“Layout has numerous strategic implications because it establishes an organization’s competitive priorities in regard to capacity, processes, flexibility and cost, as well as quality of work life, customer contact and image. ” I agree this statement and I will use Toyota Motor Corporation to discuss as below: First of all, I want to introduce some background of Toyota Motor Corporation. Toyota Motor Corporation, commonly known simply as Toyota, is a multinational corporation headquartered in Japan, and the world’s largest automaker by sales. Toyota employs approximately 320,808 people worldwide.
The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father’s company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a department of Toyota Industries, it created its first product, the Type A engine, and, in 1936, its first passenger car, the Toyota AA. Toyota also owns and operates Lexus and Scion brands and has a majority shareholding stake in Daihatsu and Hino Motors, and minority shareholdings in Fuji Heavy Industries, Isuzu Motors, Yamaha Motors, and Mitsubishi Aircraft Corporation.
The company includes 522 subsidiaries. Toyota is headquartered in Toyota City, Aichi and in Tokyo. In addition to manufacturing automobiles, Toyota provides financial services through its division Toyota Financial Services and also builds robots. Toyota Motor Corporation (including Toyota Financial Services) and Toyota Industries form the bulk of the Toyota Group, one of the largest conglomerates in the world. On May 8, 2009, Toyota reported a record annual net loss of US$4. billion, making it the latest automobile maker to be severely affected by the 2007-2009 financial crisis. In my opinion, we can understand the competitive priorities as to satisfy customer. In Toyota, they would achieve this by various manufacturing method. One of the method is Lean Manufacturing. Lean manufacturing or lean production, which is often known simply as “Lean”, is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination.
Working from the perspective of the customer who consumes a product or service, “value” is defined as any action or process that a customer would be willing to pay for. Basically, lean is centered around creating more value with less work. Lean manufacturing is a generic process management philosophy derived mostly from the Toyota Production System (TPS). It is renowned for its focus on reduction of the original Toyota seven wastes in order to improve overall customer value, but there are varying perspectives on how this is best achieved.
The steady growth of Toyota, from a small company to the world’s largest automaker, has focused attention on how it has achieved this. Lean manufacturing is a variation on the theme of efficiency based on optimizing flow; it is a present-day instance of the recurring theme in human history toward increasing efficiency, decreasing waste, and using empirical methods to decide what matters, rather than uncritically accepting pre-existing ideas. As such, it is a chapter in the larger narrative that also includes such ideas as the folk wisdom of thrift, time and motion study, Taylorism, the Efficiency Movement, and Fordism.
Lean manufacturing is often seen as a more refined version of earlier efficiency efforts, building upon the work of earlier leaders such as Taylor or Ford, and learning from their mistakes. To implement lean manufacturing, Toyota use Just-in-time to achieve it. Just-in-time (JIT) is an inventory strategy that strives to improve a business’s return on investment by reducing in-process inventory and associated carrying costs. To meet JIT objectives, the process relies on signals or Kanban between different points in the process, which tell production when to make the next part.
Kanban are usually ‘tickets’ but can be simple visual signals, such as the presence or absence of a part on a shelf. Implemented correctly, JIT can dramatically improve a manufacturing organization’s return on investment, quality, and efficiency. Quick notice that stock depletion requires personnel to order new stock is critical to the inventory reduction at the center of JIT. This saves warehouse space and costs. However, the complete mechanism for making this work is often misunderstood.
For instance, its effective application cannot be independent of other key components of a “lean” system or it can, as its academic founder noted, “… end up with the opposite of the desired result. “. In recent years manufacturers have continued to try to hone forecasting methods (such as applying a trailing 13 week average as a better predictor for JIT planning), however research of today’s leading corporations demonstrates that basing JIT on the presumption of stability is inherently flawed. Just-in-time operation leaves suppliers and downstream consumers open to supply shocks and large supply or demand changes.
For internal reasons, Ohno saw this as a feature rather than a bug. He used an analogy of lowering the water level in a river to expose the rocks to explain how removing inventory showed where production flow was interrupted. Once barriers were exposed, they could be removed. Since one of the main barriers was rework, lowering inventory forced each shop to improve its own quality or cause a holdup downstream. A key tool to manage this weakness is production levelling to remove these variations. Just-in-time is a means to improving performance of the system, not an end.
Very low stock levels means shipments of the same part can come in several times per day. This means Toyota is especially susceptible to flow interruption. For that reason, Toyota uses two suppliers for most assemblies. As noted in Liker (2003), there was an exception to this rule that put the entire company at risk because of the 1997 Aisin fire. However, since Toyota also makes a point of maintaining high quality relations with its entire supplier network, several other suppliers immediately took up production of the Aisin-built parts by using existing capability and documentation.
Thus, a strong, long-term relationship with a few suppliers is better than short-term, price-based relationships with many competing suppliers. Toyota uses this long-term relationship to send Toyota staff to help suppliers improve their processes. These interventions have been going on for twenty years and have created a more reliable supply chain, improved margins for Toyota and suppliers, and lowered prices for customers. Toyota encourages their suppliers to use JIT with their own suppliers.
In production way, Toyota has its techniques and methods to achieve continuous flow in production and lower wastes during production. Toyota does it in 2 ways which are production working principals and production working methods. Production working principals is to ensure the quality and lower the waste to be produced. When there is a problem occurs, Toyota production line will stop function. The production will not process until the problem is eliminated. This is called “JIDOKA” in Toyota.
Autonomation describes a feature of machine design to effect the principle of jidoka, used in the Toyota Production System (TPS) and Lean manufacturing. It may be described as “intelligent automation” or “automation with a human touch. ” This type of automation implements some supervisory functions rather than production functions. Autonomation prevents the production of defective products, eliminates overproduction and focuses attention on understanding the problem and ensuring that it never recurs.
It is a quality control process that applies the following four principles: (1) Detect the abnormality. (2) Stop. (3) Fix or correct the immediate condition. (4) Investigate the root cause and install a countermeasure. Jidoka is related to Just-in-time, Jidoka or “the decision to stop and fix problems as they occur rather than pushing them down the line to be resolved later” is a large part of the difference between the effectiveness of Toyota and other companies who have tried to adopt Lean Manufacturing.
Autonomation, therefore can be said to be a key element in successful Lean Manufacturing implementations. For “just-in-time” (JIT) systems, it is absolutely vital to produce with zero defects, or else these defects can disrupt the production process – or the orderly flow of work. JIT and Lean Manufacturing are always searching for targets for continuous improvement in its quest for quality improvements, finding and eliminating the causes of problems so they do not continually crop up. Jidoka involves the automatic detection of errors or defects during production.
When a defect is detected the halting of the production forces immediate attention to the problem. The halting causes slowed production but it is believed that this helps to detect a problem earlier and avoids the spread of bad practices. For production working methods, to implement Jidoka, first of all, Toyota change the design of production machines to ensure they can automatically stop when there is production problems occurred in the production lines such as not enough materials, wrong control of machines.
There is also a yellow string passing through each production stage and will be pulled when there is production problem occurred. This can gieve signal to each production stage workers to let them know. Then they can stop working because of the production problem. There is also a manual instruction to each worker to let them know when to stop the production machines. In order to achieve the continue flow of production and reduce the wastes in production, there is two parts to do so: 1. workers’ working position or arrangements, and material handling in production.
For working arrangements, firstly, workers are to be arranged to work on both left and right side of the vehicle on the conveyor. This allows some production process to work mutually at the same time to reduce the production time. For material handling, one of the most important technique is “Kanban”. An important determinant of the success of production scheduling based on “pushing” the demand is the quality of the demand forecast which can receive such “push”. Kanban, Kanban is a concept related to lean and just-in-time (JIT) production.
The Japanese word kanban is a common term meaning “signboard” or “billboard”. According to Taiichi Ohno, the man credited with developing JIT, kanban is a means through which JIT is achieved. Kanban is a signaling system to trigger action. As its name suggests, kanban historically uses cards to signal the need for an item. However, other devices such as plastic markers (kanban squares) or balls (often golf balls) or an empty part-transport trolley or floor location can also be used to trigger the movement, production, or supply of a unit in a factory.
By contrast, it is part of an approach of receiving the “pull” from the demand. Therefore the supply, or production is determined according to the actual demand of the customers. In contexts where supply time is lengthy and demand is difficult to forecast, the best one can do is to respond quickly to observed demand. This is exactly what a kanban system can help: it is used as a demand signal which immediately propagates through the supply chain. This can be used to ensure that intermediate stocks held in the supply chain are better managed, usually smaller.
Where the supply response cannot be quick enough to meet actual demand fluctuations, causing significant lost sales, then stock building may be deemed as appropriate which can be achieved by issuing more kanban. Taiichi Ohno states that in order to be effective kanban must follow strict rules of use , Toyota, has six simple rules, below and that close monitoring of these rules is a never-ending problem to ensure that kanban does what is required. Toyota’s Six Rules are: . Do not send defective products to the subsequent process 2. The subsequent process comes to withdraw only what is needed 3. Produce only the exact quantity withdrawn by the subsequent process 4. Equalize production 5. Kanban is a means to fine tuning 6. Stabilize and rationalize the process To conclude, according to the analysis of Toyota’s facilities layout, Toyota reflect the real situation and support the view of the statement mentioned at the beginning.