NEW SUPPLY CHAIN METHOD INTRODUCED BY TOYOTA RECENTLY

1. The Toyota Production System
A Transition from Mass Production to
Lean Manufacturing and Supply Chain Management
Gunjan Tiwari
D-19
SIMS
MBA 2015-17

2. TOYOTA
• Toyota Motor Corporation is a Japanese automotive
manufacturer headquartered in Toyota, Aichi, Japan.
• In March 2014 the multinational corporation consisted of
338,875 employees worldwideand, as of November 2014, is
the fourteenth-largest company in the world by revenue.
• Toyota was the largest automobile manufacturer in 2012
(by production) ahead of the Volkswagen Group and
General Motors.
• Toyota is the world's first automobile manufacturer to
produce more than 10 million vehicles per year.
• As of July 2014, Toyota was the largest listed company in
Japan by market capitalization and by revenue.

3. Major Revolutions in
Manufacturing
• 1776, Adam Smith “The Wealth of Nations”
• 1910, Henry Ford and Mass Manufacturing.
• 1980, The Toyota Production System.
• Lean Manufacturing.
• Supply Chain Management.

4. The Gestation of TPS
• Eiji Toyoda visit to Henry Ford’s factory in 1950.
• The SMED (Single-digit in Minutes Exchange of Dice)
program at the stamping plant.
• Deming’s quality movement in Japan.
• The Engineers: Taiichi Ohno and Shigeo Shingo
• “Japanese” Manufacturing hits America in 1970

5. Main Features of TPS
• Greater Product Variety
• Fast Response (Flexibility)
• “Stable” Production Schedules
• Supply Chain Integration
• Demand Management

6. Elements of TPS
• The SMED Program.
• Highlight Problems (Jidoka).
• Gradual Elimination of Waste.
• Continuous Improvement (Kaizen), Root-Cause Analysis (5-whys?) and Fool-
proofing (Poka-Yoke).
• Cross-Trained Workers.
• Just-In-Time Production.
• Stable Production Schedules (Heijunka)

7. Traditional “Buffered” Supply
Chain
Assembler
2nd
Tier
1st
Tier
Flow of Production
Flow of Information
Customer
Demand

8. The Just-in-Time Supply Chain:
“Look Ma” No Stocks!
Toyota
2nd
Tier
1st
Tier
Flow of Production
Flow of Information
Customer
Demand

9. Expectations from Suppliers
• Frequent deliveries.
• Hours (not days) lead time.
• Rapid response capability (not from stocks).
• Delivery to assembly line at the right time in the
right sequence without inspection.
• Reliability (quality and timing).

10. Supplier Relationships
• Long-term, steady relationships with a few
suppliers.
• Negotiation based on a long term commitment to
productivity and quality improvement.
• Interested in supplier capabilities.
• Continuous improvement.
• Product/process technology.
• Design for manufacturability.

11. What’s in it for a supplier?
• A Stable Manufacturing Environment.
• Steady production volume.
• Leaner Processes.
• Cost/Flexibility/Quality
• Profits.

12. •THANK YOU