars

9,0

8,4

1930 1950 1990 2008

 ? Because
Why the it works
concept only as
of house the
? whole.
 ? Because
Why the it works
concept only as
of house the
? whole.

?
What are
Protection,
the
creates
properties
home,
of the
security, etc…
whole, the
house
? What properties and functions have entrance
door to the house ?
 ? Because
Why the it works
concept only as
of house the
? whole.

?
What are
Protection,
the
creates
properties
home,
of the
security, etc…
whole, the
house
? What properties and functions have entrance
door to the house ?
 ? Because
Why the it works
concept only as
of house the
? whole.

?
What are
Protection,
the
creates
properties
home,
of the
security, etc…
whole, the
house
? What properties and functions have entrance
door to the house ?
TPS and LEAN difference

TPS – Toyota Production System developed by Taichi Ohno (1950 – now)

LEAN – Lean thinking book by J. Womack, D. Ross, D.T. Jones (1991)

Describes TPS and analyse its productivity (comparing to other OEM):

Toyota Japan USA Europe

(average) (average) (average)

Productivity
Assembly 100 83 65 54
1st-tier suppliers 100 85 71 62
Quality (delivered defects)
Assembly (per 100 cars) 30 55 61 61
1st-tier suppliers (PPM) 5 193 263 1373
2nd-tier suppliers (PPM) 400 900 6100 4723
LEAN Principles

1. Pull - Production or delivery of resources required by final of semi-final

customer

2. One piece flow - Production or delivery of the smallest possible quantity,

ideally ONE PIECE

3. Tact - Production or delivery regular schedule

4. Zero defects - Solving the root cause of the problem instead of effect

You Tube: Four Lean Principles:

https://www.youtube.com/watch?v=wfsRAZUnonI&t=7s
 Every activity consist from 2 parts

Value added WASTE

activities

Brings value Useless activities, Obvious waste,

but necessary for needs to be
working process eliminated

Costs TIME Costs TIME

Costs Money Costs Money
NO VALUE ADDED

VALUE WASTE
What is a common share of value
added and waste activities ?

Activity, which do not bring any

value: Value added:
- Waiting, delay Activity which is customer
- Useless movement willing to pay for
- Controls, checking
- Searching, storing
- Mistakes, repairs

95% 5%
9 EXAMPLES OF WASTE IN AUTOMOTIVE
HROMADNÉ VÝROBY
Mass Suply chain management (MSCM)

Mass supply chain management

Frequency of deliveries (Max.- Min.) Weeks – days

Warehouse level (Max.-Min.) Weeks – days
Accuracy of deliveries (loading, unloading) Days
Communication Limited
Information flow Directive
Level of standardization Low
 Waste in Mass supply chain management
Waste at suppliers side:
- time of loading and unloading,
- Readiness of produced components for loading
- Warehouse level of supplier
Waste at suppliers side:
- flow of empty packaging to supplier,
- Waiting for expedition, movement of truck in plant
- The level of warehouse level (space in warehouses,
number of packaging, cost of tight capital)

ŠKODA AUTO a.s.

Waste in transportation:
- un-utilized truck,
(either with components or only empty packaging)
- Delay during transportation, at supplier, customer
 Lean Supply chain management LeanSCM

Mass supply chain Lean supply chain

management management
Frequency of deliveries (Max.- Min.) Weeks - days Days – hours
Warehouse level (Max.-Min.) Weeks - days Days - hours
Accuracy of deliveries (loading,
Days Minutes
unloading)
Communication Limited Regular
Information flow Directive Co-operative
Level of standardization Low High
Mass Production
LEAN Production
Effectiveness and efficiency of LEAN

MASS LEAN
PRODUCTION PRODUCTION
Systems (LEAN) thinking attitude
What is the purpose of
the glass ? It seems
that the glass is twice
as big as it should be….

System thinker
Systems (LEAN) thinking attitude
What is the
purpose of the
glass? Who is
going to use the
glass?

The Purposivist
Wholeness Synthesis delivering UNDERSTANDING included in the
LEAN Management delivers the competitive advantage of 21st century
ASK (Activity, Skills, Knowledge)– triangle of success including Knowledge, is it enough ?

Intellectual Pyramid KNOWLEDGE

Know-Why. UNDERSTANDING
Doing the right things due to the Wholeness
We need ASK „U“ concept of success.
Synthesis, WST. U as Understanding
Know-How. (when we want to ask, we need to know whom )
Doing things right due to the Wholeness
Analysis.
Comparison of Toyota and VW performance of the Whole

Founded 28.5. 28.8.

1937 1937
Number of employee 2013 (thousands) 550 330
Profit margin 2013 (%) 2,9 8,8
Number of sold cars 2013 (mio.) 9,7 9,98

Profit margin 2016 (%) 4,5 8,0

Profit per car 2016 (Euro) 801 1602
Number of sold cars 2016 (mio.) 10,2 10,1
There is difference between doing things right and doing the right things.
Peter F. Drucker

Which company is doing things right and

which company is doing the right things ?