Experience the ease of deal management system for production

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Have you heard about 'lean'? For the past 30 years it has been one of the most significant   business phenomena in manufacturing, and has increasingly spread into many other industries.  In this lecture you will learn about  the original inspiration of lean:   Toyota and its powerful Production System.  Lean is a label given in the end of the 1980s  to describe the way Toyota Motor Manufacturing   operated its supply chain and factories. Toyota's model was distinctively different   from what western companies did at that time and became known as the Toyota Production System.  The Toyota Production System had many influences  but one person was perhaps the most important one  in its development: Taiichi Ohno. Over a 30-year time span after the Second World War   Ohno and his colleagues gradually developed the  production system unlike any other at that time.   Toyota produced higher quality cars at lower prices at the same time as they developed   more new models than any other car manufacturer. How were they able to do so?  A large international research team studied these questions.  A usual explanation in the 80s was that Toyota's  performance could be explained by the unique   Japanese work ethics and culture.  However, the researchers found that there was   much more to it than culture. Even the Toyota transplants and joint venture factories   in the West out-competed competitors in terms of effectiveness and efficiency.  So there was something special about Toyota  - and this mojo was called 'Lean'   in the 1988 MIT Sloan Management Review article by  John Krafcik, and two years later in the best selling book 'The Machine That Changed The World' by James Womack, Dan Jones, and Dan Roos.  One good overview of the Toyota Production System is provided by Jeff Liker.   It is common to represent TPS as a house, which must be built ground-up.   As the foundation, we find operational stability.  Toyota figured out that steady and well-working processes are the only way to ensure an effective  and efficient production - and the only way   improvements could be implemented and sustained. This principle had been discovered much earlier,   for example by Henry Ford, so it's not the one that makes Toyota unique.   But - on top of the fundament, Toyota added  two principles: Just-in-time and Jidoka.  Just-in-time means always delivering  the right part at the right time   in the right amount and quality. A practical consequence of this   is that Toyota holds very little inventory in the production system.  Jidoka means 'automation' in Japanese, but was used in Toyota to create opportunities   for stopping and fixing problems as they occurred  - rather than continue building on defects   and repair them at the end of the line. This principle is sometimes also called 'built-in-quality',   which captures the idea of creating robust processes that do not pass on quality errors.  While having these key principles are useful,  factories also need to try to implement and sustain them. Therefore Toyota introduced  'continuous improvement', or Kaizen, in Japanese.  The two key pillars of the Toyota Production System,  Just-in-time and Jidoka, were developed   by members of the Toyota family. Founder of Toyota Loom Sakichi Toyoda  developed Jidoka to make the machines stop automatically when the thread broke. Later, Kiichiro Toyoda developed the idea of Just-in-time, after Toyota had started producing cars. Toyota did not have excess   of space and money at that time and needed to find a way to produce cars with a minimum waste.  They started with two used car presses they bought from the United States and went to study automobile production around the world.  Over many years, Taiichi Ohno experimented   with quick changeover of dies of these presses,  and got it down from one day to three minutes.   Instead of changeover engineers, the die exchange  could now be done by the operators themselves.   This process invention made it cheaper to run small batches than the large batches other used.   It enabled Just-in-time production and eliminated  the need to carry large, expensive inventories.   But more importantly, it made stamping mistakes almost immediately visible.  This was an incredible discovery. It basically enabled Toyota to produce higher quality cars   at the lower cost and faster than its competitors. It was clear that Toyota aimed to develop   a very tight, or fragile production system.  If Toyota was going to work with very little inventory and build in quality at every process step, the foundation had to be extremely stable.   There had to be reliable parts delivery,  equipment that worked as it was supposed to be,   well-trained team members, and essentially  no deviations from the standard.   Ideally, the foundation would provide the ability to build  consistently to a leveled production schedule,   without huge ups and downs, following the customer takt time. Such leveled production would provide a steady rhythm for the factory. Toyota figured out that the only way to develop and maintain such a system was to engage the people who were working in it. The employees had to be disciplined and intelligent to deal with any little variation that occurred during production. They also had to contribute knowledge  on how to improve the process standards.   People are therefore at the center of the TPS, which some have labeled  the 'Thinking People System' instead  of the Toyota Production System.  From the start, Toyota noticed  that the Just-in-time principle   only worked when the whole supply chain was aligned.   Too large fluctuations in the demand side or poor quality deliveries from suppliers   made the Just-in-time system break down. Toyota noticed that a key to avoid this was to design good products that could assembled efficiently. Product design was therefore one of Toyota's focus areas.  Toyota also took steps to manage the demand side closely via its dealer network.   Toyota gradually stopped building cars in advance  for unknown buyers, and started instead to build and deliver cars that were sold by a dealer to a customer. The dealers followed up the end-customers closely, and did even home visits to help families plan the next cars.  Toyota also integrated its suppliers tightly  in their supply chain. They worked with local suppliers and invested in their capability improvement through supplier network programs.   Rather than the usual  'keep-your-cards-close-and-negotiate'   practice of the West, Toyota collaborated openly with suppliers  to make them as reliable and cost-efficient as possible. Unfortunately the product design and supply chain perspective  of the Toyota Production System  have somehow been lost in the Lean literature.   Many have falsely interpreted TPS as a pure  inventory reduction scheme for supply chains.  In addition to the more technical and  logistical Toyota Production System,   there is another secret to Toyota's success:  its culture and leadership philosophy.   When Fujio Cho became president of Toyota in 1999, he wanted to reinforce this culture globally by making this more behavioral advantage explicit. In 2001, Toyota therefore published   an internal document called "The Toyota Way". The Toyota Way was presented as another house,   but this time with leadership behaviors at the bottom. They were:   Challenge - Do not be satisfied with status quo. Kaizen - Always look for a better way.  Genchi Genbutsu - meaning: 'go and see' at the place work happens.  Respect - Show respect for what machines  and humans can do, and what they cannot do.  And Teamwork - The best results are achieved, when people work together.   These principles help leaders create  a culture of continuous improvement,   where people are enabled to meet customer demand.  That was a short introduction to the Toyota Production System, its supporting leadership philosophy, and its culture of continuous improvement. The immense success of Toyota's approach, also known as Lean production, has inspired many other organizations in different industries to seek to build a similar competitive advantage. But it's not easy. Sayonara!