Toyota is in trouble. Is lean the cause?

Toyota, the father of lean manufacturing is facing a critical issue. As most of you may know they are recalling large number of vehicles across the word due to a problem with their accelerator. According to the media, the faulty accelerator or the gas pedal has a tendency of sticking. Obviously this is risky. I certainly do not want to drive at full speed all the time 🙂
A wall street journal article on this regard caught my attention. This article focuses not only on Toyota’s recent issues but also issues faced by other manufacturers like Ford, Sony etc. It is true to say we have been hearing about problems of this nature in the recent past a lot. But what is the cause?
According to this WSJ article, it is the risk of using common parts across models. For an example, you may use the same sensor across few car models, unlike early days where you may have several unique sensors for each model. Using common items across models has its advantages. But according to this article in WSJ, it increases the risk. I agree to a certain extend. When you use the same sensor in ten models as opposed to just one model, if that sensor fails, it will affect all the ten models not just one model. So you will have a bigger problem. This is common sense isn’t it? But why manufacturers are taking such a risk, sometimes a risk which can cost them few Billion dollars?
Using standard parts reduces the cost of manufacturing. This is one of the main advantages of using common parts. It is easy and less costly to produce one design than manufacturing ten designs in small quantities. It is that simple. On the other hand using common parts makes it easier to design stuff. It also reduces the lead time in manufacturing the part and the overall lead time of the vehicle. It will make it easier to have spares available in the market in long term. Reduced number of parts makes it easy to rationalize the supplier base, which is one of the aims of lean manufacturing.
This seems like a problem with lean isn’t it? Yes it certainly looks like.
So the problem is with using common parts, then the solution is not having common parts. Isn’t it? Let’s think in that line for a moment.
When you have unique designs of the same product for each model this will increase the cost of manufacturing. This is simple enough to understand. Having too many models will lead to additional amount of testing. So your testing resources will be shared among many models. This will reduce the focus on one single model and will increase the risk of passing a defective product. Having too many products and suppliers will complicate the logistics handling. This will make it required to have a complex systems and large amounts of resources to handle this system.
This for me is a net increase of cost and risk. But even if the risk is higher per model it will only affect one model at a time. So the recalls will be frequent but not in large quantities. This will prevent huge media attention and hence will happen behind the scene. So my gas paddle might stick to the floor, but nobody will know.
My conclusion is using common parts reduces risks from the users point of view. User gets better product for a better price. Even if there is a problem there is a higher chance of taking it to the spotlight.

The Impact of Lean manufacturing on the consumer product manufacturers

Lean is everywhere. But frankly, I do not think it is implemented for its full potential, nor it is implemented for correct reasons. One of the industries which could have greatly benefited form lean is the consumer manufacturing industry. Lean is capable of providing great boost to the consumer product manufacturers all over the world.

But unfortunately lean manufacturing is not implemented in consumer product manufacturing environment as it should have been. In general industry is just entering the lean arena.

One whitepaper caught my attention some time back in this regard. It talks about the challenges and the advantages of implementing lean in the consumer product manufacturing environment. This white paper is offered free of charge. You can download it following this link.

Findings were very interesting. In fact, consumer product manufacturers face some significantly different set of challenges when it comes to implementing lean. For an example, risk of business disruption due to the changes lean brings in is 1.5 times greater (or 150% greater) when compared with the all the other sectors.

Similarly, when overcoming obstacles lean brings in, consumer product manufacturers have opted in to different methods than those used by the other businesses in general. For an example they have placed low importance on getting external domain expertise than the others.

This white paper provides very interesting quantified observations. Importantly all this information is packed into just 6 pages. I believe even if you are not from the consumer manufacturing industry, this information can bring you some valuable insights to lean manufacturing. You can download this for free by following this link.

Let me know what you think about the information here and on the white paper. Please leave your comment.