The Toyota Production System (TPS) is a management philosophy and strategy from the lean production perspective. It is a people oriented system because it respects the fact that it is people who operate the system. Respect for the work team forms the basis of TPS. Effective utilization of a member`s time - employee engagement and encouraging lean process improvement contributions from staff are key elements. Under TPS, every action of a team member should add value to the production process and help increase overall productivity. Communication and visual management are at the core TPS.
What are the main pillars of TPS?
Profit and Cost
Cost + Profit does not equal Price
Price - Cost = Profit
In order to increase profit do not raise the price - it is determined by the market.
In the market, companies compete against eachother in function, quality and price.
Determined by production and supply chain management methods
Use internal know how and innovation to reduce cost and generate profit
Unless you reduce the cost, you cannot expect a profit!
TPS is based on the complete elimination of waste in all aspects of production in the pursuit of the most lean production method.
This was developed by Kiichiro Toyoda, the founder (and first president) of The Toyota Motor Corporation.
Central to TPS is the complete elimination of waste or "muda".
There are 7 types of waste:
All these "muda" elements intertwine with each other to create more muda, eventually impacting the management of the corporation itself.