The Toyota production system (TPS), sometimes also referred to as the lean production system, refers to the principles and practice of lean manufacturing. The TPS is the systematic elimination of all types of waste. It is also about the implementation of the concepts of continuous flow and customer satisfaction through a flexible production system that allows for flexibility and rapid customization.
The TPS is the philosophy that organizes manufacturing and logistics at Toyota, including the interaction with suppliers and customers. It was largely created by the founder of Toyota, Sakichi Toyoda, his son Kiichiro Toyoda, and the engineer Taiichi Ohno. The focus of the TPS is the elimination of waste and defects at all points of production including input, process, and final output (delivery) through the ingenuity of individual staff and creativity of teams in designing and implementing an error-proof work system. Toyota’s chairman stated: To build [quality] cars we need to build people first. That is in essence the TPS way. Indeed, TPS is also about truly empowering people and giving them the knowledge to be successful. Failures and problems are okay and are viewed as learning opportunities and a way to address the root cause. The true strength of the TPS is the understanding that people are the real strength, not just techniques. Jidoka or ‘autonomation’ with a human touch and just-in-time are two major components of the TPS.” The main goal of the TPS is to eliminate muda, the Japanese term for waste. Seven kinds of waste are targeted in the TPS:
1. Waiting (of operators or machines)
3. Processing itself
4. Inventory (raw materials)
5. Motion (of operators or machines)
6. Defects(reworking and scrap)
Toyota was able to reduce lead time and costs using the TPS while improving quality at the same time. This enabled it to become one of the leading automobile companies in the world. The TPS is a classic example of the kaizen approach to productivity improvement. It is a flexible system to produce various quantities of different products within a very short delivery period. Techniques for the TPS include concurrent engineering, relationships with excellent suppliers, just-in-time production, 5S, total quality management, total productive maintenance, supply chain management, etc. Due to this stellar success of the production philosophy, many of these methods have been copied by other manufacturers. Since the 1980s, the TPS has been so popular that it has been dubbed the least-cost method of manufacturing, or ultimate production system.
See also: 5S or Good housekeeping; 7 wastes; Kaizen; Lean production system
Total quality management (TQM) is more than a concept; it is a philosophy by itself. TQM is defined as a management strategy for an organization, centered on awareness of quality in all organizational processes. According to the American Society for Quality, the term total quality management was first used by the US Naval Air Systems Command to describe its Japanese-style management approach to quality improvement. The TQM management strategy is based on the participation of all members and aimed at long-term success through customer satisfaction and benefits to all members of the organization and society. TQM relies on necessary quality management tools to achieve and maintain the desired level of quality in everyday operations, allowing for continual improvement of operations and meeting changing customer expectations.
Total factor productivity (TFP) refers to the productivity of all inputs taken together. TFP is a measure of the output of an industry or economy relative to the size of all of its primary factor inputs. When the growth of a nation’s economic output over time is compared with the growth of its labor force and its capital stock (inputs) it is usually found that the former exceeds the latter. This is due to the growth of TFP, that is, the ability to combine the factors (labor and capital) more effectively over time. This can be due to changes in qualities (more appropriate skills or embedded technologies) or to better methods of organization. TFP represents any effect in total output not accounted for by inputs. It addresses the real driver of output growth, not contributed by growth in productivity or inputs such as capital stock and the labor force. TFP can be interpreted as growth through technological innovation and efficiency achieved by enhanced labor skills and capital management.
The Taguchi method of product design, pioneered by Dr. Genichi Taguchi, is an experimental approximation that shows how the statistical design of experiments (DOE) can help design and manufacture high-quality products and reduce product development time and cost. The method is also called robust design. Dr. Taguchi’s approach is primarily focused on eliminating the causes of poor quality and making product performance insensitive (less variable and more robust) in the face of the variation of expected problems. DOE is a powerful statistical technique for determining the optimal factor settings of a process performance, thereby achieving reduced process variability and improved manufacturability of products. Dr. Taguchi referred to DOE as off-line quality control because it is a method of ensuring good performance in the design stage of products or processes, while other sets of experimental designs are called on-line quality control because they are used while the process is operating. In a nutshell, it is a technique for designing and performing experiments to investigate processes where the output depends on many factors (variables; inputs) with the fewest trials and errors and without uneconomical operations of the processes using all possible combinations of those variables. The method systemically chooses optimal combinations of the variables desired.
A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such analysis of the strategic environment is referred to as SWOT analysis. SWOT analysis is a widely used strategic planning tool for projects or business ventures, as well as for organizations and individuals, that require decision making. SWOT analysis provides information that is helpful in matching an enterprise’s resources and capabilities to the competitive environment in which it operates. It is therefore instrumental in strategy formulation and selection and forms the first stage of planning to focus on key issues.