Toyota, the father of lean manufacturing is facing some serious quality issues recently. In the latest of these, they are recalling around 270,000 vehicles globally. This is another setback for the giant vehicle manufacturer. Recall is due to faulty engine valves according to media and has affected the luxury Toyota brands Lexus and Crown.
From a lean manufacturing point of view, these quality problems are very serious concerns. Lean methodology is about driving out waste and offer the customer want they want at a lower price wit highest quality.
When it comes to Toyota, they have huge number of outsourced manufacturers and vendors from whom Toyota get their parts and assemble. Even a failure of a single vendor and failure of Toyota to find the problem before the stuff hit the market, can really drive you to results like these.
In lean mindset quality inspection can be considered as a non value added activity. But with the problems Toyota facing today, it will be a very valuable to go for an intense quality inspection together with the high end quality assurance methods Toyota being following.
There are many media reports on Toyota’s temporary closure of their manufacturing facilities in Japan. Toyota December Sales has reduced by 36.7%. Reducing demand is causing the manufacturing giant to close down some of its manufacturing facilities across Japan for 11 Days. And Toyota is predicting an operational loss for the first time in the financial year ending from March 2009. This goes to show even the best lean manufacturers might suffer the effects of global recession.
From a lean manufacturing point of view what the closure means? Is it violating the key lean concept of respect for people? No of course not. They are temporally closing their plants so jobs will not get affected (according to my knowledge). For me, Toyota is simply sticking with lean concepts.
One of the most important concepts of lean is the pull manufacturing. Supply is pulled by the demand, not the other way around. So if there is less demand they have to produce less. It is as simple as that. But how do they produce less. They can work full time and manufacture the vehicles needed slowly, in other words with higher TAKT time. But how slow one can get? One can not produce one vehicle a day for an example. So they have to workout a method to even out their load so that they can get the optimal result out of it. Looking at the bigger picture and balancing of resources (heijunka) are among important lean concepts.
Although I am unaware of the actual figures, I am sure this temporary closure for 11 days is well within the lean concepts. I am happy to see an organization sticking to their basics even in tough times. What are your thoughts on this?
Lean manufacturing is mastered at Toyota. But roots of Toyota can be found in Henry Ford’s system of line assembly. In the Ford system they manufactured automobiles in large quantities of standard designs. It made the system highly efficient, delivering a product with low cost.
Corner stone of the Ford system is the standardized product. This lead to the standard processes. Workers can be trained easily. Anyone can become a worker in the Ford plant within no time. They had to perform only a small part of the full job like tightening a screw or oiling a part. Moving assembly line made it possible to manufacture in the phase Ford wants not the other way around. In other words workers had to adapt to the speed of the conveyer. This will remove the personal element from the production line. The full system was in a harmonization with the rhythm of the assembly line.
The same aspects bought Ford the efficiencies, created its downfall. People wanted vehicles to meet their requirements, not the other way around. So the main assumption of the system, standard product was not in demand anymore. Hence the systems had to change, but Ford refused to change.
On the other hand Toyota executives who studied the Ford system managed to identify the problems that system had. With the unique requirements of Japanese market they had to look for the ways to deliver variety of products within short time periods. This lead to the unique Toyota Production System (TPS).
Instead of the manufacturing and then looking for the market, Toyota designed a system to look at the market demand and deliver what they want when they want. This was known as the Just In Time or JIT manufacturing system. Toyota created a unique pull manufacturing system instead of the Ford push manufacturing system which then became the backbone of lean manufacturing.
My last weeks post on lean manufacturing and TPS caught attention of many. In a comment to that post I found something interesting. This is from a reader with the blog name MM. In his comment I found something very important on lean manufacturing and the management, even in Toyota.
In his comment mm says “……you probably be surprised at the number of areas within Toyota not practicing TPS. This is due to the influx of Senior Managers hired directly from other Manufacturers into Toyota without fully understanding TPS. The more effective Managers come up through the ranks. Just my opinion” With his self introduction I think this statement makes much more sense. Our reader introduces himself “Having worked as one of Toyota‘s internal TPS consultants for 18 years, I can tell you what you’re looking at” So I think he has a great knowledge about Toyota.
Management plays an important role in applying lean concepts in to practice. Even the most matured lean system like TPS seems to be having problem with making it truly lean. This is where lean management comes to play.
First of all don’t confuse lean management to the project management. Simply lean management is where basic principles and concepts of lean are applied in managing the organization. For an example instead of increasing end line quality check, a lean manager will look at the source to the problem and will fix it to improve on quality. They will always question the way things are done even when they seems to be working fine.
Lean is a culture. Management is a critical part of this culture. Everything will evolve around management. Managers who identify and live this lean culture can bring result to the organization. Generally identifying and training these managers takes time. Hence this is a continuous process. Managers who do not follow lean can create the total system to break. As per the comment by our reader, this seems to be a problem even in Toyota. Hiring people from outside can be a good strategy to bring different point of views and different sets of skills. But it can add true value to the system if they can understand and live the lean culture.
In short although seems simple, cultivating a true lean culture is very difficult. It involves training, careful recruitment, passion and much more. Lean management will play the central role in this lean culture.
Lean manufacturing is about continuous improvement. Lean believes even the most lean manufacturer can have 30% of waste in their system. So the famous Toyota Production System or the TPS can also have plenty of room for improvement.
I was watching a video on Toyota’s workflow yesterday (You can watch it by clicking here). It was very interesting to see actually how Toyota is practicing lean. They have a good combination of automation with manual intervention in manufacturing. But they have little too much of inspection for my liking. Some of the main processes are followed by part by part inspection processes.
Higher inspection means they are not comfortable with the quality of work. Root cause for higher inspection might be the limitations with technology available or simply the cost effectiveness. If not this is a waste which adds no value to the end product.
This is an important lesson for any lean manufacturer. If you question the processes, you will find new wastes, hence opportunities for improvement. This is why lean is a continuous process which can not be stopped.