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Great events 2. fall, 1973 – oil crisis
Catch up with america
• Based on 2 pillars supported TPS:
• Just-in-time (JIT): in perfect JIT model, the inventory is zero
dramatically cut cost.
• Autonomation or automation with a human touch: give the
machine intelligence – it changes the meaning of management:
an operator is not needed while the machine is working normally.
Only when the machine stops because of an abnormal situation
does it get human attention. As the result, one worker can attend
• synergy effect of 2 pillars to make a better individual skill and
• Kanban (card) method: to control the amount of production
based on the idea of the communication between many
processes. Kanban conveys information about picking up
or receiving the production order.
• From the time the industry acquired mass production of
American system until 1973 oil crisis, Japan had the
illusion a system fit their needs.
Cost reduction is the goal
• Before: Selling price = profit + actual cost. And consumer
responsible for every cost.
• Now: Cost reduction must be the goal to survive.
• Establishing a production flow:
Then: one operator, one machine
Now: one operator many machines in different processes
• Production leveling: need a big warehouse to store part or
materials (however, they did foresee the big problem if the
production increased); dealing with the suppliers’ cooperation
in terms of manpower, material, and money
• A successful result in TPS lies in history and culture: in
American system, a lathe operator is always a lathe operator
and welder is a welder to the end. But in Japanese system, an
operator has a broad spectrum of skills.
• There is no waste in business more terrible than
overproduction. But it happened because of farming society
before. This type of hoarding is no longer practical in industry
society. --> The need of revolution in Consciousness
• Waste (Muda)?
• 1. Delay, waiting or time spent in a queue with no
value being added
2. Producing more than you need
3. Over processing or undertaking non-value
5. Unnecessary movement or motion
7. Reduction of Defects
• (*) https://en.wikipedia.org/wiki/Satoshi_Nakamoto
• Taiichi Ohno, 1978, Toyota Production System Beyond
• Q1: What are the two pillars of TPS?
• Two pillars are:
• Autonomation, or automation with a human touch.
• Q2: How are automation and
• The automation is the machine operates by
itself once the switch is turned on. However,
autonomation is an automation with a human
touch. According to the text, human intelligence
is given to the machines.
• Q3: Do you know someone came from
different business field and made a big
• As far as I know, Bitcoin is a virtual currency that
has caused a lot of controversy recently. But no one
can deny that it is a great innovation in the 4.0 era,
and bitcoin will effect to many industries, especially
in banking and finance. Furthermore, the father of
the coin is unknown and named as Satoshi
Nakamoto (*) is thought to be an expert in
• Q4: What does it mean: making a flow in a
• Making a flow in a business process (or production
flow) means a range of various machines is
managed in the sequence of machining
processes, therefore many parts of a product
would be assembled in a flow from the earlier
processes toward the later one, forming the unit
parts then the body of products, and then a
operator can take care for many machines.
• Q5: What is your opinion about what Mr.Ohno said:
“Need cannot be found if you just try to wait for
and see it. In order to find Need, you should go
into such a troublesome situation and try to see
the source of complexity…”
• In my opinion, what Mr. Ohno said means if you are in need of
something, you must be experienced or suffered from the real
situtation, then you’ll have motivation to improve or change it
becomes more efficient, more convinience or higher performance.
This motivation is from your internal need by enthusiasm or
under pressure. And I totally agree with such kind of thought.