The Japanese Lean Production Revolution - Essay Example

Critically discuss with reference to the car industry e.g (Toyota), the Japanese Lean Production revolution Japan, one of the oldest cultures in the world , was once an insular, agrarian, feudal nation. In 1854, Admiral Matthew Perry of the U.S Navy forced the rulers of Japan to open their nation for western trade and commerce. The introduction of western ideas, of products made by western countries, led to the advent of modern education and industry in Japan. The Japanese adapted very quickly to these developments. Political changes also kept pace with the rapid economic and industrial transformation . The entire nation was unified under an emperor (termed 'the meiji restoration'), and a western style of government was established. The meiji restoration transformed the Japanese empire into an industrial world power. With new found pride in their country, and their culture, the Japanese flexed their muscles overseas. After the first Sino-Japanese War (1894-95), and the Russo-Japanese War (1904-05), Japan conquered a part of China, some parts of Russia, Taiwan and Korea. These territorial conquests provided Japan with valuable raw material and cheap labor for industries back home. In turn , these occupied territories were fertile markets for Japanese products. The relentless hunger for territorial expansion found expression in Japan's annexing of Manchuria in 1931. In 1937, Japan occupied more territories in China by waging a war on that country for the second time ( Second Sino-Japanese War, 1937-45). All these aggressive expansionist plans brought Japan in direct conflict with the U.S and its allies. Japan joined the Axis powers- Germany and Italy, in 1941.The same year, Japan declared war on the U.S. The war with Japan ended after the atomic bombing of Hiroshima and Nagasaki in 1945. Between 1945 and 1952, post-war Japan was administered by the U.S government .To help Japan stand on its own feet, American financial and technical aid were provided to Japanese business and industry. As part of the technical assistance , the U.S government brought in industrial and managerial experts from the U.S, to train Japanese companies on modern management and production methods. One of the most definitive techniques that influenced Japanese manufacturing, and made Japan the powerhouse that it is today , was the 'Training Within Industry', concept. Training within industry (TWI) service, was a creation of the U.S Department of War, to meet wartime needs. During war, manpower was required by the armed forces to fight the enemy. At the same time, industry which provided key material and equipment to the defense forces, faced a shortage of hands to finish production. Therefore, to optimize the productivity of U.S workforce, a program for training supervisors and workers in industrial establishments was devised. The training was to be done by experts drawn from universities and businesses. The aim of this program was to improve productivity and quality. The basic concept of the training consisted of the following sequences: a. study and understand the process b. break up the process into its sub-components. c. Educate the supervisor and the worker on the process and its sub-components. d. Train the supervisor and the worker to work efficiently and without wastage. e. Train the worker to evaluate the end result and suggest corrective steps. f. Training the supervisor to deal with workers effectively and fairly. g. Training managements to develop newer and better training programs. The essential elements of the TWI program were similar to the principles laid down by Frederick w.Taylor (1856-1915), father of scientific management. In his book, 'The principles of scientific management (1911), Taylor proposed the following: a. replace rule of thumb work methods with methods based on scientific study of the task. b. Scientifically select , train, and develop each employee rather than passively leaving them to train themselves. c. Divide work equally between managers and workers so that managers apply scientific management principles to planning the work and the workers actually performing the tasks. F.W.Taylor is best remembered for his time and motion studies. He would break up a job into its component parts and measure each to the hundredth of a minute. The TWI program was very successful and helped the U.S government mount a winning war effort. Based on this experience , the U.S army introduced this concept to Japan. The idea was well received in that country. Many companies, including Toyota, incorporated these elements into their production activities. TWI formed the basis of the Kaizen culture that was to develop in Japan in the 1950's and 60's. Kaizen, which was an offshoot of Training Within Industry (TWI), was a homegrown product Of Toyota Motors. The word Kaizen means, to improve, to change for the better. It also means, to take it apart, and put it back in a better way. The cycle of Kaizen activity can be defined as : Standardization of operation=> Measure the standardized operation => Compare measurements against requirements => Innovate to meet requirements and increase productivity => Standardize the new improved operation => continue the cycle ad infinitum. In Toyota, it is usually a local improvement within a workstation or local area and involves a small group in improving their own work environment and productivity. While Kaizen usually delivers small improvements to Toyota, the culture of continually aligned small improvements and standardization, yield larger results in the form of compounded productivity improvement There were also influential individuals who made a tremendous impact in Japan, and contributed immensely to quality consciousness. The first was W.Edwards Deming. Dr.Deming was a mathematician and an expert in statistical quality control. After world war II, Japan was experiencing a crisis in product quality. Japanese goods were thought to be cheap, easily broken and in general , of extremely poor quality. Recognizing this Problem, the Japanese Union of Scientists and Engineers( JUSE), invited Dr.Deming to train Japanese industry in statistical quality control. In 1950, Dr.Deming taught SQC to both managers and executives. His message on quality was: 'Improving quality will reduce expenses while increasing productivity and market share'. Dr.Deming 's SQC methods were widely adopted by Japanese industry, and the results were unheard of improvements in quality and productivity. The other person who had a tremendous impact in Japan was Joseph M.Juran. Juran was an electrical engineer. He wrote his first article on quality in 1935. In 1954, the Japanese Union of Scientists and Engineers (JUSE), invited him to train Japanese managers on quality management. Juran started a course on quality management, and sensitized managers to quality issues. Juran's contribution to Japanese industry was to create an environment in which quality became the cornerstone of an organization's existence. Based on the work of Deming and Juran , the concept of Total Quality management was developed in Japan in the 1950's and 60's. The core idea of TQM is that everything is done towards, and focused on quality, and all activities should be directed to achieve this objective. So, the emphasis on quality is not dependant on one individual or group of individuals, but on the entire organization. The international organization for standardization defines TQM as : " TQM is a management approach centered on quality , based on the participation of all its members and aiming at long term success through customer satisfaction , and benefits to all members of the organization and to society." Taiichi Ohno, the Chief Engineer of Toyota motors in 1950, was looking for ways to reduce costs, and to save on down time wasted on retooling. He chanced upon a book , 'My life and work', written by Henry Ford . In that book, Henry Ford described the Just-in-Time concept practiced by the Ford Motor Company. "We have found in buying materials that is not worthwhile to buy for other than immediate needs. We buy only enough to fit into the plan for production, taking into consideration the state of transportation at the time. If transportation were perfect, and an even flow of materials could be assured, it would not be necessary to carry any stock whatsoever. The carloads of raw materials would arrive on schedule and in the planned order and decrease the money tied up in materials. With bad transportation , one has to carry larger stocks. The JIT concept was applied first on inventories at Toyota Motors ,with encouraging results. Later, Chief Engineer Ohno applied the concept to retooling. Earlier, down time due to retooling used to take days . By standardizing design , body parts and body sizes, need for retooling was minimized. Where retooling was unavoidable, by redesigning the tools, by training and by standardizing procedure , down time was reduced to a few minutes. Also, refinements were achieved in parts storage. After JIT, it was possible to store as little as one part in each assembly station. When a part was taken for use, it was a signal to produce a new one or order a replacement. The governing philosophy of JIT is that keeping excessive inventory is a waste. Therefore, JIT is all about having , "The right material, at the right time, at the right place, and in the exact amount." The JIT philosophy was applied by Toyota to its suppliers and vendors.There were tremendous savings in inventory costs, down time costs and warehousing costs for the vendors. A Review of Just in Time as a Management Technique: " In the 1980's , Just in time, a new Japanese management system that advocated ordering parts or inventory as they are needed, created a stir worldwide, because it did away with conventional ideas about overhead. One of the most prominent companies to adopt the JIT method of ordering inventory was Toyota. For example, Toyota does not have endless numbers of cars assembled and sitting waiting for someone to purchase. Instead, Toyota can fabricate most cars upon placement of the order in approximately four hours. They do not have one plant with all the parts and components of the car, but rather outside plants that deliver the parts and components immediately upon notification .In some cases , parts and components can be delivered in one hour ,and a car assembled in the following three hours. This is not the process for a custom or a special car, but rather a routine procedure the company uses." A better practice: Inventory Management, by Roger Levine, D.D.S, M.B.A, J.Am Dent.Assoc, vol 135, No 6, 786-787, www.jada.ada.org. " JIT is part of a production system whereby a firm vastly reduces inventory from its production processes so that utilization of production inputs and delivery of finished products are accomplished without incurring significant holding costs. one can imagine how Toyota, a pioneer of JIT systems, might save on storage costs ..and these storage costs savings apply not only to (these) finished goods, but also to parts that Toyota might use as inputs in production. JIT also cuts delivery costs as finished products are shipped to where they are in demand. .this approach also facilitates decreases (in) holding costs by not overstocking certain locations with a product..it might be possible for suppliers , merely by the nature of their customers' JIT systems, to greatly expand their ability to fill large orders without having to increase production capacity" The risks of being just in time, Nick Koletic, Economics Specialist, UCLA, Inventory Management Review, Oct 17, 2005., www.inventorymanagementreview.com " Toyota Motor Corporation are known as the 'master and pioneer' of JIT and are currently entering the market to provide customized vehicles to customers with a minimal wait. Toyota has spent the last six years revamping its ordering, manufacturing and distribution to make it easier for dealers and customers to make changes right before the production. (Fahey,2004). Their goal is to reduce the average time between dealer's order and deliveryfrom 70 days to 14.(Fahey,2004). This goal accomplishment would not only make customers happier, but also cut dealers inventory costs , and the need for Toyota to spend on rebates for slow-selling vehicles(Fahey,2004)..the integration of the value chain , creates visibility for all members of Toyota's supply chain. Toyota has also adjusted their distribution process to effectively provide customized vehicles in a just in time process. This process adjustment has provided Toyota with a cost saving as a result. JIT Inventory Management strategy & lean Manufacturing, David Broyles, Jennifer beims, James franko and Michelle bergman, Kansas state university, April 2005. Reproduced by www.academicmind.com. Conclusion Through a combination of world class best practices like the Training Within Industry concept, Statistical Quality Control, Quality Management and indigenously developed concepts like Just in Time , Total Quality Management and Kaizen, Japan has achieved the enviable position of being declared No.1 in quality. Toyota Motor Corporation has contributed hugely to this positive image of Japan. Toyota is one name in the list of Japanese greats, who has consistently maintained high standards of quality, has retained the hunger to constantly innovate, and still retains the humility to learn from others. No wonder that Toyota Motor Corporation statistics are impressive: a. Most profitable automaker in the world- U.S $ 11 billion profits for 2006. b. Highest quality ratings given to Toyota products. c. Second largest carmaker after General Motors. d. No.1 automaker in net worth, revenues, and profits. e. Only manufacturer to appear in the top 10 brandz ranking. References This article draws on information sourced from www.wikipedia.org . References for the purpose of this article were taken from the following pages of wikipedia: Japan Toyota motor corporation Frederick w.taylor W.EdwardsDeming Joseph M.Juran 5S Quality circles Just In Time Total Quality Management Kaizen Training Within Industry Henri Fayol Other references carry acknowledgement as to their source , wherever such references appear in this article. Read More