Toyota Production System (TPS)

Many of Lean Manufacturing’s best-known tools, such as Poka Yoke, Kanban, and SMED, came to be as a result of the Toyota Production System. By identifying what your customers are and are not willing to pay for, and eliminating that which they deem waste, you can maximize your company’s value-added activities and profitability.

What Is TPS?

Synonymous with Lean Manufacturing and Lean Production, the Toyota Production System is a manufacturing methodology developed over many years by Toyota of Japan. In the most simplistic definition of TPS, all manufacturing activities are divided into two groups: Adding value or creating waste. The goal of TPS is to maximize value by eliminating waste.

TPS in Lean Manufacturing

TPS is a system that was initially developed to account for the specific issues facing one company in post-war Japan, a period of extremely limited resources. The revolutionary ideas and concepts pioneered at Toyota have been used in many other organizations and industries throughout the world. Value is truly the central focus of TPS. By defining and understanding value, TPS has evolved to help companies maximize value. In this system all activities relating to the manufacturing process are classified as value or waste.

The Father of TPS

Taiichi Ohno is generally credited as being the father of TPS. Mr. Ohno was the Vice President of manufacturing for Toyota and the driving force behind the creation of Toyota Production Systems. The first documented version of TPS was a paper presented in August 1977, and it has since been codified in many books.

The Goal of TPS

The goal of companies using TPS is to provide goods in the exact quantity, with the exact quality, at the exact time the customer wants them. The tools used to identify and minimize non-value adding activities are the primary components of TPS. However, TPS is not a static system; rather, it allows for continued change and improvement. Perhaps the true brilliance in TPS is not the tools and techniques in existence, but the underlying system that allows for new techniques to be understood and created.

Defining value can be one of the most difficult tasks a company undertakes. TPS has addressed this issue with a very elegant solution: Value is an item or feature for which a customer is willing to pay. When this definition of value is implemented, it enables companies using TPS to have an exceedingly clear vision when analyzing an activity or process. No organization likes waste; however, it is difficult to eliminate waste if it has not been precisely and accurately identified. The Toyota Production System forces companies to ask, “Would someone pay for this?” If the answer is no, then it's waste.

Defining value is a difficult task for most companies. Luckily, TPS has addressed this issue by defining value as an item or feature for which a customer is willing to pay.

The Seven Categories of Muda (Waste)

Once waste (“muda” in Japanese) has been identified, it can then be eliminated. The Toyota Production System further defines waste as activities that consume time, resources, and/or space but do not add value. Tools to eliminate waste have evolved around the seven most common areas of waste.

The seven categories of muda are:

  1. Overproduction: Producing more than, faster than, or sooner than is required
  2. Waiting: Idle time that could be used productively
  3. Transporting: Unnecessary transport of parts or materials
  4. Inappropriate processing: Operations that add no value from the customer's perspective
  5. Unnecessary inventory: Exceeding one-piece flow
  6. Unnecessary/excess motion: Any movement by people or equipment that does not add value
  7. Defects: Rework, repair, or waste in its simplest form

The Poka Yoke Error Proofing Technique

Poka Yoke, or error proofing, is a technique to eliminate the waste of defective product by not producing it in the first place. As defective product is identified, the root cause of how the product was made defective is determined, and then a poka yoke is created to ensure that cause cannot occur again.

The Kanban System

As product is sold to the end customer, a Kanban system pulls replacement product through the system. By building as a direct result of customer activity, waste in the form of excess inventory is minimized or eliminated. Wasted time typically refers to setup and die change applications.

The SMED Technique

SMED (Single Minute Exchange of Die) techniques are used to minimize time lost to production changeovers. By eliminating unnecessary changeover steps and streamlining those that are needed, changeover times can be reduced to less than 10 minutes. This allows machines to run for longer, increasing valuable production time. It also enables more frequent changeovers and shorter production runs to better match production to customer demand.

Although techniques such as Poka Yoke, Kanban, and SMED are concrete, well understood techniques to minimize waste and eliminate errors, they are also components of the overall TPS. These techniques are not the definition of TPS, rather, they are a result of TPS. By codifying and understanding the relationship of manufacturing practices and end customer value, TPS allowed Toyota to grow into one of the premiere world class manufacturing companies.

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Toyota Production System Benefits

Companies that pursue and emulate TPS best practices have seen much success as a result of this highly effective manufacturing philosophy.

The top four benefits of TPS include:

  1. Identify and enhance customer value
  2. Decrease waste and cost in the manufacturing process
  3. Improve product quality and on-time delivery
  4. Develop a competitive, world-class manufacturing operation

The Toyota Production System has given companies a blueprint for manufacturing excellence.

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