All around the world, people drive Toyota cars, they have built up a reputation as good cars to own. The architect of the Toyota Production System was Taiicho Ohno and a new book was recently published Taiicho Ohno’s Workplace Management, Special 100th Birthday Edition by McGraw Hill, 2013. The book gives insights into how Mr. Ohno approached his job and has lessons for everyone, whether you work in manufacturing or not.

1. The misconception that mass production is cheaper. Is it really or can many examples be found where it is not the case. The reality is many times  an increase in  production results in higher costs, rather than lower costs. When the volume is beyond the capacity of the machines, factory costs rise. If the volume is high a new machine is needed which adds to costs, but most important is matching sales to new volumes. If items are not sold, there is inventory storage costs.

2. Wasted motion is not work. The most important job of production control is to limit overproduction.When people do tasks that are not directly related to their jobs, is it work or can the work be improved. The example given was a cutter doing some work, then spending time to sharpen the tools. Is sharpen tools the work or is there a better way? different process? centralized processes? Usually the answer is yes, there can be a different and better way.

3. the Better Question to ask – an example is a motorized loom, when a thread broke, the machine would stop and a worker would have to reconnect the thread. This happened often and the thinking at the time was to connect the thread as soon as possible in order not to lose production. The better question is how do we produce a thread that would not break?

4. The simpler it is the harder it is to do. Rationalization means doing what is rational, so there should be nothing that makes you think “Wow!” we did  it.

5. Why Shutoff buttons – the reason for the many shutoff buttons on a production line or the ability to shut down the line is to minimize defects and to ensure workers focus on quality. The point is not for workers to abuse the shutoff buttons, but to ask the question why is the line being shut down?  Finding  solutions will keep the line running longer and costs are reduced when there are fewer defects.

6. One of the main fundamentals is to make ‘what you need, in the amount you need, by the time you need it’, with the next phrase not written down at the lower cost. For example if you can make 120 units but only need 100, then make 100 for it is the lower cost. What happens to the other 20 and the costs for running the machines an d plant are not incurred or saved.

Linking to dividend producing stocks, Mr. Ohno’s philosophy focuses on learning, improving and focus on reducing costs. In Japan at the time of Mr. Ohno’s writing there was a full employment policy, this meant reducing bodies was the last step. It seems in North America, it tends to be considered the first step, perhaps it should be the last step.

There are more questions than answers, till the next time – to raising questions