Process Improvement Japan They Key to Toyota`s Strength Improving Profitability & Quality Simultaneously I would like to emphasize the point today that when it comes to quality and process optimization, relationships are key. Relationships with customers, amongst staff members and with suppliers. Consumer delight and profitability are not just a matter of economics and optimization. These elements are vitally important, but to energize and ensure high performance of people and systems, relationships must be factored in. I will explain Toyota`s improvement methodology undertaken, as well as, how relationships are fostered in order to invigorate the company and ensure total participation in the successful development of the business. Kozo Sakano, Director Process Improvement Japan

Kaizen + Standardization Dr. Shiba’s Triangle Focus on Customers Who is the customer? Omotenashi Continuous Improvement Total Participation Involvement ↓ Commitment Dedication Kaizen + Standardization ↓ Kaizen Endless 1. Autonomy 2. Respect for Humanity 3. Delegate Authority ↓ Creative Suggestions PDCA ↓ SDCA A management philosophy that has been embraced at Toyota and other reputable organizations is Dr. Shiba’s Triangle. Dr. Shiba emphasizes three elements to Total Quality Management. Focus on Customers Thoughtfulness and the dedication to the customer’s needs must be fostered throughout the organization Continuous Improvement Kaizen (improvement) followed by the standardization of the improvement must be an endless cycle to achieve innovation. Small continuous improvements in a methodical manner leads to great results. This must be accompanied by a system of PDCA – Planning, Doing, Checking, Acting then creating Standards from your actions and follow the cycle again. Staff skill in problem solving and actively thinking of improvements will enormously benefit the organization. This must be management led, efforts must be planned thoroughly and checked regularly to see the results. Total Participation This means effective team work. Total involvement, total engagement, total commitment and total dedication. This can only be achieved through ensure effective leadership and encouragement of staff members. Keep them vitalized should be a management priority. Having staff involved in improvement efforts and asking their opinions on changes, is key.

What factors create an innovative and efficient business? Root Cause Analysis What factors create an innovative and efficient business? Innovative & Efficient Business Man Method Machine Material Causes Effect Respect Quality Autonomation Skill Development In root cause analysis, we look at four factors causing an effect. We call it the 4 Ms – Man, Method, Machine and Material and is integral to Toyota`s version of innovation, quality and process optimization. Man First, people must be respected. Second, Method Skill development is very important. This often occurs by teaching staff the correct standard and ensuring staff can be multi function workers. This strategy ensures stability and smooth flow of operations – even during times of high demand. The goal of a standard work procedure is to be able to teach a new staff member a procedure within 20 minutes. Machine Equipment is looked at from the point of view of efficiency, ease of use, and the ability to detect abnormalities. Investment in equipment which can alert the operator of defects and problems is critical. Material Quality material is critical. Relationships with suppliers must be fostered. Shipments and inspections at the source should be regularly undertaken. Also, the just in time system was implemented, ensuring that supplies arrived when needed as needed (or as closest to as possible)

Avoid the 3 M`s Muri ムリ Mura ムラ Muda ムダ Key: Price – Cost = Profit Over Burden Inconsistency Waste The 7 Wastes Overproduction Waiting Conveyance Processing Inventory Motion Defects Key: Price – Cost = Profit Not… Profit = Price – Cost *Costs do not exist to be calculated; costs exist to be reduced. Your PDCA efforts must focus on minimizing the impact of the 3 Ms. Standardized work procedures must be created to ensure the most efficient method is undertaken. Standards ensure staff can work with ease (with as little stress as possible) while maintaining the pace of work required to meet customer demand. The mindset of the need to minimize waste and inconsistency is fostered organization wide. Workflow is designed around customer demand and is optimised to meet customer requirements. By engaging all staff in optimization and waste elimination efforts, customer needs are met, with delight, by both customers and staff. There is at least a 20% difference in productivity between a good and bad workflow. In the case of a bad or inefficient work flow, not only does the customer become dissatisfied but so do staff members. A heavy burden and pressure is placed on staff resulting in higher turnover which results in higher labor costs and lower service quality. Ensuring good workflow is not a matter of human engineering or industrial engineering. It can be achieved by developing an understanding for the job, locating and analysing problems so as to eliminate any kind of waste, inconsistency and over burden. Optimum flow line can be changed according to the current conditions. It can be adjusted by continuous improvement efforts. Benchmarking is an important activity to undertake to see best practice in workflow and design.