Toyota Inventory Management

7/30/2019 Toyota Inventory Management

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TOYOTA MOTOR CORPORATION

Toyota Motor Corporation:

Japanese multinational

Headquartered in Aichi, Japan

Sakichi Toyoda, founder:

Toyota Group of companies.Toyota as a textile machine

company

Kiichiro Toyoda, son ofSakichi, Founder: ToyotaMotor Corporation,1937

Developed the concept ofJust-in-Time.

PS: Shingo Prize is thehighest manufacturing

excellence award in the U.S.The prize is given both to

companies and individualswho contribute to the

development ofmanufacturing excellence.


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WHY TOYOTA?


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HOUSEOF TOYOTA

To provide bestquality

Lowest costShortest lead timethrough elimination

of waste

Two Pillars:

Just In Time &

Jidoka(autonomation)


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Attacks waste

Anything not adding

value to the product

Exposes problems

and bottleneckscaused by variability

Deviation from optimum

Achievesstreamlinedproduction

By reducing inventory


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Waste(muda

in Japanese)

anything other than the

minimum amount ofequipment, materials,

parts, space, and workers

time, which are absolutely

essential toadd value

tothe product.

Shoichiro Toyoda

Founder, Toyota


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CONTINUOUS FLOW-ONE-PIECEFLOW, SINGLE-PIECE

FLOW,ANDMAKEONE, MOVEONE.

Producing and

moving one itemat a time

Or small batchof items

Through a

series of stepscontinuously

With each step

making just whatis requested bythe next step


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CONTINUOUS FLOW PRODUCTION

CustomersSuppliers

Customers

Suppliers

Production Process(stream of water)

Inventory (stagnantponds) Material

(water instream)

Traditional Flow

Flow with JIT


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PUSH (OLDSTYLE MRP / MATERIAL

REQUIREMENTS PLANNING SYSTEM)

Material

Information (Production Schedule)

WorkStation 1

WS 2 WS 3

Push system: material is pushed into

downstream workstations regardless of whether

resources are available


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PULL (JIT) SYSTEM

Material

Information (via Kanban/Card)

WorkStation 1

WS 2 WS 3

The production of items only as demanded for useor to replace those taken for use.

Pull system: material is pulled to a workstation just

as it is needed.


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MARKER


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TRIANGULAR KANBAN

Part #

Trigger (Reorder) Point

Part Description Location

Date Triggered Lot Size

Tool #

Machine #

KANBAN

Authorizesproduction from

downstream

operations

Pulls material

through plantMay be a card, flag.

Easy to add orremove containers

to change

production rate


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A

A A B B B C

JIT Small Lots

Large-Lot Approach

Time

Time

A A B B B C

A A A B B B B B B C C

JIT produces same amount

in same time if setup times

are lowered

SMALLVERSUS LARGE LOTS

Small lots also increase flexibility to meet

customer demands


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CYCLE TIMES

Working time per day = 480 minutes

Daily requirements: A = 40 units; B = 40 units; C = 10 units

The system cycle time = 480/(40+40+10) = 5.33 min/unit

Product Requirements Cycle Time

480 40 12

480 40 12

480 10 48

A 40

B 40

C 10


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Customer

orders 10

Lot size = 5

Lot 1 Lot 2

Lot size = 2

Lot 1 Lot 2 Lot 3 Lot 4 Lot 5

REDUCING LOT SIZES INCREASESTHE NUMBEROF

LOTS-TO LOWER INVENTORY,

REDUCE LOT SIZES


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Change for better = continuous improvement

Kaizen workshop or

Kaizen event:A group of Kaizen

activity, commonly lastingfive days, in which a

team identifies and

implements a significant

improvement in a

process, e.g., creating amanufacturing cell.

KAIZEN


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5S: OF KAIZEN/LEAN MANUFACTURING

S LEAN PRODUCTION SYSTEM


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5 STEPSOF LEAN PRODUCTION SYSTEM

Step 5: PerfectionThere is no end to the process of reducing effort, time, space, cost, and mistakes. Its a

chain process.

Step 4: Create Pull ProductionLet the customer pull products as needed.

Step 3: Create Continuous FlowMake the remaining steps in the value stream flow. Eliminate functional barriers and develop

a product-focused organization that dramatically improves lead-time.

Step 2: Value Stream Mapping.the problem-solving task, the information management task, and the physical transformation

task. Identify and categorize waste and eliminate it.

Step 1:Specify Value

Define value from the perspective of the final customer..


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ATTRIBUTESOF LEANMANUFACTURING

use JIT toeliminateinventory

build systems to helpemployees product a

perfect part everytime

reduce spacerequirements

develop closerelationships with

supplierseducate suppliers

eliminate all butvalue-added

activities

develop theworkforce

reduce thenumber of job

classes and buildworker flexibility

apply TotalProductive

Maintenance(TPM)


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JIDOKA TECHNIQUES

Poka-yoke (mistake or error proofing)

A form of device for building-in quality at each productionprocess.

This device may take many shapes and designs.

Typical types of Pokayoke are sensors, proximity switches,stencils, light guards and alignment pins.

Simple circuitry is usually used to operate these electricalerror proof devices as they should be of low cost andsimple design.

Goal: Finding defects before they occur = Zero Defects

Statistical Quality Control (SQC): Finding defects after theyoccur


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Value Stream Mapping

What?

Why?

Who?

When?

Where?

How?

A visual tool for identifying all activities of the planning,

and manufacturing process to identify waste.

Provides a tool to visualize what is otherwise usually

invisible.

The leaders of each product family need to have a

primary role in developing the maps for their own area.

Develop a current-state map before improvements are

made so that the efforts and benefits can be quantified.

On the shop floor, not from your office. You need the real

information, not opinion or old data.

Next page


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VALUE STREAM MAP SYMBOLS

Spot weld

Process

Finishedgoods

Vendor Data box Inventory

Push Supermarket:

the location of a

predetermined

standard inventory

Physical pull Shipment


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COMPARISONOF

MRP (MATERIAL REQUIREMENTS PLANNING), JIT

Loading of operations

Batch sizes

Importance of data

accuracy

Speed of scheduled

development

Flexibility

Cost

Goals

Planning focus

Production basis

Checked by capacity

requirements

Planning afterward

One week or more

Critical

Slow

Lowest

Highest

Meet demand

Have doable plan

Master schedule

Plan

Controlled by kanban

system

Small as possible

Unnecessary

Very fast

Highest

Lowest

Meet demand

Eliminate waste

Final assembly schedule

Need

MRP JIT


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REFERENCES

http://www.toyota.com/

http://www.toyota-global.com/

http://scm.ncsu.edu/scm-articles/article/cash-to-

cash-toyota-inventory-management-and-heijunka http://team2toyota.blogspot.in/2010/02/toyotas-

inventory-management.html

http://en.wikipedia.org/wiki/Toyota

www.wisegeek.org/what-is-a-just-in-time-inventory.html
http://www.toyota.com/http://www.toyota-global.com/http://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://team2toyota.blogspot.in/2010/02/toyotas-inventory-management.htmlhttp://team2toyota.blogspot.in/2010/02/toyotas-inventory-management.htmlhttp://en.wikipedia.org/wiki/Toyotahttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://www.wisegeek.org/what-is-a-just-in-time-inventory.htmlhttp://en.wikipedia.org/wiki/Toyotahttp://team2toyota.blogspot.in/2010/02/toyotas-inventory-management.htmlhttp://team2toyota.blogspot.in/2010/02/toyotas-inventory-management.htmlhttp://team2toyota.blogspot.in/2010/02/toyotas-inventory-management.htmlhttp://team2toyota.blogspot.in/2010/02/toyotas-inventory-management.htmlhttp://team2toyota.blogspot.in/2010/02/toyotas-inventory-management.htmlhttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://scm.ncsu.edu/scm-articles/article/cash-to-cash-toyota-inventory-management-and-heijunkahttp://www.toyota-global.com/http://www.toyota-global.com/http://www.toyota-global.com/http://www.toyota.com/


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Toyota Inventory Management