The Toyota Economic System: How Leaders Create True Prosperity Through Financial Congruency, Dignity of Work, and Environmental Stewardship

Cover
Half Title
Title Page
Copyright Page
Table of Contents
Acknowledgments
About the author
Introduction
Section 1 Philosophy, principles, and goals: Beyond tradeoffs by aiming for total instead of individual efficiency
	Chapter 1 Production systems’ contribution to human progress
		Initial condition: Craftsmanship
		Current condition: The great mass production system
			Inflexibility in producing customized goods makes profit conflict with cash flow
			Dehumanization of work
			Singular dependence on economic growth and environmental pollution (Myopic dependency of singular performance metrics)
		Target condition: The Toyota Production System
			Technical innovation: Reconcile profit with cash flow
			Labor relation innovation: Re-humanization of work
			Economic innovation: Congruence between economic growth and environmental stewardship
			A new economy paradigm
	Chapter 2 Toyota Production System (TPS) as a system
		The three elements of TPS: What TPS does
			The philosophical element
				Customer focus philosophy
				“People are the most important asset” philosophy
				Kaizen philosophy
				Shop floor focus philosophy
			The technical element
			The managerial element (expertise with a framework)
		The unity of the three elements displayed in the house of TPS
			The house of TPS: A holistic framework from which to think
				The roof of the house: The goals of TPS
				The pillars of the house: The technical methods of TPS
				The foundation of the house: The managerial methods of TPS
			The house of TPS as a system
Section 2 Technical innovation: Congruency Between profit and Cash Flow
	Chapter 3 As a system of economies of scale based on individual efficiency the traditional mass production system has inherent contradictions
		Batch of conveyance to reduce cost conflicts with quality and lead-time
		Batch of production to reduce cost conflicts with quality and lead-time
		Batch processing means relying on a long-range forecast
			Long lead-time of supply against production starts
			Long lead-time against equipment design
		Trading-offs factors instead of innovating
	Chapter 4 The Toyota Production System and its inherent harmony: Approach to reconciling income and cash flow financial statements
		Stop and notify, the first element of jidoka
			Stop-and-notify
				Stop-and-notify via poka-yoke or failsafe process
				Stop-and-notify via Andon
				Final manual inspection station
				Stop-and-notify: Conclusion
		Continuous flow as the first element of Just-in-Time
			The mass production system: Isolated and functionally organized assets and processes
			The issue with terminology
				Lead-time
				Clarification of terms and process characteristics
			Process design for continuous flow
				Continuous flow requires each process to have the same cycle time
				Continuous flow and proximity of processes
				Continuous flow and eliminating changeover time between product variety
				Summary of process design for continuous flow
			Design for a batch size of production as a result of changeover time and cost
				The economic order quantity (EOQ)
				Lot size calculation based on demand
				Summary of batch size of production
			Production lead-time versus the rate of supply under different conditions
				Discrete mass production system conditions
				Continuous flow conditions
				Conclusion of production lead-time calculation
			Summary of continuous flow
		Takt time is a new datum with which to calculate and organize resources
			Calculation for labor needed
			Calculation for machine and equipment needed
			Calculation for material and component inventory needed
			The difference between takt time and the rate of pull
			Takt time summary
		Separate Man and machine work
			Automation and production lead-time
			Automation and lead-time of equipment design
			Automation to cut the cost of labor rather than boost the value of labor
			One worker, one machine
			Conclusion of “separate man from machine work”
		Pull system, the second element of Just-in-Time
			Elements of the pull system
				Authorization to work, produce, and convey
				The store and the stock
			Types of pull system
				A-type or replenishment pull system
				B-type or sequential pull system
				C-type (combined) pull system
			Practical application of the pull system
			Pull system conclusion
		Jidoka and Just-in-Time conclusion
		Heijunka: Leveling work by varieties
			Heijunka and cash flow
			Heijunka and efficiency of assets
				Heijunka and machine efficiency
				Heijunka and labor efficiency
			Heijunka illustration
				A new look at labor requirements
				A new look at machine and equipment capacity requirements
				A new look at inventory requirements between the component process and the assembly line
				A new look at labor requirements
			Building the heijunka sequence
				How many orders to consider for the sequence
				Building the heijunka sequence
			Conclusion to heijunka
		Standardized work
			Purpose of work standards
			Purpose and benefits of standardized work
				Standardized work as an instrument
			Approach to implementing standardized work
				Role of the team leader
				Role of the environment
			Elements of standardized work
				Sequence of operation
				Takt time
				Standard in-process stock
			Different types of standardized work based on varying cycle times
				Type one standardized work
				Type two standardized work
				Type three standardized work
			Standardized work forms
				Machine capacity sheet
				Standardized work chart
				Standardized work combination table
			Conclusion on standardized work
			Heijunka and standardized work: Craftsmanship in an industrial setting
		Conclusion on the technical element of TPS
		Note
Section 3 Managerial innovation: Industrial craftsmanship by reconciling the creative nature of people with the mundane requirements of industrial work
	Chapter 5 Management based on a vision of the ideal—true north
		The purpose of the ideal
		Application of the ideal
			Focused attention
			Grasping the gap between the current and the target condition
		Images of the ideal
			Characteristic of the ideal condition
			Technical characteristics of the ideal condition
				Zero defect (highest quality)
				100% value-added, (lowest cost)
				On-demand and in sequence, (lowers cost and shortest lead-time)
				One-by-one (shortest lead-time)
			Human characteristics of the ideal condition
				Physical safety
				Mental safety
				Human development
		Note
	Chapter 6 Kaizen, a scientific problem-solving activity
		Observation (plan)
			Using our senses
			Grasping point-of-cause and root-cause deeply
			Cultivate expertise at all levels
		Hypothesizing (do)
		Testing (check)
		Draw a conclusion (act)
	Chapter 7 Institutionalization of problem-solving by developing experts: Learning problem-solving and solving learning-problems
		Humility
			Management shares in success and failure with others
			No problem is too small to solve
		Confirm by yourself
			“Go-see”
			Reach for the standard and the standardized work
		An intimate relationship between learning new tasks and scientific problem-solving
			Progressive learning
			Types of excess capacity to mitigate learning risk
		Teamwork
		Demonstrate results by realizing true efficiencies
	Chapter 8 Practical principle-based performance indicators
		Managing by total efficiency through the elimination of unevenness, overburden, and waste to achieve true efficiency
			Total versus individual (independent) efficiency
			Eliminating waste, unevenness, and overburden versus forcing work
		Waste or “Muda”
			Waste of overproduction
			Waste of waiting
			Waste in conveyance
			Waste in processing
			Waste of inventory
			Waste of motion
			Waste of correction
		Unevenness or “Mura”
			Equal capacity
			Simple flow
				Bends
				Tributaries
			Kanban size
		Overburden or “Muri”
			Safety
			Cycle time
			Overtime
			Mental burden
			Machine overburden
			True versus apparent efficiency
				Congruency between profit and cash flow
				Re-humanization of labor
				Economic and environmental benefits
			Summary of managing efficiency
		TPS metrics: Measuring and managing the 4M of the shop floor
			Rate of operation
		Overtime
		Less expensive, more reliable, and flexible equipment
			Operational availability: A keystone operational measure
		What counts as output toward operational availability?
		Late delivery doesn’t count as output toward operational availability
		Relationship between RO and OA
			Labor efficiency
			∑ cycle time also called total cycle time
			Demand
			Number of people and time worked
			Lead-time/inventory
			First design and specify the process and then measure the performance
			Separate rate of operation from operational availability
			Notification and categorization of performance indicators
		Notification of ahead or behind schedule?
		Categorization of behind-schedule conditions
			People
				Best repeatable manual cycle time too long?
				Manual cycle time fluctuates
			Machines and equipment
				Machine cycle time too long
				Unplanned downtime
				Quality defects and categorization
		Categorization of ahead of schedule condition
	Chapter 9 Managing human development with “A4 and A3”
		Using material and information flow A3 to manage total efficiency and achieve true efficiency through the elimination of unevenness, overburden, and waste
			Material information flow of current condition: A diagnostic tool
		Grasping the organization’s capability to design TPS operation
		Grasping the organization’s capabilities to manage the operation
		Gather facts yourself
		Correcting some misconceptions and pitfalls of value stream mapping
			Material information flow versus value stream mapping
			Value stream mapping and inventory
		Make a diagnosis by drawing a story
			Material information flow of target condition: A prescription (Rx)
		Designing the target condition based on the ideal state
			Determine the pace of work:
			Consider continuous and simple material flow versus discreet and complex material flow
			Consider pull system type
			Standardized work
		TSSC Metalsa reflection case example 2009–2010
			Material and information flow conclusion
Section 4 The broader socio-economic benefits of the TPS method: Beyond the appearance of efficiency
	Chapter 10 Reconciling economic prosperity with environmental stewardship
		The asset-driven mass production system is a push system
		The customer-driven Toyota Production System is a pull system
		Economic innovation
		Notes
Index