Lean Manufacturing and Toyota's Philosophy

Just-in-time (JIT) and lean manufacturing are vital concepts to modern manufacturing theories.  The goal of JIT is to save money in storage costs and produce and deliver products "just in time" to be sold (1).  The customer, rather than completing the sales cycle by buying the product, starts the cycle by ordering it and therefore creating the demand for manufacturing.

Toyota's lean approach to vehicle manufacturing has been adopted by almost every major car maker in the world.  The goal of the lean factories is to eliminate waste wherever possible (2).  Machines are not up and running if there is not a direct demand.  This saves money on raw materials, storage, labor, and overhead costs.  Everything that is in production has a direct demand associated.  By staying lean, Toyota has fewer inventories to worry about, and can focus on building quality vehicles.


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The lean philosophy has direct implications on their supply chains as well.  Keeping inventory levels low is central to the approach (3).  It reduces carrying costs, and by not overstocking, the company is able to get rid of cars that get outdated with minimal costs.  Embracing technology can also improve processes and reduce waste.  Technology will help monitor levels of inventory and shorten lead time by getting products to their destinations in the fastest time.  Technology can be used to better schedule and coordinate labor efforts as well.  It can diagnose and problems in lead times or low inventory levels, and help to correct the issues.

Lean philosophies can be applied to many other industries and settings, as many industries use similar processes and supply chain management systems.  One such setting is hospitals.  Hospitals have to coordinate spaces, people, and medical equipment and inventory to efficiently meet demand.  Many health systems are using lean approaches for their inventory management and improving processes.  Retailers with perishable goods benefit heavily from lean manufacturing and supply chain management also.  Grocery stores have to manage inventory of produce and meat to not overstock and sell the food before it goes bad.  Pharmacies have to sell their medications before they expire.  Lean manufacturing will help manage inventory levels to appropriately match customer demand.

Questions for further discussion:

What industries may NOT benefit much from lean approaches?
Is lean manufacturing sustainable for all car manufacturers?
How does a work or societal culture affect lean implementation?




Works consulted:
1) http://businesscasestudies.co.uk/exel/managing-the-supply-chain-for-globally-integrated-products/just-in-time-and-lean-production.html#axzz3Fm2zhgUi

2) http://scm.ncsu.edu/scm-articles/article/the-road-to-lean-manufacturing

3) http://www.beckershospitalreview.com/news-analysis/5-key-principles-for-hospitals-from-toyotas-lean-production-system.html