TPS /Lean Seminar, 28 Sep.~02 Oct. /2018, M.P.E.C. at Yangon

Toyota Way & Production System Part 1

Satoshi Kuroiwa ([email protected]) Managing director Association for Support of ESD 21 Former Visiting Professor, NIT and KIT Former Toyota Corp. Introduction Outline of ESD21 Economic Sustainable Development for21st Century 1. ESD21 ; Abbreviation of our Association - Non Profit Organization founded in 2010 - Corporate Member: 70 Individual : 120 cf. -Toyota Tsusho -Kojima press, -USP, etc. 2. Mission -“(TPS) & Innovation(IT)” of the people for business competitiveness. - Practical philosophy of “ Sanpou-Yoshi” (三方よし：Seller, Buyer, Society). 3. Activities (1) Various support services based on TPS() , and IT (Information Technology). (2) Special projects and events Ex. Collaboration with SEDA (NGO in Myanmar) Part1, contents

１．Introduction ２．Why should you learn TPS/Lean system ３．Toyota’s ”Monozukuri “ , Toyota Way and Toyota Production System (TPS)

TPS=Toyota Production System “Monozukuri”= Manufacturing - Worked for Toyota for 34 years and had experience in the car production preparation engineering together with IT engineering - Specialized in Factory Automation and IT enhanced TPS (1980~2000) - Involved in associations related to Japan’s IT strategy organized METI - Visiting professor of Nagoya /Kyusyu Institute of Technology(2004~’16) - Now, working for NPOs, such as ESD21, APSOM and TMS &TPS certification institute Introduction Structural change to the global economy Almost issues brought by ICT evolution and digitalization Key Issues ICT= Information & Communication Technology 1. Globalization of economy 2. Environment and energy issues 3. Change of the industrial structure 4. Brexit and US. President Trump (American first) 5. New ICT impact to the manufacturing industries

Hardware to Software , Auto Sector Prius(HV) ICT Sector Now new business model 1. Mega-competition Vertical Horizontal 2. EV/HV/PHV/FCV Mirai（FCV） Structure Structure New ICT era (40 years ago) (20 years ago) (Now) 3. Car Modularization ： IBM CPU Intel Google Four innovations in the new ICT era OS： Win, Mac  ： Apple EV Apps SAP Amazon  Autonomous Vehicle N/W： Cisco  ： Facebook Connected Peripheral Canon ……  Sharing

All ProductsAll PC ： HP, Dell Introduction Short history of ICT and some topics in Japan 70s 80s 90s 2000s Now Main-frame, LAN, VAN Cloud, IoT, Internet Mobile μCPU(1971)⇒PC Big data, AI 40 Years ago(IBM) 20 years ago (Wintel) Current (GAFA)～ μCPU changed Internet changed Creation of new the world of the world of business model computer communication by IoT, AI, Big Data, DARPA/ARPA net  Industry advanced and CPS at DOD in US information projects Intel 8008  Acceleration of Project or Consortium global business in Germany ,US NEC, TK80  Industry 4.0, ＜Projects  Industry Internet Establishment of organized by METI＞ Consortium VLS Research ＜Activities in Japan ＞ Association（1975）  Robot revolution Start of E-nation initiative Japan  IoT acceleration Association Introduction Initiative or consortium for collaborative works in Manufacturing

IoT Acceleration Consortium

＜Members＞ Why learn TPS/Lean Toyota System and ICT are critical for sustainable manufacturing General-purpose technologies (GPTs) are technologies that can affect an entire economy (usually at a national or global level) -Domestication of plants -Domestication of animals -Melting -Wheel -Bronze -Iron “Printing” and so forth  Automobile  Airplane  Mass Production (Ford System)  Computer  Lean Production (Toyota System)  Internet  Biotechnology https://en.wikipedia.org/wiki/General_purpose_technology Why learn TPS/Lean Management system exchange between Japan and the U.S. Toyota Production System is globally well- known as the lean system

Japan QC SQC TQC TQM Management Toyota Production System（TPS) Quality Keiretu JIT JMS Union-mgt. cooperation Kaizen Teamwork 1980’s （ Post World Current 2000~) Japan-style （Management WarⅡ Management Quality） E. Deming Malcolm Baldrige U.S.A. National Quality Award Reengineering Performance Lean system Scientific Mgt. BSC Mgt. Strategic Six Sigma Mgt. TOC CMM SQC Marketing Information Strategyﾞ Strategy ABC/ABM Why learn TPS/Lean Basic fundamentals of Monozukuri Global NO.1 TPS(Toyota Production System) Product Quality First -Just-In-Time -Gnechi-genbutu (Go and see) -Jidoka (Autonomation) - QC(Quality control) Monozukuri -Production technology -Making things is making people -Respect for people -Processing technology Continuous Improvement - TQM / TPM - IT system with Technology and Skill -Teamwork Technology Evolving Hitozukuri Hitozukuri= Human development Monozukuri management Monozukuri= Manufacturing TQM, TPS, TPM TQM=Total ), TPM=Total productive Maintenance Production Control(Management) Process management Cost management Work management Progress management Facility management Safety management Quality management Material management Labor management Why learn TPS/Lean People are the greatest management resource Goal Create teams and members who continue kaizen activities of TPS always seeking for “ To Be ” , ideal system Value added by Output Input Information processing/creating , People communication Products Material （ Design/ Production preparation/ Service Money Parts procurement/ and etc.) CS/CV Information and Production

Aim for an ideal Factory Resources of an enterprise people money material wisdom information Why learn TPS/Lean Business consists of people and machines(IT) Business Activities are information processing with people and machine systems (IT)

People (Brain) Computer(software) People Organization IT Architecture Machine/IT Systems Management Analogy Control Systems Communication Connection Enterprise Organization COM COM Internet Org Man Ent. Extranet COM Intranet COM Man Man Org. COM Ent. LAN COM Org. COM Org. COM WAN COM Business Ent. COM Partners COM Ent. COM COM＝Computer Ent. Office work ＝ People ＋ Machine （CAD/ERP, RPA, e-Mail, Printer ) Production work ＝ People ＋ Machine （Robot/Automation, FA/IT) TPS IT Why learn TPS/Lean Productivity and Competitiveness Increase Sales OUTPUT Added Value Sales Productivity ＝ ＝ ＝ INPUT Lead-time Cost Reduce Cost

Competitiveness= Relative height of productivity to competitors What should do you do to increase competitiveness (1) - Increase added Value - Increase amount of Sales (2) - Reduce Cost Improve Productivity TPS(Toyota Production System) Sales - Shorten lead-time - Eliminate waste (Muda) Kaizen Innovation - Two pillars of TPS  Just-In-Time  Jidouka (Autonomation) Cost Toyota Way（TPS) Trend of Toyota’s production and overview

Sales volume : 10,386 thousand Worldwide production Operating incomes: 29,384.07B jpy Toyota’s globalization Net incomes: 2,493.98B jpy Number of employees: 369,124 Recession in the collapse ( FY2017 ) of the bubble economy Toyota’s crisis

Prius Collora

Domestic production Camry Vitz (Yaris)

Motorization in Japan Overseas Production IMV Lexus

http://www.toyota-global.com Toyota Way（TPS) Toyota’s origin of making things 1. Enterprising spirit - Commit yourself to research and creation. (Toyota’s platform) 2. Principle of genchi genbutsu (Go and see: 現地現物) -Try first. Don’t be afraid of making mistakes (Sakichi Toyoda) -Engineers who do not wash their oil-stained hands more than two times a day are not engineers at all. (Kiichiro Toyoda) 3. Total participation -Good products, good thinking (Company’s slogan for inventiveness) 4. Making things is making people -"Because people make our automobiles, Taiichi OONO nothing gets started until we train and Sakichi educate our people.“ () Eiji Toyoda TOYODA

Toyota Production System (TPS), Kiichiro TOYODA Toyota Way Toyota Way（TPS) History of the Toyota Production System 1. Stop-the-Line Culture Toyoda Sakichi “Jidoka” (=Autonomation) concept in 1902 -Automation with human with human touch 2. Just-In-Time Process Toyoda Kichiro “Just-In-Time” concept in 1938 -Produce only what is needed by the next process - Eliminate Waste 3. Single minute exchange of die Sigeo Shingo 4. Kanban System - Pull Production - Replenishment of the next process

Type-G Toyoda Automatic Loom with Non-stop Shuttle Change Motion (1924) Toyota Way（TPS) Toyota’s management and guidelines for activities Toyota’s platform Origin of (Five main principle of Toyoda) Toyota’s spirit

Guiding Principle Contribution towards Toyota’s Constitution Sustainable Development Published in 2001 6 pages booklet Corporate image Toyota Way Global Vision that Toyota is aiming 2020 towards the 2020 2001 Action principle of employees Medium & Plans for global Toyota Global Long-term vision realized in Vision 2020 in Toyota Business Plan 2020 Deployment of Challenge for the Toyota Production System (TPS) Company medium and long- policy term management plan Corporate Philosophy “Toyota Way 2001”  Established as an action program of “Toyota’s basic principles”  Based on TPS which is “People are the most important management resource.” Visual control/sharing information 6 pages’ throughout Global Toyota in Toyota Way booklet

Challenge We form a long-term vision, meeting challenge with courage and creativity to realize our dreams. Continuous We improve our business operations continuously Kaizen Improvement always driving for innovation and evolution. We practice genchi genbutsu. Go to the source Genchi to find the facts to make collect decisions, build Genbutsu consensus and achieve goals at our best speed. We respect others, make every effort to Teamwork understand each other, take responsibility Respect and do our best to build mutual trust. for People We stimulate personal and professional growth Respect share the opportunities of development and maximize individual and team performance Toyota Way（TPS) TPS/

19th Century Craft-man Production （Hand operation） Craft -man

First half Mass Production 20 Century （Ford system= Fordism） Ford system Eiji Toyoda Latter half Lean Production 20 Century Taichi Oono （Toyota system= Toyotism） Shigeo Shingo ＜ ＞ Benchmarking between GM and Toyota Research in 1987 Lean system GM Toyota NUMMI named by MIT Framingham Takaoka Fremont Assembly hours ［Hours/Car］ 31 16 19 Defects/100cars 135 45 45 Assembly space/car ［ sq. ft. ］ 8.1 4.8 7.0 Source：J.P.Womack, et al., Average Parts 2 Days The Machine that Changed inventory 2 Weeks 2 Hours the World （IMVP Survey） Toyota Way（TPS) US. learned TPS at NUMMI in 1980’s High-tech (Robotics, CIM, etc. )was defeated by Low-tech based on TPS Magazine, “Fortune” report in1986

1982 – GM closed the Fremont, CA Plant Fremont plant - Lowest Productivity - Highest Absenteeism 1984 – Reopened as NUMMI (Toyota & GM) - Same work force - White-collar jobs switch from directing to support. - Small work teams trained to design, measure, standardize and optimize their own work. - If an operator finds a defective on the assembly line, he can stop the line. 1985 - Productivity & quality doubled, exceeded all other GM plants 2010 – End of Toyota-GM joint venture Tesla S sedan -Tesla Motor and Toyota announced a partnership Flagship car to work on EV development. - Tesla S sedan is built at the plant. Toyota Way（TPS) Toyota’s DNA, according to Harvard Business Review Magazine

“Decoding the DNA of the Toyota Production System” by S. Spear and H.K. Bowen Sep.& Oct. 1999 The tacit knowledge that forms the basis of the Toyota Production System can be understood according to four rules. These rules are used as a guide for process design, work, and improvements in all activities and procedures used for products and services. Rule 1: How People Work Rule 2: How People Connect Rule 3: How the Production Line Is Constructed Rule 4: How to Improve On-site managers do not teach these rules directly to supervisors and workers, but teach the rules (ways of working, links between tasks, zero defects, improvements) and ways of learning on site. Toyota Way（TPS) What is Toyota’s DNA ? 1. Principle of “Customer Orientation” - The first is Customer, second is Dealer, third is Maker - Next process is the customer 2. Genchi-genbutu (Go and see) 3. The head office, car development division and production plant are adjacent - The climate of Toyota’s head office is good Spartan Mikawa. - The headquarters in Tokyo, are mostly bad 4. Focus on human resource development - Making Things is Making People 5. Strong energy for transformation Okuda (Former chairman and top of Keidanren) saying ; "It is wrong not to change” "Those who oppose change are not silently next to me at least" 6. The strength of the sense of crisis Toyota Way（TPS) Publishing examples spread TPS/Lean to the world TPS established（1970’s）⇒TPS spread to U.S.（1980’s）、TPS named as Lean system

S. Shingo Y.Monden K.Ishikawa M. Imai Taichi Oono Lester & Solow （1981） （1983） (1985) （1986） （1988) （1989） Lean system spread from U.S to Europe（since 90’s） ⇒ Lean System spread widely

Womack & Daniel Jones Jeffrey Liker Mike Rother K. Sobek II. Eric Ries （1990） （1996） （2003） （2009） (2009) (2011) Shingo Prize Toyota Way（TPS) Deployment of Toyota Production System (TPS) TPS has been studied by people around the world in the name of “Lean system” 1970 1980 1990 2000 2010 ’37TMC founded Japan bashing Collapse of Break away from In U.S. bubble economy Development the traditional TPS ’73 TPS （In-house Manual) of · Global expansion TPS ’78 TPS Publish（Oono） · From production to (Japan) ’84 NUMMI launched general management ’83 TPS Publish （Monden） · ICT innovation T Visit of Japanese industry from US. Deployment ’89 Made in America（Lester） of ’90 The machine that change the world（Womack） Lean system Deployment of （US, Lean production Overseas） ’03 The Toyota Way (Liker) Spread Method and concept to other sector originated in TPS Six Sigma、ECR,TOC Agile software process Toyota Way（TPS) TPS (Toyota Way) is evolving  TPS is a people centered system rather than the methodology.  Principles of traditional TPS don't change. But TPS is evolving by advanced IT with many researcher and TPS consultants TPS/Lean/Agile system 1. Toyota Production system 2. Lean Thinking 3. Toyota Way 4 Ps Define CS (Customer Satisfaction) Customer QCD ( Quality, Cost, Delivery) Value People & Define the Problem Just-In Teamwork 自働化 (Autono- Value Stream Solving -Time Kaizen mation) Activities People Make Value and Partners Eliminating Flow Muda Process -Continuous flow -Pull System Leveled Production, Standardized Work Pull System Visual Management, Information Sharing Philosophy ES (Employee Satisfaction) -Respect people Strive for Mutual Trust between Employee and Management, DNA at Toyota Perfection Toyota Way（TPS) Examples of the basic principles that TPS teaches Premises for applying Just-In-Time: -Building quality in process. -Next process is your customer. -Never hand over defective units to the next process. -Elimination 7 Muda (wastes) -Continuous small flows (Leveled production and delivery) -No kaizen if there is no standard -Working is totally different from moving. 自働化(Autonomation） -Remove intra-process distribution that does not add value -Elicitation of problems (Each worker can stop the line. No warehouses) -No problem is a problem Characteristics of vehicle manufacturing process Heat treatment Material Forging Deep multistage process Material Casting Machining Unit assembly Material Sintering Plastic molding Vehicle assembly plant Stamping Welding Painting Assembly

Toyota Way（TPS) Commonly used terminology in TPS

Andon  Andon (行灯) : Signboard  Mieruka (見える化) : Visibility , Visual management  Genchi Genbutsu (現地現物) :Go and see for yourself  Hansei (反省) : Self-reflection  Heijunka (平準化) : Production Smoothing  Jidoka (自働化): Autonomation, Automation with human intelligence  Just-in-Time (ジャストインタイム) :JIT Type-G Toyoda Automatic  Kaizen (改善):Continuous Improvement Loom with Non-stop Shuttle Change Motion (1924)  Kanban (かんばん) :Sign, Index Card  Muda (ムダ) : Waste  (ムラ) : Unevenness  (無理) : Overburden Kanban Toyota Way/TPS “ Know why” more critical than ” Know how” Traditional TPS is Toyota's manufacturing philosophy constructed by practices and wisdom of Toyota’s ancestors.  Due to its philosophy with variable implicit knowledge, TPS is not so understandable as American methodology (ex. Lean, TOC, Six Sigma ).

TPS Agile software “Know How” to use process Explicit knowledge Tool, Method Kanban, Andon Refactoring, Splint Poka-yoke, Pull Pair Programing “Know Why” Muda, Heijunka Iteration, TDD Implicit Essence of Tools knowledge “What is ” Essence of TPS Essence (Fundamentals) of TPS  Enlargement and enrichment of human capacity  Improvement of Kaizen power  Respect for workers Toyota Way/TPS What is TPS? Basic philosophy is “Customer First” ・JIT (Just-In-Time) Two pillars ・Jidoka (Autonomation, Autonomy)

Goal Create teams and members who continue Kaizen activities always seeking for “ To Be ” , ideal system Ideal system: Construct continuous flow business process Objective of JIT: Shorter lead-time by eliminating waste (Muda) TPS : First step to apply TPS Symphony orchestra （１）Awareness of TPS model （２）５S Harmonized （３）Visibility (Mieruka) autonomous De-centralized system Sato Sanpei Principle of TPS/Lean The basis of TPS is “Trust the worker.” 1. Mutual Trust between Labor and Management  “Labor-Management Declaration” in 1962 at Toyota  Improved productivity brings prosperity to the company and the employees  Two pillars of Toyota Way which focus on people (1) Continuous improvement (Kaizen) (2) Respect for people 2. The fundamental of TPS is human resource development  People are the greatest management resource  To make good products requires well-trained member  To vitalize people and organization 〔１〕; Role of management 〔2〕： Making workplace lively 〔3〕： Steps for vitalization End of Part 1

“Open the window and look outside. It`s a big world waiting for you.” by Toyoda Sakichi （豊田佐吉）