TOYOTA Production System;Kanban Production

Summary

The video script delves into two production systems: the Kanban system, which emphasizes 'Just-in-Time' production, and the Push system, based on demand forecasts. Kanban uses a card system to control production, ensuring materials are produced and procured only as needed, minimizing waste and inventory. In contrast, the Push system plans production in advance and maintains stock to prevent stockouts, but can lead to overproduction if demand forecasts are inaccurate. The script highlights the importance of balancing production speed with sales speed to manage inventory effectively.

Takeaways

• 📈 Just-in-Time (JIT) Production: The script introduces the JIT production style, which focuses on producing only the exact amount of products needed based on received orders, minimizing waste and inventory costs.
• 🔄 Kanban System: The JIT production is controlled by a tool called 'Kanban,' which carries production and logistics information and acts as a pull signal for the next process in the production line.
• 🔄 Backward Scheduling: The Kanban system works by moving backward through the production process, starting with the shipping of finished products and pulling required parts from previous processes based on Kanban instructions.
• 🚫 No Production Without Orders: The script highlights that in the Kanban system, production only occurs when there are orders, which helps in aligning production with actual demand and reducing overproduction.
• 📉 Inventory Control: The main goal of production control in the JIT system is to keep inventory at a minimum by matching production speed with sales speed, which is influenced by external factors like customer demand and competition.
• 🔄 Sales Speed Dependency: The script points out that sales speed is not controllable by the manufacturer and can fluctuate widely, necessitating adjustments in production speed to manage inventory effectively.
• 🛡 Safety Stock Concept: The concept of safety stock is introduced as a buffer to handle fluctuations in sales speed, ensuring that production can continue even when sales temporarily exceed production capacity.
• 🔮 Demand Forecasting: The script discusses the importance of demand forecasting in a general production style, which is crucial for planning production amounts and maintaining an optimal level of inventory.
• 🚀 Push System Production: The push system is contrasted with the JIT/Kanban system, where production is based on demand forecasts and maintains a certain level of inventory, shipping products from stock upon receiving orders.
• 📉 Overproduction Risk: The push system is highlighted as potentially leading to overproduction and excess inventory if the demand forecast is inaccurate or if actual demand falls below the forecasted levels.
• 🔄 Flexibility in Production: The script concludes by emphasizing the need for a flexible production style that can adapt to demand fluctuations, aligning production speed with sales speed to minimize inventory and stockouts.

Q & A

What is the main principle behind the pole system production style?

The pole system production style, also known as just-in-time (JIT), is based on producing the right material at the right time, at the right place, and in the exact amount as per the orders received, thus minimizing waste and inventory.

What tool is used in the pole system production to control production?

A tool called 'Kanban' is used in pole system production to control the production process, carrying all necessary information for production and logistics.

How does the Kanban system ensure the production of the right amount of material?

The Kanban system ensures the production of the right amount of material by signaling the production line to process parts using materials to fulfill the instructions indicated on the Kanban, which represents the product that has been shipped or parts used.

What is the purpose of passing the Kanban from one process to another in the pole system production?

The purpose of passing the Kanban from one process to another is to ensure that materials required for processing are picked up from storage and processed according to the instructions on the Kanban, thus maintaining a smooth flow of production.

How does the pole system production respond to fluctuations in sales speed?

The pole system production responds to fluctuations in sales speed by adjusting the production speed to match the sales speed, using accumulated inventory when sales exceed production, and replenishing inventory when sales drop.

What is the main target of production control in the pole system?

The main target of production control in the pole system is to keep inventory at its minimum by controlling the sales speed and production speed without causing stockouts.

What is the push system production and how does it differ from the pole system?

The push system production is a style based on demand forecasts and production schedules, maintaining a certain amount of inventory and shipping products from stock upon receiving orders. It differs from the pole system by focusing on the manufacturer's logic, ordering materials in large lots, and maintaining a large production lot size for efficiency.

How does the push system production plan its production schedule?

The push system production plans its production schedule based on demand forecasts and internal information from customers, making plans for materials, production facilities, personnel, and production steps accordingly.

What are the potential problems of the push system production?

The potential problems of the push system production include inaccuracies in demand forecasts leading to stockouts or excess inventory, and the difficulty in adapting quickly to market fluctuations due to its reliance on large lot sizes and set production schedules.

How can a company minimize stock or stockouts in the push system production?

A company can minimize stock or stockouts in the push system production by not solely relying on demand forecasts but also implementing a flexible style that adjusts production speed according to actual demand trends, thus reducing the difference between production and sales speeds.

What is the significance of safety stock in production control within the push system?

Safety stock is significant in production control within the push system as it serves as a buffer to prevent stockouts. It is considered standard stock and is used to control production to ensure that it is always maintained, even when there are fluctuations in demand.

Outlines

00:00

🔄 Just-In-Time (JIT) Production and Kanban System

This paragraph introduces the Just-In-Time (JIT) production style, which focuses on manufacturing products based on the exact order quantity received. The JIT system minimizes waste by procuring materials and processing only what is needed for the current order. A key tool in this system is the 'Kanban,' which carries vital production and logistics information, such as part numbers and capacity. The Kanban facilitates a pull system, where production is triggered by the demand from the post-process, ensuring that materials, parts, and production instructions are aligned with actual orders. The goal is to synchronize production speed with sales speed to maintain minimal inventory and avoid stockouts, with safety stock serving as a buffer against demand fluctuations.

05:03

🚀 Push System Production: Efficiency and Challenges

The second paragraph delves into the push system production, contrasting it with the JIT and Kanban system. The push system is based on demand forecasts and internal customer information to plan production schedules, material procurement, and staffing. It emphasizes efficiency through large lot sizes to reduce setup frequency and lower purchasing costs. However, the push system's reliance on forecasts can lead to stockouts if demand exceeds production or excess inventory if demand is lower. The paragraph highlights the push system's strengths in stable markets and the need for flexibility to adapt to fluctuating demand, suggesting that adjusting production speed to match sales speed can minimize safety stock requirements and better align inventory with actual demand.

Keywords

💡Just-in-Time (JIT)

Just-in-Time (JIT) is a production strategy that aims to produce goods only as they are needed, in the exact amount required, and at the right time and place. It is a central theme of the video, emphasizing the efficiency of manufacturing by reducing waste and inventory costs. The script describes JIT as a concept where 'the right material at the right time at the right place and in the exact amount' is produced, highlighting its importance in lean manufacturing.

💡Kanban

Kanban is a scheduling system used within JIT production to control the flow of parts and materials. It is a tool that represents the product shipped or parts used and carries crucial information for production and logistics. The script explains that 'a tool called Kanban is used to control the production,' and it is passed from one process to another, signaling the need for parts and materials, thus facilitating a pull system in manufacturing.

💡Postprocess

Postprocess refers to the stage in manufacturing after the main production process has been completed. In the context of the video, it is where the finished product or parts are handed down with a Kanban, which then instructs the next process in the production line. The script mentions that 'the Kanban of products that have been shipped are handed down to the previous process,' illustrating the backward flow of information in a JIT system.

💡Push System Production

Push System Production is a manufacturing approach where production is planned and carried out based on forecasts and schedules, rather than direct customer orders. It is contrasted with the pull system represented by Kanban in the video. The script describes it as a system where 'products are shipped from the stock every time an order is received,' and it maintains a certain amount of inventory to prevent stockouts.

💡Demand Forecast

Demand Forecast is an estimation of future demand for a product or service, based on historical data, trends, and other influencing factors. It plays a critical role in both JIT and Push System Production, as it helps in planning production volumes. The script discusses how 'demand forecast is made by analyzing the demand trend' and is essential for minimizing inventory while ensuring no stockouts occur.

💡Safety Stock

Safety Stock is the extra inventory kept on hand to buffer against uncertainties in supply and demand. In the video, it is mentioned as a standard stock in production control, which is used to manage the difference between production speed and sales speed. The script explains that 'we consider the Safety stock as the standard stock and control the production so that the standard stock is always maintained' to prevent stockouts.

💡Inventory Control

Inventory Control involves managing the amount of stock held by a company to optimize costs and service levels. The video discusses the importance of inventory control in both JIT and Push System Production, highlighting the goal of 'keeping the inventory at its minimum by controlling the sales speed and production speed.' It also addresses the challenges of balancing inventory levels with fluctuating sales speeds.

💡Production Speed

Production Speed refers to the rate at which goods are manufactured. The video emphasizes the need to align production speed with sales speed to manage inventory effectively. It mentions that 'the main target of production control is to keep the inventory at its minimum by controlling the sales speed and production speed,' indicating the importance of matching supply with demand.

💡Sales Speed

Sales Speed is the rate at which products are sold to customers. The video points out that sales speed is dependent on customers and competitors and cannot be controlled directly by the manufacturer. It is a factor that influences the need for adjusting production speed and managing inventory, as mentioned in the script where 'the sales speed depends on customers and competitors therefore cannot be controlled by ourselves.'

💡Efficient Production

Efficient Production is the goal of minimizing waste and maximizing the use of resources in the manufacturing process. The video discusses various strategies for achieving efficient production, such as minimizing setup frequency and maintaining standard stock levels. The script illustrates this with examples like 'achieving an efficient production process parts are then carried to the assembly area' in the context of Push System Production.

💡Fluctuation

Fluctuation refers to changes or variations in a particular factor, such as demand or sales speed. The video discusses the impact of fluctuation on production planning and inventory management. It mentions that 'the sales speed widely fluctuates compared to the production speed,' which can create challenges in maintaining optimal inventory levels and avoiding stockouts.

Highlights

Just-in-Time (JIT) manufacturing concept produces the right material at the right time, place, and in the exact amount.

Kanban system is used in JIT to control production with cards carrying production and logistics information.

Kanban cards instruct the production line to process parts using materials to fulfill indicated instructions.

In Kanban production, if no products are shipped, no production instructions are given, aligning production with demand.

Production control aims to minimize inventory by managing sales and production speeds without causing stockouts.

Sales speed is influenced by customers and competitors and cannot be directly controlled by manufacturers.

Accumulating inventory when sales speed drops allows manufacturers to respond to fluctuations in demand.

Safety stock in production control is considered standard stock to maintain a balance between inventory and stockouts.

Push system production is based on demand forecasts and maintains a certain amount of inventory.

Push system production plans are made for materials, facilities, personnel, and schedules based on forecasts.

Push system production focuses on large lot sizes for efficiency and reduced setup frequency.

Push system production maintains a large inventory to prevent stockouts and ensure security of supply.

Push system production is effective in markets with less demand fluctuation and easy predictability.

Demand forecast accuracy and fluctuation are weak points of push system production, leading to stockouts or excess inventory.

To cope with push system weaknesses, manufacturers must implement flexible styles that adjust to demand changes.

Adjusting production speed to sales speed minimizes the difference between the two and reduces required safety stock.

Kanban production offers a contrasting inventory logic to push system, focusing on demand-driven production.

Understanding the differences between Kanban and push system production is crucial for optimizing manufacturing strategies.

Transcripts

let's look into the details of the pole

system production style this style is

based on the orders received it

assembles products only for the amount

of order received then it processes the

quantity used for assembly and likewise

procure materials for the volume that

has been

processed this manufacturing concept

which produces the right material at the

right time at the right place and in the

exact amount is called the just in time

in the pole system production a tool

called Canin is used to control the

production the Canin representing the

product that has been shipped or parts

used is handed from the

postprocess the Canin carries all the

necessary information for production and

Logistics such as the part number pickup

cycle and

capacity the Canon provides instruction

for production the production line will

process Parts by using materials to

fulfill the instructions indicated on

the Canin once the parts have been

processed the Canin will be attached and

handed over to the post

process now the Canin of the materials

used for processing will be passed on to

the previous process to place in order

in this manner a pulse system production

using the Canon is called the Canon

production now let's find out the flow

of the Canon

production products are shipped based on

the orders that have been received the

Canin of products that have been shipped

are handed down to the previous process

the welding assembly line based on the

information on the Canin parts required

for assembly are picked up from the

previous process and assembly is carried

out in the previous processing line the

Canon of the parts which has just been

picked up now becomes an instruction

order for

processing in the processing line

materials required for processing are

picked up from the storage and then

processing is carried out the Canon

which was attached to the materials will

be

removed based on the information

indicated on this can been removed

orders will be placed to supply

materials products that have been welded

and assembled are transferred to the

shipping area materials that have been

ordered will be delivered to the factory

with the Canon being attached in this

way the Canin is issued from the post

process to the previous process in order

to pick up the parts required

instruction for production is provided

moving backwards of the processes when

products are shipped following the

orders the Canin is issued to

manufacture products this means that if

no products are shipped no production

instructions will be given the Canon

enables to achieve the production

concept of the right material at the

right time at the right place and in the

exact amount in this way the production

speed can follow the S speed the main

target of production control is to keep

the inventory at its minimum by

controlling the sales speed and

production speed and not to cause any

stockouts the the sales speed depends on

customers and competitors therefore

cannot be controlled by

ourselves this is why we have to change

the production speed to control the

inventory and stock out however the

sales speed widely fluctuates compared

to the production speed which may create

some moments in which the sales speed

exceeds the production speed so we will

have to accumulate the inventory when

the Sal speed

drops when the sales speed increases and

the production speed cannot catch up we

will use the accumulated inventory

having stock allows you to respond to

the fluctuation of the sales speed in a

production schedule we set the

production amount to make sure that the

volume of inventory and stock out is

equal the maximum difference of the

production speed and sales speed becomes

the Safety stock in production control

we consider the Safety stock as the

standard stock and control the

production so that the standard stock is

always maintained a general production

style is is based on the demand forecast

and production schedule it maintains a

certain amount of inventory and products

are shipped from the stock every time an

order is received in this style the key

factor to minimize the inventory while

making sure that there will be no stock

at will be the demand forecast demand

forecast is made by analyzing the demand

Trend based on the past Trends seasonal

factors that repeatedly vary depending

on the season and contingency that

affects sudden fluctuations based on the

demand forecast the production amount

will be planned to make sure that more

than a certain amount of stock will be

maintained even after receiving the

expected number of orders based on the

production schedule the most efficient

style of material procurement processing

and assembly will be instructed to

manufacture products completed products

will be placed and stopped in the

shipping

area products will be shipped from the

stock once an order has been received

this production style is called the push

system production now let's look into

the details of the push system

production this is an example of a

production line where parts are

processed and welded the production

schedule is planned out based on the

demand forecast and internal information

from customers then plans will be made

for the materials outsourced production

facilities Personnel production steps

Manpower and schedule based on the

production schedule the materials will

be procured materials are ordered in a

large lot in order to keep the

purchasing price low then parts are

processed using the delivered materials

and following the production schedule

processing lot is kept at a large size

so that the frequency of setups will be

kept at minimum to achieve an efficient

production process parts are then

carried to the assembly

area parts are welded and assembled in

accordance with the production schedule

and are stocked in the shipping area the

standard stock is maintained to prevent

any stock out just like the processing

line the main target is to achieve an

efficient production by minimizing the

assembly and setup frequency products

are shipped from the stock following the

orders received now let's sort out the

logic of the push system production

which will later be compared with the

canbin production the push system

production is a production style that

focuses on the logic of the manufacturer

side the first point is the logic of

procuring

materials materials and parts are

ordered at a massive lot volume in order

to minimize the purchasing price the

monthly schedule is taken into account

so that all the parts needed for the

month can be ordered at once this makes

the lot size bigger and gives Advantage

for the buyer to negotiate the price the

second point is the logic of production

by making the production lot big the

frequency of setups can be reduced

leading to an efficient line operation

rate the facilities and line systems

also focus on a big lot size so that

maximum efficiency will be

realized the third point is the logic of

inventory the basic idea is to have a

large amount of stock to feel secure

that there will be no stock out produced

this is an absolute logic which is even

called the myth of Safety stock two

factors push manufacturers to keep on

increasing their stock the idea that the

stock will definitely be sold one day so

there will be no long in having stock

the other concept is that stock out

should never happen because it will

directly cause problems to the customers

the Canin production has a completely

opposite idea to this inventory Logic

the biggest difference in the two

production Styles exists here which

makes it hard to understand the Canin

production the push system production is

extremely effective in markets and

industries with less fluctuation in

which it is easy to predict the demand

especially in markets and industries

with less demand variation this

production system allows higher

productivity expectation compared with

that of the campon

production now let's think about the

problems of the push system production

the production schedule is usually

planned out by balancing the stock

amount and the stock at volume based on

the demand

forecast however if the actual demand

results high than the production

schedule the stockout volume will exceed

that of the stock and cause frequent

stockouts

on the other hand if the actual demand

is lower than the production schedule it

will increase the inventory as more

stock will be created than stockouts the

weak points of the push system

production exist in the accuracy and

fluctuation of the demand forecast

because of these weak points the push

system production may cause increased

amount of stock or stockouts to cope

with the weak points of the push system

production and eliminate excess stock

and stock outs a company must not simply

rely on the demand forecast but also

Implement a style that is flexible to

fluctuations to achieve this style the

manufacturing speed must follow the

sales speed which reflects the actual

demand Trend it is a method in which the

production amount is changed according

to the demand change by adjusting the

manufacturing speed to the S speed the

difference in the two types of speed

becomes smaller while it also minimizes

the required Safety stock