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Toyota defines Extreme Operational Excellence as less than 3.4 defects per 1,000,000 defect opportunities. This leads to less than 1 defect for at least every 10 cars, each car includes 30,000 parts.

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The following are 2 advantages out of 12 for manufacturers and 10 for all else:

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Toyota races into the future with Kata Continuous Improvement, Policy Propagation, and Realization. 11 ideas by each employee, per year, and all in a Toyota-defined direction.

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Toyota monitors its business with profound knowledge of virtually every process in its system.

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The Toyota Production System is a Holistic, Fully Integrated System that Continually Removes Defects while utilizing Multiple Feedback Loops.

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The Build Your TPS Sitemap with Bolded Hyperlinks:

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Financial Benefits

1. $280,000 net income per employee,
2. $737B Net Income, all through organic growth.
3. Market Dominance. Original car owners that have kept their cars for 15 years, 10 of 15 listed were Toyota’s,
4. Extreme Operational Excellence is one of three of Treacy and Wieresima’s Competitive Advantages.

Key Benefits of The Toyota Production System:

1. Just-in-Time (JIT) minimizes excess inventory, reduces lead times, and improves efficiency.
2. Continuous Improvement (Kaizen) propagates you into the future at a rate of 11 ideas per year per employee all in a management-controlled direction and creates a winning culture,
3. Respect for People recognizes that employees are the foundation of success. Toyota empowers its workforce and promotes collaboration and teamwork,
4. Standardization establishes consistent processes and practices by documenting and promoting best practices. Helps identify areas of deviations and potential improvements,
5. Built-in Quality incorporates defect prevention, defect removal, and error proofing thereby improving customer satisfaction and brand reputation,
6. Pull System response to customer demand, generates responsive production, reduces waste, and aligns supply chain demand,
7. Profound Knowledge of every process’s performance characteristics through the use of Value Streams. Knowing the time through the process, the time value is added, and the defect rate through every process.
8. Visual Management leads to transparency, visual tools, performance visibility, problem visualization, and real-time monitoring.
9. For Manufacturers: Build a Lean Manufacturing or Lean Production System to replace Antiquated Mass Production.

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ROI

• For example, ROI:
  • Cost Calculations,
  • Benefits Explanation,
  • Subsequent Estimated ROI Calculation.Value Stream Discussion,
• Value Stream Map and What Information is Included Discussion,
• Estimated Time to Map a Simple Process,
• Estimated Time to Map a Complex Process, and
• Subsequently, Team Personnel Responsibilities.

Manufacturing

Money is left on the if you are running anything less than 4 Sigma. It may even make sense to shoot for 4.25 or 4.5 Sigma since your Sigma capability decreases over time. A Value Stream helps to find which processes to target for improvement. A Value Stream gives you Profound Knowledge of every process in the Value Stream. As the Value Stream improves, you keep the Value Stream Map updated so you always have Profound Knowledge. Toyota’s Continuous Improvement program is so powerful that they do not expand their business unless they are sure they can continue the program. Get to Extreme Operational Excellence using the Tools of the Toyota Production System.

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Business

Businesses focus heavily on either Customer Intimacy, Innovation, or Operational Excellence. Every business should focus on Operational Excellence. That is to say, Toyota has a maniacal focus on continuously increasing its margins. Finally, their goal is to march toward perfection, shouldn’t they? Build Your Extreme Operational Excellence Business System.

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Government

Firstly Governments have a fiduciary responsibility to their citizen supporters to use money wisely. Certainly, there is a tremendous amount of saving with aggressively managing Supply Chain costs and moving some of them to Just-In-Time. Further, attain Profound Knowledge of your processes and continually improve on the road to perfection. Build Your 6+ Sigma Government System using tools of the Toyota Production System Model.

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Healthcare

Healthcare Organizations focus on delivering value to patients as they should. Toyota delivers value to its customers by continuously working on process improvement. American healthcare costs are at about 17% of the GDP whereas European healthcare costs are about 9% of the GDP. Europeans have a longer life expectancy and fewer infant deaths. They do this by focusing on the process. Certainly, it’s time that American Healthcare Organizations start focusing on process improvement by using the Tools of the Toyota Production System Leading to Extreme Operational Excellence.

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Military

The Military has a massive Supply Chain. So does Toyota. In fact, Toyota has the largest American parts content in their American-made automobiles of anyone manufacturing cars in America. They still maintain 6+ Sigma manufacturing performance. For an automobile to be 6+ Sigma, all the parts need to be better than 6+ Sigma. Build Your Toyota Production System.

Toyota’s Production System encompasses its whole business. There are too many advantages to discuss here, but the Military’s adoption of the tools of the Toyota Production System will move the Military system towards Extreme Operational Excellence. Build Your 6+ Sigma Performance Military System. Improve your Military System now and into the future.

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Hospital

Some Hospitals are going out of business and others risk going out of business in the future, with the advent of Single Payer. Single-Payer hospitals operate about 35% more efficiently than American hospitals. They focus on process improvement. They also increase velocity through their Emergency Departments, perform more surgeries per day, and do more than talk about focusing on the patient experience. Focus on the Patient and consequently satisfy Doctors and Insurance Companies. Build Your Extreme Operational Excellence Hospital System.

A Hospital is a system and that system should constantly seek perfection and attain Extreme Operational Excellence.

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Other Systems

There are many advantages accrued when you focus on process improvement. Firstly, your system is comprised of Value Streams. Each Value Stream contains all the processes needed to deliver a service or product. A Value Stream transcends departments and focuses on the value you produce. Virtually every Toyota process is in a Value Stream. Your processes are in Value Streams whether you recognize that or not.

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6+ Sigma Operational Characteristics

Sigma Level	Associated Defects Per Million Opportunities	% Throughput Without Defect	Comment
3.0	66,800	93.3%	In the 21st century, no one should be able to compete by generating this many defects.
3.5	22,700	97.7%
4.0	6,200	99.4%	If you are willing to operate at this level, you must shoot for a higher level. Machines degrade over time.
4.5	1,350	99.87%
5.0	230	99.977%	Whether this performance is acceptable or not depends on the number of parts per final product. If Toyota ran at 5 Sigma, every 7th car would have a defect instead of more than every 10th car.
5.5	30	99.997%
6.0	3.4	99.99966%	This should be the goal. It decreases the Cost of Quality and will delight your customers.

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In Conclusion – March Towards 6+ Sigma Performance Using the Tools of The Toyota Production System

Subsequently, Building your system with the tools of the Toyota Production System takes time. The road to greatness is arduous. Don’t pause, your competitors will pass you. However, using Lean Six Sigma along with the Tools of the 6 + Sigma Toyota Production System, and striving for perfection, consequently creates a Competitive Advantage. Toyota is leading and will be for a long time.

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