Review of Toyota DNA Article

Toyota Production System (TPS) is a dynamic system with rigidly scripted activities, production and connections. The success of TPS lies not in the cultural roots but rather in rigid specifications. Rigid specification doesn’t mean inflexible. The irony is rigid specification makes flexible and adaptable system. TPS is following a scientific method, not a trail and error, to define any activity or make any improvements. The system encourages the scientific way of experiment at all level of the organization and that distinguishes it from other organizations. In this article, the implicit nature of Toyota production system was deciphered by four principles. 

Rule 1: Standardization 

The unstated rule of TPS is all the work must be highly specified as to content, timing, sequence and outcome. All the activities are split into series of small activities and outcome of each small activities are predicted. The actual outcome of each activity is compared with the expected and any deviation is immediately communicated. Standardization reduces the variation and in turn improves quality, productivity and reduces cost.

Rule 2: Communication.

While the rule 1 talks about differentiation of individual tasks, the next rule explains how to smoothly integrate individual activities. This rule states that every connection must be direct, standardized, and well-defined. Toyota uses tool like Kanban, Andon to form a direct communication between supplier-customer. 

Rule 3: Simple and direct flow

Third rule states that every product or service must follow the simple and specified path. On the contrary, each line can have multiple products. In TPS, the product or service is not simply passed down to the next available resource rather specified resource. Assigning a specific pathway to each product enables to conduct experimentation every time the product flows. 

Rule 4: Continues Improvement (CI)

Continuous improvement must be made in product or service pathways by scientific method at the lowest level of organization under the supervision of teachers. Toyota teaches their workers how to improve scientifically by conducting bona fide experiment. The frontline workers make the improvement and the supervisors provide assistance and direction. Problem solving and continuous learning occurs at all levels of the organization. 

TPS communicates the ideal notion to all employees and that translates into common goal and shared vision. The entire organization strives to achieve the ideal state – and anything less build a creative tension for CI. The authors believe that the rules help Toyota to stable and continuously improve at the same time. The authors conclude that it may take long time for any company to replicate the TPS but the dedication to apply all these rules will make it happen.

Obama Cites Lean Company as Example of How to Reinvent Manufacturing

Declaring that "we've started this year in the midst of a crisis unlike any we've seen in our lifetime," President-elect Barack Obama today urged leaders of both political parties to adopt an American Recovery and Reinvestment plan that will, he said, "immediately jumpstart job creation and long-term growth." Obama's comments were made on site at Cardinal Fastener & Specialty Co. Inc., a manufacturer of precision fasteners used in the construction of wind turbines.

As part of the recovery and reinvestment plan, the Obama Administration will commit to doubling the production of renewable energy over the next three years, the President-elect said, "and to modernize more than 75% of federal buildings and improve the energy efficiency of 2 million American homes. In the process, we'll put nearly half a million people to work building wind turbines and solar panels; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to new jobs, more savings and a cleaner, safer planet in the bargain."

Although Obama did not directly address lean manufacturing in his comments, Cardinal Fastener has instituted lean concepts based on the Toyota Production System since 1998. According to John Grabner, president of Cardinal Fastener as well as a consultant on lean thinking, Cardinal's lean initiative has led to increased efficiencies, decreased costs, and better and faster service to its customers.

Thanks to its adoption of lean principles, as well as increased interest in its products from the wind industry, Cardinal has become the largest manufacturer of American-made large-scale threaded fasteners. The fasteners are used to bolt the wind turbine towers to their foundations. Cardinal expects to add as many as 40 full-time employees in 2009, Grabner observed, a significant increase from its current roster of 65 employees. The company also forecasts a 50% increase in revenues in 2009, growing from $10 million to roughly $15 million.

Obama pointed to Cardinal Fastener as an example of how traditional U.S. manufacturers can reinvent themselves by focusing on the emerging alternative energy economy. "The story of this company, which began building wind turbine parts just two years ago and is now poised to make half its earnings that way, is that a renewable energy economy isn't some pie-in-the-sky, far-off future. It's happening all across America right now. It's providing alternatives to foreign oil now. It can create millions of additional jobs and entire new industries if we act right now."

According to statistics compiled by the American Wind Energy Association (AWEA), 80,000 U.S. workers are employed in the wind industry. The share of domestically manufactured wind turbine components, AWEA states, has roughly doubled in the past three years, from 25%-30% in 2005 to 50% in 2008.

While celebrating the accomplishments to date of U.S. entrepreneurs and researchers in developing clean energy, solar energy and bio-fuels, he sounded a note of caution, too, as he urged support for his recovery and reinvestment plan. "I'm told that if we don't act now, because of the economic downturn, half of the wind projects planned for 2009 could wind up being abandoned." He pointed to other countries, such as Spain, Germany and Japan, whose governments are aggressively investing in renewable energy projects, and suggested that if his plan does not receive the support he's seeking, then the United States will fall even further behind its global counterparts.

Source : Industry Week