Toyota Management
System
The Toyota Management System (TMS), also known as the
“Toyota Production System,” allows its adopters to produce twice as much in
half the time at half the cost with half the problems, and with a fraction of
the inventory. Far more than a mere “production” system, TMS is a combination
of three innovations: just-in-time production, total quality management, and
hoshin kanri or policy deployment. Although Toyota is not the origin of all
three innovations, it certainly has integrated them more effectively than any
other company.
Just-in-time production
Just-in-time or JIT was invented by Toyota after World War
II, based largely upon the model of continuous flow manufacturing created by
Henry Ford in 1914. Ford’s production system was originally geared to mass
production on a grand scale. Toyota adapted Ford’s system, which emphasized the
elimination of wasted material and motion to the small lot production required
by the small and fragmented Japanese postwar market. Toyota wrapped long
production lines into U-shaped cells, cross-trained workers to operate multiple
machines, and slashed changeover times, drastically reducing the need for
work-in-process inventory.To supplement its just-in-time cells, Toyota
developed its famous system of kanban, or signal cards, which are used to link
production cells that cannot be physically co-located or integrated. Kanban are
also used to integrate the operations of suppliers and (in other companies)
customers with the the requirements of production.
Quality at the source
Inspired partly by the ingenuity of Toyota’s owners and
partly by Total Quality Management (known today as Six Sigma), which was
imported into Japan after the war by the United States Government, Toyota
integrated several types of quality checks into its production cells on the
very front-line of operations, speeding both the discovery and correction of
problems:
1.
Successive checks. Successive checks require
each person involved in a process to inspect the quality of:
a) work performed previously by others, and
b)
materials, tools, or equipment utilized in the process.
2.
Self checks. Self checks require each person
involved in a process to inspect the quality of the their own work.
3.
Poka yoke (mistake-proofing). For those steps
and critical conditions in any process that are difficult or impractical for
humans to inspect, process owners invent devices and procedures that quickly
surface and either automatically correct problems, or which call management’s
attention to them.
Hoshin kanri (policy deployment)
Hoshin
kanri or policy deployment is a Japanese management system perfectly adapted to
the management of Toyota’s decentralized decision-making process. Hoshin kanri
has its roots in Peter Drucker’s MBO (management by objectives), which the
Japanese adapted in the context of implementing TQM. Toyota implemented hoshin
kanri as part of its TQM implementation in the early 1960s. Hoshin, which is
still not well understood or appreciated by Western managers, has several key
benefits:
1.
It allows management to align the organization
around critical improvement targets that link the development of current
capabilities to future performance and customer satisfaction.
2.
It enables the organization to manage by
exception, so that the organization stays tightly focused on its strategy.
3.
It augments or even replaces the relatively slow
mechanisms of management accounting with the ability to solve quality, cost,
and delivery problems in close real time.
4.
It enables cross-functional planning, execution,
and problem solving, which means that adopters of hoshin can solve the complex
problems of modern production more effectively.
5.
It enables interorganizational cost management
by providing a framework for customers, producers, and their suppliers to plan
and execute in a coordinated fashion.
