Michael Kazoglou Lean Management Instituut - Netherlands Lean Global Network Teamwork within Toyota and with its Suppliers, and methods to satisfy multiple customers during New Vehicle Development Journée Lean en ingénierie Paris, 9th Avril 2013 kazoglou@leaninstituut.nl

LEAN GLOBAL NETWORK

Total Product Cost

Manufacturing Contribution

Supplier Contribution 65%

D Q P

Why focus on

Suppliers?

Supplier is the Customer ?

Production is the Customer ?

Who is your Customer?

Engineering is the Customer ?

LEAN GLOBAL NETWORK

Why Europe, Why The Netherlands?

Background – Toyota in Australia (18 years experience)

Agenda:

1. Toyota’s Supplier Management Process

2. Toyota’s Supplier Development

3. Toyota Engineering – Product to Process

> Techniques: VAVE, PPC, Obeya/SPTT, Lean in Design

Questions

Teamwork within Toyota and with its Suppliers, and methods to satisfy multiple customers during New Vehicle Development

My ‘Toyota Way’ challenge in 2013

• Challenge : Move to The Netherlands – NEW EXPERIENCE

• Kaizen : Learn from LMI & Our Clients (& European Operations)

• Genchi Genbutsu : European Workplace, in Dutch, French,….

• Respect : Share (both ways) & Teach / Develop People & Process

• Teamwork : LMI, Lean Global Network, LMI Clients & Practitioners

The Toyota Way 2001: Lean Values & Behavours

About Toyota Australia….

AMI/Toyota Assembly Line ca.1963 2006-2013

Camry / Aurion

Manufacturing &

Purchasing

Manufacturing Quality Product

Engineering Purchasing Production

Engineering

Direct Purchasing Supplier Prep. &

Development

Indirect Purchasing

Organisational Structure

Prod Control

LEAN GLOBAL NETWORK

Why Europe, Why The Netherlands?

Background - Toyota in Australia

Agenda:

1. Toyota’s Supplier Management Process

2. Toyota’s Supplier Development

3. Toyota Engineering – Product to Process

> Techniques: VAVE, PPC, Obeya, SPTT, Lean in Design

Questions

Teamwork within Toyota and with its Supplier, and methods to satisfy multiple customers during New Vehicle Development

The ‘Tough Love’ approach:

• They understand how their suppliers work

• They supervise their vendors

• They develop their supplier’s technical capabilities

• They share information intensively but selectively

• They conduct joint improvement activities

1. Open Door Policy:

Based on Quality, Technological Capabilities, Reliability & Delivery

2. Mutual Benefit Based on Mutual Trust:

They Believe in Developing Mutually Beneficial, Long-Term Relationships Based on Mutual Trust

3. Localisation:

Purchase Parts & Materials from Local Suppliers

About Toyota Purchasing….

Managing Supplier Relationships

Performance Outcomes

SUPPORT: • TPS / Technical Consultation • Staff Secondment • Supplier Parts Tracking Team • Project Conferences

(Communications Strategy) • Benchmarking Study Tours • Technical Agreements • Toyota Institute

• Raw materials (2nd – 3rd tier suppliers) • Product unit cost :

» O/heads, energy, head-office, consumables, tooling, Capital/depreciation, Maintenance costs

» R/materials, internal & externals components » Processing costs – efficiencies, rates, waste? » Labour – efficiencies? » Wastage – allowances, best practice?

• Supplier Inventory costs • Logistics costs / efficiencies . Shipping/storage methods • Inventory costs / waste / storage / Handling-Mngt • Production Plant Impacts:

» Delivery, Quality, Wastage, Downtime, efficiencies, overtime etc

• Product variation – in-plant / field / customer etc • New Product Development – total process • Projects / support / responsiveness • Value adding opportunities?

Supplier Opportunities: (Customer always pays whether it is Quality, Delivery, Cost)

Can we make it less expensive? Can we use less expensive product? Can is perform better?

Product design opportunities: • Recycle, substitute, thinner, lighter, smaller, • Shape, surface, materials, no. of sites, no. of parts/skus, • Excessive quality, difference b/n skus, • Next NPD opportunity, suitable for plant, function, • Technical complexity, use, legals etc?

Supplier Opportunities: (Customer always pays whether it is Quality, Delivery, Cost)

Toyota Process: • Cost Structure / Biggest Gap / Priority / Activity Action Plan • Benchmarking – Target, Gaps, Breakdown costs, pareto/priority • Understand Cost elements – Processing costs, material costs, overheads • Competitor Cost elements – identify breakdown costs/gaps (Pareto/Top 1-3) • VAVE analysis – design for purpose/manufacture/customer need (O/process) • Production process costs – compare operations vs lean organisation, CI/Lean

process improvement opportunity review (lean assessment/gap analysis)

Can we make it less expensive? Can we use less expensive product? Can is perform better?

LEAN GLOBAL NETWORK

Why Europe, Why The Netherlands?

Background - Toyota in Australia

Agenda:

1. Toyota’s Supplier Management Process

2. Toyota’s Supplier Development

3. Toyota Engineering – Product to Process

> Techniques: VAVE, PPC, Obeya, SPTT, Lean in Design

Questions

Teamwork entre conception et méthodes chez Toyota pour satisfaire plusieurs clients

Objective:

The overall goal of the program is to strengthen the capability and cost competitiveness of Toyota’s local supply base and ensure achievement goals beyond next New Model Introduction.

Toyota Supplier Development

CORE FOCUS SUPPLIERS: SUPPORT REQUIRED

By Supplier Numbers

By Supplier $ VOB

LOCAL

GLOBAL

JAPANESE

OTHER

50%

Coverage

Supplier

> 80%

$ VOB

Coverage

LOCAL

JAPANESE

OTHER

Image SUPPLIERS SELECTION CRITERIA:

1. VOB / COLOR / LOGISTICS

2. COST GAP (Next Model)

3. LEAN SUPPORT ATTITUDE

4. LEAN LEVEL(OPPORTUNITY)

5. ACCESS TO ADEQUATE SUPPORT

RISKS to Toyota:

1. TIMING (Next Model UP TO SVP)

2. COST TARGET ACHIEVEMENT

GLOBAL

LEAN GLOBAL NETWORK

Why Europe, Why The Netherlands?

Background - Toyota in Australia

Agenda:

1. Toyota’s Supplier Management Process

2. Toyota’s Supplier Development

3. Toyota Engineering – Product to Process

> New Vehicle, VAVE, PPC, Obeya/SPTT, Lean in Design

Questions

Teamwork entre conception et méthodes chez Toyota pour satisfaire plusieurs clients

New Product Development Process Concept to Vehicle Production Launch

Release Drawing

Drawing

Tooling

Tuning

Prod Ready

Volume Production

Design Process “Value Analysis / Value Engineering Launch

1. Gather information Continuous Consensus

Building

2. Function/Performance analysis

5. Presentation

3. Creation innovation 4. Analyze ideas

Get agreement and proceed to development of parts!

Create Design!

Include ALL GLOBAL HISTORY / Knowledge of Company

Internal Quality / Workability Problems

Previous Customer Impact Concerns Quality tracking systems etc

(Not just within your organisation)

Previous Problem Check

Vehicle concerns

Plant concerns

Supplier concerns

Problem Area

Problem Lists

NPD Design

NPD Process

NPD Parts

Make PPC

Check Final Outcome

C/M Process

Key Point: Make a product problem history list

Obeya – Visual Project Management

• Visualisation – Everyone can share Progress

• Inform Bad News First – Reporting, Informing, Consulting

• Practice Worst Case Scenario Activity

Pre- Production: • Product Design/Raw Materials • Tool Design/Manufacture (Jidoka + QDC) • Equip. / Tool Trial (SOP/STD. Work/Training) • Production Proto-type trial (Die / Equip./Assy.)

Process • Equip./Process integration • Lay-out • Mat. Handling/Conveyance • Ergonomics/Safety • Labour Req.& Training Production • Total work contents (Process c/time) • Efficiency (Change over/Down time/Op.Efficiency/Rejects) • Takt time • Confirmation of Mass production(HVPT)

LEAN IN DESIGN STAGE (Pre-production, Process, Production) Opportunities

for Process Improvement at the Design

Stage

• Production Preparation Parts / Process Summary. • Part Specific Value Stream Map. • Plant/Process layout to show material Flow. • Man / Machine loading and Capacity estimates

(Std Work Charts).

LEAN IN DESIGN STAGE (Pre-production, Process, Production)

Respect the Production Operator, while making improvement to Quality, Delivery & Cost

1. Minimise No. of equipment (More than one function)

2. Avoid secondary process

3. Consider handling problems

4. Consider / use gravity force (Avoid complex motions)

5. Consider self locate jigs/fixtures

6. Integrate “Pokayoke” functions

7. Simplify or eliminate packaging (container size / Wrapping / Access)

8. Minimise variations if possible

9. Enhance ergonomic conditions

10.Eliminate Movements, adjustments and Reorientations

11.Floor space reduction

12.Overall focus on all relevant non value adding operations

Focus points for New Process Design

LEAN GLOBAL NETWORK

Agenda themes:

1. Toyota’s Supplier Management Process

2. Toyota’s Supplier Development

3. Toyota Engineering – Product to Process

> Techniques: VAVE, PPC, Obeya/SPTT, Lean in Design

Teamwork within Toyota and with its Supplier, and methods to satisfy multiple customers during New Vehicle Development

Michael Kazoglou Paris, 9th Avril 2013 kazoglou@leaninstituut.nl