Kaizen Manual of Toyota Production System.doc

Kaizen Strategies and Activities Activity Group Manual October 2002 TABLE OF CONTENTS INTRODUCTION 1 ACKNOWLEDGMENTS 2 PURPOSE 3 The Manual 4 The Kaizen Activity Groups 4 Benefits for Staff 5 STRATEGY 6 The manual 7 Adapting the culture 7 Facilitating process improvement 7 Harness internal synergies 8 Global approach 8 Summary 8 Kaizen 9 Dual focus 10 ESTABLISHING GROUP GUIDELINES 11 1 0 Preparing for Kaizen Activities 12 2 0 Kaizen Activity Group Responsibilities 14 3 0 Other Reading and Related Information 16 KAIZEN REVIEW 17 1 0 Plan 18 1 1 Plan What Definition of Problem and Analysis of Problem 18 1 2 Plan Why Identification of Causes 21 1 3 Plan How Planning Countermeasures 22 2 0 Do Implementation 24 3 0 Check Confirmation of Results 26 4 0 Action Standardisation 27 CONTINUOUS IMPROVEMENT 29 Continuously improving 30 Future strategies and opportunities 31 APPENDIX A 32 Analysis tools 32 Cause and effect diagrams 35 Histograms 37 Control Charts 42 APPENDIX B 44 Contact List 44 Toyota Customer Service Marketing 45 Best Practices Team USA 45 Global Best Practice Group 46 Other References 47 APPENDIX C 48 Definitions 48 Common Language of Kaizen 49 APPENDIX D 50 Process Mapping 50 Mapping a Process 51 Main Elements of an Activity Decision Flow Diagram 52 Alternative Nature of a Process 53 Hierarchical Composition of a Process 54 1 INTRODUCTION The Toyota Way was launched globally in 2001 Following this Mr Hideo Ozaki President of Toyota Financial Services Corporation outlined a plan to focus upon building the internal synergies and processes within each Sales Finance Company SFC To facilitate the introduction of The Toyota Way Global Best Practice Group GBPG was established The GBPG consists of a representative Champion from each SFC within Toyota Financial Services TFS A Regional Coordinator has been appointed for each of the four global best practices regions Asia Oceania Northern Europe Southern Europe including South Africa and Americas Together this group reports to a Global Coordinator The focus of the GBPG is to champion the introduction of The Toyota Way concepts into each SFC These concepts are Continuous Improvement Respect for People This manual will assist you to achieve success through proven methods of Continuous Improvement Kaizen a concept adapted from the world recognised Toyota Production System TPS This system has been responsible for the improving profits quality and delivery time of Toyota vehicles over the past 60 years It has also provided a basis for empowerment encouraging factory staff to make improvements to their jobs Whilst TPS concepts have their roots in a manufacturing environment they can also apply to operations of SFC s The task of translating these concepts has been a major challenge and will also be subject to continuous improvement 2 ACKNOWLEDGMENTS This first release must acknowledge invaluable assistance and support in developing this manual Hideo Ozaki President TFSC Koji Kobayashi Executive Vice President TFSC Larry Cannon Senior Vice President TFSC Ross Springer President Asia Oceania TFS Ichrio Yajima Deputy Managing Director Australia TFS Walter Leyendecker Chairman Europe Africa TFS Yoshihiko Morinaga President Europe Africa TFS David Betteley Vice President Europe Africa TFS George Borst President Americas TFS Ken Arnold Managing Director Canada TFS Nampachi Hayashi Executive Advisory Engineer TPS The TPS group at Araco Corporation Toyota Industries Corporation Takahama Plant and Toyotomi Kiko Plant Best Practice Team USA and representative Champions and Coordinators of Global Best Practices Group are also acknowledged for their participation in the first year of GBPG 3 PURPOSE 4 The Manual TFS operates in an increasingly competitive market where internal and external demands require more than just the provision of goods and services The increasing international expansion of TFS and the changing nature of the business environment into the technologically reliant economy have seen new opportunities evolve To continue to exceed customer expectations the harnessing of synergies within the TFS global community is paramount Your contributions to TFS are recognised as important to the company s success This first release manual will assist you to become involved in group based activities where your contributions can result in improvements to your work environment The manual is designed to be used in all SFC s by staff with a wide ranging skill set The manual will also provide a universal platform for information sharing and permit direct comparison between SFC s The building of Knowledge Management will eventually stem from the use of this standardised process of Kaizen initiatives involving concepts measuring fact data recording and eventual reporting to a GBPG The manual also gives a framework to help staff undertake Kaizen activities that qualify for a TFS Global Kaizen Award Further information is available in the Global Best Practices Group pack or from your Global Best Practices representative The Kaizen Activity Groups The role of Kaizen Activity Groups is to identify opportunities for improvement within business processes Two main opportunities for improvement are 1 The elimination of Muda waste from processes 2 The correction of any issues problems within processes in addition to Muda The relevance of Muda is that it both directly causes problems and also hides or disguises other issues or problems that are occurring within a process It is therefore the most important element to eliminate from a process Past experience through TPS has shown that Muda has the worst effect upon a process and in turn upon a business Therefore the orientation of Kaizen Activity Groups will be to focus on elimination of Muda to improve efficiencies and to detect issues or problems within processes where improvement opportunities can be introduced 5 Benefits for Staff Kaizen Activity Groups are an opportunity for all staff to participate and learn about Toyota Job functions Problem identification and analysis Project management Group activities and synergies The Toyota Way The Toyota Production System Process improvement management The undertaking of Kaizen activities is not extra work and must not be thought of as such Kaizen is a part of working at TFS Some will no doubt be asking why this is not additional work The simple answer to this is that Toyota has empowered staff to challenge processes and will reward them for doing so This philosophy is a factor for success of TPS in Toyota manufacturing Similar to Toyota TFS is developing staff through training and education to naturally identify areas for opportunity in their roles and to deliver Customer First products and services Kaizen also offers opportunities to participate in a global initiative which will increase staff understanding and exposure to aspects of TFS provide opportunities to meet with people from within the local SFC and other SFCs in the TFS family Ultimately Kaizen gives employees customers and TFS satisfaction for the accomplishment of activities The constantly evolving nature of Continuous Improvement provides an ongoing improvement so as an employee you are part of something special a cultural adaptation of The Toyota Way to TFS 6 STRATEGY 7 The manual TFS is looking to sustain long term growth The company s strategic goals are focused upon creating opportunities to make this happen One such strategy has been the formation of the GBPG This group will contribute towards the goal of long term growth by Changing the culture of TFS Facilitating process improvement Harnessing internal synergies Promoting a global approach Methods of achieving this are briefly addressed below Adapting the culture The Kaizen culture is one that requires discipline and dedication It is not something that is isolated to management or non management staff It is a way of doing business In adapting TFS culture to The Toyota Way we should consider matching Job related requirements including oWays to act oWays to think oKey accountabilities Corporate goals Staff training and development Human Resources will play a large roll in the facilitation and management of these activities Translating The Toyota Way into meaningful actions is necessary to encourage and develop the people of TFS Moments of truth where staff should encounter The Toyota Way are Corporate Business and Personal goals Induction and Orientation Job descriptions Training and Development Policies and Procedures Facilitating process improvement Kaizen requires both the proficient thinking and action skills of The Toyota Way The skills necessary for identifying opportunities to improve the measurement and implementation of processes are partly addressed in this manual The whole directional pull for Kaizen comes from Internally from senior management through corporate and business goals and objectives to process operators Externally from our customers and through market research Other methods of facilitating process improvement come from the sharing of policies and procedures by SFCs These documents provide the starting point for newer SFCs to 8 develop best practices or for established SFCs to compare and assess their ongoing practices Harness internal synergies People and knowledge are the most important resources of TFS Learning to manage and effectively promote knowledge transfer between our people and companies will bring improvements in processes Sharing the following types of knowledge resources will improve internal synergies People Policies and Procedures Research Experiences Techniques All of these knowledge resources add value to the way business is done Sharing these resources would reduce the amount of initial development required and encourage improvement of existing benchmarks Global approach This Kaizen Activity Manual contributes towards a global approach by Being a universally adaptable resource Providing a common language for Kaizen Providing a common platform for activities Providing a universally comparable output Summary Kaizen Activity Group outcomes and activities will become comparable throughout the TFS global community This will improve Cultural adaptation Facilitation of process improvements Internal synergies Global approach 9 Kaizen The principles of Kaizen are 1 the most important company assets are the people 2 evolution of processes will occur by gradual improvement rather than radical changes 3 beneficial changes are to be implemented immediately where possible 4 improvement recommendations must be based on statistical and quantitative evaluation of processes The Kaizen Activity Groups support and encourage the principles of Kaizen Kaizen strategies are generally implemented at three different levels 1 Management Oriented 2 Group Oriented 3 Individual Oriented This activity manual will explain and address Group Oriented activities Briefly the support mechanism of Group Orientated Kaizen activities will integrate with the Hoshin Kanri from Management and a suggestion system from Individuals These two areas provide some meaningful guidance for Kaizen Activity Groups pre work activities Supporting the strategies of planning and staff development the Kaizen Activity Groups will develop the skills of participants to a level where they may become group leaders for future process reviews The manual is a resource that is to be used throughout the TFS family to ensure a consistent approach to Kaizen training and application provide a universal comparison of activities and outcomes and globalise Kaizen Activity Group practices Other than the incentives for Kaizen Activity Groups which are related to the empowerment and participation of staff increased job satisfaction and exposure to a global concept TFSC is also recognising and rewarding Kaizen activities The next World Sales Finance Conference will host the winner of a TFS Global Kaizen Award competition The winner will present their implemented Kaizen Group Activity to the Senior Management and Country Managers of the company For further information see the TFS Global Kaizen Award criteria The use of existing Policy and Procedure as a basis to move forward is paramount Policy and Procedure documents will explain the as is situation and initiate the base of the Kaizen activity Kaizen Activity Group outcomes will in turn update and create new and improved Policies and Procedures These documents will form Best Practices within TFS 10 and will build the platform for further improvement opportunities by looking both within TFS and externally Dual focus During the identification stage of the activity focus will be upon identifying problems in processes A method for this is to observe a job function in its entirety in order to measure those aspects that add value are incidental or wasteful This will in turn identify processes that can be improved upon or eliminated The group is structured to address and deliver 1 Process improvements 2 Job function improvements Processes that are improved will become Best Practices Full utilisation of staff will eliminate Muda and maximise value added work 11 ESTABLISHING GROUP GUIDELINES 12 1 0 Preparing for Kaizen Activities The members of the group should have skills in the following areas 1 Project Management 2 Some basic statistical analysis 3 Microsoft Word 4 Microsoft Excel 5 Microsoft Visio The group is structured to address and deliver 1 Process improvements 2 Job function improvements As with most roles preparatory work forms some part of the overall job function For a Kaizen Activity Group preparatory work forms an important starting point This is explained here in this strategy section and includes Step 3 Contribution to Corporate Goals Step 4 Policy and Procedure documents Step 5 Stakeholder support Step 2 Research and identify key areas for improvement Step 1 Establish Kaizen Activity Group 1 1 Establishing a Kaizen Activity Group The Kaizen Activity Group is responsible for various functions including 1 Project Management 2 Process Management 3 Statistical Analysis 4 Problem Solving Techniques 5 Implementation 6 Updating of Policies and Procedures SFC are encouraged to establish groups with a diverse range of members with complementary skills and knowledge to fulfil roles that are naturally best suited to them Establishing a group of like minded people with similar skills may not be able to achieve the same results of a broad skill based group Appointments will be made by the local GPBG representative and local management however GBPG will assist whenever possible 1 2 Identifying the SFC Corporate Goals and Key areas for Improvement The identification of Corporate Goals that the Kaizen Activity Group can contribute towards can be identified through discussions with the senior management of the SFC Further research may be required into 1 Balance Sheet 2 Profit or Loss 13 3 General Ledger Research into submissions in a Kaizen suggestion scheme may also provide direction for various areas of improvement 1 3 Contribution the towards the attainment of Corporate Goals Corporate Goals may consist of cost reduction processing improvement quality improvements Usually Corporate Goals will stipulate a level of attainment required for the company as a whole and during the scope setting the group can set itself a target to reach The Kaizen Activity Group should undertake work that is not only valuable for group members but that will also contribute to the achievement of Corporate Goals 1 4 Obtain all related Policy and Procedure documents The base point for examination and analysis of processes commences with Policies and Procedures Current Policies and Procedures should be an accurate and relevant reflection of the current process as is and business rule If Policy and Procedure documents are outdated or inaccurate the as is process will need to be established 1 5 Identify major stakeholders in the area where the Kaizen Activity Group propose to work Prior to commencing work the Kaizen Activity Group must identify all stakeholders that will be impacted by activity outcomes The list of stakeholders may include operators in the business process for review the supervisor and manager of the area other departments with inter related activities either prior to or after the process area senior management A full list must be drawn up to facilitate communication throughout the activity Communication and involvement of stakeholders is an important aspect of successful Kaizen Activity Group activities 1 6 Obtain stakeholder support to the Kaizen Activity Group Stakeholder meetings should be called prior to the commencement of the Kaizen activity The meeting should address issues such as scope of the Kaizen Activity Group purpose of the Kaizen activity role of stakeholders and Kaizen Activity Group stakeholder concerns expected length of the Kaizen activity plan for future communication and involvement of stakeholders 14 2 0 Kaizen Activity Group Responsibilities 2 1 Structured format PDCA Providing a structured format for all Kaizen Activity Group activities the adoption of the Plan Do Check Action PDCA cycle is applied The PDCA has proven to be a successful method of reaching goals and objectives for organisations in Japan and around the world and it is a tried and tested method at Toyota and TFS The integral part of the Kaizen strategy is to systematically follow a cyclical channel of developing and delivering Continuous Improvement The format is utilised after Pre Kaizen work 15 2 2 Eliminate Muda The Kaizen Activity Group will be focused on the elimination of Muda Muda Waste is the residue of poor process Muda is waste Muda is represented by all types of waste in a process inclusive of conveyance movements waiting redundancy overburden unevenness and correction rework amongst other things Incidental work is non value added work which is necessary under present working conditions Value added work Net work is value added jo