(EN) Toyota’s and Denso’s Relentless Quest for Lot Size One

A famous step toward perfection in a lean production system is a lot size of one. However, few people realize what enormous effort and rigor Toyota applies to achieve this goal. During my visit to a Toyota plant and the APMS conference in Tokyo in 2015, I saw quite a few stunning examples of this quest. Let me show you …

Introduction

While in traditional cost accounting, smaller lot sizes usually mean higher changeover cost or effort, Toyota realized long ago that this cost is more than offset by the gained flexibility and reduction in inventory. With smaller lot sizes, you need less inventory, and hence you can react faster to changes in the production system. While the Western world often also aims for smaller lot sizes, there seems to be many cases where further lot size reduction is considered too expensive. Well, not for Toyota and Denso.

Automated Guided Carts

During my 2015 visit to a Toyota plant in Japan, I noticed something curious. I am sure you all know about automated guided vehicles (AGVs), computer-controlled vehicles for material transport. They usually have a certain size, and then you fit as much material on it as possible.

However, at Toyota I noticed a curiously small AGV. It was much smaller than a normal AGV, only the size of a large suitcase. It carried exactly one front bumper and one back bumper.

Later I learned that Toyota calls these things Automated Guided Carts (AGCs) rather than Automated Guided Vehicles (AGVs). I have also seen videos of different carts for other parts in use at other locations within the Toyota group, namely Denso.

Since I was not allowed to take pictures at Toyota, the image here is a photo-shopped version of another shop floor, to give you a feeling for the size of the AGC.

Dantotsu

The following examples are from a presentation at APMS 2015 by Katsuhiko Sugito, Director of Production Innovation Center at Denso. Denso is part of the Toyota group, and in my view has implemented the Toyota Production System even better than Toyota.

Denso aims for what they call Dantotsu. This is a mashed-together word from Danzen (断然 for firmly, absolutely, definitely, extremely) and the English word Top. Their goal is to be the absolute best; they won’t accept second place. (Please note that Dantotsu is a Denso-internal word, and not [yet] part of the Western lean vocabulary.)

One of these goals is to have true one-piece flow everywhere. Whenever parts are needed, then there is one machine that makes exactly one part whenever this part is needed. Sound simple? Then apply this to aluminum casting!

One Piece Flow Casting

Normally, casting is a batch operation. A large number of aluminum ingots are melted, a larger number of parts are cast, and then the whole batch is put into a heat treatment oven. Reducing this operation to a lot size of one and attaching it directly to the assembly line sounds crazy. Hence I was quite surprised and amazed to learn that Denso did this!

Denso radically reduced everything to lot size one. For the melting of the aluminum they could not use the industry standard bars, which typically weigh around 5 kg and are around 70 cm long. For their products they needed much smaller ingots.

It was quite an effort, but finally they found a supplier that provided them with pyramid shaped mini-ingots weighting only 100 grams and with a length of around 6 cm. The image here is for illustration only. The shown large ingot is a stock image, and the smaller a draft by me, as Mr. Sugito asked us not to publish his images.

As a result, they also needed only one much smaller machine to melt the aluminum, reducing the occupied volume (length by width by height) by over 300-fold. Surprisingly, the small machine also turned out to be more energy efficient.

They also had a much smaller die casting machine. The occupied volume of the machine  was reduced to 1/5th. The new electric die-casting machine also not only used much less energy than the previous hydraulic machine, but the quality was also significantly better.

Finally, the heat treatment furnace was also changed from a large batch-type oven to a smaller gravity fed chute (karakuri). Since the parts entered the oven still hot, the process  was faster and also used less energy. The size was also reduced more than 40 fold.

Overall the new system was significantly smaller than the old system and used half of the energy, not to mention the better quality, less inventory, higher flexibility and shorter lead time.

One-Piece Flow Forging

Similar to the casting, they reduced the size of the forging machine. They changed from a general-purpose large press to a much smaller press that produced just one part when needed.

One-Piece Flow Cutting

Yet another example was the cutting tool. They replaced a normal-sized CNC tool with a much smaller tool 1/4th the size and 1/3rd the price.

The image here is again my own illustration based on stock photos, not original Denso machinery.

There were more examples in the presentation of similar reduction in machine size to achieve one-piece flow, like lathes, surface treatment, and joining machinery. The material flow has also been overhauled, with the AGC from above being only one example.

The cost, the cost …

In all likelihood, if you present any of the above suggestions to cost accounting in your plant, the accountant will probably burst more than just a vein or two. Traditional cost accounting is highly unsuited for lean improvements. As explained in a previous post, cost accounting measures the cost very well but is ill-suited to measure the benefits. And, if the accountant can’t measure it, then he will set the benefit to zero (and probably even believe it).

However, the benefit is definitely there. Denso reports multiple benefits that exceed the cost, like flexibility, inventory reduction, reduced energy consumption, more available floor space and hence less transport distance, and many more. Most of them are hard to quantify, but Denso strongly feels that they are on the right path to become the-best-of-the-best „Dantotsu,“ and I agree.

Of course, this does not necessarily mean that you should immediately aim for one-piece flow casting. One-piece flow in casting has little benefit if the rest of your plant has a lot size of 500. As always, start with the easy low-hanging fruits. If you are a typical Western plant, you probably have quite a few easier options to improve before you go for a one-piece casting machine.

Think about it. What improvement project gives you the best bang for your buck in your current situation? Got one? Now go out, start this most beneficial and urgent improvement, and organize your industry!