How the Toyota Production System Was Misrepresented to US Audiences

What This Article Covers

  • The Toyota Production System and the Flexible Manufacturing System
  • The Toyota Production System and Flexible Programs
  • The Limitations of a Flexible Manufacturing System
  • Flexible Manufacturing System as an Infinite Box
  • How About Stability?
  • Manufacturing Stability and Quality
  • The Secret Behind Inexpensive High-Quality Light Bulbs
  • A True Flexible Manufacturing System

Flex

Introduction

Toyota is often put forward as an exemplar of what to follow — and there is a cottage industry in consulting which often explains what Toyota did incorrectly.

Most of the books on Toyota and the Toyota Production System (TPS) were written by consultants, who have consulting services to sell and therefore will often alter the actual history of what set Toyota apart to appeal to executive audiences.

The Toyota Production System and the Flexible Manufacturing System

To continue to give US executives more of what they want to hear, but less of what is true, the TPS has been commingled with concepts of flexible manufacturing systems.

Manufacturing flexibility could be a good thing, as it depends upon what is meant by the term. In practice the term is often used by those that refuse to accept any of the actual limitations of manufacturing operations, such as:

  1. Changeover Time
  2. Quality Tuning During a New Production Run
  3. Resource Constraints
  4. Manufacturing Costs Increases with Small Production Runs

Whatever the real restriction, flexible manufacturing proponents are against it.

The only real way I am aware of to improve manufacturing flexibility is to have the highest quality and best fitting production scheduling system possible. This is something I cover in the previous article Grading Your Production Scheduling System. However, flexible manufacturing proponents tend not to be for this and are often unimpressed by system solutions to the problem. They will often point to failures of previous production scheduling systems as evidence that this is not an answer. However, as I say, many production scheduling applications have been selected by feeble evidence with executive decision makers not including schedulers into the software selection process. And secondly, production scheduling implementations are a specialized trade. They require a lot of involvement from the software vendor’s consulting organization.

Is it true that Toyota performed great things with flexible manufacturing? Were variable production schedules a hallmark of the Toyota Production System, and is this something that the Toyota Production System was known to master? This is crucial to determine because flexible manufacturing proponents are aligned with the viewpoints of both Sales and Marketing that manufacturing should be flexible, because Marketing in particular, and Sales to a somewhat lesser degree has been reducing the ability to forecast items.

Let us take a look in the Toyota Production System and production schedule variability.

Best Practices?

This actually gets to the question of how well best practices can be migrated or transferred from one place to another.

In the literature, some spectacular examples of the identification and transfer of best practices can be found, lean production probably being the most famous one. A team of the Sloan Management School at MIT condensed the practices of Japanese producers of automobiles and recommended automobile producers in their countries to adopt these principles. The major automotive companies readily followed the plea. The MIT concept became the world standard for automobile production. The principles have also been transferred to t he other industries. However, it is not at all clear whether this case is an example of a successful transfer of a practice. Th MIT team has been accused of constructing a highly stylized model of the Japanese automotive production system there by downplaying the specific Japanese context of automobile production. There is no consensus whether and how learn production positively affect performance. Lean production and other “best practices” of he soft are rather raw sketches of good rather than actual practices. – Trading Best Practices a Good Practice?

Toyota’s Flexible Programs

Toyota had a Flexible Body Line back in 1985. They have modified this over time declaring that they can change over between models more easily on its production lines which they now call theGlobal Body Line or GBL. Some of the articles do bring up some specifics related to Toyota’s GBL, which include:

  • “Replacing three pallets with a single pallet”
  • “New robots that are single task versus multi-jig robots”
  • “Vehicle designs with a commonality for various hardpoints”

“Even with the ability to produce either different models, there is a limit to GBL’s flexibility. Once pressed, engineers admit that not everything Toyota makes can be produced on a single GBL Line.” – Wards Auto

Another publication called the Idea of Practice of Flexible Manufacturing Systems of Toyota states that.

“We should understand that FMS is an extensive system form product design through product distribution, but not as a system limited to a process in manufacturing.”

The Limitations of a Flexible Manufacturing System

However, there is a limit of how much the factory floor can be adjusted to speed changeover times.  And these adjustments for flexibility have a cost. As I quoted above, Toyota had to invest in new robots and redesign the factory floor. Another thing that is often used to promote flexibility is to create a manufacturing cell. A cell is a pre-designated grouping of resources, labor, etc.. that is coordinated when a new product is made.

All of this is nice, but there are simply limitations to how much of this can be done, and whatever is done, be it adding specialized robots, or developing manufacturing cells, when the factory is setup, then those are the constraints. Now production scheduling deals with the obstacles as they are presented to the system.

The problem is that when these restrictions are referred to, often a person from Sales or Marketing or a flexible manufacturing guru will say that all that needs to occur is that manufacturing needs to be made more flexible. Now the person from Sales or Marketing does not know manufacturing and has a strong bias as they see any limitation placed upon their ability to sell, as they mainly want the manufacturing facility to act as a magic box, where pretty much any product can be pulled out of.

Flexible Manufacturing System and an Infinite Box

Far too many people from Sales and Marketing see the manufacturing plant in this way. Would this be nice? Of course, but reality says there are always constraints in manufacturing. 

How easy it is. One can know nothing about manufacturing but declare that there should be a flexible manufacturing system in place so that none of the normal manufacturing tradeoffs apply. One need only use the phrase “flexible manufacturing system.” Its a bit like using the term “clean coal.” By using the terms the person can propose that there are no limits.

So if you don’t study or understand manufacturing, then one should probably not be proposing that the factory simply is “more flexible,” because you don’t know that that means.

As for other flexibility proponents, it should be understood that the factory does not become more flexible, from whatever the layout/cells/, etc. s at a particular time. That is, flexibility is an inherent product of how the factory is set up and prepared. And whatever that flexibility is, it is — if the master data has been set up to reflect this — what the production scheduling system is already working with as a model. I feel that distinction is lost on quite a lot of people.

The Benefits of Manufacturing Stability

People who frequently discuss the importance of the flexible manufacturing system present an unbiased viewpoint on the management and planning of manufacturing. While touting the flexible manufacturing system, they dismiss the benefits of manufacturing stability and a stable production schedule. 

As much as flexibility is talked up as universally virtuous, it is in fact stability from where production efficiency flows. A plant may be able to be made more flexible, but flexibility always has a cost in the form of production output. Obviously, the longer you keep making the same thing, the higher your output. And in fact, while Toyota has flexible components to it, my research into Toyota’s early years is that they had a very stable production schedule. This tends not to be brought up because while it is considered trendy to talk about flexibility it is considered awkward to bring up the topic of stability.

The Basis for Manufacturing Productivity

Stability, not flexibility is the basis for manufacturing productivity. 

Toyota and Stability

Toyota had a strong input from manufacturing in the overall strategy, and in the early years particularly, Toyota kept a very stable production schedule — often a firm horizon for a month or more — something curiously left out by many of the proponents of the Toyota Production Systems in the US. A firm horizon of a month is now unheard of and along with it manufacturing environments have become far more chaotic and difficult to plan.

Toyota could do this because the demand for their cars (in the early years in particular) exceeded the supply. They sold basically every car they made at that time. This is a recipe for manufacturing stability, and manufacturing stability…get ready for it…translates directly to efficiency, to lower costs and also to quality. Something else Toyota has been known for.

Therefore, Toyota should be pointed to as an example of promoting stability in the production schedule. However, why is this story of Toyota’s success not emphasized?

Manufacturing Stability and Quality

This is now extremely unpopular to point out, but my research into manufacturing history as part of the book Process Industry Manufacturing Software, demonstrated to me that high volume manufacturing is most correlated with manufacturing quality. Prior to mass production, product quality and uniformity was much lower as most manufacturing was “flexible,” that is a job shop and primarily make to order.

It was flexible alright it just was not very good — and the costs for everyday items was high. In fact, the uniformity and quality of many manufactured items is due to high volume manufacturing. Furthermore, quality is highest later into the production run, with most the scrap being in the beginning of a new production run as things are being tuned. As a general statement, it is true to say that the longer the production run the better the quality of the average output.

Inexpensive High-Quality Light Bulbs

An excellent example of this is repetitive manufacturing, where the process is so tuned, and so automated that defects can be quite rare, manufacturing speed is amazingly high, and the costs are very very low. The perfect example of this? The light bulb. Where would we have been without inexpensive and plentiful lightbulbs. I would say “in the dark,” but that is certainly corny. 

Conclusion

Toyota and the Toyota Production System is often cherry-picked by people that want to emphasize an attribute or way of doing something of which they are in favor. It is more accurate to say that Toyota has used both flexible and stable forms of production management in its history. However, Toyota is not simply switching over willy nilly — it has setup some aspects of some of its factories to be more flexible, however, this does not mean that their factories are infinitely flexible. Secondly, Toyota accepts a loss in productivity with each change-over. This may be a good thing, but we can’t be sure, because the costs to make the factory more flexible must be included in the overall benefits analysis of becoming flexible, and this type of analysis is never performed, or performed internally by Toyota or another company and never released to the public.

So the next time you hear about how important it is to be flexible in manufacturing, and when Toyota’s name is used to support flexible manufacturing as a virtue, you can send that person this article for some more perspective.

A True Flexible Manufacturing System

Interestingly, one of the most important ways of making not only a plant but multiple plants more flexible is very rarely discussed.

I have called this the Superplant concept, and it requires specific software to enable a network of plants to work this. way. It requires no changes to the setup of the factory, it just means having the knowledge and using the right software. See the reference section below.

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References

Wellstein, Benjamin., Kieser, Alfred., Trading “Best Practices” – A Good Practice?, Industrial and Corporate Change. Jun 1, 20122.

Superplant Book

SUPERPLANT

Superplant: Creating a Nimble Manufacturing Enterprise with Adaptive Planning Software

What is the Superplant Concept?

This book addresses several production and supply planning software functionalities that are all related to the location-based adaptability of the supply chain planning application (multi-plant planning and subcontracting, and contract manufacturing planning).

Solving a Historic Weakness in Production Planning and Scheduling Software

This adaptability is a historical weakness of both advanced planning applications as well as ERP systems. Some of this functionality is rarely found in commercially-available applications, while other functionality is more commonly found but ‘s hard to implement. This book explains these how these multiple functionalities can be leveraged to provide the ultimate in planning flexibility in both supply and production planning.

Why This Book is Unique

The only book about planning for a “Superplant,” by the author who coined the term.

In an environment of increasingly globalized manufacturing, a very long production line that spans the globe is more common than ever. For an increasing number of corporations, multi-plant planning is a reality. “Superplant” describes the ability to plan separate locations as if they were part of one giant plant – or superplant, and is the more accurate modeling of location interdependencies for production and supply planning than is provided by standard advanced planning functionality.

This book delves into the three advanced functionalities that must be enabled for superplant planning: multi-plant planning, subcontracting and multi-source planning. By reading this book you will:

  • Investigate how multi-site planning works from a design perspective.
  • Learn about the functionality that exists to specifically address multi-plant planning and understand why most supply planning software can do nothing with multiple plants.
  • Explore in-depth the PlanetTogether application, which targets the unique planning requirements of a superplant.
  • Learn how to set up master data objects to support multi-plant planning functionality.
  • Improve Key Performance Indicators (KPIs) through proper deployment of multi-plant planning functionality.
  • Examine how subcontracting, and contract manufacturing fit into the superplant concept

Who is This Book For?

This book was written for those with interest in leveraging leading approaches in the supply network for planning improvement. The particular audience would range from executive decision makers to software implementers to supply and production planners.

Chapters

  • Chapter 1: Introduction
  • Chapter 2: Understanding a Superplant Conceptually
  • Chapter 3: Multi-plant Planning
  • Chapter 4: Single Versus Multi-pass Planning
  • Chapter 5: Multi-source Planning
  • Chapter 6: Subcontracting Planning and Execution
  • Chapter 7: Combining All Three Superplant Functionalities
  • Chapter 8: The Superplant and the Integration Between ERP and the External Planning System
  • Chapter 9: Superplant-enabled Capable-to-promise
  • Chapter 10: Conclusion
  • Appendix A: Labor Pools in Galaxy APS
  • Appendix B: Time Horizons in Galaxy APS
  • Appendix C: Prioritizing Internal Demand for Subcomponents over External Demand

Software Ratings: Production Planning

Software Ratings

Brightwork Research & Analysis offers the following free production planning & scheduling software analysis and ratings. See by clicking the image below:

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