Just-In Time or Lean Production The market is very competitive. Competition amongst businesses is not limited locally but globally as well. Companies are employing strategies to reduce costs and simultaneously increase their market share and bottom line. For example, Yahoo and Google are known to be competitors in the internet industry globally. However, these two companies formed an alliance explicitly for the Japanese market only. Likewise, Suzuki and Volkswagen entered into an agreement to advance their businesses cooperatively in the emerging markets of India and China (Yu, Subramaniam & Cannella, 2013). These examples are testament that in order for a business to thrive, it is essential that company managers are able to find ways and strategies to allocate and manage costs effectively while increasing their operating profit. Additionally, they must also be able to ascertain how to maximize any constraint resources they may have. The aim of this paper is to examine the Lean Production or Just-In-Time approach, one of the most popular approach of reducing costs employed by companies in varying industries. History of Lean Production or Just-In-Time One of the most well-known method of reducing costs is the Lean Production Approach or Just-In-Time which was popularized by Toyota Corporation. This system was set in motion by Sakichi Toyoda, Kiichiro Toyoda, Eijii Toyoda and Taiichi Ohno after World War II when the market share of Japanese auto makers was
Prior to Toyota’s Production System, the company was efficient, yet could not compete with large American competitors such as General Motors and Ford. Therefore, management realized that if the company was to be successful not only in Japan, but globally it would need to improve its manufacturing process. Consequently, the company developed Toyota’s lean manufacturing process, which is still used today. The LMP was used to eliminate waste in the entire production process to become more responsive to market demand and produce high quality products economically. In order to provide superior products, Toyota implemented many revolutionary strategies. For example, the company started, or invented, the Just-in-Time Manufacturing process. The JIT process, according to our text, is used to reduce inventory costs by scheduling supplies to arrive just in time to enter the production process or as inventory stock is depleted (Hill et al., 2015). Toyota used the just-in-time system to improve its supply chain management, which drastically decreased costs and increased the company’s production facilities output as compared to its competitors. In addition to JIT, the company introduced a concept known as Kanban that was included within the new JIT system. The Kanban system was developed by Ohno and was used to arrange for components and/or assemblies manufactured at Toyota to be delivered to the assembly floor only when needed, not before (Hill et al., 2015). Essentially the Kanban
As companies compete in a global market, several challenges are prevalent. As the business world becomes globalized, more companies and corporations frequently encounter dilemmas based on differences in world and cultural views. The dynamic of cutting overhead cost for companies is no longer limited to products. It has now evolved over time to
While lean thinking and principles have existed for a long period of time, many organizational leaders and people make lean mistakes basically because of some
The concept of Lean Manufacturing is well known and is being applied widely in industry. As industry moves forward in deploying lean concepts, it is important to recognize the potential benefit for attacking waste in above-the-shop-floor processes. While the benefits are significant in production, this typically constitutes less than 30 percent of the total cost of a product. Furthermore, the distributed, collaborative nature of manufacturing today depends extensively on efficient and cost-effective information processes among sites and throughout supply chains.
be required for future manufacturing, as Henry Ford did with his production line, the management
As one of the largest automotive manufacturers in the world Toyota has conceived and implemented many ideas and programs that have set themselves apart from the competition and positioned the operation for success. We will discuss both the origins and recent implementations of these programs such as Lean Manufacturing and the Toyota Production System, Just in Time, Kaizen and Kanban in detail to give insight into the streamlined and efficient operations that make Toyota such a great competitor in the automotive industry.
Toyota today is one of the leading lean example in today’s manufacturing market. Starting back in the 1930’s with the idea of Just-in-Time to cut down cost in waste from overstocked storage rooms to a better efficient assembly lines who produced what was needed at a certain time. The Kanban system is one of the most used methods that the Japanese found during the 1950’s during a trip to United States in a super market.
This pioneering lean manufacturing technique includes continuous process improvement, flexible production with just-in-time principle, and removing waste without removing value (Angel, 2008). So far, America has become Toyota’s largest market, where Toyota is rank as one of the top-selling brands (Toyota USA website).
Having analyzed more than 90 companies, it was possible to observe that Toyota created something that was later called "Lean Production". In the first stage two indicators were used to measure the efficiency of the company: the first refers to the total hours worked by all employees divided by the number of vehicles produced; and the second indicator was the number of defects per vehicle.
Abstract: The purpose of this paper is to give an idea about how the production of a company can be enhanced using various methodologies like Theory of constraints and Lean manufacturing. It also talks about the overlapping of Toc and Lean With agile manufacturing and the integration of Toc, Lean and Six sigma in the conclusion.
Resource Efficient Manufacturing (REM) focuses on reducing production costs like labor, material, energy costs and to maximize profits, increasing output sales. Certain tools for REM such as lean manufacturing and process optimization seems to be inadequate to meet sustainability goals. Resources which has greater financial impact on business are mainly focused by managers and given higher priority. Availability of resources is linked with other sources, the degree of scarcity of certain source is specified to both region and season.
Toyota’s lean manufacturing has enabled the company to focus on consistent design and responsive approach to production operation. The company’s workforce is self-directed and motivated by output based measures and customer oriented criteria. The concepts of just in time (JIT), Kanban and respect for employees together with expedited problem solving approach (automated error correcting) has enabled the company to pursue lean innovations. Lean manufacturing has enabled Toyota to successfully develop its production systems to include new types of designs. The principles enables Toyota to manage its value stream, identify customer value, implement a “pull” approach that ropes the flow of
The Toyota Production System (TPS) is a standard and admirable model of Lean Manufacturing, though it should be kept in mind that this structure is custom-made to the requirements of Toyota, so that it can 't be imitated to other organizations without alteration. Moreover, TPS incorporates not only common Lean-principles such as decreasing waste, encouraging flow and generating market-pull, but comprises also lean management by the use of other progressive approaches such as Total Productive Maintenance.
Lean originally comes from the thought of scarce resources. The Japanese automotive manufacturer called Toyota was the one who introduced this method with innovations such as JIT, and so forth [14; 44; 28]. Lean operations were used as a different method for capital-intensive mass manufacture in order to help firm use resources more effectively and efficiently. As a result, the firm will be able to reduce muda activity and non-value adding tasks. The procedure of lean implementation and research had been widely used by many organizations across the world. Conglomerates found out that the manufacturing process need not only improvement in performance, but also the development must be extended and
The main reason why organizations need to have a strategy to become lean is because of the changes inside their industry. This is occurring from increasing amounts of competition in the global marketplace. For many firms, this is forcing them to seek out ways to: continually innovate, meet customer demands and maximize profit margins. To achieve these objectives means: reducing costs dramatically and being the first to deliver the cutting edge products consumers want. Those firms that are able to achieve these benchmarks will maintain their lead. (Kawaumra 2011, pp. 108 109)