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Beyond the Giants (8)

Updated: Oct 12, 2022

Conditions for survival in the manufacturing industry in VUCA era


Satoru Murakami

CEO Goal-System consultants Inc.,


Three manufacturing giants,Henry Ford, Taiichi Ohno, and Eliyahu Goldratt.-4

Taiichi Ohno's Challenge (Toyota Production System Beyond Ford Production System)


Last time, I introduced Henry Ford, who created a synchronous production system with an emphasis on the flow of production, so this time I would like to introduce Mr. Taiichi Ohno, who built the Toyota Production System.


Unlike the United States, where motorization has become widespread since the 1920s, the spread of Japanese passenger cars had to wait for the high-growth period of the 1970s. Therefore, from the beginning, Toyota has built a small-scale, high-mix production manufacturing system. In the post-war reconstruction period, there were also large financial constraints, so the challenge faced by Ohno and other members who built the Toyota Production System was how to achieve high-mix low-volume production with high productivity.


In such an environment, Kiichiro Toyoda, the founder of Toyota Motor Corporation, advocated the idea (philosophy) of "Just in Time". And Taiichi Ohno and others systematize this idea into a "manufacturing mechanism". In the process, they found out the universality of the Ford system as a synchronous production method and concentrated on improving the flow (shortening the lead time).


However, unlike Ford, which has a single model, it was not possible to set up a dedicated in-process space because multiple models had to be produced on one production line. Therefore, Ohno invented Toyota's original system. It is an analogy of the supermarket inventory replenishment mechanism that replenishes products only when they are sold, and has devised a rule that instructs "when should not be made" by a mechanism that does not make it when there is no Kanban.


In other words, I thoroughly thought about how to transfer the spirit of Ford to own company, and showed concrete method of "applying" the "essence" of synchronous production to different specific environments. At the same time, regarding the point of "abolition of local efficiency", Ohno succeeded in expanding Ford's concept by changing the mechanism to prevent over-creation from "place (space)" to "Kanban". It is extremely suggestive as a concrete example of how to "fundamental concept" translate and bring about "innovation" when applied to a specific environment.


In this way, Mr. Ohno and his colleagues embodied the just-in-time philosophy taught by Mr. Kiichiro Toyoda, and built up a "system to produce only what can be sold in a short delivery time without waste" as the "Toyota Production System."

Toyota Production System was a great success, and the Japanese automobile industry will fly to the world. In the 1980s, large quantities of high-quality automobiles began to be exported from Japan to the United States.


To learn the secret, Dr. James Womack of MIT (Massachusetts Institute of Technology) and others continued their research. Then, they named it "Lean Manufacturing" that Toyota's manufacturing a slim production method that eliminates the "waste" of the manufacturing process. He published his book, "Lean Manufacturing Changes the World's Automotive Industry" (1990), and introduced TPS to the United States.


Dr. Womack, who was studying industrial policy at MIT in the 1980s, is studying Toyota's operations, and what really determines the competitiveness of a company is the operation of how to organize and operate manufacturing. It is said that he intuitively felt that it was management (management technology). After that, he became responsible for the benchmarking project of the global automobile industry centered on MIT, and the above-mentioned book was a summary of the research results.


In this book, detailed quantitative data proved that Japanese automobile manufacturers are superior to Western automobile manufacturers in all aspects such as quality, productivity, and lead time. And it was calmly analyzed that the overwhelming difference in productivity was not the cultural climate of Japan, but the "lean manufacturing method".


If the lean manufacturing method is introduced successfully, efficient production can be achieved without waste. Therefore, from the latter half of the 1980s to the 1990s, American companies set the slogan "Learn from Japan" and worked diligently on how to introduce this lean production in-house. This is the "first TPS boom" in the United States, and from this point on, lean production will begin to spread in the United States in earnest.


However, just-in-time is not a method that can be applied to all companies, and it was not an effective method. It has been said that lean production is relatively difficult to introduce that is products with short life cycles, large seasonal fluctuations, complicated distribution routes, large price fluctuations, custom-made manufacturing styles with few repetitive tasks, and equipment that performs most of the processes in-equipment.





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