Published on July 17, 2009
Webinar Outline About Michael E. Parker Business Today The Beginning of TPS Lean Fundamentals Overview Lean Certification Questions & Answers
LEAN FUNDAMENTALS About Michael E. Parker
B.S. Operations & Procurement M.B.A in Management Science 1st Generation Lean Expertise Handpicked by Akio Toyoda Author & Award Winning Entrepreneur
LEAN FUNDAMENTALS Business Today
Employee Morale & Customer Satisfaction Given the current economy with businesses downsizing and cutting costs to stay alive, and with some even passing costs to the customer, how do you keep employees happy, motivated and productive as well as meet/exceed customer satisfaction and create/maintain customer loyalty?
More Money for Less Service? Example: Transportation services are raising fares and cutting back on service… so customers are paying more for getting where they need to go while having to deal with less convenient and infrequent scheduling.
What’s GM Going To Do? The new General Motors will be faster and more responsive to customers than the old one, and it will make money and repay government loans faster than required, CEO Fritz Henderson said Friday as a leaner version of the automaker emerged from bankruptcy protection…
What’s GM Going To Do? The bulk of General Motors Corp.'s assets were transferred to a company controlled by the U.S. government. He said the company now will focus more on customers, including a partnership with eBay to test auctioning vehicles online.
What’s GM Going To Do? The new GM will also build more cars and trucks that consumers want and launch them faster than in the past, the CEO said.
Charged to Use the Bathroom? Ryanair CEO Michael O’Leary’s told the BBC that Ryanair was considering charging passengers to use the toilet in flight. O’Leary says the airline has looked at the idea before and is investigating it once again. O’Leary told the BBC Breakfast show.
Unfair Baggage Fees? Travelers aren't immune from rising fees. Starting Wednesday, June 10, United Airlines customers who don't pay their checked-baggage fees online will start paying an extra $5 at the airport, Chicagotribune.com says. That will amount to $20 for the first bag and $30 for the second. US Airways will follow suit.
LEAN FUNDAMENTALS The Beginning of TPS
The Three TPS Pioneers Sakichi Toyoda Taiichi Ohno Kiichiro Toyoda Just-in-Time Pull Systems Built-In-Quality
Comments – Kiichiro Toyoda “I plan to cut down on the slack time within work processes and in the shipping of parts and materials as much as possible. As the basic principle in realizing this plan, I will uphold the just-in-time approach. The guiding rule is not to have goods shipped too early or too late.” Kiichiro Toyoda, founder of Toyota Motor Company, 1938
Comments – Taiichi Ohno “All we are doing is looking at the timeline from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time by removing the non-value added wastes” Taiichi Ohno, 1988
Hard Times Led to TPS Non-Debt Management Toyota Production System JUST-IN-TIME PRODUCTION What is needed,When it is needed,in the right amount, &in the right qualityDon’t buy any unnecessary materials and don’t deliver them. Don’t produce products without any order. Sell products as soon as production is completed JIDOKA Don’t pass the defective parts onto the following processDon’t manufacture defective parts. Get rid of them on the spot.
What is needed,
When it is needed,
in the right amount, &
in the right quality
Don’t pass the defective parts onto the following process
Hard Times led to TPS TPS started after World War II It began to be noticed after 1973’s oil crisis In 1974 Japan’s economy was in a state of zero growth Toyota was able to somehow sustain strong earnings in 1975, 1976, and 1977
LEAN FUNDAMENTALS Overview
A “Customer First” Attitude “If the customer is not satisfied nothing else matters!” Customers want: the best possible product at the lowest possible cost as soon as possible“If you’re not striving for customer satisfaction, thenwhy are you in business anyway?”
the best possible product
at the lowest possible cost
as soon as possible
The Highest Quality Vehicle There is an increase in Quality when team members learn to identify and eliminate waste. Eliminating waste consists ofpreventing defects which willimprove quality. Within the TPS philosophy it is important to realize that quality should be “built-in” at each process (Jidoka).
Shortest Possible Lead-Time SUPPLIER ORDER MANUFACTURE SHIPPING CUSTOMER LEAD-TIME Must ensure that the product is available to the user when they want it: demands great flexibility ability to produce in the shortest lead-time Lead-Time In a logistics context, the time between the point of order and the receipt of the goods ordered. The new competitive advantage – “Who can get value to the customer faster?”
Respect For The Human Element Customer satisfaction is a result of team member satisfaction. All team members must participate in the system. There must be a solid framework for cultivating capable leaders and enhancing team member skills. Improvement should be drivenby those who do the work. Encourage teamwork and trainteam members to identify and attack waste in all forms.
The Lowest Possible Cost“Cost Plus Principle vs. Cost Reduction Principle” Cost Reduction Principle Sales Price - Cost = Profit “Sales price is decided accordingto market conditions. Profit is increased only if costs are kept under the sales price”. Cost-Plus Principle Sales price = Cost + Profit “If cost goes up, then sales price does too” To reduce cost you must: Distinguish between what is absolutely necessary and what is not absolutely necessary.Realize that cost varies according to the productionmethod being utilized. Some methods of building avehicle are more costly than others.
Distinguish between what is absolutely necessary and what is not absolutely necessary.
Realize that cost varies according to the productionmethod being utilized. Some methods of building avehicle are more costly than others.
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