As shown in the Global Company Profile, the Toyota Production System (TPS) contributes to a world-class operation at Toyota Motor Corporation. In this chapter, we discuss Lean operations, including JIT and TPS, as approaches to continuous improvement. All three approaches, in their own way, strive to increase the knowledge and capability of employees to build processes that improve productivity and lead to world-class operations.

Lean operations supply the customer with exactly what the customer wants when the customer wants it, without waste, through continuous improvement. Lean operations are driven by workflow initiated by the "pull" of the customer's order. Just-in-time (JIT) is an approach of continuous and forced problem solving via a focus on throughput and reduced inventory. The Toyota Production System (TPS), with its emphasis on continuous improvement, respect for people, and standard work practices, is particularly suited for assembly lines. (See the OM in Action box, "Toyota's New Challenge.")

In this chapter we use the term Lean operations to encompass all the related approaches and techniques of both JIT and TPS. When implemented as a comprehensive operations strategy, Lean sustains competitive advantage and results in increased overall returns to stakeholders.

Regardless of the approach and label, operations managers address three issues that are fundamental to operations improvement: eliminate waste, remove variability, and improve throughput. We now introduce these three issues and then discuss the major attributes of Lean operations. Finally, we look at Lean applied to services.

Eliminate Waste LO 16.2 Define the seven wastes and the 5Ss

Lean producers set their sights on perfection: no bad parts, no inventory, only value-added activities, and no waste. Any activity that does not add value in the eyes of the customer is a waste. The customer defines product value. If the customer does not want to pay for it, it is a waste. Taiichi Ohno, noted for his work on the Toyota Production System, identified seven categories of waste. These categories have become popular in Lean organizations and cover many of the ways organizations waste or lose money. Ohno's seven wastes are:

Overproduction: Producing more than the customer orders or producing early (before it is demanded) is waste.

Queues: Idle time, storage, and waiting are wastes (they add no value).

Transportation: Moving material between plants or between work centers and handling it more than once is waste.

Inventory: Unnecessary raw material, work-in-process (WIP), finished goods, and excess operating supplies add no value and are wastes.

Motion: Movement of equipment or people that adds no value is waste.

Overprocessing: Work performed on the product that adds no value is waste.

Defective product: Returns, warranty claims, rework, and scrap are wastes.

A broader perspectiveone that goes beyond immediate productionsuggests that other resources, such as energy, water, and air, are often wasted but should not be. Efficient, sustainable production minimizes inputs and maximizes outputs, wasting nothing.

OM in Action Toyota's New Challenge With the generally high value of the yen, making a profit on cars built in Japan but sold in foreign markets is a challenge. As a result, Honda and Nissan are moving plants overseas, closer to customers. But Toyota, despite marginal profit on cars produced for export, is maintaining its current Japanese capacity. Toyota, which led the way with JIT and the TPS, is doubling down on its manufacturing prowess and continuous improvement. For an organization that traditionally does things slowly and step-by-step, the changes are radical. With its first new plant in Japan in 18 years, Toyota believes it can once again set new production benchmarks. It is drastically reforming its production processes in a number of ways:

The assembly line has cars sitting side-by-side, rather than bumper-to-bumper, shrinking the length of the line by 35% and requiring fewer steps by workers.

Instead of having car chassis dangling from overhead conveyors, they are perched on raised platforms, reducing heating and cooling costs by 40%.

Retooling permits faster changeovers, allowing for shorter product runs of components, supporting level scheduling.

The assembly line uses quiet friction rollers with fewer moving parts, requiring less maintenance than conventional lines and reducing worker fatigue.

These TPS innovations, efficient production with small lot sizes, rapid changeover, level scheduling, half the workers, and half the square footage, are being duplicated in Toyota's new plant in Blue Springs, Mississippi.

Sources: Forbes (July 29, 2012); Automotive News (February, 2011); and The Wall Street Journal (November 29, 2011).

For over a century, managers have pursued "housekeeping" for a neat, orderly, and efficient workplace and as a means of reducing waste. Operations managers have embellished "housekeeping" to include a checklistnow known as the 5Ss.1 The Japanese developed the initial 5Ss. Not only are the 5Ss a good checklist for Lean operations, but they also provide an easy vehicle with which to assist the culture change that is often necessary to bring about Lean operations. The 5Ss follow:

Sort/segregate: Keep what is needed and remove everything else from the work area; when in doubt, throw it out. Identify nonvalue items and remove them. Getting rid of unneeded items makes space available and usually improves workflow.

Simplify/straighten: Arrange and use methods analysis tools (see Chapter 7 and Chapter 10) to improve workflow and reduce wasted motion. Consider long-run and short-run ergonomic issues. Label and display for easy use only what is needed in the immediate work area. (For examples of visual displays, see Chapter 10, Figure 10.8 and the adjacent photo of equipment located within prescribed lines on the tarmac at Seattle's airport.)

Shine/sweep: Clean daily; eliminate all forms of dirt, contamination, and clutter from the work area.

Standardize: Remove variations from the process by developing standard operating procedures and checklists; good standards make the abnormal obvious. Standardize equipment and tooling so that cross-training time and cost are reduced. Train and retrain the work team so that when deviations occur, they are readily apparent to all.

Sustain/self-discipline: Review periodically to recognize efforts and to motivate to sustain progress. Use visuals wherever possible to communicate and sustain progress.

In keeping with 5S, airports, like many other facilities, specify with painted guidelines exactly where tools and equipment such as this fuel pump are to be positioned.

Courtesy of Alaska Airlines

U.S. managers often add two additional Ss that contribute to establishing and maintaining a Lean workplace:

Safety: Build good safety practices into the preceding five activities.

Support/maintenance: Reduce variability, unplanned downtime, and costs. Integrate daily shine tasks with preventive maintenance.

The Ss support continuous improvement and provide a vehicle with which employees can identify. Operations managers need think only of the examples set by a well-run hospital emergency room or the spit-and-polish of a fire department for a benchmark. Offices and retail stores, as well as manufacturers, have successfully used the 5Ss in their respective efforts to eliminate waste and move to Lean operations. A place for everything and everything in its place does make a difference in a well-run office. And retail stores successfully use the Ss to reduce misplaced merchandise and improve customer service. An orderly workplace reduces waste, releasing assets for other, more productive, purposes.

Heizer, J., Render, B., & Munson, C. (2019). Operations Management: Sustainability and Supply Chain Management (13th ed.). Pearson Education (US). https://online.vitalsource.com/books/9780135202722

Please answer the following

Toyota is renowned for its TPS system and its primary goal of reducing all waste. Discuss your perspective on what contributes to waste and a few suggestions to eliminate waste in operations

Present your perspectives on how processes like JIT and Kaizen improve supplier and customer relationships