‘Things that are running smoothly should not be subject to any control. If you c
ID: 2749024 • Letter: #
Question
‘Things that are running smoothly should not be subject to any control. If you commit yourself to just finding and fixing problems, you'll be able to carry out effective control (within an organisation) with fewer personnel’ (Minoura, 2003).
Discuss what the above statement means and whether you agree with it. Describe how an organisation that you have experience of, or have researched, has benefitted from just-in-time (JIT) techniques and with special reference to inventory control. Also discuss whether the potential benefits—and drawbacks—of such JIT techniques are limited to large manufacturing businesses or whether they have wider applications for other organisations.
Explanation / Answer
Things that are running smoothly should not be subject to any control. If you commit yourself to just finding and fixing problems, you'll be able to carry out effective control (within an organisation) with fewer personnel’
The TPS is based on the concept of continuous improvement, which is reinforced by a corporate culture that empowers employees to improve their work environment. “Things that are running smoothly should not be subject to any control,” observes Teruyuki Minoura, a senior managing director of Toyota Motor Corp. “If you commit yourself to just finding and fixing problems, you’ll be able to carry out effective control on your lines with fewer personnel.” That presupposes an environment where people have to think, which is why Minoura says the “T” in TPS can also stand for “Thinking.”
The success Toyota and other automotive companies have achieved with lean techniques is being monitored by other industries as well. For instance, Moen, a manufacturer of plumbing products, has studied world-class lean operations with the intent of introducing lean practices and standardizing work within its manufacturing facilities. “We’re trying to find the best fit for our operation and determine how much change we can bring about within our organization, and how quickly,” says Scott Saunders, Moen’s vice president of global supply chain.
Part of that change is being accomplished by having teams determine the best manufacturing processes, document those processes, train each other on those processes, and then implement a plan where they all agree to those processes. It’s easier to run lean in a self-contained plant, Saunders admits, so it’s important to get input from operations managers as to the best way to do the work. Running lean throughout the supply chain, which is where Moen expects to enjoy the most benefits, requires evaluating every step within the manufacturing cycle.
JIT (systeme de fourniture sur commande) est generalement employe par les grands producteurs faisant l'objet de commande de routine. Cependant, les petites compagnies avec ateliers peuvent a ussi beneficier de facon significative de l'application de JIT, ou des systemes de production/livraison sur commande, par elimination de la necessite de conserver trop de produits en depot. Les petits producteurs ont souvent un taux de production assez bas, ce qui implique habituellement une division du travail a moindre echelle, un moins grand nombre d'ouvriers specialises, davantage d'equipement a usage multiple, et moins d'automatisation. Ces caracteristiques facilitent, pour eux, l'emploi de technologies de groupe et d'employes a fonctions diversifiees, deux elements essentials du JIT. Les petits producteurs ont aussi plus de souplesse et un esprit d'entreprise qui leur permet de s'adapter plus facilement que les grandes entreprises.
During the 1960s, Toyota developed the just-in-time (JIT) system in order to streamline its manufacturing operations. Soon after, JIT became popular throughout Japan. According to one estimate, the Japanese can build a car and ship it to the U.S. for $2,000 less than the cost of an American-made car. Five hundred dollars of this cost advantage is associated with the application of JIT in the Japanese firm.'
Intrigued by the success of the Japanese, U.S. firms are now using JIT. According to one expert, many American companies, including most of the Fortune 1000 industrial corporations, have JIT efforts under way.
The primary reason behind this high acceptance of JIT in the U.S. is the significant benefits it brings. As one expert put it, the U.S. manufacturer using JIT can:
reduce inventory and lead time by something like 90 percent, cut labor costs 10 to 30 percent, reduce set-up time by 75 percent, manufacturing and storage space by 50 percent and improve the quality of manufacturing by 75 to 90 percent
AT A GLANCE LEAN MANUFACTURING Lean manufacturing is a management philosophy focused on eliminating waste, reducing inventory, and increasing profitability
14 principles that companies should follow to build and manage lean supply chains:
1. Measure any improvements in subsystem performance by weighing their impact on the whole system.
2. Focus on improving the performance of the lean supply chain, but do not ignore the supply chain’s business ecosystem.
3. Focus on customer needs and process considerations when designing a product.
4. Maintain inventories in an undifferentiated (unfinished) form for as long as it is economically feasible to do so.
5. Buffer variation in demand with capacity, not inventory.
6. Use forecasts to plan and pull to execute.
7. Build strategic partnerships and alliances with members of the supply chain, with the goal of reducing the total cost of providing goods and services.
8. Design products and processes to promote strategic flexibility.
9. Develop performance measures that allow the enterprise to better align functions and move from a functional to a process orientation.
10. Reduce time lost at a bottleneck resource, which results in a loss of productivity for the entire supply chain. Time saved at a non-bottleneck resource is a mirage.
11. Make decisions that promote a growth strategy and focus on improving throughput.
12. Synchronize flow by first scheduling the bottleneck resources on the most productive products, then schedule non-bottleneck resources to support the bottleneck resources.
13. Don’t focus on balancing capacities—focus on synchronizing the flow.
14. Reduce variation in the system, which will allow the supply chain to generate higher throughput with lower inventory and lower operating expense.
JIT is most appropriate for production of complex standard consumer products such as autos, televisions, motorcycles, and copiers. This does not mean, however, that the application of JIT is limited to these industries or to large companies. Small companies, as well as large ones, in a variety of industries, could adopt JIT. In fact, many Toyota suppliers that have adopted JIT are very small companies, as are many suppliers of Hewlett-Packard, GE, Ford, and Xerox.
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