Lean manufacturing – Toyota and over production

Throughout this blog I have talked about lean manufacturing and its concept and application and even success stories and failures. All the time I have taken Toyota as the example and as the benchmark. In fact being the initiators of lean, Toyota knows their system well than anyone else.

But recently I was reading a post on lean blog (http://www.leanblog.org). It compares Toyota to the GM on sales and the stock levels they maintain. The obvious conclusion is Toyota having lesser inventory since both of them have almost similar sales according to this post. But the reality is not that. Actually Toyota had more inventory than the GM. Interesting isn’t it. Does it mean that Toyota is not following their own system? At a glance it looks like.

Although back in our minds have a picture of no work in progress and inventory attached to lean manufacturing, the reality is lean never talks about minimizing inventory. It always talks about inventory as a waste and a reflector of the wastes. But if we think about it very carefully, lean always worried about the bigger picture. Although it is true to say inventory is a waste, reduction of inventory needs to be weighed. If the cost of reduction of inventory is higher than loss of opportunity or costs in production variations due to technical or other reason the balance must be found. Lean is about finding the balance between all of these. So in that sense Toyota is actually just living their culture, not violating concepts of lean.

This is a very good lesson to all of us. Lean is not about eliminating the entire inventory completely at any cost. It is about looking at the bigger picture and taking the action required to get the optimal out come. If you thought lean is about removing inventory from your system, think again.

Lean manufacturing and changing mindset

When I was talking to one of my colleagues at work, he came out with an interesting argument about lean manufacturing and its key concepts on changing the mind set of people. I thought of sharing his ideas with you.

Lean often talks about change in thinking, how to inbuilt quality to the system and how to manufacture good product with lesser cost and with higher quality. It talks about how to react fast to the changing customer demands. Interestingly Toyota system can be studied by anyone. It is even open for its competitors. With all these Toyota seems to be very confident about their system.

When it comes to markets if you are given the choice to buy a Ford or a Toyota with the same price tag and other options what would you go for? Most of the people will go for a Toyota. But why people go for a Toyota. Well there may be other reasons but one of the main reasons is their image in the automobile manufacturing field. Lean manufacturing or the Toyota production system has created a unique image among customers. People feel comfortable in buying a Toyota than any other brand since they know a product out from Toyota is coming through the error proofed, quality assured manufacturing system.

When more and more people visit Toyota and when more and more people adopt lean manufacturing techniques in their manufacturing units, Toyota indirectly gets the benefit. They become famous while all the other lean followers become followers of Toyota.

It is true to say lean is about change. Change in culture, change in thinking and acting. But Toyota is also changing the mind set of the customers. They are building an image in the minds of the customers. This is an image of trusted quality, value for money and an image of a leader. Lean is not only an operational excellence concept today. It is a powerful marketing tool for Toyota.