2.4 Toyota Production System (TPS)

Throughout this section, we have illustrated concepts that are core to the lean way of thinking. Most of these elements are derived from the Japanese automotive company Toyota in what is commonly referred to as the Toyota Production System (TPS). TPS is a complex, interconnected system of management that is incredibly hard to replicate—and harder to replicate well.

Yet, there are certain overarching guidelines that represent core aspects of TPS. One principle objective is to efficiently produce a variety of models in small quantities. Here, we provide you with a high-level synopsis of the history behind TPS and insight into the two pillars essential to any lean transformation: just-in-time and autonomation.

A Brief History of TPS

Post-World War II, Japanese companies were faced with scarce resources and slow demands. Meanwhile, American manufacturers were in their heyday, with Henry Ford’s mass production model affording companies tremendous economies of scale. The issue with Ford’s production system was limited variety—the system is perfectly designed to produce large quantities of items in a cookie-cutter fashion. Toyota needed to catch up, but the constraints they faced at the time meant they needed a system that allowed them to quickly produce a variety of quality automobiles at a lower cost than what mass production afforded.

Engineers at Toyota extensively studied Ford’s production system. They realized that with some simple yet highly innovative modifications to the system, Toyota could leverage Ford’s original thinking but turn it into a system capable of producing variety without compromising process flow. The resulting system formed TPS and the foundation for lean management programs.

Pillars of TPS

TPS relies on two core conceptual pillars for success: just-in-time and autonomation. Just-in-time means that each process step produces only what is needed in a continuous, single-piece flow. Autonomation, or jidoka, means that the equipment is stopped any time a defect is produced.

Just-in-Time

A just-in-time approach promotes highly coordinated activities that allow for material deliveries as they are needed. Materials that are on hand before they are needed just sit around in inventory, and inventory—as you’ll recall from the discussion above—is one of the key forms of waste. A just-in-time system seeks to receive smaller and more frequent deliveries of materials, including supplier deliveries. Often, this is supported by supplier operations that are geographically located close to the buyer’s facility. In the 1990s, BMW built an automotive assembly facility in Spartanburg, South Carolina. Over 40 Tier 1 suppliers followed and sited operations in South Caroline as a result. The geographically close network helped to support just-in-time operations for BMW.

Just-in-time production reduces inventory in a system, and therefore it is essential that whatever inventory is in the system is of good quality. There is little to no allowance for quality defects. As inventory levels are decreased, it is very common that new problems, or forms of waste, are revealed. This has led to the common “rocks and river” analogy. The water level of this metaphorical river represents buffers of excess inventory or service worker capacity; as the water level is reduced, then rocks that are piled up on the riverbed are exposed. Those rocks represent the numerous problems inherent to a process.

For example, a supermarket may regularly schedule too many cashiers, many of them idle for much of their shift. But, if the market were to scale back to a smaller number of active cashiers, they might find that one of their cashiers is exceptionally slow and causing long lines and customer wait times (you have almost certainly been in that line before!). The extra cashiers allowed customers to line-jump and managers to avoid the core training issue at hand; only by lowering the water (reducing the service capacity buffer of cashiers) can the problem be identified and resolved!

Autonomation

The Japanese concept of jidoka is best described as “intelligent automation” or “automation with a human touch.” Machines are designed so that they can detect abnormalities in output and automatically stop the process flow so that the problem can be attended to immediately. Autonomation benefits workers by routinizing with equipment those processes that are mundane, repetitive, or unsafe. Workers can focus their energy on tasks that require a more human touch—creativity and solving problems—such as resolving issues when they occur on the line.

Autonomation stops the process at exactly the moment a problem is discovered, and the process does not start back up until it is resolved. It may seem time-consuming to stop the process every single time a problem is discovered, but from a big-picture perspective it actually saves time! It helps find the root cause of the issue at hand and keeps quality issues from being passed down the line.

A number of tools are useful in executing autonomation in a process. Often, the act of stopping the line is a manual one. A visual cue (for example, a warning light as shown in Figure 2.5) will indicate the presence of an issue, and the worker monitoring the system will pull a cord that hangs above the process, called an andon cord. Pulling this cord stops the entire process flow, and all attention is afforded to finding and correcting the problem. This is often facilitated by a process called “5 Whys”, which is an iterative technique for drilling down to the root cause of the issue.

Once it is evident what caused the problem, the process must be redesigned to avoid making that error again. This step of mistake-proofing the process is known as poka-yoke.

Lean in Services

Lean thinking has permeated manufacturing process improvements around the globe, but lean has also had a big impact on the way service organizations conduct their businesses, too. Healthcare operations, in particular, have been strongly impacted by the lean movement, and made great strides in improving their processes as a result.

Take the Pittsburgh Regional Healthcare Initiative (PRHI) as an example (prhi.org). Founded in 1998, this collaborative strives to improve the safety and quality of healthcare through the implementation of its Perfecting Patient Care Lean methodology. The results of the program have been phenomenal. For example, one of the key statistics providing impetus for the program was the result of a troubling report issued by the Centers for Disease Control showing that in the U.S., approximately 80,000 patients die each year from hospital-acquired infections—each year! Following a three-year period in which lean practices and continuous improvement were applied, central line infection rates at PRHI were reduced by more than 95%, and deaths due to these infections dropped to zero!

While the improvement was incredible, the tools used to achieve such a dramatic change were not actually monumental. For example, poor handwashing protocol was found to be a common problem causing such infections. Protocol stated that doctors should wash their hands immediately upon entering a patient room, but because of tight schedules, the need to read patient charts, and the effort to interact right away with patients, handwashing was often overlooked.

So what did PRHI do? Using visual controls as promoted by lean management, administrators used brightly colored tape to mark off a small area on the floor just inside the doorway of all patient rooms. When doctors entered a room, they saw the tape and were reminded to wash their hands. Sanitizing dispensers were installed in the same space in every room to standardize accessibility. Finally, in following with a culture of continuous improvement in which all employees are empowered to make change, nurses were encouraged to speak up and remind doctors who still forgot to wash their hands to do so. This last step was critical, as healthcare operations take place in a highly hierarchical culture, and nurses needed that empowerment to speak free of impunity by the doctors they worked with. The whole initiative was a great example of how even small changes can make a huge difference!

Lean applications in service environments can be challenging for a variety of reasons. Consider the following:

• First, there is often not a tangible item that you can easily map through the system and readily assess inventory backlogs.

• Second, demands on service processes are typically more variable than demand in a production environment.

  This makes it tempting to use batch processing so that idle time of resources is minimized, but batch processing is in direct opposition to the single-piece continuous flow mantra of lean.

• Third, the service provided is often tailored to individual customer needs, whereas a lean system thrives under standardization.

  Idiosyncratic customer needs challenge initiation of a common work pace—called takt time in lean lingo. Standardization also helps with cross-training initiatives, which might be harder in a service process where specialized skills are required.

While these represent substantial hurdles for any service organization attempting to implement lean, PRHI and others have shown there are those up to the task!