OPERATIONS MANAGEMENT

ASSIGNMENT 1 – FLOW DESIGN STUDY

2 MBA K

SUBMITTED TO:
Prof. Vasudevan Murthy

SUBMITTED BY:
MANAS PROTIM DEKA – 1927813
MELVIN DANIEL JOHN -1927815
RACHIT SRIVASTAVA – 1927819
SHER SINGH – 1927823
VIJAY KRISHNA M – 1927826
GUTTA AMRUTA – 1927835
NIMMI SHAJI – 1927843
SIMRAN ANN VERGHESE – 1927850
SANKALP GUPTA – 1927858
REGINA JECINTHA – 1927860

INSTITUTE OF MANAGEMENT
CHRIST (DEEMED TO BE UNIVERSITY)
SEPTEMBER 2019
 FLOW DESIGN STUDY OF AUTOMOBILE MANUFACTURING

INTRODUCTION TO LEAN OPERATIONS

Lean operations are a means of running an organization by focusing on providing greater customer satisfaction
while using as few resources as possible.

The objective of lean operations is twofold: Creating value for customers and eliminating waste. Companies
that use lean operations are highly concerned with efficiency. Everything in a business’s operations that do
not meet the ultimate end of providing customers value and increasing profits is cut from the organization.
Hence the “lean” in lean operations. Mostly, if you implement lean operations, you want to cut all
inefficiencies. Lean operations allow companies to do more with less which creates value and increases profits.

A company operating on lean principles strives to be efficient. It seeks to optimize its operations through a
careful and painstaking process that looks at every aspect of the business and eliminates everything that is
nonessential to create long-term profits.
TOYOTA PRODUCTION SYSTEM

Taiichi Ohno and Eiji Toyoda, Japanese industrial engineers, developed the system between 1948 and 1975.
Originally called Just-in-time production, it builds on the approach created by the founder of Toyota, Sakichi
Toyoda, his son Kiichiro Toyoda, and the engineer Taiichi Ohno.

The push towards lean manufacturing originates from the Toyota Production System which is often referred
to as Just-In-Time (JIT) Production. Toyota developed a set of procedures that reduced the time required for
setup and changeovers.

The Toyota Production System (TPS) is an integrated socio-technical system developed by Toyota
(automotive manufacturer) to efficiently organize manufacturing and logistics, including the interaction with
suppliers and customers, to minimize cost and waste. Nampachi Hayashi claims that TPS should have been
called “Toyota Process Development System.”

The purpose is to identify and reduce three primary obstacles or deviations from optimal allocation of
resources within the system:

 Overburden (muri)
 Inconsistency (mura)
 Waste (muda)

BACKGROUND: INTRODUCTION OF TOYOTA PRODUCTION SYSTEM

Toyota Motor Corporation struggled through the 1930s, primarily making simple trucks. In the early years,
the company produced poor-quality vehicles with primitive technology (e.g., hammering body panels over
logs) and had little success. In the 1930s, Toyota’s leaders visited Ford and GM to study their assembly lines
and carefully read Henry book, Today and Tomorrow (1926). They tested the conveyor system, precision
machine tools, and the economies of scale idea in their loom production. Even before WWII, Toyota realized
that the Japanese market was too small and demand too fragmented to support the high production volumes
in the U.S. (A U.S. auto line might produce 9,000 units per month, while Toyota would produce only about
900 units per month, and Ford was about 10 times as productive.) Toyota managers knew that if they were to
survive in the long run they would have to adapt the mass production approach for the Japanese market.

Toyota’s situation after World War II, in 1950 was very different. It had a budding automotive business. The
country had been decimated by two atom bombs, most industries had been destroyed, the supply base was nil,
and consumers had little money. The Plant manager, Taiichi Ohno was given an assignment to improve
Toyota’s manufacturing process so that it equals the productivity of Ford.

Ford’s mass production system was designed to make huge quantities of a limited number of models. In
contrast, Toyota needed to churn out low volumes of different models using the same assembly line, because
consumer demand in their auto market was too low to support dedicated assembly lines for one vehicle. Ford
had tons of cash and a large U.S. and international market. Toyota had no cash and operated in a small country.
With few resources and capital, Toyota needed to turn cash around quickly (from receiving the order to getting
paid). Ford had a complete supply system, Toyota did not. Toyota didn’t have the luxury of taking cover under
high volume and economies of scale afforded by Ford’s mass production system. It needed to adapt Ford’s
manufacturing process to achieve simultaneously high quality, low cost, short lead times, and flexibility.

When Eiji Toyoda and his managers took their 12-week study tour of U.S plants in 1950, they were expecting
to be dazzled by their manufacturing progress. Instead they were surprised that the development of mass
production techniques hadn’t changed much since the 1930s. In fact, the production system had many inherent
flaws. What they saw was lots of equipment making large amounts of products that were stored in inventory,
only to be later moved to another department where big equipment processed the product, and so on to the
next step. They saw how these discrete process steps were based on large volumes, with interruptions between
these steps causing large amounts of material to sit in inventory and wait. They saw the high cost of the
equipment and its so-called efficiency in reducing the cost per piece, with workers keeping busy by keeping
the equipment busy. They looked at traditional accounting measures that rewarded managers who cranked out
lots of parts and kept machines and workers busy, resulting in a lot of overproduction and a very uneven flow,
with defects hidden in these large batches that could go undiscovered for weeks. Entire workplaces were
disorganized and out of control. With big forklift trucks moving mountains of materials everywhere, the
factories often looked more like warehouses. To say the least, they were not impressed. In fact, they saw an
opportunity to catch up.

Fortunately for Ohno, his assignment from Eiji Toyoda to catch up with Ford’s productivity didn’t mean
competing head-on with Ford. He just had to focus on improving Toyota’s manufacturing within the protected
Japanese market a daunting assignment nonetheless. So Ohno did what any good manager would have done
in his situation: he benchmarked the competition through further visits to the U.S. He also studied Ford’s
book, Today and Tomorrow.

After all, one of the major components that Ohno believed Toyota needed to master was continuous flow and
the best example of that at the time was Ford’s moving assembly line. Henry Ford had broken the tradition of
craft production by devising a new mass production paradigm to fill the needs of the early 20th century. A
key enabler of mass production success was the development of precision machine tools and interchangeable
parts (Womack, Jones, Roos, 1991). Using principles from the scientific management movement pioneered
by Frederick Taylor, Ford also relied heavily on time studies, very specialized tasks for workers, and a
separation between the planning done by engineers and the work performed by workers.

In his book Ford also preached the importance of creating continuous material flow throughout the
manufacturing process, standardizing processes, and eliminating waste. But while he preached it, his company
didn’t always practice it. Toyota saw this as an inherent flaw in Ford’s mass production system.

Toyota did not have the luxury of creating waste, it lacked warehouse and factory space and money, and it
didn’t produce large volumes of just one type of vehicle. But it determined it could use Ford’s original idea
of continuous material flow (as illustrated by the assembly line) to develop a system of one-piece flow that
flexibly changed according to customer demand and was efficient at the same time. Flexibility required
marshalling the ingenuity of the workers to continually improve processes.

LEAN OPERATIONS IMPLEMENTATION IN TOYOTA

The Toyota Production System (TPS) was established based on two concepts:
"Jidoka" (which can be loosely translated as "automation with a human touch"), as when a problem occurs,
the equipment stops immediately, preventing defective products from being produced; and the

"Just-in-Time" concept, in which each process produces only what is needed for the next process in a
continuous flow.

Based on the basic philosophies of Jidoka and Just-in-Time, TPS can efficiently and quickly produce vehicles
of sound quality, one at a time, that fully satisfy customer requirements.
IMPLEMENTATION OF JIDOKA:
Jidoka means that a machine must come to a safe stop whenever an abnormality occurs. Achieving Jidoka,
therefore, requires building and improving systems by hand until they are reliable and safe.

First, human engineers meticulously build each new line component by hand to exacting standards, then,
through incremental kaizen (continuous improvement), steadily simplify its operations.

Eventually, the value added by the line's human operators disappears, meaning any operator can use the line
to produce the same result. Only then is the Jidoka mechanism incorporated into actual production lines.

IMPLEMENTATION OF JUST-IN-TIME:
Just-in-time (JIT) manufacturing, also known as just-in-time production or the Toyota Production System
(TPS), is a methodology aimed primarily at reducing times within production system as well as response times
from suppliers and to customers. Its origin and development were in Japan, largely in the 1960s and 1970s
and particularly at Toyota.

Just-in-time is a management philosophy and not a technique. Just in time is a pull system of production, so
it provides the necessary material only when required in the correct quantity and at the correct time.

It is a manufacturing/delivery process where a minimum of goods is kept in stock. Items are planned to arrive
precisely at the time they are required for use or dispatch. Producing quality products efficiently through the
complete elimination of waste, inconsistencies, and unreasonable requirements on the production line.

FOUNDATIONS OF TPS:

1. HEIJUNKA:
Heijunka is a Lean method for reducing the unevenness in a production process and minimizing the chance of
overburden. The term Heijunka comes from Japanese and literally means levelling. It can help us react to
demand changes and utilize the capacity in the best possible way.

Heijunka is also important when it comes to sequencing production. For example, were the factory’s ordering
system to send batches of high specification models down its assembly line at the same time, workers would
be required to manage lots of complex build tasks not present in less well-equipped cars.

The Toyota Production System uses Heijunka to solve the former by assembling a mix of models within each
batch, and ensuring that there is an inventory of product proportional to the variability in demand.
2. KAIZEN:
Kaizen means continuous improvement.
Within the Toyota Production System, Kaizen humanises the workplace, empowering individual members to
identify areas for improvement and suggest practical solutions. The focused activity surrounding this solution
is often referred to as a kaizen blitz, while it is the responsibility of each member to adopt the improved
standardised procedure and eliminate waste from within the local environment.

Kaizen begins in the early designs of a production line and continues through its lifetime of use by a process
of consensus known as Nemawashi.

FLOW DESIGN OF LEAN OPERATIONS TOYOTA

The flow design consists of four mains steps:

1. PRODUCTION ORDER INFORMATION:

When a vehicle order is received, production instructions must be issued to the beginning of the vehicle
production line as soon as possible. The production plan is designed. Heijunka sequence plan method is
followed in order to meet the demand efficiently. That is, the production plans are made as per the sequence
of the orders received.

2. TIMELY PRODUCTION:
Once the order is received, the assembly line must be stocked with the required number of all necessary parts
so that any kind of ordered vehicle can be assembled. At this level, the focus is on efficiently producing
vehicles with different specifications one at a time, in a timely manner while ensuring the high quality.
3. REPLACEMENT OF PARTS USED:
The assembly line must replace the parts used by retrieving the same number of parts from the parts-producing
process. It is referred to the restocking of the inventory. Only the used-up parts are replaced in a timely manner.

4. PRODUCTION OF THE PARTS RETRIEVED:

At this level, efficiently processing and replenishing only those parts that have been retrieved in the proceeding
production level. That is, the parts which have been replaced in the previous steps are further processed for
future use.

CHALLENGES OF IMPLEMENTATION:

1. EMERGING ISSUES IN HR:

Lean manufacturing centres around minimizing waste and reducing costs through automation and continuous
improvements in operational efficiency. Lean manufacturing relies on integrated technological systems,
smaller workforces of highly trained employees and a radical shift in company culture. Each of these elements
can present distinct challenges that must be overcome to achieve a truly efficient lean manufacturing system.
Understanding these key issues is a vital building block for developing your own lean implementation plan.

2. SUPPLY CHAIN ISSUES:

Lean manufacturing includes the minimization or near elimination of storage time for incoming materials and
outgoing products. Implementing a just-in-time ordering system is necessary to ensure that raw materials are
constantly coming in at the perfect rate to meet operational demand. This requires close coordination with
suppliers, even going as far as integrating automated ordering and order-fulfilment systems between your two
companies. This kind of close operational cooperation can introduce a host of issues, since project managers
in both companies must coordinate with each other while managing their own side of the implementation
project. The same can be true on the outgoing end, as well. Serving business customers with just-in-time
ordering systems can require your business to act as a just-in-time supplier, filling orders frequently and
automatically.

3. EMPLOYEE DEVELOPMENT:
Implementing lean manufacturing methodologies in an existing business creates a talent gap that must be
crossed. The technological infrastructure required to manage supply-chain issues while maintaining automated
production and quality-control systems requires more-educated and trained employees than traditional
assembly line setups. Lean manufacturers require highly skilled and educated employees to inspect, repair and
design the layout of automated production technology regularly. Technical employees will likely require
safety certifications and special licenses to operate and maintain such systems, and they demand much higher
compensation than general-labour employees.
4. CULTURAL ISSUES:
Going lean introduces a revolutionary shift in the way work is done in a manufacturing organization.
Implementing lean manufacturing requires a smaller number of employees to take on a wider range of
responsibilities, blurring the lines between formal job descriptions. It involves a strict and meaningful
commitment to waste reduction, which can mean changing employees' familiar work processes. It should
involve reworking incentives and bonus structures to reward behaviour and ideas that reduce costs, production
time and waste. This requires true buy-in at all levels of a company, from senior managers to front-line
machine operators. Successfully developing lean manufacturing processes requires true commitment from
everyone involved.

5. TECHNOLOGICAL CHALLENGES:
Lean manufacturing can require a significant upfront investment in technology, from new production systems
to statistical analysis software for monitoring quality improvement on assembly lines. Choosing the right
systems is crucial for success as a lean manufacturer, since you will be relying on your systems for the
continued efficient operation of your business. One of the tenets of lean business practices is to automate as
much as possible, making you more reliant on technology than you may have been in the past.

6. RESISTANCE:
It seems like it is a fact of life; most people don’t like change. Most everyone likes to live in their comfort
zone and sees change as a threat to this. Although all employees may offer some resistance, long term
employees may offer the most resistance when trying to convert to a lean culture. Engaging frequently and
often with resistors is key to overcoming it. Make sure to explain what the change will provide them
personally, as well as what it will provide for the company. Training and communication should also be a key
focus to overcoming resistance.

7. COST:
The old adage about it “takes money to make money” applies here as well. Redesign of equipment and layouts
to facilitate line balances and standard work will take money. Investigating and permanently fixing problems
and mistake proofing will probably cost money. However, overtime, these improvements will pay for
themselves through increases in quality, speed, and customer complaints.

8. START-UP AND UPKEEP:

Initially, you will require resources from the facility to implement lean. The numbers will require how quickly
you want to implement and where you want to focus. Temporary workers can often be brought in to ‘back-
fill’ some of your employees to implement the system. Once implemented, there will be upkeep that is
required. Labels, floor tape, and other visual controls will get torn and need to be replaced. Parts will get
relocated, requiring Kanban cards be re-generated. Customer demand will likely require that production be
levelled on a regular basis. However, as implementation progresses, you should start to free up the need for
so much labour. As labour is freed-up, you can re-deploy some of these people to carry on the upkeep and
also implement lean in other areas.

BENEFITS OF LEAN MANUFACTURING:

Lean Manufacturing originated from the Toyota Production System, one of the most successful automotive
manufacturers, ever. The study of the success of Toyota sets the five Lean Manufacturing Principles:

• Specify Value - as seen by the Customer

• Identify and Create Value Streams
• Make the Value flow from raw material to Customer
• Pull Production not Push
• Strive for Perfection
Once a customer sets the value, a value stream flows meeting the needs of the customer by preventing the
creation of waste and according to the customer preferences. As a company reduces these wastes and strives
for single piece flow, many other benefits will follow.

1. IMPROVED CUSTOMER SERVICE:

The first principle of Lean is identifying value as perceived by the customer; customers need to be provided
with what they want, when they want and where they need it.

A company is successful as long as the customers are satisfied. If a company always supplies top quality
products and services on time, at the right place, those satisfied customers are going to keep on returning,
allowing the business to thrive.

2. EASY MANAGEMENT:
One of the major advantages of implementing Lean into organization is getting more done with less people.
As waste is reduced there is less space and manpower required to manage.

The workflow results in manufacturing cells which puts machines close together so that a single operator can
manage many pieces of equipment with the minimal energy. The workers’ main task is to enhance skill level
and properly maintain the system, once it is implemented.

The Lean approach starts at the bottom of an organization and proceeds up unlike Six Sigma which is a tops-
down management philosophy, in which the management imposes changes on the work process. In Lean
system, each individual worker within a work cell tries to improve his or her performance. A role of the
management is to go on the factory floor and check what is happening and in accordance provide additional
training, promotion, and learning.

3. IMPROVED QUALITY AND FEWER DEFECTS:

A lot of the activity in a lean environment is focused on quality improving. Without waste and its additional
costs such as transport or inventory, the products value gets increased the quality also enhances. In a top-
quality production there are fewer defects and if they occur they are easily eliminated.

4. REDUCED WASTE:
Waste is a significant product within any process. The Lean Approach is focused on improving process speed
and quality through reduction of process waste. Waste consumes energy, money, and is of no value to the
customer.

Another approach, Six Sigma, which also aims to make processes and the business more efficient, identifies
waste as results from variation within the process and tries to reduce it by eliminating variations in the process.
In the Lean Approach, reduced waste means less transport, less moving, less waiting, less space required and
reduces all variations throughout the process.

5. FINANCIAL BENEFITS:
If the LEAN principles are properly set in the organization, the financial benefits are highly significant. A
satisfied customer will make any business operate smoothly. The reduction in waste and defects adds
additional money which should be set into quality improvement and the better product quality ensures higher
profit.

The money saved on product storage and inventory management adds additional cash flow in the company.
However, less employees means additional training for workers but with clear work instructions and
standardized work the job is easily and more eagerly performed. Managing satisfied workers is easily
conducted and makes any business prosper on the long run.

Lean Manufacturing is a business philosophy which has proven highly successful since it can reduce costs,
eliminate waste, increase productivity, maintain high levels of quality and thus make a significant increase in
your profit.

OTHER BENEFITS:
Lean manufacturing improves efficiency, reduces waste, and increases productivity. The benefits, therefore,
are manifold:

• Improved lead times: As manufacturing processes are streamlined, businesses can better respond
to fluctuations in demand and other market variables, resulting in fewer delays and better lead
times.
• Sustainability: Less waste and better adaptability makes for a business that’s better equipped to
thrive well into the future.
• Employee satisfaction: Workers know when their daily routine is bloated or packed with
unnecessary work, and it negatively affects morale. Lean manufacturing boosts not only
productivity, but employee satisfaction.
 • Increased profits: And, of course, more productivity with less waste and better quality ultimately
makes for a more profitable company.

IMPLEMENTATION OF LEAN MANUFACTURING IN OTHER COMPANIES:

So, as we are discussing about the Lean operation created by Toyota their Advantages now its time to discuss
how it helped other companies in operations by taking an example of Hyundai

FACTORS DISTINGUISHING HPS FROM TPS:

HPS is quite distinct from TPS in the core aspects of production management. TPS primarily is governed by
‘pull’ production, based upon JIT process control and flexible labour utilization, HPS is a ‘push’ production
model, utilizing centralized IT-driven process control. On the technical aspect, HPS and TPS both have
pursued the reduction of operational cost, though in a contrasting manner. The most crucial difference between
HPS and TPS is observed in the way of utilizing worker capabilities: HPS has relied on engineer-driven
workplace innovations and operation control, rather than the full utilization of worker capability and
involvement, highlighted by TPS.

THE DIFFERENCES AT HYUNDAI CAN BE EXPLAINED BY SEVERAL INTER-RELATED

FACTORS:
Unlike Toyota, Hyundai management has emphasized high utilization of production capacity under a supplier-
dominated market condition, rather than stressing flexible responses to customer demands. This business
orientation, which has led Hyundai management to stick to the push production model, is associated with its
dominant position in the domestic market and its sustained growth overseas.

Most importantly, confrontational labour-management relations at Hyundai have been a major constraint (Cho
and Lee 1989 Labour–management cooperation and worker collaboration are a key pre-condition of the
operation of the JIT production principle at Toyota (Forza 1996). The problematic labour relations climate at
Hyundai has been derived from worker mistrust of the labour-exclusive management style.

BENEFITS OF LEAN OPERATION TO HYUDAI

HPS has enhanced its utilization ratio up to 95.6%, close to that of TPS (97%), over the past 5 years. It also
has improved product quality (measured by the sign-off ratio) up to 92.3%, drawing near Toyota levels (94–
95%), over the same period. In particular, Hyundai's improvements in quality can be evidenced by the recent
favourable recognition of overseas markets; for instance, its passenger cars rank as one of highest quality
products in JD Power's IQS (initial quality satisfaction). Moreover, despite its push mode production system,
Hyundai has reduced its inventory of parts delivery to 2 hours, comparable to Toyota, through tight control of
parts suppliers. These notable accomplishments mainly are attributable to the company's great efforts in
engineer/ technology-driven production management innovation.

FUTURE ASPECTS OF LEAN OPERATIONS:

HOSPITALS
Hospitals are being reimbursed in pretty much the same way that commodity sellers are and, like them, will
rise or fall largely on the strength of operational performance. Stocks and flows, queuing theory, just-in-time
processes—all of the notions associated with the factory floor—are exactly what modern hospitals most sorely
need.

Lean Operations Model Used

Problem A:
When examining the hourly arrival rate of patients to an emergency room over a 90-day period, significant
variability was observed.

Solution:
After organizing the data by time of day, much of the variability disappeared: at a given hour, the rate was
largely predictable (as shown in the model).
Result:
The hospital could manage this variability by adjusting staffing levels over the course of day to match the
expected demand.

Problem B:
When measuring the time needed for triple-bypass operations at a hospital, we observed a great variance and
found that they took from 283 to 368 minutes.

Solution:
When we grouped these data according to the particular surgeon performing the operation, the variance fell
significantly. Some surgeons take longer than others, and the hospital, recognizing this reality, began to
schedule more time for those who needed it.

Result:
This resulted in a dramatic reduction in the unused capacity of the operating rooms.

AIRLINES
Our recent work in the trenches of maintenance and other operations at several airlines has shown us that they
can simultaneously make breakthroughs in cost and quality while continually improving their performance in
both areas—an achievement known as the "first paradox" of Toyota Motor’s lean-production system. As lean
techniques eliminate waste, they also root out the non-standardized work times, variable team structures, and
highly asynchronous work flows that many airline executives now view as unavoidable.

Lean Model Used

Problems Identified:
Consider ground operations: Aircraft worth $100 million or more routinely sit idle at gates. Turnaround times
between flights typically vary by upward of 30 percent.

Solutions:
Lean techniques cut hours to minutes with a changeover system.

• One person is responsible for the job

• Each function is in place and ready to go before the plane arrives
• Passengers are briefed prior to boarding
• Flight attendants help stow carry-on baggage to speed seating
Results:
We have seen turnaround times at two internationally based carriers reduced by 20 to 40 percent in this way.

RESTAURANTS
Beset by waste and operational variability, food service operators are taking a page from industrial
manufacturers and applying lean-production approaches to their own operations.

Lean techniques seek to improve product and service quality while simultaneously reducing waste and labor
costs. For food service operators, the additional trick is to link such improvements to customer loyalty.
Lean Operations Model Used

Problems Involved:
• Tackling unpredictable demand
• Excessive error rates and wait-time (ten minutes for simple sandwiches) on orders.

Process Flow:
• The operator mapped daily changes in demand to highlight fluctuations

• Introduced a self-service counter

• Redesigned kitchen and food preparation procedures to standardize sandwich making and eliminate
waste.

Results:

• Waste produced fell by 40 percent.

• Labor costs dropped by 15 percent.
• Service times improved by one-third.
• Margins on affected products more than doubled, since employees could spend more time influencing
customers and less time apologizing to them.
RESEARCH PAPER BY JEFFREY K. LIKER AND JAMES M. MORGAN
TOYOTA’S MANAGEMENT PRINCIPLES IN LEAN PPD
• Jim Morgan did a in-depth study of Toyota’s automotive body development.
• Collected data through interviews of 40 people from 12 sites in U.S and Japan for 1000 hours and
site visits.
• Study led to the identification of 13 management principles for lean product development.
• Framework of these principles consists of Process, People and Tools technology.
• Toyota follows a systems model; all pieces fit together and support each other. Even if one part is
pulled out, the whole system collapses.

13 MANAGEMENT PRINCIPLES:
The 13 management principles are again segregated under 3 main heads as follows:

PROCESS PRINCIPLES:

PEOPLE PRINCIPLES:
TOOLS AND TECHNOLOGY PRINCIPLES:

TOYOTA ANALOGY:
 Toyota uses the analogy of trying to navigate through waters while lowering the water level to reveal
the rocks.

Water level: Inventory

Rocks: Problems
 When you lower the inventory, problems are exposed. If the problems are not solved, the boat will
crash into the rocks. Jidoka also reveals rocks throughout the day leading to an endless journey of
improvement.

GLOBALIZING THE TOYOTA WAY:

1. COORDINATOR SYSTEM:
The company realised the need to make major investment in people.
“Coordinators”
 Every manager and above had a full-time Japanese coordinator.
 Daily teaching Americans for years how to think, speak and act in the Toyota way.
 They are developing more efficient methods as there are fewer Japanese coordinators to go around.
2. CAREFUL SELECTION:
 Toyota carefully selects its people in Japan and elsewhere identifying people who fit the DNA of the
company.

 Smart, dedicated, hardworking, committed, who are excited about cars, like to work in teams, have a
curiosity about solving problems and open to learning.

3. TRIPS TO JAPAN:
 An opportunity for indoctrination.
 People are impressed by the energy, efficiency and problem solving exhibited across the Toyota
organization.
 While in Japan they are given challenging tasks and learn a different level of problem solving.
4. CHIEF ENGINEER SYSTEM:
 Teaching and coaching in leading product development projects.

CHALLENGES
TRANSFERRING HANSEI
Hansei means reflection. To reflect come back and express how deeply sorry they are about their failing and
vow to improve and never do it again.

ADULT VERSION OF HANSEI:

To take responsibility for problems, feel really sorry, and explain what you will do to prevent that mistake
from happening again via a written plan.

When a Japanese manager finds a weakness in a project the engineer is expected to take it constructively as
an opportunity for improvement.

American Toyota employees started using the phrase “the obligatory negative” that the Japanese managers
must put into every assessment of every project.

Due to such painful instances, the Hansei was removed.

It made a comeback after 10 years as there was more trust between Americans and Japanese managers.
Japanese managers also learnt to balance positive and negative feedback.
WORK-LIFE BALANCE:
 In japan company comes before personal or family life.
 In America and other western cultures there is a high value placed on personal and family life.
 Due to the issue of work-life balance Toyota instituted flex time and start and end time for employees.
INDIVIDUAL VERSUS GROUP REWARDS:
 In Japan, dedication to company and the team is expected in Toyota.

 Individuals feel embarrassed to praised individually and they attribute it back to the team.

 While Americans expect to be individually praised. Hence certain individual rewards had to be
instituted in America.

 Twice per year bonus in Japan, depends solely on company performance and not on individual
performance.

 In America this bonus also includes a component based on individual performance.

CONCLUSION:
Implementing Lean management in an organization is a concept that is designed to support the concept of
continuous improvement in a manufacturing and support organization. Using this approach will systematically
seek to achieve small and incremental changes in processes in order to improve efficiency and quality. Lean
principles will continue to be used to reduce waste and improve processes. The Lean management process
when used correctly seeks to eliminate any form of waste in reference to time, effort or money by identifying
each step in the business process and revising steps that does not create value.