case study on jit in toyota

• How Toyota's Just-In-Time (JIT) System Revolutionized Manufacturing

When one thinks of groundbreaking innovations in manufacturing, Toyota's Just-In-Time (JIT) system undoubtedly stands out. Born out of necessity and refined through careful observation and relentless pursuit of efficiency, the JIT system has not only transformed Toyota's operations but has also left an indelible mark on the global manufacturing landscape. Let's delve into this game-changing philosophy.

1. The Birth of JIT

Post-World War II Japan was resource-scarce. With limited space for inventory and a pressing need for diversified automobile production, Toyota faced a challenge. Traditional mass production methods, epitomized by companies like Ford, weren't feasible. Thus, under the guidance of Taiichi Ohno, the company began to develop a system where parts were produced only when needed and in the exact quantities required.

2. JIT Defined

At its essence, JIT is about producing the right item, in the right amount, at the right time. This system minimizes waste by drastically reducing inventory and streamlining production processes.

3. Pillars of JIT

• Kanban System: Serving as the linchpin of JIT, the Kanban system uses cards (or other signaling methods) to indicate when a particular component should be produced or supplied. As products move through the production line, Kanban signals ensure that parts are replenished only when consumed.
• Takt Time: This refers to the maximum amount of time allowed to produce a product to meet customer demand. It helps synchronize production processes, ensuring a smooth, efficient flow.
• Leveling: By spreading production evenly and minimizing fluctuations, Toyota can efficiently allocate resources, reducing downtime and bottlenecks.

4. The Benefits Realized

Toyota's adoption of JIT led to various benefits:

• Reduced Inventory Costs: Large inventories tie up capital and occupy space. By minimizing inventory, Toyota significantly cut storage and handling costs.
• Improved Quality: With a focus on real-time production, defects were detected and addressed promptly, enhancing product quality.
• Flexibility: JIT allowed Toyota to adapt swiftly to changes in market demand, offering a diverse range of models without maintaining vast inventories of each.

5. The Global Ripple Effect

Toyota's success didn't remain a Japanese secret for long. As companies worldwide noted Toyota's efficiency and profitability, they sought to understand the magic behind the scenes. The JIT system, with its undeniable benefits, became a sought-after model:

• Manufacturing: Beyond automobiles, sectors like electronics, aerospace, and consumer goods started to adopt JIT principles, aiming to optimize their processes and reduce waste.
• Supply Chain Management: The JIT philosophy redefined supply chain dynamics, emphasizing partnerships, real-time communication, and synchronized deliveries.
• Lean Manufacturing: JIT principles became foundational to the broader "Lean" philosophy, emphasizing waste reduction and value optimization throughout the production process.

6. Challenges Along the Way

JIT, while transformative, isn't without its challenges. It demands precise coordination, real-time communication, and a high degree of trust among all stakeholders. Any disruption, whether from supplier delays, natural disasters, or geopolitical issues, can have significant repercussions.

7. The Legacy of JIT in the Digital Age

With advancements in technology, particularly the Internet of Things (IoT), Artificial Intelligence (AI), and advanced analytics, the JIT system is evolving. Real-time data, predictive analytics, and smart factories are enhancing JIT's principles, offering even more refined levels of efficiency and responsiveness.

Toyota's Just-In-Time system is a testament to the power of innovation born from necessity. It's a story of how keen observation, a deep understanding of processes, and the courage to challenge conventional wisdom can lead to revolutionary outcomes. In the annals of manufacturing history, JIT stands as a beacon, illuminating the path to efficiency, responsiveness, and quality.

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THE ESSENCE OF JUST-IN-TIME: PRACTICE-IN-USE AT TOYOTA PRODUCTION SYSTEM MANAGED ORGANIZATIONS - How Toyota Turns Workers Into Problem Solvers

by Sarah Jane Johnston, HBS Working Knowledge

When HBS professor Steven Spear recently released an abstract on problem solving at Toyota, HBS Working Knowledge staffer Sarah Jane Johnston e-mailed off some questions. Spear not only answered the questions, but also asked some of his own—and answered those as well.

Sarah Jane Johnston: Why study Toyota? With all the books and articles on Toyota, lean manufacturing, just-in-time, kanban systems, quality systems, etc. that came out in the 1980s and 90s, hasn't the topic been exhausted?

Steven Spear: Well, this has been a much-researched area. When Kent Bowen and I first did a literature search, we found nearly 3,000 articles and books had been published on some of the topics you just mentioned.

However, there was an apparent discrepancy. There had been this wide, long-standing recognition of Toyota as the premier automobile manufacturer in terms of the unmatched combination of high quality, low cost, short lead-time and flexible production. And Toyota's operating system—the Toyota Production System—had been widely credited for Toyota's sustained leadership in manufacturing performance. Furthermore, Toyota had been remarkably open in letting outsiders study its operations. The American Big Three and many other auto companies had done major benchmarking studies, and they and other companies had tried to implement their own forms of the Toyota Production System. There is the Ford Production System, the Chrysler Operating System, and General Motors went so far as to establish a joint venture with Toyota called NUMMI, approximately fifteen years ago.

However, despite Toyota's openness and the genuinely honest efforts by other companies over many years to emulate Toyota, no one had yet matched Toyota in terms of having simultaneously high-quality, low-cost, short lead-time, flexible production over time and broadly based across the system.

It was from observations such as these that Kent and I started to form the impression that despite all the attention that had already been paid to Toyota, something critical was being missed. Therefore, we approached people at Toyota to ask what they did that others might have missed.

What did they say?

To paraphrase one of our contacts, he said, "It's not that we don't want to tell you what TPS is, it's that we can't. We don't have adequate words for it. But, we can show you what TPS is."

Over about a four-year period, they showed us how work was actually done in practice in dozens of plants. Kent and I went to Toyota plants and those of suppliers here in the U.S. and in Japan and directly watched literally hundreds of people in a wide variety of roles, functional specialties, and hierarchical levels. I personally was in the field for at least 180 working days during that time and even spent one week at a non-Toyota plant doing assembly work and spent another five months as part of a Toyota team that was trying to teach TPS at a first-tier supplier in Kentucky.

What did you discover?

We concluded that Toyota has come up with a powerful, broadly applicable answer to a fundamental managerial problem. The products we consume and the services we use are typically not the result of a single person's effort. Rather, they come to us through the collective effort of many people each doing a small part of the larger whole. To a certain extent, this is because of the advantages of specialization that Adam Smith identified in pin manufacturing as long ago as 1776 in The Wealth of Nations . However, it goes beyond the economies of scale that accrue to the specialist, such as skill and equipment focus, setup minimization, etc.

The products and services characteristic of our modern economy are far too complex for any one person to understand how they work. It is cognitively overwhelming. Therefore, organizations must have some mechanism for decomposing the whole system into sub-system and component parts, each "cognitively" small or simple enough for individual people to do meaningful work. However, decomposing the complex whole into simpler parts is only part of the challenge. The decomposition must occur in concert with complimentary mechanisms that reintegrate the parts into a meaningful, harmonious whole.

This common yet nevertheless challenging problem is obviously evident when we talk about the design of complex technical devices. Automobiles have tens of thousands of mechanical and electronic parts. Software has millions and millions of lines of code. Each system can require scores if not hundreds of person-work-years to be designed. No one person can be responsible for the design of a whole system. No one is either smart enough or long-lived enough to do the design work single handedly.

Furthermore, we observe that technical systems are tested repeatedly in prototype forms before being released. Why? Because designers know that no matter how good their initial efforts, they will miss the mark on the first try. There will be something about the design of the overall system structure or architecture, the interfaces that connect components, or the individual components themselves that need redesign. In other words, to some extent the first try will be wrong, and the organization designing a complex system needs to design, test, and improve the system in a way that allows iterative congruence to an acceptable outcome.

The same set of conditions that affect groups of people engaged in collaborative product design affect groups of people engaged in the collaborative production and delivery of goods and services. As with complex technical systems, there would be cognitive overload for one person to design, test-in-use, and improve the work systems of factories, hotels, hospitals, or agencies as reflected in (a) the structure of who gets what good, service, or information from whom, (b) the coordinative connections among people so that they can express reliably what they need to do their work and learn what others need from them, and (c) the individual work activities that create intermediate products, services, and information. In essence then, the people who work in an organization that produces something are simultaneously engaged in collaborative production and delivery and are also engaged in a collaborative process of self-reflective design, "prototype testing," and improvement of their own work systems amidst changes in market needs, products, technical processes, and so forth.

It is our conclusion that Toyota has developed a set of principles, Rules-in-Use we've called them, that allow organizations to engage in this (self-reflective) design, testing, and improvement so that (nearly) everyone can contribute at or near his or her potential, and when the parts come together the whole is much, much greater than the sum of the parts.

What are these rules?

We've seen that consistently—across functional roles, products, processes (assembly, equipment maintenance and repair, materials logistics, training, system redesign, administration, etc.), and hierarchical levels (from shop floor to plant manager and above) that in TPS managed organizations the design of nearly all work activities, connections among people, and pathways of connected activities over which products, services, and information take form are specified-in-their-design, tested-with-their-every-use, and improved close in time, place, and person to the occurrence of every problem.

That sounds pretty rigorous.

It is, but consider what the Toyota people are attempting to accomplish. They are saying before you (or you all) do work, make clear what you expect to happen (by specifying the design), each time you do work, see that what you expected has actually occurred (by testing with each use), and when there is a difference between what had actually happened and what was predicted, solve problems while the information is still fresh.

That reminds me of what my high school lab science teacher required.

Exactly! This is a system designed for broad based, frequent, rapid, low-cost learning. The "Rules" imply a belief that we may not get the right solution (to work system design) on the first try, but that if we design everything we do as a bona fide experiment, we can more rapidly converge, iteratively, and at lower cost, on the right answer, and, in the process, learn a heck of lot more about the system we are operating.

You say in your article that the Toyota system involves a rigorous and methodical problem-solving approach that is made part of everyone's work and is done under the guidance of a teacher. How difficult would it be for companies to develop their own program based on the Toyota model?

Your question cuts right to a critical issue. We discussed earlier the basic problem that for complex systems, responsibility for design, testing, and improvement must be distributed broadly. We've observed that Toyota, its best suppliers, and other companies that have learned well from Toyota can confidently distribute a tremendous amount of responsibility to the people who actually do the work, from the most senior, expeirenced member of the organization to the most junior. This is accomplished because of the tremendous emphasis on teaching everyone how to be a skillful problem solver.

How do they do this?

They do this by teaching people to solve problems by solving problems. For instance, in our paper we describe a team at a Toyota supplier, Aisin. The team members, when they were first hired, were inexperienced with at best an average high school education. In the first phase of their employment, the hurdle was merely learning how to do the routine work for which they were responsible. Soon thereafter though, they learned how to immediately identify problems that occurred as they did their work. Then they learned how to do sophisticated root-cause analysis to find the underlying conditions that created the symptoms that they had experienced. Then they regularly practiced developing counter-measures—changes in work, tool, product, or process design—that would remove the underlying root causes.

Sounds impressive.

Yes, but frustrating. They complained that when they started, they were "blissful in their ignorance." But after this sustained development, they could now see problems, root down to their probable cause, design solutions, but the team members couldn't actually implement these solutions. Therefore, as a final round, the team members received training in various technical crafts—one became a licensed electrician, another a machinist, another learned some carpentry skills.

Was this unique?

Absolutely not. We saw the similar approach repeated elsewhere. At Taiheiyo, another supplier, team members made sophisticated improvements in robotic welding equipment that reduced cost, increased quality, and won recognition with an award from the Ministry of Environment. At NHK (Nippon Spring) another team conducted a series of experiments that increased quality, productivity, and efficiency in a seat production line.

What is the role of the manager in this process?

Your question about the role of the manager gets right to the heart of the difficulty of managing this way. For many people, it requires a profound shift in mind-set in terms of how the manager envisions his or her role. For the team at Aisin to become so skilled as problem solvers, they had to be led through their training by a capable team leader and group leader. The team leader and group leader were capable of teaching these skills in a directed, learn-by-doing fashion, because they too were consistently trained in a similar fashion by their immediate senior. We found that in the best TPS-managed plants, there was a pathway of learning and teaching that cascaded from the most senior levels to the most junior. In effect, the needs of people directly touching the work determined the assistance, problem solving, and training activities of those more senior. This is a sharp contrast, in fact a near inversion, in terms of who works for whom when compared with the more traditional, centralized command and control system characterized by a downward diffusion of work orders and an upward reporting of work status.

And if you are hiring a manager to help run this system, what are the attributes of the ideal candidate?

We observed that the best managers in these TPS managed organizations, and the managers in organizations that seem to adopt the Rules-in-Use approach most rapidly are humble but also self-confident enough to be great learners and terrific teachers. Furthermore, they are willing to subscribe to a consistent set of values.

How do you mean?

Again, it is what is implied in the guideline of specifying every design, testing with every use, and improving close in time, place, and person to the occurrence of every problem. If we do this consistently, we are saying through our action that when people come to work, they are entitled to expect that they will succeed in doing something of value for another person. If they don't succeed, they are entitled to know immediately that they have not. And when they have not succeeded, they have the right to expect that they will be involved in creating a solution that makes success more likely on the next try. People who cannot subscribe to these ideas—neither in their words nor in their actions—are not likely to manage effectively in this system.

That sounds somewhat high-minded and esoteric.

I agree with you that it strikes the ear as sounding high principled but perhaps not practical. However, I'm fundamentally an empiricist, so I have to go back to what we have observed. In organizations in which managers really live by these Rules, either in the Toyota system or at sites that have successfully transformed themselves, there is a palpable, positive difference in the attitude of people that is coupled with exceptional performance along critical business measures such as quality, cost, safety, and cycle time.

Have any other research projects evolved from your findings?

We titled the results of our initial research "Decoding the DNA of the Toyota Production System." Kent and I are reasonably confident that the Rules-in-Use about which we have written are a successful decoding. Now, we are trying to "replicate the DNA" at a variety of sites. We want to know where and when these Rules create great value, and where they do, how they can be implemented most effectively.

Since we are empiricists, we are conducting experiments through our field research. We are part of a fairly ambitious effort at Alcoa to develop and deploy the Alcoa Business System, ABS. This is a fusion of Alcoa's long standing value system, which has helped make Alcoa the safest employer in the country, with the Rules in Use. That effort has been going on for a number of years, first with the enthusiastic support of Alcoa's former CEO, Paul O'Neill, now Secretary of the Treasury (not your typical retirement, eh?) and now with the backing of Alain Belda, the company's current head. There have been some really inspirational early results in places as disparate as Hernando, Mississippi and Poces de Caldas, Brazil and with processes as disparate as smelting, extrusion, die design, and finance.

We also started creating pilot sites in the health care industry. We started our work with a "learning unit" at Deaconess-Glover Hospital in Needham, not far from campus. We've got a series of case studies that captures some of the learnings from that effort. More recently, we've established pilot sites at Presbyterian and South Side Hospitals, both part of the University of Pittsburgh Medical Center. This work is part of a larger, comprehensive effort being made under the auspices of the Pittsburgh Regional Healthcare Initiative, with broad community support, with cooperation from the Centers for Disease Control, and with backing from the Robert Wood Johnson Foundation.

Also, we've been testing these ideas with our students: Kent in the first year Technology and Operations Management class for which he is course head, me in a second year elective called Running and Growing the Small Company, and both of us in an Executive Education course in which we participate called Building Competitive Advantage Through Operations.

· · · ·

Steven Spear is an Assistant Professor in the Technology and Operations Management Unit at the Harvard Business School.

Other HBS Working Knowledge stories featuring Steven J. Spear: Decoding the DNA of the Toyota Production System Why Your Organization Isn't Learning All It Should

Developing Skillful Problem Solvers: Introduction

Within TPS-managed organizations, people are trained to improve the work that they perform, they learn to do this with the guidance of a capable supplier of assistance and training, and training occurs by solving production and delivery-related problems as bona fide, hypothesis-testing experiments. Examples of this approach follow.

• A quality improvement team at a Toyota supplier, Taiheiyo, conducted a series of experiments to eliminate the spatter and fumes emitted by robotic welders. The quality circle members, all line workers, conducted a series of complex experiments that resulted in a cleaner, safer work environment, equipment that operated with less cost and higher reliability, and relief for more technically-skilled maintenance and engineering specialists from basic equipment maintenance and repair.
• A work team at NHK (Nippon Spring) Toyota, were taught to conduct a series of experiments over many months to improve the process by which arm rest inserts were "cold molded." The team reduced the cost, shortened the cycle time, and improved the quality while simultaneously developing the capability to take a similar experimental approach to process improvement in the future.
• At Aisin, a team of production line workers progressed from having the skills to do only routine production work to having the skills to identify problems, investigate root causes, develop counter-measures, and reconfigure equipment as skilled electricians and machinists. This transformation occurred primarily through the mechanism of problem solving-based training.
• Another example from Aisin illustrates how improvement efforts—in this case of the entire production system by senior managers—were conducted as a bona fide hypothesis-refuting experiment.
• The Acme and Ohba examples contrast the behavior of managers deeply acculturated in Toyota with that of their less experienced colleagues. The Acme example shows the relative emphasis one TPS acculturated manager placed on problem solving as a training opportunity in comparison to his colleagues who used the problem-solving opportunity as a chance to first make process improvements. An additional example from a Toyota supplier reinforces the notion of using problem solving as a vehicle to teach.
• The data section concludes with an example given by a former employee of two companies, both of which have been recognized for their efforts to be a "lean manufacturer" but neither of which has been trained in Toyota's own methods. The approach evident at Toyota and its suppliers was not evident in this person's narrative.

Defining conditions as problematic

We concluded that within Toyota Production System-managed organizations three sets of conditions are considered problematic and prompt problem-solving efforts. These are summarized here and are discussed more fully in a separate paper titled "Pursuing the IDEAL: Conditions that Prompt Problem Solving in Toyota Production System-Managed Organizations."

Failure to meet a customer need

It was typically recognized as a problem if someone was unable to provide the good, service, or information needed by an immediate or external customer.

Failure to do work as designed

Even if someone was able to meet the need of his or her customers without fail (agreed upon mix, volume, and timing of goods and services), it was typically recognized as a problem if a person was unable to do his or her own individual work or convey requests (i.e., "Please send me this good or service that I need to do my work.") and responses (i.e., "Here is the good or service that you requested, in the quantity you requested.").

Failure to do work in an IDEAL fashion

Even if someone could meet customer needs and do his or her work as designed, it was typically recognized as a problem if that person's work was not IDEAL. IDEAL production and delivery is that which is defect-free, done on demand, in batches of one, immediate, without waste, and in an environment that is physically, emotionally, and professionally safe. The improvement activities detailed in the cases that follow, the reader will see, were motivated not so much by a failure to meet customer needs or do work as designed. Rather, they were motivated by costs that were too high (i.e., Taiheiyo robotic welding operation), batch sizes that were too great (i.e., the TSSC improvement activity evaluated by Mr. Ohba), lead-times that were too long, processes that were defect-causing (i.e., NHK cold-forming process), and by compromises to safety (i.e., Taiheiyo).

Our field research suggests that Toyota and those of its suppliers that are especially adroit at the Toyota Production System make a deliberate effort to develop the problem-solving skills of workers—even those engaged in the most routine production and delivery. We saw evidence of this in the Taiheiyo, NHK, and Aisin quality circle examples.

Forums are created in which problem solving can be learned in a learn-by-doing fashion. This point was evident in the quality circle examples. It was also evident to us in the role played by Aisin's Operations Management Consulting Division (OMCD), Toyota's OMCD unit in Japan, and Toyota's Toyota Supplier Support Center (TSSC) in North America. All of these organizations support the improvement efforts of the companies' factories and those of the companies' suppliers. In doing so, these organizations give operating managers opportunities to hone their problem-solving and teaching skills, relieved temporarily of day to day responsibility for managing, production and delivery of goods and services to external customers.

Learning occurs with the guidance of a capable teacher. This was evident in that each of the quality circles had a specific group leader who acted as coach for the quality circle's team leader. We also saw how Mr. Seto at NHK defined his role as, in part, as developing the problem-solving and teaching skills of the team leader whom he supervised.

Problem solving occurs as bona fide experiments. We saw this evident in the experience of the quality circles who learned to organize their efforts as bona fide experiments rather than as ad hoc attempts to find a feasible, sufficient solution. The documentation prepared by the senior team at Aisin is organized precisely to capture improvement ideas as refutable hypotheses.

Broadly dispersed scientific problem solving as a dynamic capability

Problem solving, as illustrated in this paper, is a classic example of a dynamic capability highlighted in the "resource-based" view of the firm literature.

Scientific problem solving—as a broadly dispersed skill—is time consuming to develop and difficult to imitate. Emulation would require a similar investment in time, and, more importantly, in managerial resources available to teach, coach, assist, and direct. For organizations currently operating with a more traditional command and control approach, allocating such managerial resources would require more than a reallocation of time across a differing set of priorities. It would also require an adjustment of values and the processes through which those processes are expressed. Christensen would argue that existing organizations are particularly handicapped in making such adjustments.

Excerpted with permission from "Developing Skillful Problem Solvers in Toyota Production System-Managed Organizations: Learning to Problem Solve by Solving Problems," HBS Working Paper , 2001.

Toyota’s Jit Concept: Other Industries, Other Countries

Cite this chapter.

• Z. M’Barek 2 ,
• H. Fujii 2 &
• Y. Ohtaki 2  

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The Just-in-Time production system (JIT) is well known to result in a considerable cost reduction and improvement in total productivity in many types of manufacturing companies. Its applications in the past, however, have made manufacturers disinclined to use it, because its introduction seemed to require a great change in their management concept. The first investigation reported in this paper was devoted to whether and to what extent the JIT concept has actually been applied to industries other than the automobile industry and in other countries than Japan. Next, a hypothetical application of JIT to the food-processing industry is proposed. The main conclusions were (1) JIT can be partially introduced in production management to solve a/some specific problem/s; (2) when JIT is applied outside the automobile industry, its form might become drastically different; (3) The success or the failure of adopting JIT outside Japan vill depend primarily on the human factor; and (4) JIT is a mirror of the present system in which the Japanese worker is educated.

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TAIICHI OHNO (1978) Toyota Seisan Houshiki — Datsukibo no Keiei wo Mezashi te: Toyota Production System — Aiming at an Off-Scale Management, Tokyo Diamond, p. 11.

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(Ibid. /1/, p. 81)

YASUHIRO MONDEN (1983) Toyota Production System — Practical Approach to Production Management, Industrial Engineering and Management Press Institute of Industrial Engineers, (preface, p. v)

(Ibid. /3/, preface, p. v)

ROBERT WATERBURY (1981) How Does Justin-Time Work in Lincoln, Nebraska?, Assembly Engineering, April, p. 52–56.

JOHN KOTEN (1982) Auto Makers Have Trouble with “Kanban”, The Wall Street Journal, April 7, pp. 29–45

(Ibid. /6/, p. 29)

(Ibid. /3/, Foreword of Taiichi Ohno, p. i-ii)

J. C. ABEGGLEN AND GEORGE STALK, JR. (1985) Kaisha, the Japanese Corporation, Basic Books Inc., Publishers/New York, p. 273.

(Ibid. /9/, p. 273)

MASANORI MORITANI (1982) Getting the best for the least, Japanese technology, The Simul Press, Inc. Tokyo, Japan, pp. 69–88. P.S: ‘The author attributes this particularity to historical and cultural roots.’

(Ibid. /3/, p. 2)

(Ibid. /9/, p. 91)

BENJAMIN DUKE (1986) The Japanese School/ Lessons for Industrial America, Praeger, p. 21.

Ibid. /16/, Forewords from America by Clark Kerr, p. ix)

(Ibid. /16/, Introduction by E. Reischauer, p. xix)

PETER F. DRUCKER (1971) What We Can Learn from Japanese Management, Harvard Business Review, March–April, p. 110 -122.

(Ibid. /16/, p. 40)

THOMAS P. ROHLEN (1983) Japan’s High Schools, University of Carifornia Press, pp. 321–322.

MAURIEL JOLIVET (1985) L’universite au service de l’economie Japonaise, Economia, Paris, pp. 33–52.

The Japan Times, (Nov. 6th., 1987) p. 7.

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About this chapter

M’Barek, Z., Fujii, H., Ohtaki, Y. (1988). Toyota’s Jit Concept: Other Industries, Other Countries. In: Davies, B.J. (eds) Proceedings of the Twenty-Seventh International Matador Conference. Palgrave, London. https://doi.org/10.1007/978-1-349-09912-2_1

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Why Toyota’s Just-in-Time Method Is Critical to Its Success

Toyota began using the Just-in-Time method in 1938. However, the true potential of this strategy was realized when it integrated this strategy with TPS.

May 30 2016, Updated 11:08 a.m. ET

Toyota’s Just-in-Time method

The automotive industry is highly capital-intensive in nature. This is the driving reason behind efforts by automakers (XLY) to employ cost-effective business strategies to minimize their costs. The Toyota Production System (or TPS) is one of the most notable business strategies utilized by the automaker.

The Just-in-Time (or JIT) method is an integral part of this strategy. In this part of the series, we’ll explore how Toyota’s (TM) Just-in-Time method evolved and helps the company to minimize its costs.

Evolution of the Toyota Production System

After World War II, the majority of Japanese companies, including automakers, were facing challenges and struggling to survive. At the time, a sharp decline in auto demand and the high costs of production haunted automakers, including Toyota.

Toyota began using the Just-in-Time method in 1938. However, the true potential of this strategy was realized when it integrated this strategy with TPS. The company notes that this system was based on the concept of “the complete elimination of all waste.”

According to the company, “The TPS has evolved through many years of trial and error to improve efficiency based on the Just-in-Time concept developed by Kiichiro Toyoda, the founder of Toyota.” Additionally, a former Toyota vice president, Taiichi Ohno, is also associated with TPS. Ohno helped Toyota in creating the basic framework for the JIT method.

The company describes JIT as “making only what is needed, when it is needed, and in the amount needed.”

How does it work?

Using JIT, Toyota produces its vehicles based on the orders it receives through its dealers. In this production process, the company uses its supply chain in such a manner that only the parts that are needed to manufacture vehicles are received on time. Thus, the manufacturing and transportation of parts take place simultaneously. This allows Toyota to minimize its inventory of vehicle parts.

JIT also emphasizes the importance of work efficiency. According to Toyota’s website, the “use of JIT within the Toyota Production System means that individual cars can be built to order and that every component has to fit perfectly first time because there are no alternatives available.”

Notably, TPS has become very popular globally. It is also used by companies such as Hewlett-Packard (HPQ) , Motorola (MSI) , and General Electric (GE) .

Now, let’s take a look at Toyota’s marketing strategy.

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Toyota Production System : an integrated approach to Just-In-Time

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• Total Framework of the Toyota Production System Primary Purpose Kanban System Production Smoothing Shortening Setup Time Process Layout for Shortened Lead Times Standardization of Operations Autonomation Improvement Activities The Goal of TPS Summary
• Implementation Steps for the Toyota Production System Introductory Steps to the Toyota Production System Introduction of JIT at Toyo Aluminum- A Case Study SUBSYSTEMs
• Adaptable Kanban System Maintains Just-In-Time Production Pull System for JIT Production What Is a Kanban? Kanban Rules Other Types of Kanban
• Supplier Kanban and the Sequence Schedule Used by Suppliers Monthly Information and Daily Information Later Replenishment System by Kanban Sequenced Withdrawal System by the Sequence Schedule Problems and Countermeasures in Applying the Kanban System to Subcontractors Guidance by the Fair Trade Commission Based on the Subcontractors Law and the Anti-monopoly Law Supplier Kanban Circulation in the Paternal Manufacturer Practical Examples of Delivery System and Delivery Cycle
• Smoothed Production Helps Toyota Adapt to Demand Changes and Reduce Inventory Smoothing of the Total Production Quantity Demand Fluctuation and Production Capacity Plan Smoothing Each Model's Production Quantity Comparison of the Kanban System with MRP Summary of the Concept of Production Smoothing
• The Information System for Supply Chain Management between Toyota, Its Dealers, and Parts Manufacturers The Order Entry Information System Monthly Production System The Information System between Toyota and Parts Manufacturers New Toyota Network System (TNS) Production Planning System at Nissan
• How Toyota Shortened Production Lead Time Four Advantages of Shortening Lead Time Components of Production Lead Time in a Narrow Sense Shortening Processing Time through Single-Unit Production and Conveyance Shortening Waiting Time and Conveyance Time A Broad Approach to Reducing Production Lead Time
• Machine Layout, Multi-Functional Workers, and Job Rotation Help Realize Flexible Workshops Shojinka: Meeting Demand through Flexibility Layout Design: The U-Turn Layout Attaining Shojinka through Multi-Functional Workers
• One-Piece Production in Practice Requirements for One-Piece Production Resistance to Working Standing Up Resistance to Multi-Skilling Barriers to Autonomation Attaching Castors Smoothed Production An Example of Improvement for One-Piece Flow: A Factory Producing Cabinets for Use as Flat-Screen Television Stands
• Standard Operations Can Attain Balanced Production with Minimum Labor Goals and Elements of Standard Operations Determining the Components of Standard Operations Proper Training and Follow-Up: The Key to Implementing a Successful System
• Reduction of Setup Time-Concepts and Techniques Effects of Shortening the Setup Time Setup Concepts Concept Application
• 5S-Foundation for Improvements 5S Is to Remove Organizational Slack Visual Control Practical Rules for Seiton Seiso, Seiketsu, Shitsuke Promotion of 5S System
• Autonomous Defect Control Ensures Product Quality Development of Quality Management Activities Statistical Quality Control Autonomation Autonomation and the Toyota Production System Robotics Company-Wide Quality Control
• Cross-Functional Management to Promote Company-Wide Quality Assurance and Cost Management Introduction Quality Assurance Cost Management Organization of the Cross-Functional Management System
• Kaizen Costing Concept of Kaizen Costing Two Types of Kaizen Costing Preparing the Budget Determination of the Target Amount of Cost Reduction Kaizen Costing through Management by Objectives Measurement and Analysis of Kaizen Costing Variances
• Material Handling in an Assembly Plant The Parts Supply System in an Assembly Plant A System for Supplying Parts in Sets (the SPS, or Set Parts System) "Empty-Handed" Transportation
• Further Practical Study of the Kanban System Maximum Number of Production Kanban to be Stored Triangular Kanban and Material Requisition Kanban on a Press Line Control of Tools and Jigs through the Kanban System JIT Delivery System Can Ease Traffic Congestion and the Labor Shortage
• Smoothing Kanban Collection Obstacles to Collecting Smoothed Numbers of Kanban Relationship between Smoothed Collection of Kanban and Parts Delivery Smoothing Schedule for the Timing of Kanban Collection Inventions of Kanban Posts at the Production Site Post-Office Mechanism for Outgoing Supplier Kanaban
• Applying the Toyota Production System Overseas Conditions for Internationalizing the Japanese Production System Advantages of the Japanese Maker-Supplier Relationship Reorganization of External Parts Makers in the United States Solution for Geographical Problems Involving External Transactions External Transactions of NUMMI Industrial Relations Innovations Conclusion
• QUANTITATIVE TECHNIQUES
• Sequencing Method for the Mixed-Model Assembly Line to Realize Smoothed Production Goals of Controlling the Assembly Line Goal-Chasing Method: A Numerical Example The Toyota Approach: A Simplified Algorithm Simultaneous Achievement of Two Simplifying Goals New Sequence Scheduling Method for Smoothing Basic Logic of Sequence Scheduling Sequence Scheduling Using Artificial Intelligence Diminishing Differences between Product Lead Times Computation of the Number of Kanban Computation of the Number of Kanban The Constant-Cycle Withdrawal System for Computing the Number of Inter-Process Withdrawal Kanban Computation of the Number of Supplier Kanban Constant-Quantity Withdrawal System for Computing the Number of Inter-Process Withdrawal Kanban Computation of the Number of Production-Ordering Kanban Computation of the Re-order Point Determination of Lot-Size Changes in the Number of Kanban Maintaining the Necessary Number of Kanban.
• (source: Nielsen Book Data)
• Total Framework of the Toyota Production System. Implementation Steps for the Toyota Production System. SUBSYSTEMs. Adaptable Kanban System Maintains Just-In-Time Production. Supplier Kanban and the Sequence Schedule Used by Suppliers. Smoothed Production Helps Toyota Adapt to Demand Changes and Reduce Inventory. The Information System for Supply Chain Management between Toyota, Its Dealers, and Parts Manufacturers. How Toyota Shortened Production Lead Time. Machine Layout, Multi-Functional Workers, and Job Rotation Help Realize Flexible Workshops. One-Piece Production in Practice. Standard Operations Can Attain Balanced. Reduction of Setup Time Concepts and Techniques. 5S Foundation for Improvements. Autonomous Defect Control Ensures Product Quality. Cross-Functional Management to Promote Company-Wide Quality Assurance and Cost Management. Kaizen Costing. Material Handling in an Assembly Plant. Further Practical Study of the Kanban System. Smoothing Kanban Collection. Applying the Toyota Production System Overseas. QUANTITATIVE TECHNIQUES. Sequencing Method for the Mixed-Model Assembly Line to Realize Smoothed Production. New Sequence Scheduling Method for Smoothing. Computation of the Number of Kanban.

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Toyota Production System A production system based on the philosophy of achieving the complete elimination of waste in pursuit of the most efficient methods

Toyota Motor Corporation's Toyota Production System (TPS) is a way of making things that have become known and studied worldwide.

It is based on the premise of making work easier for workers. The objective is to thoroughly eliminate waste and shorten lead times to deliver vehicles to customers quickly, at a low cost, and with high quality. This production system is pursued in all areas of Toyota Motor Corporation, including vehicles and services, and all employees implement daily incremental kaizen.

The Two Pillars of TPS

The basic philosophy of the Toyota Production System is based on two pillars. The first pillar is jidoka ―which can be loosely translated as "automation with a human touch"―based on the concepts of stopping immediately when abnormalities are detected to prevent defective products from being produced and improving productivity to eliminate the need for people to be simply watching over machines. The second pillar is Just-in-Time, based on the concept of synchronizing production processes―linking all plants and their production processes in a continuous flow―by making only what is needed, when it is needed, and in the amount needed.

These two pillars enable the production of vehicles that satisfy customer requirements quickly, at a low cost, and with high quality.

Jidoka in the TPS is "automation with a human touch," where human wisdom is added to automation. Human wisdom means that when an abnormality occurs, such as a machine or equipment abnormality, quality abnormality, or a work delay, the machine or equipment can detect the abnormality and stop automatically, or the operator can stop the line by pulling the stop cord themselves. This eliminates the outflow of defective products while also making it possible to build quality into processes by clearly detecting abnormalities and preventing them from recurring. Furthermore, having the ability to stop when an abnormality is detected means that machines and equipment no longer need to be watched over, saving labor by reducing working hours.

To create these kinds of machines, it is necessary to first be able to do the work smoothly and correctly by hand, determine abnormalities in the work, and replace those operations with machines. In other words, rather than starting with a machine from the beginning, you must first try doing it thoroughly by hand, implement kaizen, eliminate waste, inconsistencies, and unreasonable requirements―known respectively in Japanese as muda, mura, muri ―and make it possible for anyone to do the work. You must then make it possible to detect abnormalities in the work and build that into the actual machines. These incremental efforts lead to a production line that is high-quality, low-cost, flexible, and easy to maintain.

This implementation of kaizen on work is the bedrock of jidoka. It doesn't matter how much machines, robots, or IT excel; they can't evolve any further on their own. Only humans can implement kaizen for the sake of evolution. In other words, craftsmanship is achieved by discovering the basic principles of manufacturing through manual work and then applying them on the production line to steadily implement kaizen. This cycle of kaizen in both human skills and technologies is critical for taking on the challenge of new technologies and construction methods. Human wisdom and ingenuity are indispensable to delivering ever-better cars to customers. Going forward, we will maintain our steadfast dedication to constantly developing human resources who can think independently and implement kaizen.

Just-in-Time

Making only what is needed, when it is needed, and in the amount needed fulfilling orders from customers as quickly as possible.

A car is made up of more than 30,000 parts. These parts are made not only by Toyota but also at the plants of many of our business partners. All plants must work with complete synchronization to make the vehicles quickly and without waste. All adhere to the following principles of Just-in-Time to achieve synchronized production: 1) Only make what is needed by the customer, when it is needed, and in the amount needed; 2) Don't allow goods and information to be held up during production; 3) Make them at the pace at which they're sold. It would take many months to fulfill a customer's order if all the parts were made only after receiving it. To avoid that, the minimum number of parts needed are stocked in advance on the vehicle assembly line so that a car can be built as soon as the order is received. The preceding process has a store of finished products from which the next process can pick up the parts that it needs. The preceding process is also stocked in advance with the minimum number of parts needed to re-make parts picked up by the next process before the next pick-up, allowing it to immediately replenish whatever was picked up. Having all processes engaged in this loop achieves wasteless production where we only make what is needed, when it is needed, and in the amount needed to fulfill customer orders and ensure that only sellable items are produced.

The continuous pursuit of these two pillars of the TPS are the wellsprings of Toyota's competitive strength and unique advantages. We will develop human resources throughout Toyota who put this philosophy into practice to make ever-better cars that will be cherished by customers.

Origin of the Toyota Production System A production system fine-tuned over generations

Roots of the toyota production system.

The Toyota Production System (TPS), which is based on the philosophy of the complete elimination of waste in pursuit of the most efficient methods, has roots tracing back to the automatic loom invented by Sakichi Toyoda, the founder of the Toyota Group. TPS has evolved through many years of trial and error to improve efficiency based on the Just-in-Time concept developed by Kiichiro Toyoda, the founder of Toyota Motor Corporation.

At the root of this is Sakichi Toyoda's idea of "doing things for others." As he sought something he could do that would benefit the world, he focused on making things easier for his mother, who worked late into the night operating a manual loom. The automatic loom that he invented not only automated work that used to be performed by hand but also built the capability to make judgments into the machine itself. By eliminating both defective products and the associated wasteful practices, Sakichi succeeded in rapidly improving both productivity and work efficiency. This is where the concept of jidoka was born.

Kiichiro Toyoda advocated Just-in-Time based on this strong conviction: "A complete car cannot be built if even one part is missing. Coordinating this is no small task. However, without this control, we could have a mountain of parts and still not be able to build a car. No amount of money will suffice if we don't think of a unique way to organize these tens of thousands of parts."

Via the philosophies of Daily Improvements and Good Thinking, Good Products, TPS has evolved into a world-renowned production system. Even today, all of Toyota is implementing kaizen to TPS day and night to ensure its continued evolution.

We carry on TPS around the world with a strong desire to contribute to the enrichment of society and the nation, which has continued since the days of Sakichi and Kiichiro.

• [Special Lecture] Akio Toyoda's 14-year battle | Steadfast Reforms: Lessons from TPS From his birth into the Toyoda family to his embattled 14 years as president, Akio Toyoda gave a speech reflecting on his life so far and a message to corporate managers.
• Chairman Toyoda on TPS and his Fight to Restore Authority to the Genba As a business leader, Akio Toyoda has approached countless decisions with a mindset rooted in the Toyota Production System. We share the lecture he delivered to a 200-strong audience of fellow corporate managers.
• Akio Toyoda's View on Toyota Production System In a new workshop centering on TPS to help create "TPS Leaders" across the company, Akio seeks to narrow the gap of understanding on its two pillars―Jidoka and Just-in-Time―by sharing his interpretation of them.

For more Toyota Times articles on TPS

How does just-in-time production work?

If you’ve ever studied manufacturing, it’s likely you will have heard of just-in-time production methods. The technique of arranging regular, small deliveries of exactly the correct amount required was pioneered by Toyota .

Just-in-time (JIT) production is a ‘pull’ system of providing the different processes in the assembly sequence with only the kinds and quantities of items that they need and only when it needs them. Production and transport take place simultaneously throughout the production sequence – inside and between all the processes.

The primary objectives of just-in-time production are to save warehouse space and unnecessary cost-carrying and to improve efficiency, which means organising the delivery of component parts to individual work stations just before they are physically required.

To apply this flow efficiently means relying on ordering signals from Kanban  boards or by forecasting parts usage ahead of time, though this latter method requires production numbers to remain stable.

Use of JIT within the Toyota Production System means that individual cars can be built to order and that every component has to fit perfectly first time because there are no alternatives available. It is therefore impossible to hide pre-existing manufacturing issues; they have to be addressed immediately.

Discover the 12 other pillars of the Toyota Production System: Konnyaku Stone Poka-Yoke Hansei Andon Jidoka   Just-In-Time Heijunka Kaizen Genchi Genbutsu Nemawashi Kanban Muda, Muri, Mura Genba

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I use to wonder why a part of production equipment wasn’t ready available when needed, now I understand and the concept is brilliant but I would think costly if the company was a make it or break it operations.

I agree wholeheartedly

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The Case For Just-In-Time Inventory Systems in Challenging Times

While too much inventory may be an invisible cost, a more obvious problem is the opposite condition—running out of inventory when it is needed.

• JIT resulted in higher productivity among inventory and warehousing staff, as might be expected from a LEAN initiative. Work was more evenly spread across time, reducing slack.
• JIT offered massive cost savings. By ordering and consuming inventory closer to the time of sale, practitioners sharply reduced the amount of working capital tied up in inventory buys. Additionally, the “operational holding cost” of inventory declined. Warehouse space and warehouse staff were reduced, increasing profits.
• JIC is a buffer against uncertain supply and demand. Missed shipments and other disruptions do not send an OEM scrambling for alternatives.
• JIC also insulates the OEM from price volatility, at least for a period of time.
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