Lean Management Application to Toyota Production System - Report Example

TOYOTA WAY – A REVIEW OF LEAN MANAGEMENT AND ITS APPLICATION TO FIRMS OUTSIDE LARGE SCALE MANUFACTURING Contents Introduction 3 Background of Lean Production 3 Part 1: Implementation of Lean Thinking 5 Strategic Level Inputs for integrating Lean Production 5 Integration of New Lean Production Systems 6 Monitoring & Controls 8 Part 2: Suitability and Flexibility of Lean Production in other Sectors 9 Strategic Pointers 10 Standardisation of Work 11 Stability 11 Work Breakdown & Just-in-Time Operations 11 Quality Control (Information Management & Quality Standards) 12 Conclusion 12 Bibliography 14 Introduction Lean production is a term that is used to describe Toyota’s approach towards manufacturing its cars to the highest quality, at the lowest cost, within the shortest production time with a conscious effort to eliminate waste (Chalice, 2012). This includes cutting down and eliminating production processes and activities that do not contribute to the achievement of optimal results (Vallespir, 2014). This includes a series of value-added tasks that provides better results that their competitors are not carrying out like just-in-time production amongst others (Chalice, 2013). There are activities like Kanban and Kaizen which are applied in Toyota to ensure that quality controls and measures are transposed to all the units and components of the production system (Nicholas & Soni, 2011). The purpose of this report is to critically review and analyse the concept of Lean Production which is a component of Toyota Production System. This will be applied and connected to the idea for implementation of Lean Thinking in large manufacturing entities and units. The second part will critically review and analyse the ability to adapt and apply lean production and the Toyota system to other entities other than large manufacturing entities. This paper will conduct a brief literature review and then proceed to review implementation of lean production strategies and finally handle the suitability of lean production in other sectors. Background of Lean Production Lean production and the Toyota production system has to do with reducing waste on the basis of seven core principles and ideas which include: 1. Avoiding the production of defective parts; 2. Avoiding the production of more parts than needed; 3. Avoiding excessive inventory which locks up working capital; 4. Eliminating unnecessary processing steps; 5. Preventing the unnecessary movement of workers; 6. Avoid the unnecessary handling and movement of materials; 7. Eliminating workers’ waiting time (Groover, 2010) Therefore, Lean Production is a system through which a firm is able to put in place measures to avoid the production of the right and optimal number of units in its production process. This includes the identification of the right and appropriate number of steps and units. This will also be one that is organised to eliminate the movement of workers and the movement of materials. Also, in ordering, there is a conscious use of the just-in-time model of ordering to prevent ordering too much or ordering too little since either of the approaches involves costs and risks. Just-in-time is a function of supply chain management and it involves setting the reorder level by maintaining a strong linkage and connection to the producers or suppliers (Hopp, 2012). This implies that the company will have a direct and regular connection with its suppliers and this leads to a process whereby the suppliers get information about stocks levels and reorder levels. Thus, when there is the need for new stocks, the suppliers get to know it and restock the manufacturing plants just before the need arises. This means capital is not locked into stocks and there is no need for storing and warehousing costs that could also open stocks to theft and other risks. There is also a Kanban or supermarket model which involves breaking down work and providing parts in a bid to create the separate units for producing a car or a final model (Toyota, 2015). Kanban includes the use of tools for visual control, checking against overproduction and the use of various mechanisms to ensure that the right quantities and quality of products are produced at every point in time and at every stage (University of Kentucky Lean Systems Program, 2015). Part 1: Implementation of Lean Thinking The implementation of Lean Production comes with various techniques and approaches that ought to be put in place and the entire process has to do with major formulation of changes that affects the top level strategy of the organisation (Ohno, 2012; Chalice, 2011). This requires the reinterpretation and the change of a firm’s strategy in order to incorporate a new idea that meets the Toyota Way and the Toyota approaches to lean manufacturing. Figure 1 below, the Toyota House, shows how the process changes right from the strategic level up to the business process units and models and ensure that the firm achieves the best in everything they do. Figure 1: The Toyota House (Chalice, 2015) Strategic Level Inputs for integrating Lean Production In order to implement lean production, there is the need for the firm to change its management plans throughout the organisation. This comes with a focus on consumers, respect for humanity and an attempt to eliminate waste (Dennis, 2014). The implication for this is through the valuation of the way things are done and then assess what consumers need, corporate social responsibility matters and other considerations and then evaluate and critique the production system and the production process (Womack, et al., 2013). Once this is done, the top level management of the company will need to take decisions about the things to change and how to modify this. This is almost always about the presentation of a new set of instructions for the creation of an improved and enhanced business process (Marksberry, 2012). These come with three interventions that help to shape the production system and structure; 1. Emergent Strategy: The firm moves to a point whereby the company will pursue continuous improvement by setting metrics for taking data and information about production from time to time (Harris & Harris, 2012). This will complement the new production system and attempt to get new standards for monitoring quality and improving the quality of service; 2. Work Breakdown: There must be a new breakdown of work in a manner that ensures that productivity is at the highest levels and standards (Albert, 2010). This includes the integration of the minute details of technical systems that Toyota often uses and applies in cutting waste; 3. Profitability: The firm must not move its mind from the profitability motive and targets. This will help it to achieve its ultimate goals of getting a corporate target that is important and vital. Integration of New Lean Production Systems The new lean production system will be one that will make conscious efforts to integrate and accept elements of the Toyota productions system. And this will change and modify the way and manner in which production is done. This includes various activities and procedures. 1. Continuous Flow Processing: This involves the creation of a system through which production is done in stages within an organisation. This implies that all the units and components of the productions system are divided and one stage leads to another (Sople, 2013). 2. Just in time Integration & IT: This includes the integration of an intranet system that will connect the stocks and production systems of the firm to the suppliers. The suppliers will therefore be able to know it when the stocks of the firm falls to a certain level that requires restocking (Best & de Valence, 2012); 3. Multi Skill Development: One thing that comes with the new approach and system of the lean production system is one in which there is a new approach and method towards doing things. This will mean the training and retraining of staff members in different roles so that in cases of high production quotas, there is the opportunity for the workers from one unit can be moved to another without any issues (Black & Hunter, 2014); 4. Jidoka: There must be arrangements to ensure that in cases where there are defects in any unit, that unit will be shut down in order to ensure that the production goes on smoothly (Hill, 2012). Jidoka is also about the automation of processes and the integration of information systems as a means of gathering information about production in real time. This allows the firm to create a intercommunication system that links it to all stakeholders with an emphasis on the executives. Thus, the executives are able to deduces issues and make timely decisions that helps them to achieve important goals and ends. 5. Quality Control Measures and Processes: There is the need for the integration and evaluation of quality standards and expectations. These processes will allow all the changes and modifications to be carried out without any issues or limitations. Hence, there will be the production of important activities and procedures. This is required to be done in a way and manner that there are allowances in the system and process of carrying out business activities without any major issues and problems. Thus, where there are supervisions and limitations, these things can be integrated as and when necessary. These new systems are meant to ensure that there is a better and improved measure through which production can be carried out. There is the need to integrate Muda or waste elimination and this is a process through which there is a conscious effort to identify the causes of waste and try to integrate measures to avoid these waste limitations (Monden, 2012). Monitoring & Controls Aside the standards and levels of expectations, there are major requirements and expectations towards the conduct of various forms of monitoring and control to ensure that the best quality and productivity targets of the company are met throughout the entire production system when it is put in place and is functioning. Monitoring requires the integration of new systems that will ensure that each stage of production has some metrics that are relevant to the technical aspects of production in that aspect (Turner, 2011). Monitoring is about defining the levels of production that are considered normal and identifying which aspects are abnormal (Sandoval, 2012). These are to help to define what must be turned out at every stage and what standards can be considered normal and which levels are abnormal. With this, there is a framework for checking the output of each stage and this can help to provide monitors and control the levels of output to eliminate low quality products from going through the system and the process. Visual controls are also important and relevant to production because it helps to identify things in a clear and conspicuous manner in order to identify defects and issues as and when it goes through the production line (Rainer & Turban, 2012). The Toyota system visual control is sometimes called visual problemization and this is the presentation of the problem in a way that will create a strong impression on managers and help them to make immediate decisions and stop production. Therefore, the Kaizen model complements this and managers are required to manage and control affairs by being on the floor and ensuring proactively that waste is eliminated and stopped. This is done by using visual controls as a tool for the identification and deduction of limits. Production sequence tables are also an important practical tool that the Toyota System utilises and applies in all situations and contexts. This includes the use of these diagrams to show the activities of each stage and document the actual results of each state of the production process (Shimokawa, 2013). Therefore, the implementation of lean management will have to involve the creation of a standard system and sequence of tables that can be used by managers on the floor to deduce and identify the main trends and procedures in production and help to monitor affairs. The procedure will involve checks and real time information that will be clocked in to ensure that the final deliverable meets all targets. The production sequence table is progressive and as such, action can be taken at the different stages and pointers in order to notice defects and correct and deal with them. Different organisations can flex this and integrate various plans and tables that fits specific goals and expectations. This helps them to achieve their core goals and objectives in operations and production and can be an important tool for monitoring and elimination of defects. Part 2: Suitability and Flexibility of Lean Production in other Sectors Lean production is something that has to do with the manufacturing sector. It developed in a car-manufacturing entity and has been replicated in other such large-scale entities (Emiliani, et al., 2013). Lean production has found itself in different entities and organisations around the globe. And this includes some entities that provide services that are in sectors that are far removed from the manufacturing sectors. Some authorities argue that in theory, lean production systems and the Toyota way can be replicated for all entities (Krar & Gill, 2013). However, in practice, this is not as simple as that because there are some replications and shortfalls that ought to be adjusted to achieve the best and most appropriate goals and objectives that the firm needs and desires. Historians on the topic indicate that “Lean Management” is a term that was coined by Jim Womack and Daniel Jones who were commissioned by the US auto industry to study auto manufacturing around the world (Szwejczewski & Jones, 2010). The term lean management is therefore one that can aid in the replication of the system across different sectors and different organisations around the world. It will be wrong to say the Toyota Way is perfect for all organisations around the world. Clearly, some organisations do not need to follow all the rules. This includes some important principles and ideas that have become standard practice in different sectors around the world. There are different elements of these and they are preferred to the traditional methods and approaches which are less productive. Over the years, the following ideal pointers and standards have developed that can be adopted selectively based on the requirements of a given industry to help firms in achieving their best goals and objectives: Strategic Pointers There is the strategic pointers that organisations can put together important things that will help the organisation to achieve its best goals in a quality framework and productivity position. 1. Leadership: This includes the formulation of strategic business units for all necessary components of the firm and formulating teamwork principles to ensure that all units work to achieve the best results; 2. Urgency: There is the need to create a proactive system in all units and components of the firm to ensure that the firm responsively deals with issues and matters as and when they come up; 3. Accountability: There is the need to set up a companywide accountability system that will enable the company to get units to account for important things and pointers periodically. Standardisation of Work There is the need for objective and standardised rules on how to conduct things. This will help to develop the most important and the most significant approach and system for monitoring affairs. There is also a requirement for visual management and visual monitoring of information and affairs in everything the various units and components conduct their affairs. Stability There must be a volume of products that the firm must produce and this should be the maximum capacity that will exclude pitfalls and lower quality matters. There must be important plans towards long-term expansion which should be done constructively. Work Breakdown & Just-in-Time Operations There is the need for a breakdown of work in every organisation and entity and this includes the conduct of affairs and activities that are meant to help the firm to optimise resources and achieve the best standards (Baudin, 2013). This gives the impetus for just-in-time operations and affairs which includes the sourcing of products and services from different partners at the right time when it is needed. This prevents the lock up of capital and encourages better productivity standards and methods. Quality Control (Information Management & Quality Standards) Quality must be an important part of the company’s affairs. This must be done by setting up the standards like the Toyota System and also monitoring it through autonomous methods and processes. The procedure is to be done through the integration of a real-time system and procedure to achieve better and optimal results. Jidoka, involves the setting up of quality control targets and the separate monitoring of human and machine contributions to these forms of quality standard achievement (Kremer & Fabrizo, 2012). There is also the need for the quality standards to be continuously evaluated and assessed in order to conduct close and thorough evaluation of operations and affairs. Conclusion There study shows that the lean management system from Toyota is carried out in a way and manner that work is broken down into several units. This is done in a such a way that all the entire elements and entire components of the firm is organised for the achievement of higher quality products, and the cutting down of costs by eliminating waste. This is through various procedures like the Jidoka, JIT and Muda. In order to integration JIT into a system, there is the need for the creation of a continuous flow process. This will enable the different activities and processes of the firm to be carried out in a way and manner that can help a firm to carry out activities in the most optimal manner. Just-in-Time is about making arrangements with suppliers in order to get stocks delivered as and when the need arises for production. There is also the need for on-the-floor monitoring or Jidoka to be carried out to achieve the best results and standards. The Toyota way has been replicated in different units of production around the world. It is traditionally linked to the car-manufacturing industry. Therefore, it is used in almost all car manufacturing entities. However, it can be replicated selectively to all industry to ensure higher quality and efficient utilisation of resources. This is done through the positioning of a firm strategically to achieve lean management. This is followed by the standardisation of work in order to make all operations efficient. This is to be complemented by a strong information system for management and control. This will allow the firm to get real time information and make immediate moves to achieve optimal results. Finally, there must be quality control standards and this must be implemented as and when necessary. Bibliography Albert, M., 2010. Lean Production for the Small Company. New York: CRC Press. Baudin, M., 2013. Working with Machines: The Nuts and Bolts of Lean Operations with Jidoka. 2nd ed. New York: Productivity Press. Best, D. & de Valence, G., 2012. Design and Construction. London: Routledge. Black, J. T. & Hunter, S. L., 2014. Lean Manufacturing Systems and Cell Design. London: SME Publishing. Chalice, R., 2011. Stop Rising Healthcare Costs Using Toyota Lean Production Methods. New York: ASQ Press. Chalice, R., 2012. Improving Healthcare Using Toyota Lean Production Methods. 2nd ed. New York: ASQ Publishing. Chalice, R., 2013. 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