From the Toyota Continuous Improvement System to DOS

Since the 1980s, companies and students alike have looked to the legendary continuous improvement-inspired Toyota Production System (TPS) as the blueprint for manufacturing success. It’s the best-known example of lean processes in action and has become a model for competitive manufacturing today.

But what are the foundational efficiency drivers that made the Toyota continuous improvement system so desirable in so many manufacturing processes and assembly lines across the world, and how have these been expanded on in the decades since its original formulation?

This blog looks at the origins of the TPS, its main pillars and principles, its management approach, and the transition to a digital operating system that unlocks greater levels of productivity and organizational efficiency.

Also known by the more generic “lean manufacturing system” or Just-in-Time (JIT) production, TPS has its origins, surprisingly, not in Japan, but the US. In the 1920s, Henry Ford devised a “one-piece flow” manufacturing system that outperformed every other manufacturing operation of its day. By 1925, the River Rouge plant near Dearborn, Michigan, produced roughly one Model T Ford per minute with a total lead time – from steelmaking to the finished vehicle – of around 33 hours. Even though Ford was building only one model in one color, it was still a remarkable feat at the time.

This sparked the interest of a Japanese automaker, which commenced production in 1937. Thirteen years later, Eiji Toyoda, an engineer and member of Toyota’s founding family, visited the River Rouge plant on a three-month pilgrimage to learn more about production. At the time of his visit, Toyota was in dire straits and teetering on the brink of collapse. It had produced about 2,700 vehicles, whereas Ford was churning out around 7,000 vehicles a day.

What Toyoda saw at River Rouge would eventually shape his thought processes – with major influences from his colleagues Taiichi Ohno and Shigeo Shingo – to build what was to become the world’s largest and most profitable automobile manufacturer. The TPS – steeped in the philosophies of daily improvements and complete waste elimination in pursuit of the most efficient methods – forms the backbone of all Toyota’s production processes today.

Key concepts of the continuous improvement Toyota Production System

The TPS house has become a cultural icon in the manufacturing world. The TPS, representing the roof, rests on two main conceptual pillars: Just-in-Time (JIT) production and Jidoka.

1. JIT production: Pioneered by Taiichi Ohno, just-in-time production is the most well-known aspect of the house and a cornerstone of modern manufacturing. Together with the TPS, it has evolved over a long period of trial-and-error experimentation to improve efficiency. It took over 15 years for Toyota to perfect their ideas of pull production with just in time concepts. The JIT method was only introduced into western manufacturing at the end of the 1970s.

As the name suggests, ‘‘just in time’’ is a management philosophy that calls for the production of what the customer wants, when they want it, in the quantities requested, where they want it, and without it being held up in inventory – in other words, the right part to the right place at the right time.

Ohno believed that the ideal conditions for making things “are created when machines, facilities and people work together to add value without generating any waste.” Therefore, he conceived methodologies and techniques for the elimination of waste between operations, both lines and processes. The result was the Just-in-Time method.

Within a JIT manufacturing system, each process will only produce what the next sequential process calls for. In this way, you can focus your resources on only fulfilling what you’re going to be paid for rather than manufacturing for stock. This has been instrumental in helping companies curb overproduction.

2. Jidoka: This is a lesser-known and more complex concept which Toyota defines as “automation with a human touch”, also known as autonomation. It represents a machine with human intelligence, where it immediately stops itself upon detecting a deviation from a set standard.

The concept has also been extended to manual processes where operators pull a cord and interrupt production when they detect an error or abnormal condition. This enables them to build quality into each process by eliminating the root causes of defects. Therefore, problems are contained in an area before it spills over possibly even leading to a defect for the customer.

Whether human or automatic, Toyota refers to every process as enabled or empowered to detect abnormal conditions and stop autonomously. It also floats problems to the surface, which brings about continuous improvement. Put simply, think of jidoka as a process or technique for detecting and correcting production defects rather than persisting with producing an inferior product.

An added benefit of having a machine stop when a problem arises is that one operator can efficiently control and monitor several machines, increasing productivity.

No house will remain standing without a strong foundation. Underpinning the two pillars of the TPS are the principles of heijunka (levelization), standardized work, and kaizen (continuous improvement):

• Heijunka: Toyota defines heijunka as the overall leveling of overburden (Muri) and unevenness (Mura) in the production schedule in terms of the volume and array of items produced in a given time. Production leveling is a prerequisite for just-in-time delivery and is essential in a lean facility’s pursuit of eliminating waste and improving production efficiency to establish a continuous flow of high-quality products.

Changing customer demand is a reality in every industry, whether seasonal or market influenced. In made-to-order approaches, attempts to meet these changing demands often result in a “hurry up, slow down” scenario. This leads to an uneven production schedule that produces more inventory than needed, overtime expenses, and added pressure on people and equipment to handle a sudden flood of orders. Heijunka aims to prevent this from happening.

• Standardized work: At first glance, the concept of standardization may concern many companies regarding its impact on professional employees. These employees expect to have autonomy, be creative in their work, and not be restrained by following standard procedures.

However, Toyota has created a different type of standardization. In their version, standardization is part of continuous improvement. It provides the foundation for them to develop sophisticated solutions to highly cyclic resource demands typically found in product development systems.

Toyota creates higher level flexibility by standardizing lower-level tasks, making the process liberating rather than confining.

• Kaizen (continuous improvement): Kaizen has become a universal term, but organizations seldom practice it as genuine continuous improvement permeating the organization. The practice is based on deeply rooted Japanese principles that hold the belief that everything can be improved upon constantly, no matter how big or small.

In business, the kaizen culture promotes the idea that improvement is a gradual and methodical process that can only be sustained if built into an organization’s culture. Every individual should strive to improve products, processes and themselves for better results over time. They achieve this by making changes at all levels of the operation – from strategic planning to production processes. Employees own the processes, and their ideas and suggestions are valued.

Applied correctly, kaizen will improve quality and promote a growth and problem-solving mindset with employees believing that there’s always room for improvement. This, in turn, leads to better customer service and improved operational efficiency.

The Toyota Way

The Toyota spirit of monozukuri (making things), referred to as “the Toyota Way” today, built upon the foundation of heijunka. The Toyota Way management approach is an integral part of the continuous improvement Toyota Production System.

Toyota has gone to extraordinary lengths to remove every roadblock to production leveling, especially in reducing changeover times so that it can support various production lines without production loss.

The vehicle manufacturer’s lean thinking and relentless pursuit of eliminating waste – any part of a process that doesn’t add value for the customer – has enabled them to reduce waste drastically during changeovers.

Over several decades, Toyota has brought the ability to cut changeover times down to a fine art. Many have been reduced to less than 20% of the original changeover times. Even more remarkable, some changeovers that took more than a shift to do in the past have now been reduced to a matter of minutes.

The Toyota Way consists of two primary and five underlying principles. Let’s take a brief look at each:

1.	Continuous improvement	Challenge:	shaping a long-term vision to create an atmosphere of constant learning through courage and creativity.
		Kaizen:	continuously improve business operations through innovation and evolution.
		Genchi genbutsu:	Go and see for yourself at the source (the gemba) to thoroughly understand the situation and make the correct decisions. Gemba walks are a key component of leader standard work. The how-to guide Gemba walks for executive leadership explains this concept in more detail.
2.	Respect for people	Respect:	We respect our colleagues, including our extended network of partners and suppliers, by building mutual trust and making every effort to understand their ideas and cultural and personal beliefs.
		Teamwork:	Successful teamwork is about solving problems across functional boundaries, maximizing individual and team performance, and sharing opportunities for development and personal and professional growth.

The Toyota culture of continuous improvement has been adopted not only by companies in Japan and within the automotive industry, but in production activities worldwide and it continues to evolve globally.

The dawn of DOS

Digital operating systems (DOS) represent an emerging approach to next-generation production systems that harmonizes lean and continuous improvement principles with smart manufacturing. By leveraging leading-edge technologies, the focus is on unlocking new productivity and organizational efficiency levels through advanced analytics and increased digital capability with speed and agility.

Digital disruption is often misinterpreted as a negative occurrence. In reality, it is only an opposing force for those why try to ignore it, whereas those who embrace it experience greater efficiency levels and competitive advantage. While DOS won’t change the fundamental purpose of corporate production systems, they will alter how they’re built and run.

The first step in making the transition to a digital operating system is to have a deep understanding of your organization’s level of digital and best practice maturity. Your current state of operations and value chain alignment also needs assessment.

These insights will help you develop an implementation road map to maximize digital capability across every aspect of your business.

Implementing a modern production system

Like any production system, the ultimate goal of a DOS is to enhance an organization’s competitive advantage by establishing a set of systems, processes and practices to guide its operations and employees in line with its business objectives. However, this modern version of the continuous improvement Toyota Production System will only be successful if it follows a sequenced plan of action.

Therefore, a stage-managed implementation strategy is key to unlocking the power of a digital operating system. Failing to understand the implementation process and its components can easily trip up a business’ ambitions. For all the success stories, there are also examples of organizations battling with costly, complex and challenging transitions to a DOS that disrupt operations rather than advance them.

Fortunately, manufacturers can now ask for help defining, developing and executing a DOS implementation plan uniquely designed for their specific needs. Implementation can be complex, but a digital integrative improvement system such as the TRACC Platform can seamlessly transform your entire value chain into an interconnected, agile end-to-end network.

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