January 1, 2005

By Darren Dolcemascolo

The power of lean manufacturing or “The Toyota Production System” is undeniable. Toyota has repeatedly proven its effectiveness. According to Jeffrey Liker’s book The Toyota Way (Jeffrey K. Liker. McGraw Hill, 2004, p. 4-5. ), Toyota’s $8.13 billion annual profit in 2003 was 8.3 times higher than the industry average and larger than the combined earnings of “the big 3.” Their automobiles are consistently at the top of the quality rankings; they have the fastest product development process in the world; and they are benchmarked as best-in-class for high quality, high productivity, manufacturing speed, and flexibility.

The ultimate goal of lean is to increase cash flow and operating profits by:

Reducing inventory, delivery time, cycle time, and set-up time.

Improving quality.

Increasing overall customer satisfaction.

Improving employee involvement, morale, and company culture.

Lean organizations achieve such benefits by eliminating waste or non-value creating activities using a set of tools and principles. They create a culture of continuous improvement, and within that culture, they employ the tools of lean to eliminate waste. Not surprisingly, it begins with the customer (not the plant manager or industrial engineer). The customer is the definer of value. Once value is clearly defined, then value streams can be clearly identified. Single-piece flow is applied where possible; pull systems are applied where single-piece flow is impossible (e.g., to control batch processes or between facilities). After using value stream mapping to create a plan to achieve this, kaizen is used to eliminate waste. Process kaizen tools include:

5S, which is a system for organizing the workplace. It helps to create a culture of continuous improvement at the shop floor level. It can also be applied to administrative processes in the office.

Quick Changeover¸ which is a system for reducing setup or changeover time. This allows organizations to produce smaller batch sizes, with the ultimate goal of one-piece flow.

TPM or Total Productive Maintenance, which is a system for properly maintaining equipment. More effective than simple preventative maintenance, TPM involves operators and makes use of teams to increase the uptime of equipment. Near 100% uptime is critical for the lean producer.

Manufacturing Cells/Cellular Manufacturing, which are effective systems for manufacturing or assembling product using one-piece flow. Instead of moving product from area of the factory to another in batch-and-queue fashion, cellular manufacturing makes for much shortened lead times and makes one-piece flow possible.

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