Parte 3 third revolution [modalità compatibilità]

Automotive industryAutomotive industry

From crisis to restructuring From crisis to restructuring From crisis to restructuring From crisis to restructuring Rewriting the rules of Rewriting the rules of automotiveautomotive industryindustry

The third revolutionThe third revolution

Lean productionLean productionLean productionLean production

By Masters Division By Masters Division -- Facoltà di Facoltà di Economia di TorinoEconomia di Torino

From…From…

�� Fujimoto TFujimoto T ., ., The evolution of a manufacturing The evolution of a manufacturing system at Toyotasystem at Toyota, Oxford University Press, , Oxford University Press, 1999.1999.

�� Magee D., Magee D., How Toyota became n.1How Toyota became n.1, Portfolio, , Portfolio, 2007.2007.2007.2007.

�� Maxton G.,Wormald J., Maxton G.,Wormald J., Time for model changeTime for model change, , Cambridge University Press, 2004.Cambridge University Press, 2004.

�� Womack J., Jones D. e Roos D., Womack J., Jones D. e Roos D., ““ The The machine that changed the world”, machine that changed the world”, Macmillan,1991.Macmillan,1991.


The PreThe Pre--World War II history of World War II history of automobile manufacturing in Japan,1automobile manufacturing in Japan,1

�� Although production of fourAlthough production of four--wheel wheel automobiles in Japan started around 1910, automobiles in Japan started around 1910, early work was nothing but sporadic trials early work was nothing but sporadic trials by by small venture businesssmall venture business owners, owners, by by small venture businesssmall venture business owners, owners, inventorinventor--engineers, or mechanics.engineers, or mechanics.

�� Customers were mostly limited to a small Customers were mostly limited to a small number of number of wealthy upperwealthy upper--class peopleclass peoplewith curiosity.with curiosity.


The PreThe Pre--World War II history of World War II history of automobile manufacturing in Japan, 2automobile manufacturing in Japan, 2

KnockKnock--down (KD) assembly of foreign down (KD) assembly of foreign automobiles, as well as imports of automobiles, as well as imports of automobiles, as well as imports of automobiles, as well as imports of complete vehicle (mainly European complete vehicle (mainly European makes), existed by 1920, but the numbers makes), existed by 1920, but the numbers of cars produced of cars produced was extremely smallwas extremely small ..



Dominance by US automakers. Dominance by US automakers. �� The firstThe first significant attempts at automobile significant attempts at automobile

production in Japan were knockproduction in Japan were knock--down down (KD) assembly operations, mostly (KD) assembly operations, mostly (KD) assembly operations, mostly (KD) assembly operations, mostly between midbetween mid--1920s and the mid1920s and the mid--1930s, 1930s, mainly by Ford and General Motors.mainly by Ford and General Motors.

�� American cars and trucks dominated the American cars and trucks dominated the Japanese between 1925 and 1935.Japanese between 1925 and 1935.



Protectionist policy and Japanese firms.Protectionist policy and Japanese firms.

�� The situation changed in 1936, when the Japanese The situation changed in 1936, when the Japanese government under the military authority’s influence, government under the military authority’s influence, launched a launched a protecionist policy.protecionist policy.launched a launched a protecionist policy.protecionist policy.

�� The same law subsidized three licensed domestic The same law subsidized three licensed domestic companies for producing trucks: companies for producing trucks: Toyota, Nissan e Toyota, Nissan e Isuzu.Isuzu.

�� Toyota’s prewar Toyota’s prewar productivityproductivity was estimated to be was estimated to be roughly roughly oneone--tenthtenth that of Ford Motor Companythat of Ford Motor Company


Toyota AA 1936Toyota AA 1936



The origin of Toyota’s automobile business.The origin of Toyota’s automobile business.

�� Toyota Motor Co., a Toyota Motor Co., a spinoffspinoff automobile producer of automobile producer of Toyoda Automatic Loom Works, was established in Toyoda Automatic Loom Works, was established in 1937.1937.1937.1937.

�� Kiichiro Toyoda ordered from Germany and US the Kiichiro Toyoda ordered from Germany and US the machine tools for building a prototype, purchased a machine tools for building a prototype, purchased a Chevrolet car, Chevrolet car, reversereverse--engineered engineered it, sketched the it, sketched the composed parts, and estimated the materials used. composed parts, and estimated the materials used.

�� In 1934, Toyoda started building a In 1934, Toyoda started building a pilot plantpilot plant



Patterns of technology transfer: Toyota Patterns of technology transfer: Toyota versus Nissan.versus Nissan.

�� Nissan adopted the U.S system as a Nissan adopted the U.S system as a packagepackage�� Toyota was more active than Nissan in Toyota was more active than Nissan in �� Toyota was more active than Nissan in Toyota was more active than Nissan in

absorbing unbundled American and European absorbing unbundled American and European technologies and technologies and infusinginfusing them in its own them in its own production baseproduction base , in which certain traditional , in which certain traditional craftcraft--type production elements persisted.type production elements persisted.


World War IIWorld War II

�� Hiroshima, 6 agosto 1945Hiroshima, 6 agosto 1945


A Postwar II history of automobile A Postwar II history of automobile manufacturing in Japan, 1manufacturing in Japan, 1

Late 1940sLate 1940s-- Recovery and survival. Recovery and survival.

�� The Japanese auto industry started producing The Japanese auto industry started producing truckstrucks soon after the end of World War II, under soon after the end of World War II, under supervision of Allied Forces.supervision of Allied Forces.supervision of Allied Forces.supervision of Allied Forces.

�� For the first five years, the main Japanese For the first five years, the main Japanese automobile automobile firms did not have financial firms did not have financial capability,capability, so they have to live with existing so they have to live with existing production equipment and models.production equipment and models.

�� Production of passengers cars was Production of passengers cars was negligiblenegligible ..



1950s1950s-- Laying the foundation of ToyotaLaying the foundation of Toyota--style style manufacturing.manufacturing.

�� The special orders for motor vehicles by the The special orders for motor vehicles by the American Army during the American Army during the Korean WarKorean War helped helped Toyota and other Japanese truck makers to Toyota and other Japanese truck makers to Toyota and other Japanese truck makers to Toyota and other Japanese truck makers to recover from the recession.recover from the recession.

�� As for management techniques, the Japanese As for management techniques, the Japanese automakers continued to learn the automakers continued to learn the US US techniquestechniques

�� Kaizen and Kanban started in late 1950sKaizen and Kanban started in late 1950s


Korean War. Motor vehicles for the Korean War. Motor vehicles for the American Army American Army



1960s1960s--Rapid growth of domestic car market.Rapid growth of domestic car market.

�� Annual automobile production Annual automobile production grew grew dramaticallydramatically , from about 500.000 units in 1960 , from about 500.000 units in 1960 to 5 million in 1970.to 5 million in 1970.to 5 million in 1970.to 5 million in 1970.

�� The major engine for this growth was The major engine for this growth was domestic domestic demanddemand for familyfor family--owned psssenger cars which owned psssenger cars which profoundly changedprofoundly changedthe automobile production system.the automobile production system.

�� The 1960s was the era of The 1960s was the era of Total Quality ControlTotal Quality Control


Toyota Sports 1965Toyota Sports 1965



1970s1970s--Export expansion and technology Export expansion and technology development.development.

�� Quite contrary to the 1960s situation, domestic Quite contrary to the 1960s situation, domestic production growth was production growth was fueled by exportsfueled by exports ..production growth was production growth was fueled by exportsfueled by exports ..

�� While production increased from about 5 million While production increased from about 5 million to 11 million units per year betweenn 1970 and to 11 million units per year betweenn 1970 and 1980, exports grew from 1 million to 6 million 1980, exports grew from 1 million to 6 million units.units.



�� Thus, by the end of the decade 1970s Thus, by the end of the decade 1970s Japanese motor vehicle exports had Japanese motor vehicle exports had surpassed domestic salessurpassed domestic sales ..surpassed domestic salessurpassed domestic sales ..

�� The main area of export growth was The main area of export growth was North North AmericaAmerica (from 500.000 in 1970 to about (from 500.000 in 1970 to about 2,6 million in 19802,6 million in 1980).).


Toyota Corolla 1975Toyota Corolla 1975


Nissan Skyline 1975Nissan Skyline 1975


Brief Toyota’s historyBrief Toyota’s history

�� Toyota’s headquarter in NagoyaToyota’s headquarter in Nagoya


ToyotaToyota

�� Toyota was founded in 1933 as an Toyota was founded in 1933 as an offshoot of Toyoda Loom Works, a offshoot of Toyoda Loom Works, a company that made machinery for company that made machinery for weaving vast bolts of industrial fabrics.weaving vast bolts of industrial fabrics.

�� …outside Nagoya, three hours west of …outside Nagoya, three hours west of Tokyo.Tokyo.

�� Maynard M., Maynard M., The end. How the big three lost their grip on the A merican The end. How the big three lost their grip on the A merican car market.car market. Doubleday, 2003.Doubleday, 2003.


Eiji went to U.S. againEiji went to U.S. again

Eiji Toyoda studied how the massive Eiji Toyoda studied how the massive Rouge complex turned out 800 hundred Rouge complex turned out 800 hundred vehicles a day, examining how Ford vehicles a day, examining how Ford produced engines.produced engines.produced engines.produced engines.

�� Maynard M., Maynard M., The end.The end. How the big three lost their grip on the Am erican How the big three lost their grip on the American car market.car market. Doubleday, 2003.Doubleday, 2003.


Taiichi OhnoTaiichi Ohno

Shortly after Toyoda returned to Japan, Shortly after Toyoda returned to Japan, one of the greatest figures in Toyota’s one of the greatest figures in Toyota’s history, Taiichi Ohno, came forward to history, Taiichi Ohno, came forward to implement ideas that he, too, had learn in implement ideas that he, too, had learn in implement ideas that he, too, had learn in implement ideas that he, too, had learn in Dearborn. Dearborn.

�� Maynard M., Maynard M., The endThe end . . How the big three lost their grip on the American How the big three lost their grip on the American car market.car market. Doubleday, 2003.Doubleday, 2003.


Ford …..Ford …..

Ohno saw how FordOhno saw how Ford

�� took intook in vast carloads of copper, iron ore and coal vast carloads of copper, iron ore and coal on its own freighters,on its own freighters,

�� which arrived at its own docks from its own which arrived at its own docks from its own �� which arrived at its own docks from its own which arrived at its own docks from its own mines in northern Michigan, mines in northern Michigan,

�� and trasformed the raw materials into steel, and trasformed the raw materials into steel, glass and auto parts…glass and auto parts…

�� Maynard M., The end. Maynard M., The end. How the big three lost their grip on the American c ar How the big three lost their grip on the American c ar market.market. Doubleday, 2003.Doubleday, 2003.


……and supermarkets……and supermarkets

OhnoOhno

�� studied the manufacturing lines…..studied the manufacturing lines…..

��And then went to a supermatket…And then went to a supermatket…

�� Maynard M., The end. Maynard M., The end. How the big three lost their grip on the How the big three lost their grip on the American car market.American car market. Doubleday, 2003.Doubleday, 2003.


River Rouge complexRiver Rouge complex


Toyota’s principlesToyota’s principles

From his observation Ohno created three From his observation Ohno created three basic principles that required the basic principles that required the involvment of everyone in the company.involvment of everyone in the company.

�� First,management had to make strong First,management had to make strong commitment to the system.commitment to the system.



Toyota’s principles, 2Toyota’s principles, 2

�� Second, all employees had to partecipate Second, all employees had to partecipate in implementing itin implementing it

�� Third, everyone involved in making an Third, everyone involved in making an automobile from hourly workers to automobile from hourly workers to automobile from hourly workers to automobile from hourly workers to suppliers, to dealers had to accept that suppliers, to dealers had to accept that this way was the way Toyota was run.this way was the way Toyota was run.



Under TPS..Under TPS..

A fundamental element is the concept of A fundamental element is the concept of justjust--inin--time delivery.time delivery.

�� As with the replenishment of goods in a As with the replenishment of goods in a supermarket, every components that supermarket, every components that supermarket, every components that supermarket, every components that Toyota uses, whether engines on the Toyota uses, whether engines on the assembly line floor or SUVs shipped to assembly line floor or SUVs shipped to dealers arrives as it is needed.dealers arrives as it is needed.

�� This is called a “pull system”..This is called a “pull system”..


“The pull system”“The pull system”

�� “Pull system” means that the required “Pull system” means that the required goods are pulled out of inventory goods are pulled out of inventory according to demand.according to demand.

�� It’s vastly different from, and more difficult It’s vastly different from, and more difficult �� It’s vastly different from, and more difficult It’s vastly different from, and more difficult than, Detroit companies’ traditional than, Detroit companies’ traditional practice of stockpiling supplies of parts practice of stockpiling supplies of parts and automobiles and selling down the and automobiles and selling down the supply, which is called the “push system”.supply, which is called the “push system”.


Months talking to consumers and dealersMonths talking to consumers and dealers

The “pull system” requires a daisy/first rate chain The “pull system” requires a daisy/first rate chain of communication.of communication.

�� As Toyota engineers set out to develop new As Toyota engineers set out to develop new vehicles, they spend months talking to vehicles, they spend months talking to consumers and dealers to find out what kind of consumers and dealers to find out what kind of consumers and dealers to find out what kind of consumers and dealers to find out what kind of features they want.features they want.

�� Likewise, once those vehicles reach the Likewise, once those vehicles reach the showroom, dealers must keep track of what showroom, dealers must keep track of what consumers are requesting and stock their lots consumers are requesting and stock their lots with vehicle that will move quickly with vehicle that will move quickly


Customer needCustomer need

�� The customers’ need and desires are the The customers’ need and desires are the starting and ending points of TPS.starting and ending points of TPS.

�� The most humbling and frustrating aspects The most humbling and frustrating aspects �� The most humbling and frustrating aspects The most humbling and frustrating aspects of TPS is that it is impossible to become of TPS is that it is impossible to become completely proficient.completely proficient.


Not to become complacentNot to become complacent

�� Toyota executive say that they have Toyota executive say that they have mastered only 50 to 60 per cent of what mastered only 50 to 60 per cent of what Ohno hoped Toyota could achieve through Ohno hoped Toyota could achieve through the production systemthe production systemthe production systemthe production system

�� That kind of thinking all but guarantees That kind of thinking all but guarantees that Toyota will not become complacentthat Toyota will not become complacent


Toyopet was a disasterToyopet was a disaster

�� But before Toyota could run, it had to walk.But before Toyota could run, it had to walk.�� Its first attempt to sell a car in U.S.,Toyopet, was Its first attempt to sell a car in U.S.,Toyopet, was

a disaster. It was a small, inexpensive car meant a disaster. It was a small, inexpensive car meant to coax cash strapped consumer back into the to coax cash strapped consumer back into the to coax cash strapped consumer back into the to coax cash strapped consumer back into the market.market.

�� It arrived in the middle of the most ostentatious It arrived in the middle of the most ostentatious era of American automobile history.era of American automobile history.

�� Toyota was forced to retreat from the market.Toyota was forced to retreat from the market.


Toyopet Corona 1970Toyopet Corona 1970


To be selectiveTo be selective

�� In the 1970s Toyota began setting up its In the 1970s Toyota began setting up its dealer organizationdealer organization , which would , which would eventually prove to be one of its most eventually prove to be one of its most valuable tool.valuable tool.

�� Unlike Detroit companies, which seemed Unlike Detroit companies, which seemed to have a showroom in every sizable town to have a showroom in every sizable town across the United States, Toyota decided across the United States, Toyota decided to be selective and to be selective and choose areas where choose areas where population growth was taking placepopulation growth was taking place


A far bigger foreign competitor: A far bigger foreign competitor:

But Detroit barely took notice as Toyota But Detroit barely took notice as Toyota was putting together its dealer network, was putting together its dealer network, because Toyota sales were dwarfed by a because Toyota sales were dwarfed by a because Toyota sales were dwarfed by a because Toyota sales were dwarfed by a far bigger foreign competitor: far bigger foreign competitor: Volkswagen.Volkswagen.


Volkswagen at the heightVolkswagen at the height

�� Through the 1960s and into the 1970s, Through the 1960s and into the 1970s, Volkswagen was at the height of its Volkswagen was at the height of its postwar popularity thans to postwar popularity thans to the Beetle, the Beetle, postwar popularity thans to postwar popularity thans to the Beetle, the Beetle, the VW Bus and Karmann Ghiathe VW Bus and Karmann Ghia


Volkswagen Bus 1975Volkswagen Bus 1975


Karmann Ghia 1975Karmann Ghia 1975


Honda Honda

�� Honda had founded an auto part companyHonda had founded an auto part companybefore World War II but sold it to Toyota as before World War II but sold it to Toyota as

the war ended, choosing to start over from the war ended, choosing to start over from the scratchthe scratchthe scratchthe scratch

Honda wanted to win the famous Mann Honda wanted to win the famous Mann Tourist Trophy motorcycle race.Tourist Trophy motorcycle race.

Sold more than a million of Dreams, Sold more than a million of Dreams, introduced its next best seller SuperCub introduced its next best seller SuperCub


Mann Tourist Trophy Mann Tourist Trophy


Honda Honda

�� Soichiro Honda was close to retirement Soichiro Honda was close to retirement age when he finally got into the car age when he finally got into the car business.business.

�� Honda was 60 years old as Honda’s first Honda was 60 years old as Honda’s first �� Honda was 60 years old as Honda’s first Honda was 60 years old as Honda’s first car, the N360, went on sale in Japan in car, the N360, went on sale in Japan in 1966, and it wasn’t until 1977 that Honda 1966, and it wasn’t until 1977 that Honda cars debuted in the US.cars debuted in the US.


Honda N360 1967Honda N360 1967


ExampleExample: : initialinitial situation situation ((withoutwithout leanlean manifacturingmanifacturing))

1.1. RackRack unnecessarilyunnecessarilyoversizedoversized takingtaking upup tootoomuchmuch spacespace onon thethe lineline..muchmuch spacespace onon thethe lineline..

2.2. ExampleExample ofof wastedwasted nonnon--valuevalue--creatingcreating spacespace..

3.3. OnerousOnerous operatoroperator tasktask..4.4. UnnecessaryUnnecessary motionsmotions..5.5. OperatorOperator idlenessidleness..


ExampleExample: middle : middle stepstep

1.1. NewNew logisticslogistics2.2. SmallSmall containerscontainers3.3. CompressionCompression ofof spacesspaces3.3. CompressionCompression ofof spacesspaces4.4. “Zoning”“Zoning” ofof clearedcleared

spacesspaces:: nothingnothing happenshappensherehere -- nono mudasmudas..

5.5. PartsParts withinwithin immediateimmediatereachreach ofof thethe operatorsoperators..


ExampleExample: : finalfinal stepstep

1.1. IntegrationIntegration ofof aa newnewmodelmodel andand itsits partsparts onon thetheexistingexisting lineline..existingexisting lineline..

2.2. CompressedCompressed lineline side,side,eliminationelimination ofof aa severalseveralmudasmudas:: FlexibilityFlexibility ofof thetheproductionproduction tooltool withwith aaconsiderableconsiderable increaseincrease ininproductivityproductivity..


�� IMPV measured productivity principally IMPV measured productivity principally by the number of hours by the number of hours nedeednedeed for for assembly.assembly.


The time neededThe time needed

Because all assembly plants performed roughly Because all assembly plants performed roughly the same three operationsthe same three operations

-- welding the body, welding the body, -- painting the body painting the body -- painting the body painting the body -- and attaching components to the body and attaching components to the body the time needed from initial welding to final the time needed from initial welding to final

drivedrive--way of complete vehicle way of complete vehicle from the from the assembly lineassembly line was the best industry’s was the best industry’s measure for comparing relative efficiency.measure for comparing relative efficiency.


The gapThe gap

The IMVP found that lean producers needed The IMVP found that lean producers needed much less time than mass producers for much less time than mass producers for finalfinal--assembly operations: assembly operations:

�� 17 hours for plant in Japan, 17 hours for plant in Japan, 17 hours for plant in Japan, 17 hours for plant in Japan, �� 21 hours for Japanese managed plants in North 21 hours for Japanese managed plants in North

America, America, �� 25 hours for plants owned by American firms in 25 hours for plants owned by American firms in

North America North America �� and 36 hours at European plantsand 36 hours at European plants


Make it easyMake it easy

�� The Machine That Changed The World The Machine That Changed The World concluded that the main cause of the concluded that the main cause of the productivity gap was productivity gap was “manufacturability”.“manufacturability”.“manufacturability”.“manufacturability”.

�� The 19 world largest producers were The 19 world largest producers were asked to rank the other 18 companies asked to rank the other 18 companies according to the ease with which their according to the ease with which their vehicles could be built.vehicles could be built.


Toyota the best Toyota the best

�� TheThe easiesteasiest vehiclesvehicles toto buildbuild werewere mademade bybyToyota,Toyota, followedfollowed byby HondaHonda..

�� AllAll 1818 competitorscompetitors rankedranked ToyotaToyota vehiclesvehiclesamongamong thethe threethree easiesteasiest toto buildbuild..

�� FIATFIAT rankedranked fourthfourth�� FIATFIAT rankedranked fourthfourth�� FordFord waswas thethe highesthighest rankingranking USUS company,company, inin

sixthsixth place,place, withwith GMGM rankedranked tenthtenth andand ChryslerChryslerthirteenththirteenth..

�� MercedesMercedes BenzBenz waswas rankedranked eighteen,eighteen, andandJaguarJaguar lastlast..


Easy to see…Easy to see…

�� ManyMany NorthNorth AmericanAmerican finalfinal assemblyassemblyplantsplants offeroffer publicpublic tourstours..

�� EvenEven aa casualcasual visitorvisitor inin aa publicpublic tourtour inin20002000 couldcould seesee thethe obviousobvious differencesdifferences20002000 couldcould seesee thethe obviousobvious differencesdifferencesbetweenbetween assemblyassembly plantsplants inin NorthNorth AmericaAmericaoperatedoperated byby USUS companies,companies, suchsuch asas GMGMandand Ford,Ford, andand thosethose operatedoperated bybyJapaneseJapanese companies,companies, suchsuch asas ToyotaToyotaandand HondaHonda ..


… but ignored… but ignored

�� USUS carcar makersmakers throughthrough 19801980ss failedfailed totoacceptaccept thatthat differencesdifferences betweenbetween massmassproductionproduction andand leanlean productionproduction assemblyassemblyplantsplants –– visiblevisible eveneven toto anan uninformeduninformedplantsplants –– visiblevisible eveneven toto anan uninformeduninformedvisitorvisitor-- werewere significantsignificant..


Incontrovertible evidenceIncontrovertible evidence

�� TheThe smokingsmoking gungun thatthat irrevocablyirrevocably convincedconvincedeveneven lastlast holdoutsholdouts camecame fromfrom aa 55 million,million, 55yearsyears studystudy begunbegun inin 19861986 byby thetheMassachusettsMassachusetts InstituteInstitute ofof TechnologyTechnology (MIT)(MIT)InternationalInternational MotorMotor VehicleVehicle ProgramProgram (IMVP)(IMVP)InternationalInternational MotorMotor VehicleVehicle ProgramProgram (IMVP)(IMVP)paidpaid byby AmericanAmerican andand EuropeanEuropean carcar makersmakers andandgovernmentgovernment agenciesagencies inin severalseveral NorthNorth AmericaAmericaandand EuropeanEuropean countriescountries..

�� SmokingSmoking gungun == aa piecepiece ofof incontrovertibleincontrovertibleevidenceevidence ofof incriminatingincriminating evidenceevidence


“The machine that changed the “The machine that changed the world”world”

�� TheThe book,book, “The“The machinemachinethatthat changedchanged thethe world”,world”,publishedpublished inin 19901990,, isisprobablyprobably thethe mostmostprobablyprobably thethe mostmostinfluentialinfluential studystudy onon autoautoindustryindustry everever publishedpublished ..

�� AuthorsAuthors areare WomackWomack JJ..,,directordirector ofof researchresearch IMVP,IMVP,JonesJones DD.. ee RoosRoos DD..,,


It It shocked sceptical car makers shocked sceptical car makers

�� “The machine that changed the world” “The machine that changed the world” shocked sceptical US and European car shocked sceptical US and European car makers into admitting that the quality gap makers into admitting that the quality gap existed. existed. existed. existed.

�� In addition, and more important, it In addition, and more important, it convincinglyconvincingly explained the causes of the explained the causes of the quality gap.quality gap.


To be perfectTo be perfect

�� TheThe qualityquality goalgoal underunder massmass productionproductionwaswas toto bebe “good“good enough”,enough”, whilewhile underunder leanleanproductionproduction itit waswas toto bebe perfectperfect..

�� MassMass--producersproducers setset aa targettarget ofof�� MassMass--producersproducers setset aa targettarget ofofacceptableacceptable numbernumber ofof defectdefect andandproclaimedproclaimed successsuccess whenwhen thethe targettargetwaswas achievedachieved ..


KaizenKaizen

LeanLean producersproducers cancan nevernever achieveachieve thethegoalgoal ofof perfection,perfection, soso theythey settlesettle forfor aacontinuous,continuous, nevernever endingending processprocess ofofimprovement,improvement, calledcalled kaizenkaizen ininimprovement,improvement, calledcalled kaizenkaizen ininJapaneseJapanese ..


… … measured quality measured quality

�� ““ TheThe MachineMachine ThatThat ChangedChanged TheTheWorldWorld ”” measuredmeasured qualityquality atat assemblyassemblyplantsplants byby thethe numbernumber ofof defectsdefects perperhundredhundred vehiclesvehicles detecteddetected byby dealersdealershundredhundred vehiclesvehicles detecteddetected byby dealersdealersoror consumersconsumers ..


…average of 60 defects…average of 60 defects

�� IMPVIMPV reliedrelied onon thethe InitialInitial QualityQuality SurveySurveyconductedconducted inin 19891989 byby JJ..DD.. PowerPower andandAssociates,Associates, oneone ofof aa largelarge numbernumber ofof qualityqualitymeasuremeasure generatedgenerated byby thatthat companycompany..

�� InIn 19891989 JapaneseJapanese companiescompanies hadhad anan averageaverage ofof6060 defectsdefects forfor 100100 vehiclesvehicles assembledassembled inin theirtheirplantsplants andand 6565 perper 100100 inin theirtheir plantsplants inin NorthNorthAmericaAmerica .. NorthNorth AmericanAmerican plantsplants ownedowned bybyUSUS companiescompanies hadhad 8282 defectsdefects perper 100100vehicles,vehicles, andand EuropeanEuropean plantsplants hadhad 9797 perper100100.. By Masters Division By Masters Division -- Facoltà di Facoltà di

Economia di TorinoEconomia di Torino

It’s never too lateIt’s never too late

StungStung byby thethe demonstrationdemonstration gapgap inin qualityqualitywithwith JapaneseJapanese competitorscompetitors,, EuropeanEuropeanandand AmericanAmerican carcar makersmakers scrambledscrambled totoandand AmericanAmerican carcar makersmakers scrambledscrambled totoimproveimprove ..


Toyota Production System (TPS)Toyota Production System (TPS)

TheThe UU..SS.. andand EuropeanEuropean carcar makersmakersemulatedemulated thethe ToyotaToyota ProductionProduction SystemSystem(TPS),(TPS), aa rulebookrulebook ofof principlesprinciples andandproceduresprocedures forfor factoryfactory managersmanagers andandproceduresprocedures forfor factoryfactory managersmanagers andandemployeesemployees toto followfollow ..


Three key philosophiesThree key philosophies

TPS is a collection of manufacturing TPS is a collection of manufacturing methods that incorporate three key methods that incorporate three key philosophies: philosophies:

�� Customer firstCustomer first�� Customer firstCustomer first�� Employee satisfactionEmployee satisfaction�� Company stabilityCompany stability

Magee D., Magee D., How Toyota became n.1How Toyota became n.1 , Portfolio, 2007., Portfolio, 2007.


Objectives of TPSObjectives of TPS

Objectives of TPS: Objectives of TPS: �� Highest quality Highest quality �� Lowest cost Lowest cost �� Lowest cost Lowest cost �� Shortest lead timeShortest lead time



Kaizen’s three principlesKaizen’s three principles

Effective kaizen relies on three principlesEffective kaizen relies on three principles�� Process and results (not just results)Process and results (not just results)�� Systematic thinking (seeing the big Systematic thinking (seeing the big

picture)picture)�� NonNon--blaming (blame is wasteful)blaming (blame is wasteful)



TPS’s main principlesTPS’s main principlesTPS is built on two main TPS is built on two main

principlesprinciples�� JustJust--inin--time,time, reducingreducing

wastefulwasteful inventoryinventory byby usingusingonlyonly “what“what isis needed,needed, whenwhenitit isis neededneeded andand inin thetheamountamount needed”needed”amountamount needed”needed”

�� JidokaJidoka ,, thethe abilityability toto stopstopproductionproduction lineslines byby manman orormachinemachine toto stopstop qualityquality

Magee D., Magee D., How Toyota became n.1How Toyota became n.1 , , Portfolio, 2007.Portfolio, 2007.


How to implement Toyota’s How to implement Toyota’s kaizen kaizen culture in the workplace:culture in the workplace:

Identify Determine Develop a

Toyota’s Toyota’s kaizenkaizen


Identify trouble

Determine the root cause

Develop a solution


Trading off productivity and quality Trading off productivity and quality

�� ForFor EuropeanEuropean andand NorthNorth AmericanAmerican companiescompanies““TheThe MachineMachine ThatThat ChangedChanged TheThe WorldWorld””reinforcedreinforced thethe traditionaltraditional viewview thatthat massmassproductionproduction involvedinvolved aa tradetrade--offoff betweenbetweenproductionproduction involvedinvolved aa tradetrade--offoff betweenbetweenproductivityproductivity andand qualityquality..

�� NorthNorth AmericanAmerican manufacturersmanufacturers achievedachievedhighhigh productivityproductivity atat thethe expenseexpense ofof quality,quality,whilewhile EuropeanEuropean manufacturersmanufacturers sacrificedsacrificedproductivityproductivity forfor highhigh qualityquality..


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Parte 3 third revolution [modalità compatibilità]