Guest Post: Is TPS the "Best" System?
By David Meier:
In this LinkedIn Group discussion, a member posted this question:
“In the book TPS Taiichi Ohno gives in chapter 5 praises to Henry Ford. He refers to Henry Ford his book Today and Tomorrow, written in 1926. Henry Ford was at his peak in 1926. In the following years, as Taiichi Ohno written, Ford faced failure and discouragement.
Now Toyota at their peak have the slogan “Today Tomorrow Toyota”.
Why? Is it now proven in this recession that TPS is the best way of manufacturing?”
I felt compelled to reply. First of all, let's be clear that TPS is not actually the “best way” of manufacturing. TPS is very difficult and is intended to show problems. If the other aspects such as support and ability to solve problems are not in place, the TPS process (flow) would be a disaster. It is often a disaster by comparison to traditional manufacturing methods- at least in the short term.
It is very, very difficult to make a direct comparison because the values, principles, and strategies BEHIND the actual tactical method (the production itself) are quite different from other companies. These are the things that provide a direction and intent. It is necessary to consider both long-term and short-term objectives in the comparison.
As an example if you do a Google search on “efficient US auto plants” you will soon find interesting information about the most “efficient” auto plant closures. In fact a few years ago 5 of the top 10 most efficient plants CLOSED! You will not see Toyota plants at the top of the list for efficiency, because efficiency as measured is simply a short-term purpose. Toyota is more concerned with process flexibility for the long-term. Efficiency is important, but it is not the PRIMARY purpose.
Anyone can argue that what Toyota does in total is “effective” which is not to say that everything they do is “better.” We can say effective because what Toyota does is intentional and meets their desired objectives overall. The primary one being to create a strong company for continued success regardless of conditions (such as recession). And for Toyota there is no separation between company and employees, so it is not something for the betterment of the company at the expense of people.
So is it “better”? That can be debated forever. One thing I can say is that Toyota leaders have a great respect for Henry Ford and what he accomplished. That does not mean that they agree with everything Mr. Ford did!
One final note that I might read into your comment. Several people have asked, “If TPS is so good why did Toyota lose money in the recession?” and it is a fair question, but shows a fundamental misunderstanding of Toyota's production strategy. The principle of Heijunka suggests balancing the production process and there is therefore a limit to the amount of customer demand variation that the system is DESIGNED to handle. Depending on the plant and situation it is roughly +- 10% so a drop in demand of 30% would be beyond the design capability of the system. Keep in mind that every system has limitations and there is no production process that is free of some constraints. The primary difference between Toyota and others is that this is within Toyota's strategic intent. It is deliberate and intentional and serves a greater overall purpose.