The most readily-visible consequence of this was better service from the company’s suppliers. If we were working together on agreed plans and the supplier could arrange activities based around a long-term relationships then we might avoid a major problem that plagued us in the West – that just as we played off suppliers against each other, they played off their customers. They never knew what demand they may get so they sought more orders than they could, in reality, fulfil. They then reacted to screams and shortages and tried not to fall out too often with each customer. All of this meant all customers holding safety stock to cope with the repeated failures.
Partnership approach brought other benefits – if we worked as true partners then we would not need to spend so much effort in continuously expediting. We could leave behind this ludicrous situation where we had to keep asking «is that order going to be on time?». We could also expect our suppliers to warn us of problems in advance. If their key piece of plant broke down and they told us now of the impact this might have in a week or two, then we could set our own plans to work around the problem.
4. The Elimination of Variety
Variety was recognised for its cost in that it complicated the manufacturing process. A sunroof on every Toyota Corolla was not only a marketing trick but a practical manufacturing improvement as having to make two different types of roof and two different types of headlining introduced potential problems.
5. Shortened Cycle Times
One point which we all understood was that our overall cycle times for our product dictated the level of work-in-progress (WIP). If we have an average lead time of four weeks for the components going through our welding department, then we will have an average WIP level of four weeks’ worth of production.
The Japanese had addressed this in a number of ways, primarily in a fundamental redesign of factory layout and process flow. We learned that rather than have one area of the plant for presses, another full of lathes, another drills, and so on, they had switched to «focussed factories» where each area of the plant made a particular type of component. The unit making drive shafts had saws, followed by milling, turning, drilling and so on. These focussed units then brought the opportunity for multi-skilling and teamwork which helped to provide for productivity improvements – as well as significantly reducing the movement of materials through the factory.
6. «Pull»
The
Culture
Few of the Japanese ideas for change in manufacturing were totally new. Frederick Taylor and Henry Ford had promoted many of them at the start of the 20th century. Where the Japanese did have much to teach us was in the total commitment of everybody to these new ways of working. We began to hear of stock levels being reduced to the point that every slightest problem immediately caused a major hold up, and this was actually treated as a reason for celebration. «A problem is a pearl, «we heard, meaning that finding a problem in a process was a good thing. Why? Because the problem was there and we didn’t know about it, but now we do, so we can fix it.
The Move to Lean from JIT
As we understood more of JIT we learned that stock levels and lead times were not the only targets of the Toyota Production System and its followers in Japanese industry. We began to realise that our aim must be to eliminate waste in all its forms. «What is waste?» we asked ourselves, and turned to people like Mr Ohno and Mr Shingo and were told that «waste is anything which does not add value.»