I. Reading: Factors of Production - A Case Study: The 4Ms of Production at Toyota *Teacher’s Copy*
Basic Stability
So what is it that has given Toyota basic stability and success in production?
In the simplest sense basic stability means consistent availability in terms of
manpower, machines, materials, and methods: the 4Ms. No manufacturer
wants to get too far down the road of its production without making sure
that the 4Ms have been checked.
The reason is simple. Without basic items like machines or human
resources in place you cannot run a production line efficiently. How do you
know if you have enough stability in operations to proceed? The answer
depends upon your ability to meet a few key needs:
• Do you have enough machine uptime to produce customer demand?
• Do you have enough material on hand to meet your production needs?
• Do you have enough trained employees available to handle the job?
• Do you have work methods, such as basic work instructions, in place?
If the answer is “no” to any of these questions, stop and fix the problem
before going on. Attempting to flow product exactly to customer demand
with untrained employees, poor supervision, or little inventory in place would
be a mistake. Conversely, don’t fall into the trap of using these questions as
excuses for not moving forward. Remember, you do not need perfect
uptime in order to meet customer demand. For instance, if the line
needs eight people to run and you consistently only have six people
trained to do the job, then you have a basic stability problem.
How to Achieve Stability
To achieve basic stability, you should concentrate on four key elements
corresponding to the 4Ms.
1. Manpower
Basic stability starts with a well trained workforce. Fortunately employees
tend to know their jobs very well or we would all be in serious trouble.
Managers need to learn basic techniques about supervision in
production and how to further improve the skills and capabilities of work
teams. These three specific job training components for production
supervisors are job instruction, job methods, and job relations.
Job instruction (JI) teaches supervisors how to plan for the correct resources
they need in production, how to break down jobs for instruction, and how to
teach people safely, correctly, and conscientiously.
Job methods (JM) teach supervisors how to analyze jobs and make simple
improvements within their control. Supervisors learned to question why an
activity was done the way it was, and if it could be eliminated, combined
with something else, rearranged, or simplified.
Job relations (JR) teaches supervisors how to treat people as individuals and
solve human-related problems in production rather than to ignore them.
Taken together these three areas help supervisors create a basic routine,
discipline, and sense of fairness in work teams.
2. Machines
You do not need equipment with perfect uptime, but you must know your
customer demand, the capacity of your process, and the actual average
output. If you have theoretical capacity as well as demonstrated capacity to
meet customer demand then there is no problem. It is only when you have
no demonstrated capacity to meet demand that you have a basic machine
stability problem. For example, if customer demand is 700 units per shift
and your actual output is only 500 units despite having the capacity for
1000, then you need more availability.
3. Materials
In general the goal is to reduce waste and shorten the timeline from
when an order is received until the time it is produced. Normally this
requires a reduction of inventory. If you suffer from basic instability,
however, you might need to increase inventory in the short term in some
places. Here are two pieces of advice:
- First, not all inventories are waste. Only inventory beyond what is
needed to run the process is waste.
- Second, inventory often exists as a symptom of a problem in the process. Solving the problem earns you the right to reduce the inventory.
4. Methods
Finally, achieving basic stability requires having standard methods of
manufacturing. The key point here is the definition of a standard. The
normal definition is that a standard is a rule or way to do things. However,
people are not encouraged to question or change the rule. “We do it this
way because that is our company standard” is a phrase workers often hear.
Perhaps, the definition of a standard could be stated slightly differently: “A
standard is a rule or a basis for comparison.” Thus, a standard is a tool to
measure how we are doing something and refer to when we want to make a
change. Efficiency is about changing work methods in order to eliminate
waste and make improvements. The standards are what we use to measure
and compare our changes so that we know if the new way is better or not.
In some companies, this improvement thinking is set in the minds of all
employees. Therefore, everyone is encouraged to make changes. However
change is only implemented and maintained if it beats the old standard.
Summary
There are many other elements of basic stability. For instance, we could add
a fifth M for Metrics. However, the final point is this: New companies
struggle with establishing efficient production. Along the way, they
discovered that they need basic stability before they can improve. Much like
we need to crawl and walk before we can run, companies often find that
they need to improve their basic stability before they can expect overall
improvement.
II. Vocabulary & Definitions
1. stability
the quality or attribute of being firm and steadfast
EXAMPLE SENTENCE:
Harmony, stability and social order are important to all countries.
2. simple
having few parts; not complex or complicated or involved
EXAMPLE SENTENCE:
The simplest methods are often the best.
3. material
the tangible substance that goes into the makeup of a physical object
EXAMPLE SENTENCE:
In the simplest sense it means consistent availability in terms of manpower, machines, materials, and methods: the 4Ms.
4. method
a way of doing something, especially a systematic way; implies an orderly logical arrangement (usually in steps)
EXAMPLE SENTENCE:
Their school taught alternative business methods.
5. conversely
with the terms of the relation reversed
EXAMPLE SENTENCE:
Conversely, don’t fall into the trap of using these questions as
excuses for not moving forward.
6. perfect
being complete of its kind and without defect or blemish
EXAMPLE SENTENCE:
Remember, you do not need perfect uptime in order to meet customer demand.
7. consistently
in a systematic or consistent manner
EXAMPLE SENTENCE:
For instance, if the line needs eight people to run and you consistently only have six people trained to do the job, then you have a basic stability problem.
similar especially in position or purpose
EXAMPLE SENTENCE:
To achieve basic stability, you should concentrate on four key elements
corresponding to the 4Ms.
9. technique
a practical method or art applied to some particular task
EXAMPLE SENTENCE:
Managers need to learn basic techniques about supervision in
production and how to further improve the skills and capabilities of work
teams.
10. skill
an ability that has been acquired by training
EXAMPLE SENTENCE:
Do you have the skills to do the job?
11. capability
the quality of being able to do something physically, intellectually, or legally
EXAMPLE SENTENCE:
My supervisor has numerous capabilities in this business.
12. supervisor
one who oversees or has charge and direction of
EXAMPLE SENTENCE:
These three specific job training components for production
supervisors are job instruction, job methods, and job relations.
13. instruction
the activities of educating or teaching; activities that impart knowledge or skill
EXAMPLE SENTENCE:
His style of instruction was highly entertaining.
14. eliminate
terminate, end, or take out
EXAMPLE SENTENCE:
Supervisors learned to question why an activity was done the way it was, and if it could be eliminated, combined with something else, rearranged, or simplified.
15. combine
put or add together
EXAMPLE SENTENCE:
The company combined the systems of two famous corporations to produce its own.
16. individual
being or characteristic of a single thing or person
EXAMPLE SENTENCE:
Job relations (JR) teaches supervisors how to treat people as individuals
and solve human-related problems in production rather than to ignore them.
17. solve
find the solution to (a problem or question) or understand the meaning of
EXAMPLE SENTENCE:
The factory workers advised the management how to best solve the manufacturing problem.
18. definition
a concise explanation of the meaning of a word or phrase or symbol
EXAMPLE SENTENCE:
The key point here is the definition of a standard.
19. encourage
inspire with confidence; give hope or courage to
EXAMPLE SENTENCE:
However, people are not encouraged to question or change the rule.
20. implemented
forced or compelled or put in force
EXAMPLE SENTENCE:
The business implemented these changes after a new CEO was chosen.
III. Exercise: Match the Definitions
Use: eliminate, method, perfect, skill & stability
1. ________________: an ability that has been acquired by training
(skill)
2. ________________: a way of doing something, especially a systematic way; implies an orderly logical arrangement (usually in steps)
(method)
3. ________________: being complete of its kind and without defect or
blemish
(perfect)
4. __________________: the quality or attribute of being firm and
steadfast
(stability)
5. ________________: terminate, end, or take out
(eliminate)
IV. Exercise: Fill in the Gaps/Blanks
Use: conversely, definition, encouraged, implemented, materials, simplest, solve & techniques
1. Managers need to learn basic about supervision in production and how to
further improve the skills and capabilities of work teams.
(techniques)
2. In the simplest sense it means consistent availability in terms of manpower, machines, _____________________,
and methods: the 4Ms.
(materials)
3. ____________, don’t fall into the trap of using these questions as excuses for not moving forward.
(conversely)
4. The ________________ methods are often the best.
(simplest)
5. The key point here is the _______________ of a standard.
(definition)
6. The factory workers advised the management how to best ___________ the manufacturing problem.
(solve)
7. However, people are not ___________________ to question or change the rule.
(encouraged)
8. The business _________________ these changes after a new CEO was chosen.
(implemented)
V. Exercise: Match the Picture
Use: factors of production, machine, manpower, materials & method
__________________________________________________
(factors of production)
________________________________________
(method)
_______________________________________
(materials)
_______________________________________
(machine)
______________________________
(manpower)
VI. Listening: Factors of Production
What are the 4 Factors of Production?
http://www.youtube.com/watch?v=Q7KlMb4U0IA
(1:09)
Factors of Production Economics
http://www.youtube.com/watch?v=1cWn13Lxqjk
(1:24)
Factors of Production
http://www.youtube.com/watch?feature=endscreen&v=Srgfjt3yt1s&NR=1
(2:41)
VII. Just for Fun
Economics Factors of Production
http://www.youtube.com/watch?v=yowdLgvxxGM
(3:10)
Factors of Production Economics music video
http://www.youtube.com/watch?v=D2hATLICv0Q
(3:57)
RE: Factors of Production Economics music video
http://www.youtube.com/watch?v=VU0LPeKLG20
(0:11)