The main consideration for the Toyota production system is a reduction in costs by eliminating waste altogether. There are four types of waste in manufacturing production operations.
1. Source of production a day too many
2. Excessive production
3. Preparations are too many
4. Unnecessary capital investment
First, the waste in the manufacturing workplace is primarily the production of too many resources, that is labor that is too many, too many facilities and preparations are too much. If these elements are present in greater numbers than are needed, whether people, equipment, materials, or products, they will only add cost and do not add value. For example, labor is too much resulting in excessive personnel costs, facility costs too much cause excessive shrinkage, and the dosage was too much resulted in excessive interest.
In addition, production of too many resources to create secondary waste – overproduction, which is seen as a waste of the worst kind at Toyota. Excessive production occurs when a person continues to work at the time of the principal operations should be halted. Excessive production causes a third type of waste found in manufacturing plants – too much inventory.
Extra preparation will create a need for more manpower, more equipment and more floor space for transporting and storing inventory. This extra work then this will create excessive production invisible.
Given that too many resources, excessive production, and too many of the same dosage over time, demand for the four types of waste will be developed that is unnecessary capital investment.
Capital savings will determine the productivity of a manufacturing. Optimization of capital employed for the construction of the factory is the beginning of the savings that will happen next.