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The following article was published in our article directory on September 27, 2010.
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On the Toyota Production of 4 Major Misconceptions

Article Category: Opinions

Author Name: Amanda xzh

Toyota Production System (TPS) manufacturing industry is very successful as a mode of production, has long been the world's attention. However, the understanding of TPS, it is often too easy to fall into its assessment and evaluation of the error is too small.

Misconception 1: TPS is a very special, very complex production system

Positive Solutions: TPS is a common sense that anyone can achieve a very simple system

TPS principles, in fact, is a well-known for our daily collection of all common sense. In this regard, Mr. Taiichi Ohno once expressed: "TPS these things, as long as they can count the people who own 10 fingers, and no one can be imported."

Each process is the same process as much as possible next to the rhythm of production, which proceeds to the "beat time" concept, the principle and the park in China, every morning the old people everywhere the case of the common shadow boxing have the same purpose. The so-called "stop and let goods" and "to create a flow of" thinking, in fact, from 2500 years ago, I. It was originally a very natural thing, but because modern people have learned from the United States OR (operationsresearch) and EOQ (Economic Order Quantity) and other knowledge and cost calculation methods, making the TPS that common sense is becoming increasingly blurred. This just proves I was: "Wisdom out, a large pseudo-", that is, the more people will learn to become more stupid.

Toyota achieved in September 2003 a joint venture with FAW, the establishment of the Tianjin FAW Toyota Automobile Co., Ltd.. It is noteworthy that the joint venture vehicle, leaving only 5% of the original staff of Tianjin, and the rest are all from living in Tianjin, ordinary citizens with no experience in employment. Why do this? This is because taking into account in order to completely change the car has been used in Tianjin production inventory, used to plan the production of "DNA" is very difficult, so might as well start from scratch to teach, the more easily achieved limited production to the TPS " DNA "to change. As a result, the beat of the current time in Tianjin Toyota has been very favorably with its Japanese parent factories. If you know too much, it is difficult to achieve this goal. Here, from the teachings of Lao Tzu's "no" proceed, that think they do not know, to this humble attitude to face, the TPS can anyone really is a simple common sense.

Misconception 2: TPS is the work site

Positive Solutions: TPS is the headquarters and the work of non-manufacturing sector

TPS is indeed a departure from the production site thought limited production (only the number of production orders required), but if there is no headquarters, sales, purchasing and other departments to help, will soon run into a wall.

Production site as long as the realization of small batch production, process flow will be realized leveling, and this is good, but this is not fundamental, because if there is no mass production of small orders, although it has been completed, do not say can not be immediately changed into money, get the backlog of inventory only. Subprime crisis, due to the rapid reduction of U.S. orders in the U.S. West Coast ports filled with Japanese cars including Toyota, including inventory, which also proved that when the production instruction volume of business sectors, and production cycle is a direct month, in the face of rapidly changing market, the response time becomes too long. From this point of view, TPS is also the business sector.

In addition, when the stop mass production, switching to the production reduction occurs when production costs rise. As long as there is time to prepare for line, it will have it. Into limited production for the decrease in profit brought about, the headquarters not only can not criticize, but must be commended. Why? Because such a result is increased cash pocket.

On the contrary, when the concentration of purchasing cost per unit declined to buy, leading to increased profits, as long as accompanied by the increase in inventories, the headquarters not only can not be commended for this procurement, the opposite must be strictly monitored or criticism. If the company's headquarters could not make such judgments with the corresponding TPS, the TPS of the import will fail. Even Toyota, although the factory has been done in the TPS unmatched in the world of the stage, but if the field of application of TPS to the business sector to expand, purchasing departments, headquarters and overseas subsidiaries, and will expand its scope to a global when their efforts can only say that the process has only just begun.

Finally, the operators can properly plan the ultimate goal of their company (in this called TrueNorth / True North). Operators can properly define the true north, or "winning the hills" when the "hills", which is the key. I have from the vice president of Toyota Takeshi Yamada and other Toyota executives there heard the words: "really is the only economic effect will be to implement TPS. However, the economic effect if and nurture talent, or operators in the long view comparison of things, it becomes much more limited. "kind of" hills ", is undoubtedly true north is the most valuable.

Myth 3: JIT into immediately after the increase in profits

Positive Solutions: JIT into first annual profit will be reduced

T-Ford car with the heyday of the corresponding calculation of incurred costs that produce more, "the cost per piece (CostperUnit)" the cheaper, profits will increase. Certainly in the production after Ford sold early this calculation method is still valid. However, with the oil crisis, began to enter the low growth period, because of the recession brought a large backlog of inventory, then, by the increase in profits from stock, it will not be recovered, resulting in black bankruptcy. More seriously, once caught in the trap of this method, when limited by the large volume production into the production of JIT (JustInTime) when, brought the book inventory reduction will result in reduced profits, which makes business people feel confused, Thus JIT can lead to termination of the tragedy from happening. Especially in Europe and the United States, the reason why JIT can not be universal, is this.

However, if not from the profit point of view, but from the perspective of cash flow, when imported to the middle of JIT inventory reduction, the raw material procurement spending would be reduced, because sales of the same cash on hand will increase.

Operators along with the cash for this increase in profits, and were supposed to lift up our hands welcome. Furthermore, the reduction can also reduce the profit tax expenses. To shareholder value, short-term profit-oriented business, bound by the Wall Street business, the inventory reduction will decrease the profit caused by the faltering, it is difficult to be determined to be limited production.

Therefore, the charge of importing a consultant or director of TPS should first visit to the headquarters of the CEO and CFO, explain to them in advance if the JIT into limited production, profits will be how to get them to understand. This decrease in profit during the event, CEO and CFO would not blame and pessimism, but on the contrary, the scene would be congratulated.

Myth 4: There is no inventory is TPS

Positive Solutions: flexibility necessary minimum stock holding is TPS

Mr. Taiichi Ohno once said: "I hope we do not misunderstand, I never said must be zero inventory of the kind of thing." First of all, according to the safety stock held by our own strength. Second, efforts to reduce this by improving the safety stock. Toyota to the predetermined minimum inventory necessary inventory on hand as the standard. For example, a standard process inventory is on hand 10, when the stock was reduced to seven when we should be supplemented by production of 3, must not produce more volume, which is TPS. The feature is recognized by the amount of safety stock required to be "standard intermediate inventory" (SWIP), then efforts will be to reduce the SWIP improvement.

Thus, measurement and understand their own strength, and in accordance with existing procedures to maintain the strength necessary to make their minimum inventory, and then began to improve, but also step by step to reduce its standard inventory - this is the TPS.

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