Production leveling in the scope of Bosch Production System

Content

List of abbreviations

List of figures

List of tables

List of formula

1 Introduction

2 Robert Bosch GmbH and Bosch in China
2.1 Bosch in China
2.2 The Chinese market, BRIC countries and other rising countries
2.3 Bosch’s five locals

3 Theoretical Part
3.1 Classification into Business Administration
3.2 Toyota Production System
3.2.1 Milestones of TPS
3.2.2 Pillars of the Toyota Production System
3.2.3 Muda, Mura and Muri: The 3M principle
3.2.4 Production planning and production control with Heijunka
3.3 Bosch Production System
3.4 Production control
3.4.1 Central versus local control
3.4.2 Order Entry
3.4.2.1 Planning and controlling with cumulative figures
3.4.2.2 MRP and MRP II
3.4.2.3 Kanban
3.4.3 Order release
3.5 Implementation of Heijunka
3.6 One-piece-flow

4 Practical Part
4.1 Current state of the SB12 value stream
4.2 Target state of the SB12 value stream
4.3 Prerequisites for applying leveling and process of choosing value stream
4.4 Different levels of leveling
4.4.1 Current state of SB12 value stream
4.4.2 Level 1 leveling: Push leveling
4.4.3 Level 2 leveling: 1-loop leveling
4.4.4 Level 3 leveling: 2-loop leveling
4.4.5 Level 4 leveling: Just-in-sequence
4.5 Preoperational steps
4.5.1 Classification into high runners and exotics
4.5.2 Overall Equipment Effectiveness
4.5.3 Required capacity
4.5.4 Available capacity
4.5.5 Determination of planning intervals
4.5.6 Customer analysis
4.5.7 Leveling pattern
4.5.8 Lot size, numbers per kanban and packing unit
4.6 Calculation of Kanban controlled loops
4.6.1 Replenishment time coverage (RE)
4.6.2 Production lot size (LO)
4.6.3 Demand peaks (WI)
4.6.4 Safety stock (SA)
4.7 Leveling board and production planning with the board

5 Conclusion

5.1 Accomplishments and next steps

5.2 Summary

List of literature

Appendix

Appendix

Appendix

Appendix

Appendix

List of abbreviations

illustration not visible in this excerpt

List of figures

Figure 1: Map of Bosch locations in China (in accordance to: Robert Bosch GmbH, 2012)

Figure 2: Vehicles per 1,000 inhabitants by country/region (in accordance
to: Robert Bosch GmbH, 2012, p. 74)

Figure 3: House of Toyota (in accordance to: Liker, 2004, p. 40)

Figure 4: Muda (Liker J. K., The Toyota Way—14 Management Principles
from the World´s Greatest Manufacturer, 2004, p. 28)

Figure 5: Local control of production, push principle (in accordance to:
Vahs & Schaefer-Kunz, 2007, p. 541)

Figure 6: Local control of production, kanban / pull principle (in accordance
to: Vahs & Schaefer-Kunz, 2007, p. 541)

Figure 7: Example of cumulative figures for production planning
(Loedding, 2008, p. 251)

Figure 8: Possible bullwhip effect in the SB12 value stream

Figure 9: Distribution curve of IC products

Figure 10: Current state of SB12 (no leveling)

Figure 11: Level 1 leveling: Push leveling

Figure 12: Level 2 leveling: 1-loop leveling

Figure 13: Elements of production losses for OEE calculation (in accordance
to: Robert Bosch GmbH, 2010, p. 29)

Figure 14: Calculation of available capacity (in accordance to: Robert Bosch GmbH, 2011,
p. 28)

Figure 15: Planning horizon of four weeks

Figure 16: Elements of replenishment time (in accordance to: Robert Bosch GmbH, 2010)

Figure 17: SB12 leveling board

Figure 18: 1-loop-leveling concept presentation to end customer

Figure 19: Drawing SB12 leveling board

Figure 20: SB12 hydraulic block with four slices (Bosch Rexroth, 2013)

List of tables

Table 1: BMW Group Revenues by region (in accordance to:
BMW Group, 2012)

Table 2: Annual percentage growth rate of gross domestic product from
1995 to 2011 (in accordance to: Trading Economics, n.d.)

Table 3: 2011 Gross domestic product per capita in USD (in accordance to: Trading
Economics, n.d.)

Table 4: BPS principles and elements (in accordance to: Robert Bosch
GmbH, 2005, p. 2)

Table 5: Current production fluctuations of the SB12 value stream from
(cf. Appendix 3)

Table 6: Delivery Performance Report Shanghai headquarters to end
customer (in accordance to: Shanghai BW report)

Table 7: ABC/XYZ analysis of finished goods (in accordance to: Robert
Bosch GmbH, 2011, p. 21)

Table 8: Distribution curve of SB12 part numbers (cf. Appendix 2)

Table 9: Production sequence SB

Table 10: Elements of replenishment time for six high runner parts

Table 11: Replenishment time coverage for SB12 high runner

Table 12: Consideration of production lot size for the SB12 value stream

Table 13: Coverage for demand peaks (WI)

Table 14: Forecast (Purchase Plan) numbers SB12 from November 2012 to September 2013

Table 15: Production Plan CW1 to CW45

Table 16: First data gathering for Wujin plant value streams

List of formula

(4.1) Calculation net production time

(4.2) Calculation quality losses

(4.3) Calculation number of changeovers for high runner parts

(4.4) Calculation number of changeovers for low runner parts

(4.5) Calculation required capacity

(4.6) Calculation available capacity

(4.7) Calculation number of possible changeovers

(4.8) Calculation Every Part Every Interval.

(4.9) Kanban formula.

(4.10) Bosch kanban formula

(4.11) Calculation size of supermarket.

(4.12) Calculation replenishment time

(4.13) Calculation replenishment time: time for assembly process.

(4.14) Calculation replenishment time coverage.

(4.15) Calculation of summand “production lot size” of the kanban formula

(4.16) Calculation customer demand peaks

„Break free of conventional thinking!“

Taiichi Ohno (1912-1990)

(Hino, 2006, p. 20)

1 Introduction

In general, the profit situation of producing companies depends on two main factors. On the one hand, companies need to offer products, which are demanded by market. The market demand is the basis to be successful. On the other hand, the success of the company is influenced by its ability to produce goods in a competitive way, meaning efficiently and flexibly. The best efficiency can neither be reached by excessing the existing capacity nor by unutilized capacities. Both situations would lead to an increase in costs compared to the optimum capacity utilization. Flexibility is the other component in order to have a competitive production. If a product is produced efficiently in high quantities which cannot be sold, this will lead to high inventories. That’s why a flexible production which is able to produce exactly according to the real market demand is important as well(Becker, 2006, pp. 298-299).

Conventional production systems are based on a negative correlation between efficiency and flexibility. A higher flexibility would mean a reduction of efficiency because of an increase in changeover periods for instance.

The need of Toyota, a Japanese automaker, for a production system, which is both efficient and flexible to the markets’ demand, was the starting point for the Toyota Production System. After World War II, Toyota did not have such a high demand for cars in order to start mass production like automakers of the United States. The future of this company depended on the challenge to find ways to satisfy the market in a competitive way. Toyota found a way(Liker J. K., The Toyota Way—14 Management Principles from the World´s Greatest Manufacturer, 2004).

During the 1990s, the famous five million dollar and five year study about the future of the automobile The Machine That Changed the World, conducted by the MIT (Massachusetts Institute of Technology), was published. This book was a study about the future of the automobile and it presented the differences between lean production and conventional mass production. According to this study, Toyota needed less than half of the assembly hours per car in 1986 compared to the American automaker General Motors. Furthermore, wherever GM had inventory of parts of two weeks, Toyota only needed two hours of inventory(Womack, Jones, & Roos, 1990, p. 81). Hence, Toyota achieved a higher efficiency with a higher flexibility compared to the production systems of Western carmakers in only a couple of decades. Since this study, the production of Toyota is called lean production and Western companies try to apply Toyota’s philosophy to their businesses.

Western companies are starting to realize, that economies of scale are not necessarily leading to the lowest total costs. A high output might lead to low fixed costs per finished good unit. However, fixed costs only add up to one part of the total costs. Focusing on economies of scale and therefore on mass production will also generate other costs, which do not occur when lean principles are applied. High inventories, due to missing flexibility, and complexity are two examples which usually cause more costs than savings with economies of scales

(Schneider, 2008, p. 3).

Nowadays, the competition is tougher than ever before. In the automotive market for instance, there is a buyer’s market. Companies are working harder and harder to gain new customers and at the same time the margins seem to shrink more and more. Original Equipment Manufacturers (OEMs) are forced to allow discounts in order to acquire customers. Simple programs, applied in the past, with the intention of avoiding costs are good but not enough to stay competitive in the midterm(Universitaet Siegen, 2012). Lean production with all its principles seems to get increasingly attractive for these companies. By the year 2015, there are about 2,000 USD cost savings per car needed in order not to lose profitability. Standardizing, modularization and “keeping things simple” are the key words for the future to meet the required cost reductions (Wyman, 2007, p. 4). More and more OEMs and their suppliers try to apply the philosophy of Toyota to be competitive in the long run. The annual awarded “Lean Production Award” shows the trend in European companies(Automobil Produktion, 2012). Companies like Volkswagen and Fiat but also suppliers like Bosch, Hella or Eissmann have been making good progress in lean manufacturing and therefore they won the Lean Production Award for 2012. At Volkswagen, the lean philosophy is not only applied on its shop floor but it is deep-rooted both in its organization and its management sector(Automobil Produktion, 2012). Without management commitment at the highest level, companies will struggle in getting lean in the long term.

Becoming lean and thus eliminating any kind of waste is the core idea of the Toyota Production System (Ohno, Toyota Production System: Beyon Large-Scale Production, 1988, p. 18)and of the Bosch Production System. One key element of both production systems is Heijunka, production leveling. With fluctuating demands and at the same time limited capacity and limited flexibility, leveling helps to reconcile these conditions.

In addition, the so-called bullwhip effect to the supplier can be avoided, inventories will decrease and usually a higher flexibility with a better delivery performance can be achieved.

Implementing Heijunka usually includes the implementation of production leveling and the implementation of a kanban pull system (cf. §4.3). This process, in the scope of the Bosch Production System, will be part of the following thesis. After a short introduction of the Robert Bosch GmbH and particularly of Bosch in China in chapter two, a theoretical part will follow in chapter three. In this paragraph the author of this thesis wants to introduce some basic elements and core principles about the Toyota- and the Bosch Production System. Moreover, some production control methods will be explained.

Chapter four, the practical and main part of this thesis, is devoted to the whole Heijunka implementation process in the respective plant of Bosch, Wujin plant. At the beginning, the current state of the value stream and the target state of the value stream are compared with each other. The next step will cover the preparations and finally the selection of a suitable value stream. The supermarket calculation and future steps are also included in chapter four. However, chapter four also contains some theoretical explanations to provide a bigger picture and to link theory to the practical implementation.

Finally, the author will move to the last chapter of this thesis, which shall deal with a short review of this project.

2 Robert Bosch GmbH and Bosch in China

The Robert Bosch GmbH (Bosch), with over 300.000 employees worldwide has more than 350 subsidiaries in over 60 countries. Its products are currently sold in about 150 countries. The Bosch Group had a 51.5 billion Euros turnover in 2011. In the same period 4.2 billion Euros have been invested in Research and Development and Bosch has applied for 4,100 patents(Robert Bosch GmbH, 2012).

The Bosch Rexroth AG (Rexroth), for which this thesis is created, is a 100 % subsidiary of the Robert Bosch GmbH. Bosch Rexroth belongs to the business sector Industrial Technology (UBI) with its Drive and Control Technology (DC) of Bosch. Other UBI divisions are Packaging Technology (PA) and Solar Energy (SE). Besides the business sector of UBI there is the Automotive Technology (UBK) and the Consumer Goods and Building technology (UBG) within the Robert Bosch GmbH.

Rexroth has its roots in 1795 in the Spessart region of Germany, when the Rexroth family established a hammer mill. In the 20th century many other German companies have been acquired by Rexroth. In 2001, the Robert Bosch GmbH merged with Mannesmann Rexroth AG, forming a new company called the Bosch Rexroth AG.

Rexroth itself has globally about 38,400 employees (2011) with its Hydraulic, Electric, Linear and Pneumatic Systems and Components(Bosch Rexroth AG). In 2011, Rexroth had a turnover of 6.4 billion Euros which has been the highest turnover in the history of this company(Bosch Rexroth AG, 2012).

Bosch Rexroth Changzhou (Wujin plant), where leveling is supposed to be implemented, produces and serves a variety of products for industrial application and mobile application, such as hydraulic cylinders, power units and valves, for Chinese customers. Wujin plant has its roots from 1996 on in the Jiangsu province, building a joint venture with another company at this time. Jiangsu province has the second largest gross domestic product of all provinces in China with 4,860.4 RMB in 2011. In the same year, Wujin plant achieved a turnover of about 1,100 million RMB. The total number of employees summed up to about 1,100 at the end of 2011 (Bosch Rexroth (Changzhou) Co., Ltd.).

2.1 Bosch in China

Bosch has an over 100 year long lasting history in China. In 1909 the first Bosch sales office in Asia was opened in Shanghai. At that time Shanghai has already been the leading industrial center in China. A German trading company called Walter Schaerff & Co. helped Bosch to establish its business activities in Asia. The Bosch magneto ignition system was launched. Subsequently, further products were launched and the first Bosch Service for vehicles was opened in Shanghai. After the First World War, Bosch cooperated with a new German trading company, Jebsen & Jessen. This cooperation lasted 60 years with ups and downs (Bosch (China) Investment Ltd., 2009, pp. 63-66).

Around the 1980s a turning point took place in China. Deng Xiaoping, a reformer and politician belonging to the Communist Party of China, initiated the beginning of reforms and a more open policy in China(Bosch (China) Investment Ltd., 2009, p. 89). Following, car imports, for instance from Japan jumped up. The exports of Toyota to China sevenfold at that time(Mann, 1989, p. 149). Before, only a few passenger cars were produced besides of trucks and buses in China. Consequently, new joint venture agreements were concluded at that time with foreign companies in order to produce cars in China instead of importing these to China. In relation to this, Chrysler signed a 20 year contract to produce one car type in Beijing and Volkswagen signed a 25 year contract to produce cars in Shanghai(Harwit, 2001).

In 1984, Bosch got license agreements for the manufacturing of diesel injection systems. In the following decades, new representative offices, new testing facilities and new plants have been opened. As for 2011, Bosch in China has 51 legal entities, over 30,200 employees and 42.3 billion sales with an increase of 13 % compared to 2010(Robert Bosch GmbH, 2012, p. 13). The concentration of Bosch locations in China is densest within a radius of 200 km around Shanghai in the provinces Jiangsu and Zhejiang. Bosch is supporting China’s Go West strategy. A new plant is built up in Chengdu, in China’s Midwest region. It is important for Bosch to be present when these areas are developing in the upcoming years. Furthermore, labor costs are not as high as in the eastern part of China.

Abbildung in dieser Leseprobe nicht enthalten

Figure1: Map of Bosch locations in China (in accordance to: Robert Bosch GmbH, 2012)

2.2 The Chinese market, BRIC countries and other rising countries

The Chinese market is known for growing and growing over the last years. As for today, China’s economy is the second largest economy behind the United States of America(Trading economics). There is no doubt that China’s economic turn in the late 1970s, as a result of Deng Xiaopings optimism and reforms, is unique in history. Coming from a poor country, China is today one of the leading economic countries with about 1.3 billion people. For experts it is inevitable that in some years China’s economy will be number one in the world.

In addition, the domestic demand in China is getting more and more important for western industries. Whereas in the past, foreign companies often invested in China in order to produce in China and to export goods out of China; however, companies now are also focusing on the Chinese market. Experts predict that by the year 2025 300 million people in China will move from rural areas to cities. This might cause big investment needs in cities and a quick increased demand(Rauterberg, 2010). “The Chinese economy is becoming more complex and variegated, no longer simply based on a huge supply of unskilled labor and very basic manufacturing techniques”(Jacques, 2012, p. 190).

The following paragraphs will refer to the automotive industry as an example in order to display the increasing importance of Chinese demand for Germany but for other developed countries as well. Whereas in the early 1980s there was almost no foreign car on China’s streets, since the 1990s many foreign cars can be seen there. In the last ten years the car market in China, for private passenger cars, has developed like never before. Previously, people in China were just focused on key items, such as television, washing machine and motorbike. 30 years later, 15 million families own a car and more and more people are buying apartments instead of renting apartments (Bosch (China) Investment Ltd., 2009, p. 89). China became one of the most important markets for German car manufacturers (Eisert, 2013). The following table gives a picture about the revenue devolvement of BMW Group over the last years in respective markets.

Abbildung in dieser Leseprobe nicht enthalten

Table1: BMW Group Revenues by region (in accordance to: BMW Group, 2012)

The biggest revenue increase over the last years can be identified in Asia. While markets in Europe and in the United States of America are mainly stagnating, German automakers were able to increase their turnover after the record of 2011 in 2012 again because of big demand in China. Audi and BMW increased their sales in China over 30 % compared to 2012. Daimler is struggling with a growth of only 1.5 % in China in 2012. That’s why Daimler was not as successful as Audi or BMW in 2012 overall(Verlag moderne industrie GmbH, 2013). With a new management board in China, Daimler wants to make up leeway to other competitors in China in order to ensure future growth of the company.

Volkswagen was one of the first foreign automaker companies in China from the 1980s onwards. In 2011 Volkswagen had the biggest sales market share of all automakers(ANCOCA SRL, 2013).

However, most automakers nowadays have realized that there is much potential in the Chinese market. They started building up huge production plants in China in order to satisfy the local market demand (Gomoll, 2012).

According to a research of the Ifo institute in Munich, the requirements for further growth in the automotive market is given. A huge growth is expected in the BRIC countries over the year 2020. Except of BRIC, there are 15 other countries, especially in Asia, where constant growth over at least the next ten years is expected. “Neben den BRIC Staaten formiert sich in den nächsten Jahren eine zweite Wachstumsschiene in der Autoindustrie. 15 Länder, die überwiegend in Asien liegen, prägen die zweite Wachstumswelle. Damit ist die Autoindustrie auch nach 125 Jahren eine junge Industrie und wächst langfristig in beachtlichem Tempo weiter.” Examples for Next 15 countries are: South Korea, Malaysia and Thailand (Dudenhoeffer, 2012, pp. 28-31).

Comparing the BRIC countries with Europe, Japan or the United States the BRICs have a lot of catching up the western countries and Japan in terms of cars per inhabitants. The following figure illustrates the current situation in respect to car ownership per 1,000 inhabitants in different countries.

Abbildung in dieser Leseprobe nicht enthalten

Figure2: Vehicles per 1,000 inhabitants by country/region (in accordance to: Robert Bosch GmbH, 2012, p. 74)

Besides, taking a look at the annual growth rate of the gross domestic product in China compared to Germany, India and the United States, it is obvoius that China’s growth rate was in average by far more than in Germany and the United States and more than in India as well. The average growth of China from 1995 to 2011 adds up to 9.9 %, whereas Germany had 1.4 % growth and the United Stated had 2.5 % growth in average.

Abbildung in dieser Leseprobe nicht enthalten

Table2: Annual percentage growth rate of gross domestic product from 1995 to 2011 (in accordance to: Trading Economics, n.d.)

The following table illustrates the gross domestic product for the BRIC countries, Germany and the United States . China with TUSD 5.5 in 2011 has about 12 % of the per capita income of Germany. Germany had TUSD 44 in 2011, the United States TUSD 48.

Hence, there is still a big gap between BRIC countries and developed countries. At the same time the size of these markets needs to be pointed out. If the Chinese market is growing, this will usually have a big influence on the world’s market because of its size.

Abbildung in dieser Leseprobe nicht enthalten

Table3: 2011 Gross domestic product per capita in USD (in accordance to: Trading Economics, n.d.)

All in all according to these facts, economists are expecting further growth of business in China. Not only in the automotive industry but in the mechanical engineering industry as well where Rexroth is doing business. Most economists think there will be a long-lasting growth of the Chinese economy the next decades and for the economies of the BRIC countries as well.

2.3 Bosch’s five locals

Bosch’s five locals, also called local for local, is a concept of Bosch in order to do

- Local Production,
- Local Purchasing,
- Local Engineering,
- Local Commissioning and
- Local Management.

As mentioned in the sections above, companies are concentrating more and more on the Chinese local market due to increasing demand. Local plants are set up and growing local manufacturing is taking place, where in the past usually assembling of imported parts was executed.

With this strategy, Bosch wants to be able to react fast on market demands in China with a short lead time. Currently, for some raw materials shipped from Europe, the lead time to get these raw materials to China is about four to five months. This causes long supply chains and thus inflexibility. That’s why local purchasing will be more and more in the focus of Bosch.

Local engineering would enable quick adaptions to country specific requirements on finished goods.

In regard to local management, the management will be concentrated on this local market. This leads to a detailed understanding of customer demands and of market changes.

Besides of Bosch, other big German companies have the same approach, such as Volkswagen, Audi and BMW for respective car models. These models are produced in China and not imported anymore. Following, offering goods at a more favorable price to the Chinese market is another important factor of localization.

3 Theoretical Part

3.1 Classification into Business Administration

Production Management and Material Management, where production leveling belongs to, are part of the Operations Management. According to Vahs and Schaefer-Kunz the Operations Management consists of four different areas within a company:

- Innovation Management,
- Material Management,
- Production Management and
- Marketing (Vahs & Schaefer-Kunz, 2007).

Subject of Material Management is to supply the right goods at the right time in the right quality to the right place.

The task of Production Management is the transformation of existing production factors into products (Vahs & Schaefer-Kunz, 2007, p. 514).

Within Production Management there are mainly the following goals:

1. Goals for costs: Manufacturing and assembly are supposed to produce at the lowest cost level possible.
2. Goals of time: Achieving a high delivery performance to the customer is usually the most important goal of production. Missing goods on the customers’ side will cause additional costs for production.
3. Other goals: Furthermore, production needs to produce planned quantities within a certain period of time and the quality of goods needs to meet the customers’ expectation(Vahs & Schaefer-Kunz, 2007, p. 516).

Production leveling usually influences each of these goals. In order to be flexible for customers’ orders, to reduce inventory and to reduce the throughput time production leveling is useful. Further details on the effect of leveling will be shown in the following sections, for instance in §3.2.4.

Production leveling, also known as production smoothing or in the Japanese expression Heijunka, is part of production planning and production control within the Production Management(Veit, 2010).

3.2 Toyota Production System

A production system is a bunch of rules or principles regarding production planning and production control. Companies define rules of action for production considering their organizational culture. In different branches big companies have already defined their production system. Most of the time they name it after the company’s initials followed by “PS” (Veit, 2010, p. 14). One of the first companies in Germany implementing a production system, based on the principles of Toyota, was Porsche. At the end of the 1980s Porsche was in a deep crisis. Revenues and production volume dropped constantly. Management decided to do a turnaround and to restructure the company. This step of Porsche was supported by external consultants from Japan in the beginning of the 1990s(Porsche Consulting, 2009). For sure it was not an easy way to break up the existing processes in order to build up new processes. But this change in production was certainly one of the factors which made Porsche successful. Today the Porsche Production System (PPS) enables a flexible production line. Different models can be assembled on a single production line. Porsche produces 16 different models on one line. Comparing the year 1990 to the year 2005, this company has been able to increase the number of employees by about 20 % but at the same time the number of produced cars quadrupled(Porsche Consulting, 2009). That is why this company is called these days the “most profitable car manufacturer of the world”(Handelsblatt, 2012).

However, all these production systems are based on the very first production system: the Toyota Production System (TPS)(Veit, 2010, p. 14).

3.2.1 Milestones of TPS

The Toyota Production System has its roots in the end of World War II. The Japanese automotive industry was at the rock bottom. Japan had a depression and there was almost no demand for cars. Many employees lost their jobs at Toyota during that time(Liker & Michael, 2008, p. 35). Compared to America the ratio with respect to productivity was 1:9 which means that ten workers of an American plant did the work of 100 workers in a Japanese plant. These circumstances and the call of Kiichiro Toyota (1894-1952), the founder of Toyota Motor Corporation (TMC), “to catch up with America in three years. Otherwise the automobile industry of Japan will not survive,” initiated the Toyota Production System (Ohno, Toyota Production System: Beyon Large-Scale Production, 1988, p. 3).

Toyota learnt a lot from Ford in the 1930s and applied the principles of Ford to Toyota (Toyota Motor Manufacturing Kentucky, Inc., 2012). Ford had a huge population with a huge demand which Toyota did not have ( Liker J. K. , Becoming Lean: Inside Stories of U.S. Manufacturers, 2004, p. 49). Instead, the market and demand in Japan was small. Engineers had to go out after World War II to get orders from people. Toyota tried to fulfill every wish in order to get as much orders as possible. This led to a high variety of products. There was no way to compete with Ford with respect to “economies of scale” (Liker J. K., Becoming Lean: Inside Stories of U.S. Manufacturers, 2004, p. 49).

The TPS presented by Toyota shows that a production system can be as productive as other systems. There is not necessarily only the need to focus on economies of scale. The goal is not only to reduce constantly waste but also to achieve equal efficiency compared to mass production (Liker J. K., Becoming Lean: Inside Stories of U.S. Manufacturers, 2004, p. 49).

After developing the system over years it was first documented on paper in the 1970s. Till today the system has changed slightly because of further improvements (Liker J. K., Becoming Lean: Inside Stories of U.S. Manufacturers, 2004, p. 49). Even though there is a bunch of literature about TPS today only a few companies have implemented TPS yet (Hino, 2006, p. 240). Western companies often had problems in the past with implementing the Toyota Production System at respective plants in America and in Europe. Robert Eaton, a CEO of Chrysler in the past, said in 1994: “we have achieved production efficiencies equal to those of the Japanese manufacturers. We have nothing left to learn from Toyota” (Hino, 2006, p. 240). Chrysler had hired some consultants in order to introduce the TPS at that time. A couple of months after the implementation at Chrysler, a Chrysler executive announced that Chrysler has nothing learnt from Toyota (Hino, 2006, p. 240). There are many hurdles on the way trying to implement the TPS at other companies. Examples are differences in the culture of Japan and Western countries, differences in the language and last but not least the problem that the TPS is often underestimated in terms of considering TPS as a simple tool. (Hino, 2006, p. IX). TPS is more as a simple tool. Jeffrey K. Liker means that “mass production and lean production do not refer to production systems. They reflect ways of thinking about production – the assumptions that underlie how people and institutions formulate solutions to the problems of organizing people, equipment, material and capital to create and deliver products for customers” (Liker J. K., Becoming Lean: Inside Stories of U.S. Manufacturers, 2004, p. 44). The car industry – first of all in the United States – has put much effort in implementing the TPS in their production facilities. Their recent success by doing so needs still to be figured out (Liker J. K., Becoming Lean: Inside Stories of U.S. Manufacturers, 2004, p. 44).

In the 1990s, in the scope of the five million dollar and five year study The Machine That Changed the World researchers found out, that the production system of Toyota is better than mass production. According to them “Lean production … is lean because it uses less of everything compared with mass production – half the human effort in the factory, half the manufacturing space, half the investment in tools, half the engineering hours to develop a new product in half the time. Also, it requires ... half the needed inventory on site, results in many fewer defects, and produces a greater and ever growing variety of products”(Womack, Jones, & Roos, 1990, p. 13).

3.2.2 Pillars of the Toyota Production System

The TPS is not just a bunch of techniques. It is a structured method of several tools where all tools need to work together to achieve the best results. Fujio Cho, a student of Taiichi Ohno, developed a house (cf.Figure 3) to visualize the TPS. A house symbolizes the dependence of the different elements of a house. The system is only working well and the system is only strong if all elements are working together. The basis is as important as the roof and the pillars cannot exist without the basis. The roof of the TPS includes the goals of best quality at lowest costs and at shortest lead times. The two pillars of the TPS will be explained in the following. Finally there is the basis with standardized and stable processes and Heijunka for production leveling. Heijunka, which is part of this thesis, will be explained further in §3.5.

Abbildung in dieser Leseprobe nicht enthalten

Figure3: House of Toyota (in accordance to: Liker, 2004, p. 40)

The original idea of the TPS is the removal of waste. In order to support the TPS to reach this goal there are two pillars:

- just-in-time
- and autonomation (Jidoka), or also called automation with human backing

(Ohno, Toyota Production System: Beyon Large-Scale Production, 1988, p. 4).

According to Taiichi Ohno just-in-time is reached when right parts are produced in the right amount at the right time. In an ideal case this can lead to production without any inventory, depending on the replenishment time. If the replenishment time is high it is supposable that a supermarket is needed as buffer between two stations.

In the automotive industry or in the mechanical engineering industry, from the manufacturing until final assembly there are hundreds or thousands of small process steps necessary. In the case of just-in-time all these small processes are linked together. If there is a problem in only one station of all these linked stations the process will stop. This is what the TPS is aiming at, bringing problems to the surface in order to be able to do root cause analysis and to make sure that errors do not happen again. This is the basis for improvements as well. If all the respective processes would be independently to each other there would be no need for improvement and problems would not come to a higher level in order to be solved. This approach would also create waste with higher inventories and increased number of defect parts(Ohno, Toyota Production System: Beyon Large-Scale Production, 1988, p. 4).

The TPS-pillar just-in-time includes a pull-system. This is achieved with the kanban production control. Kanban is further explained in §3.4.2.3. But what is special about the kanban production control? Conservatively material is supplied from upstream processes to downstream processes. With kanban the information flow goes the other way around. The final assembly decides which and how many products are needed and this demand will be communicated upstream from the final assembly through all the respective processes(Ohno, Toyota Production System: Beyon Large-Scale Production, 1988, pp. 5-6). Kanban is a tool which supports just-in-time production and the whole TPS approach.

The ability how to deliver to the customer just-in-time depends on the amount of inventory. If there is much inventory the production will usually be able to fulfill an earlier shipment to the customer than with little inventory. The customer wants 100 % on-time-delivery. If the processes are not able to fulfill the customers requested date without any inventory, inventory needs to support the value stream in order to satisfy the customer with his wish delivery date.

Autonomation, also known as Jidoka is the other pillar of the “House of Toyota”. The idea of Jidoka is to create machines which are able to stop if they are figuring out any deviation from the standard. This is supposed to prevent the production of bad quality. But is stopping a complete production line more efficient than checking parts after production? According to experts and according to Taiichi Ohno this makes sense in different ways. First of all waste can be avoided immediately. Machines nowadays are working fast. A quality check two hours after starting the production line at the end of the final assembly is possible. But defect parts could already have been produced in mass during these two hours. With an automated machine this scenario could be prevented(Ohno, Toyota Production System: Beyon Large-Scale Production, 1988, p. 6). Furthermore, in case the machine is stopping the worker needs to solve the problem immediately in order to continue producing. Again this helps to bring problems to the surface.

Jidoka has its roots in around 1900 when Sakichi Toyoda, the father of Kiichiro Toyoda, found a way to automatically stop his weaving machine when the weft broke. This prevented the machine to further produce defective products.

Furthermore, in this context there needs to be mentioned that with that system less workers are necessary or to put it differently, the same amount of workers can handle more machines at the same time. Workers on machines only need to stop by a machine if the machine stopped due to failures.

3.2.3 Muda, Mura and Muri: The 3M principle

The basis for the entire TPS is to eliminate waste. Taiichi Ohno differentiates between three types of waste: muda, mura and muri.

Muda (Japanese for waste or useless) includes seven different kinds of waste which are shown inFigure 4. Muda are especially kinds of work which do not lead to added value to the product. In the view of Toyota muda is definded as “anything other than the minimum of expenses for equipment, materials, parts, space and labor which is essential for the increase in value of a product(Becker, 2006, p. 278).”

The customer pays for value added process steps. Accordingly the goal should be to minimize muda. Referring to the section above companies generally can choose between Jidoka or a quality control at the end of a final assembly. In regard to muda, Jidoka makes sense. The customer is not willing to pay for bad processes producing poor quality and defect parts which are piling up at the end of all processes. Jidoka supports that deviations from the standard are showing up immediately and that production of defect parts is prevented.

Overproduction is one of the biggest areas of waste. Overproduction does not come up as a problem. Instead, it seems that everything is running the right way while creating inventories. This is malicious because other additional expenses are following, such as additional handling, additional space and additional staff(Syska, 2006, p. 14). In order to reduce muda caused by unnecessary stock, production leveling with the pull principle is one of the fundamental elements. This will be part of § Fehler! Verweisquelle konnte nicht gefunden werden..

Figure 4shows the different kinds of muda. The picture also visualizes that the basis for all is a standardized work and standardized processes. This is also explained in one of the following sections (cf. kanban, §3.4.2.3).

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Figure4: Muda (Liker J. K., The Toyota Way—14 Management Principles from the World´s Greatest Manufacturer, 2004, p. 28)

Mura (inconsistency, unevenness) results from the fluctuating demand of the market and the unbalanced production scheduling. On one day the workforce cannot handle the requested workload and on the other day people might not have enough workload for the whole day. In order to be able to handle the peaks of workload the resources always need to be available even though this peak occurs only from time to time. Muda is the consequence of that. At the bottom of demand people, equipment and material is just waiting for the next operation(Liker J. K., The Toyota Way—14 Management Principles from the World´s Greatest Manufacturer, 2004, p. 113).

In this context people are symbolizing this situation with the fable of Aesop about the turtle and the rabbit. It is better to move slowly but continuously like a turtle compared to running as fast as possible one time and taking a rest the other time like a rabbit (Liker & Meier, 2008).

Muri (unreasonableness, overburden) derive from pushing people or equipment above their limits. Quality problems and also safety problems are the result. People are suffering from fatigue, stress and dissatisfaction. The root cause might also be a lack of production leveling (Brunner, 2008, S. 65).

Reducing issues which belong to these three types of waste is the basis for implementing a stable and a productive process(Ohno, Toyota Production System: Beyon Large-Scale Production, 1988, p. 41). Companies often want to reduce muda in the first step. What they do not know is that trying to avoid muda usually does not really work without reducing mura and muri as well. Production leveling would help to decrease mura and muri. Without having a leveled production and with people only focusing on muda the workforce perhaps will start to reduce inventory, reorganize the working areas and so on. But the next peak of customers demand comes. Without any inventory and without a leveled production coming into the next peak management realizes that workers are getting overburden and that machines are breaking down. They come to the conclusion that lean production does not work here. But what is the reason for that?

Companies are only focusing on muda in the first step because it looks easy to eliminate this type of waste. But they are missing to implement Heijunka. “Achieving heijunka is fundamental to eliminating mura, which is fundamental to eliminating muri and muda (Liker J. K., The Toyota Way—14 Management Principles from the World´s Greatest Manufacturer, 2004, p. 113).”

3.2.4 Production planning and production control with Heijunka

Ensuring flexibility in the production for customers’ demands and at the same time having a good efficiency of machines is one of the classic goal conflicts in production(Syska, 2006, p. 55). In order to be more flexible, smaller lot sizes need to be produced which leads automatically to an increased changeover of machining-tools. Time of changeover is non-value-adding time.

Lean production manager have a tool which gives a solution to this conflict: Heijunka. Heijunka, within the meaning of Toyota, is based on local pull production principles. It is a tool in order to get a smooth production flow in regard to quantities. The goal is to cut the customer off from the production. The production will always produce certain series of goods independently of the current demand from the customer. This leads to small lots and usually to reduced inventory as well. Due to small lots the production gets more flexible.

The kanban is an element of the TPS. As explained later in §3.4.2.3, there is a difference between the physical kanban card and the kanban system. Heijunka usually is implemented together with the kanban system (Veit, 2010, p. 17). Kanban will synchronize the processes. However, generally it makes sense to implement as much elements of the TPS as possible. Picking out some principles of the TPS may not give the expected improvement even though some principles seem to be implemented easily. According to Shigeo Shingo, co-developer of the TPS, kanban can be applied without leveling if the fluctuation is not that high. Between the respective stations there is minimum inventory in order to absorb fluctuations. But a fluctuation over a certain level cannot be absorbed by the buffer. Production leveling needs to be implemented in that case. Fluctuations of 10-30 % can be controlled without leveling (Shingo, 1989, p. 187). With the kanban system different stations are linked together. Usually even outside suppliers are connected to the producing plant. Consequently, fluctuations in the production would be even higher at upstream processes(Ohno, Toyota Production System: Beyon Large-Scale Production, 1988, p. 37).

When demands are fluctuating, which might be the case in most industries, kanban without Heijunka is insufficient. High inventories and a flexible workforce would be needed in order to adapt to the changing demands. Furthermore, there would not be any decision about the needed production sequence without production leveling. Therefore, Toyota invented Heijunka -leveling in order to satisfy the changing demand of the Japanese markets together with a smooth production flow (Veit, 2010, p. 20).

In the past the production control of Toyota had the task to do production scheduling on one hand and to balance the upcoming workload and the existing capacity on the other hand. Capacity is the maximum workload the machines and the workers are able to handle. Workload is the volume in a certain time period that needs to be handled. The balance of load and capacity is important(Shingo, 1989, p. 123). As explained, otherwise there are huge fluctuations which influence the production and which are creating several types of waste.

However, the approach of the TPS is to have small batch sizes in order to build what the customer orders. The perfection of this can be achieved with one-piece-flow (cf. §3.6). The actual production sequence will be in accordance to the actual demand with that approach. With Heijunka, a leveling pattern is defined according to markets’ demand, which is scheduled every leveling period. In addition, in order to be decoupled from fluctuating market demands, the quantities need to be leveled. This is called leveled mixed model production. The production is mixed up to a foreseeable sequence. At the same time the customers’ demand is leveled which leads to an output of different product types and a leveled volume.

3.3 Bosch Production System

In 2002, Bosch brought the Bosch Production System into being, based on the Toyota Production System. Bosch followed other big companies like Porsche, Ford, Daimler, Audi and Festo(Robert Bosch GmbH, 2007, p. 2). Porsche was one of the first German companies introducing the Porsche Production System in 1992, as stated before.

Bosch introduced the Bosch Business System (BBS), which contains the Bosch Production System (BPS), the Bosch Product Engineering System (BES) and the Bosch Sales and Marketing System (BSS). This is a different approach compared to the TPS. Taiichi Ohno writes in his book: “The starting concept of the Toyota Production System was … a thorough elimination of waste”(Ohno, Toyota Production System: Beyon Large-Scale Production, 1988). Consequently, the basis for this system is the avoidance of waste in the production and also in other company areas, such as administration. Toyota has no other systems besides the TPS.

Regarding the production system of Bosch, Bosch has a similar house of orientation to Toyota (cf. House of Toyota, Figure 3 Figure 3: House of Toyota (in accordance to: Liker, 2004, p. 40)). The goals, which are visualized in the roof of the house, such as cost, quality and delivery, are equal.

Following, Bosch developed companywide principles of BPS. Principles display the general guideline and the general direction in order to achieve the three mentioned goals in the best way. These principles are visualized in the house of orientation of Bosch. Lean tools, which are called elements at Bosch, are considered as enablers. These elements need to be implemented in order to reach the principles accordingly. Some examples of Bosch principles and of Bosch elements are show in the following table. One element often can be applied to more than one principle.

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Table4: BPS principles and elements (in accordance to: Robert Bosch GmbH, 2005, p. 2)

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