The Toyota Production System. Japanese 101. Why study Toyota?. Total annual profit on March 2003 was $8.23 billion- larger than combined earnings of GM, Chrysler and Ford. Profit margin is 8.3 times higher than industry average.
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End result of applying the TPS to all areas of business. A five-step process:
Taiichi Ohno (founder of TPS) “All we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value-added waste.”
“Identify activities that add value to raw material, and get rid of everything else.”
“Shortening lead time by eliminating waste in each step of a process leads to best quality and lowest cost, while improving safety and morale.”
Section I – Long-term philosophy
Section II – The Right processes will produce the right results
Section III – Add value to the organization by developing your people and partners
Section IV – Continuously solving root problem drives organizational learning
“Kanban is an organized system of inventory buffers and as per TPS, inventory is waste, whether it is in pull system or push system. So kanban is something you strive to get rid of.”
Examples at Toyota: