What Made Toyota So Different?

In the last message, I explained how ‘Lean’ started way before Toyota came into view but they are recognised as the world leaders in Lean because they looked at things from a whole new viewpoint....

Lean - A new paradigm

The lean production system pioneered at Toyota created a new paradigm for excellence in manufacturing. This paradigm is founded on the belief that cost reduction is sometimes the only viable mechanism for a corporation to increase profit; price is not always an effective lever. Today, some organisations are fortunate enough to determine their selling price by first taking the product cost and adding on a sufficient profit margin:

Profit + Cost = Price

A company can therefore increase profit by raising the price of its product. However, in a diverse marketplace, most companies do not have this advantage as consumers and market conditions largely determine price. In these markets, companies face the following equation:

Profit = Price - Cost

This is often referred to as the 'cost-minus' principle because the company can only increase profit through cost reduction. Cost reduction in a manufacturing environment occurs through the elimination of waste. Waste can be defined as something for which the customer is not willing to pay; it is a non-value adding activity. The elimination of such activities shortens the lead time, so value is delivered to the customer faster and with less effort.






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Lean started way before Toyota !

Now, another common misconception amongst my clients is that ‘Lean’ and efficiency improvements all started with Toyota – wrong. Here is a very brief history of how it all came about and some would argue it started even before this!

Lean Six Sigma Overview - Lean Manufacturing
In 1910 Charles Sorensen and Henry Ford created the first moving assembly line as a way of reducing wasted motion and handling complexity in automotive assembly. Without question, the Lean system pioneered by the Toyota Motor Company has a common beginning with these early 'work flow' improvements. However, this common heritage led to two very different manufacturing systems: mass production and Lean production.

The objective of mass production is to maximise economies of scale through high capital utilisation. At Ford, the emphasis on flow was limited almost exclusively to the final assembly line, while subassembly processes, suppliers and distribution operated on almost independent production schedules, resulting in large batch sizes and high inventory levels. Inventory at all points was accepted as a necessary buffer to survive schedule and output instability. Quality was inspected and projected into the system through mass inspection and inventory buffers. Capital was a solution to the relentless push for capacity.

Finally, production was driven from forecasts, pushing material through the plant in anticipation of actual customer demand. The mass production system flourished in the high growth, boom phase of the automotive industry and was widely copied in other sectors.

The objective of Lean production is the elimination of waste through the efficient use of all resources. In 1945 the president of Toyota Motor Company issued an edict to the company to catch up with American three years otherwise the automotive industry of Japan would not survive. At the time, labour productivity in Japanese factories was 1/10 that of US automotive manufacturers. Scarce capital and small, highly diverse ?island? market did not support large-scale, mass production. Finding a solution to the challenge led to a fundamentally different 'Lean Production' system, which ultimately triumphed over mass production during the 1973-4 oil crisis. At a time of global recession and slow growth, Toyota sustained profits and grew US market share while US companies lost on both counts.






If you enjoy reading my blogs, please take a look at my many other on-line resources,

Website, http://www.beyondlean6sigma.com/
Blog, http://leansixsigmauk.blogspot.co.uk/
Facebook, https://www.facebook.com/leansixsigmacert
Follow me on twitter, https://twitter.com/DrLeanSigma
I have also recently launched a new range of Lean Six Sigma on-line training courses which you can read about here, http://www.beyondlean6sigma.com/programmes/




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Where did Six Sigma Come From?

This is a question I get asked a lot, even though it is well documented. So here is a very short history of Six Sigma -

History of Six Sigma
6 Sigma manufacturing philosophy came from Motorola

They recognised that sufficient process improvement would not occur using a conventional approach to quality. It was developed to help them reduce variation within a process by focusing effort on improving inputs to a process rather than reacting to outputs.

The process was failing the customer expectations Traditionally, processes aimed for process capability of 3 to 4 sigma (Cpk=1.0 to 1.33 or 93% to 99.3% acceptable) The customer received 6200 defective product per million at best Processes now aim for 6 sigma (Cpk=2) The customer would receive 3.4 defective product per million






If you enjoy reading my blogs, please take a look at my many other on-line resources,

Website, http://www.beyondlean6sigma.com/
Blog, http://leansixsigmauk.blogspot.co.uk/
Facebook, https://www.facebook.com/leansixsigmacert
Follow me on twitter, https://twitter.com/DrLeanSigma
I have also recently launched a new range of Lean Six Sigma on-line training courses which you can read about here, http://www.beyondlean6sigma.com/programmes/




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Is there a secret formula to a successful Lean Six Sigma project?

I’ve been asked many times by clients and students alike, what is the secret formula to a successful Lean Six Sigma implementation and the answer is never the same from company to company but one thing always seems to come up…

Implementing lean manufacturing or Six sigma or TQM or BPR or ......or ..... should be a relatively straight forward process for any business, the processes involved aren't difficult or complex and most of them are based upon common sense.

If you speak to any consultant or black belt they will tell you exactly the steps needed to implement the changes, in the order required.
Follow these steps and you have a changed organisation ............ Don't you ?

One vital flaw in the equation - an unknown variable - PEOPLE - Or to be more precise, the 8th Waste - The under Utilisation of People.
People touch every aspect of your business, from the CEO right down to the people who actually do the work.

We have factored in this variable from many years of hard won experience and knowledge.

Using lean six sigma improvement tools as a sticking plaster to try and cover a gaping wound is another common mistake made by management teams.
Business basics must be in place before lean principles or any other change programs can be successfully introduced - Discipline, timekeeping, absence, organisation structure etc. etc.

An organisation is a shadow of it's leader.
If the leader is not himself willing to change the way he works, the whole change program could be doomed before it even gets off the ground.
Change must be lead, by example, from the top.

Once the foundation has been laid and the organisation has in place some stability, lean six sigma can be introduced.





If you enjoy reading my blogs, please take a look at my many other on-line resources,

Website, http://www.beyondlean6sigma.com/
Blog, http://leansixsigmauk.blogspot.co.uk/
Facebook, https://www.facebook.com/leansixsigmacert
Follow me on twitter, https://twitter.com/DrLeanSigma
I have also recently launched a new range of Lean Six Sigma on-line training courses which you can read about here, http://www.beyondlean6sigma.com/programmes/




#leansixsigma, #beyondlean, #leansixsigmacertification, #leansixsigmatraining lean six sigma, lean six sigma training, lean six sigma certification, lean six sigma