Chapter Two

The Lean TPM Master Plan

Abstract

Lean provides a flow logic to production where inventory does not stand still in the cash flow cycle and TPM provides the means through which the production process operates without a loss of any form (defects or lost time). This chapter traces the origins of lean and the origins of TPM before combining these two approaches into a single management system. The chapter explores the main logic and features of both systems including the key TPM milestones. It identifies the benefits of the combined approach.

Keywords

Benefits; History of improvement; Lean; Management role; Milestones; Oobeya; Systems change; TPM

2.1. Achieving the Right Balance

Lean TPM is one of the most powerful organisational transformation programmes of all. It combines and builds robustness into many other improvement programmes including the approach known as six sigma (an advanced approach to quality management) and builds robustness into the bufferless lean systems. As long ago as November 1997, at the TPM5 biannual conference of European TPM practitioners, Professor Daniel T Jones addressed the conference delegates on the topic of lean thinking and TPM. His observations were that although Just-in-Time is an accepted concept, most industries still scheduled work through departments in batches, worked to forecast and sold from stock, had long lead times, high buffers and poor quality detection. These are key target improvement areas for 'lean production' and the lean enterprise business model. To the casual observer, the lean approach has a different emphasis to the classic TPM focus on equipment reliability. There is some overlap, but together these cover 12 different target areas. So why would a recognised leader of 'lean thinking' be talking at a TPM conference? The common thread is that both TPM and lean manufacturing highlight areas of historically accepted or hidden wastes (Womack & Jones, 1996). Despite their different origins, progress with either depends upon sensitising the organisation to recognise wasteful behaviours and practices. In effect, these improvement programmes create a heightened sensitivity to these 'wastes' so that each employee can detect the slightest of deviations in the production process and identify these as abnormal and take appropriate actions to restore production. Such an approach makes employees quite intolerant to other organisations that still maintain old business models and have not yet engaged in this form of waste elimination. In the case of TPM, the root cause of this waste is a short-term management perspective that tolerates and accepts poor reliability. The root cause of lean wastes is optimising parts of, rather than, the total value stream. TPM companies have always channelled improved effectiveness to increase customer value, but lean thinking helps to sharpen the definition of value. Lean thinking has always sought reliable processes, but TPM provides the route map to zero breakdowns and continuous improvement in equipment optimisation. Lean efforts without TPM are unreliable and TPM without the lean logic improves efficiency but may not translate this into customer value and improved cash flow. The penultimate slide in Dan Jones's presentation showed the potential gains from lean as reducing: throughput time and defects by 90%; inventories by 75%; space and unit costs by 50%. Overall, this potential to double output and productivity with the same head count at very little capital cost could equally be presented as the potential of TPM. Both Lean and TPM have evolved in parallel from their early concepts and are converging towards a common goal. But who cares? As long as there are benefits, all ideas are welcome. To understand what these are, it is worth taking a brief journey through the origins of both lean thinking and TPM.

2.2. The Origins of Lean Thinking

Inventor and entrepreneur Sakichi Toyoda and his son Kiichiro Toyoda, the family that founded the Toyota Motor Corporation, began to produce weaving looms and then cars in the 1930s. The approach taken by the family was to engage in a variant of flow production (Ohno, 1988a) that later matured to become known as the Toyota Production System (TPS) and has more recently become known as 'lean production' (Monden, 1983). At the heart of the manufacturing system was an attention to using simple machinery that automatically stopped, and assembly lines that could be stopped by operators, when a defect was detected (a system known as Jidoka). In this manner, no defective products would be passed forward to internal customer operations (Shingo, 1981; Schmenner, 2012). In the West, traditional large batch sizes (and the responsibility for quality inspection being the role of a specialist department only) meant that defects could move within a factory and be hidden in buffers only to generate interruptions downstream (as defects created earlier were detected later and costly rework undertaken). Other factors conspired against the development of the mass production system at Toyota not least the lack of natural resources and large amounts of capital to fund investments in large-scale and dedicated technology - certainly in the post World War II (WWII) era. To counteract the lack of resources, Toyota engaged a production system that did not rely upon forecasts for each department but used a pull system (Ohno, 1988b) and enlisted the thinking talents of all employees to seek ways of improving. The TPS is also known as the 'Thinking Person's System' for this very reason. Under the lean system parts are made on demand or as soon as the customer orders one unless it is not possible to achieve this form of fast flow (called Just-in-Time production). When it is not possible to satisfy a customer instantly then a pull system is used. A pull system operates with a small and set amount of materials which is there for customers (internal or external) to remove stock and satisfy their demand. The action of a customer removing the stock creates a pull to the earlier production stage to replenish the consumed stock. As such, production is strictly controlled and standardised inventory buffers deliberately disconnect operations. In this way, the movement of production materials from a supplier to a customer operation created a replenishment order - no computer was needed because this was a physical activity when stock was taken and the replenishment was triggered and empty boxes with control cards attached to them (called kanban) were sent to the production unit for refilling. The basic pull system was later supplemented with a deliberate approach to level the workload of each production area (called Heijunka). It was not until after WWII that Taiichi Ohno (Toyota's Chief Engineer) compiled these practices to form the lean TPS that exists today (Womack & Jones, 1996) and a production system that operates at a very high level of efficiency and effectiveness (Womack, Jones, & Roos, 1990). Ohno-san was a man with a vision and the architect of the TPS. He was a man with a strict intolerance to production wastes and a passion to optimise the flow of work - the cash-to-cash cycle. His intolerance has led to many great stories about Ohno-san and lots of stock would allegedly send him into a complete temper rage! His intent was to introduce a production system of high variety production in small volumes. Such an approach was therefore completely at odds with the Western passion for large batch sizes, dedicated and expensive technology and forecasting all operations under an era of mass production. He commenced the production system for engine manufacturing (where he had served his time as a Toyota employee) before extending it to vehicle assembly and later to include all Toyota suppliers (during the 1970s). In effect, Toyota now had a total 'pull system' network of materials supply that allowed instant availability of materials and a system that worked to replenish (pull) what had been consumed rather than pushing huge batches through operations to meet estimated forecasts. Figure 2.1 shows how a pull system works with a limited amount of finished products held to allow immediate customer satisfaction. Upon consumption, the inventory level drops and this causes an internal order (kanban card) to be returned to the drilling operation. The drilling line then takes products, from a controlled kanban stock, and drills the hole in the product. As the inventory between the drilling line and the diecasting operations falls, this places an order on the diecasters and the return of a kanban card. The diecasters replenish the orders and so on through the manufacturing process. The traditional approach is to use a push system and starts with a forecast by the company or order provided by the customer for products at a certain date in time (Rich, 1999). Let us say the 27th of the month. If it takes 2 days to drill the holes in the product, then that means the products must arrive on the 25th of the month, and if it takes 3 days to diecast, then the products must be launched on the 22nd of the month. So the physical manufacturing process starts with the release of materials in the diecast section on the 22nd of the month and the pushing of the products to the drilling station to meet the deadline of the 25th and then the push through drilling to the customer. That differentiates a push from a pull system at the most basic...