Toyota’s Supply Chain


The first-tier firms play a key role in Toyota’s Supply Chain. There are six areas in which these firms act  as the pivotal part of the system.

  1. Quality Buffer
  2. Gaining
  3. System Developer
  4. Purchaser
  5. Designer
  6. Problem Solvers

Within the Toyota supplier network there is only a small reliance on the micro firms. However, the key to Toyota’s success cannot lie within such very small firms at the 3rd and 4th tiers as they are only responsible for 3 percent of the value=adding processes, although due to their high productivity  this yields a 10 percent total productivity advantage  to the total Toyota supplier network.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Overproduction


Overproduction is regarded as the most serious waste as it discourages a smooth flow of goods or services and is likely to  inhibit  quality and productivity. Such overproduction also tends to lead to excessive lead and storage times. As a result defects may not be detected early, products may deteriorate and artificial pressures on work rate may be generated. In addition, overproduction leads to excessive work-in-progress stocks which result in the  physical dislocation of operations with consequent poorer communication. This state of affairs is often encouraged by bonus systems that encourage the push of unwanted goods. The pull or Kanban system was employed by Toyota as a way of overcoming this problem.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Japan’s Manufacturing Techniques


Nations are built not with bricks and stones but with the capacity to create and apply knowledge. The result of knowledge creation and application in manufacturing and management practices is well demonstrated by Japan. Today we are witness to many industrialized economies that are strengthening their manufacturing activities simply by adopting these techniques.

The distinguishing characteristics associated with Japanese manufacturing techniques include an emphasis on designing and redesigning processes to optimize efficiency and a strong commitment to quality.

The manufacturing techniques that Japanese companies practice provide a competitive advantage and outstanding economic performance. The key for success is an understanding of the broad context of manufacturing culture, infrastructure and environment. These sound manufacturing and business techniques created and adopted by leading Japanese manufacturers have turned out to be the secret of their market leadership in many industries.

Following are a few of these concepts, which can help in managing any business set-up in a better way:

  • Kaizen is one such technique, which in Japanese means ‘improve.’ This is commonly recognized as practices focusing on continuous improvement in manufacturing activities, business activities in general, and even life in general, depending on interpretation and usage. By improving standardized activities and processes, Kaizen helps in eliminating waste.
  • Another management Japanese technique is the 5-S. It is a technique used to establish and maintain quality environment in an organization. It has five elements: Seiri (sorting out useful and frequently used materials and tools from unwanted and rarely used things); Seiton (keeping things in the right place systematically so that searching or movement time is minimized); Seiso (keeping everything around you clean and in a neat manner); Seiketsu (standardizing the above principles in everyday life) and Shitsuke (inculcating good habits and practicing them continuously). The 5-S practice helps everyone in the organization to live a better life.
  • Kanban and ‘Just in Time’ are two other practices in inventory management practices that were pioneered by the Japanese automobile manufacturers, such as Toyota. Quality improvement, on the other hand, is the result of lower proportion of component scrap since the components spend less time in the supply chain.
  • Poka-yoke is a process improvement focused on training of workers for mastering the increasingly complicated tasks to selectively redesign the tasks so they could be more easily and reliably mastered. It involves designing a foolproof process to eliminate the chance of errors.
  • Jidoka is a practice by means of which an individual worker runs several machines simultaneously. Japan thus designs such machines that eliminate both error and the need for constant supervision.
  • Muda is another technique that reduces wasteful activity in service processes. It ensures process efficiency and effectiveness.
  • Mura curiously combines rigidity and flexibility and thus teaches service process improvement.
  • Reducing Muri means reducing physical strain. In services process improvement, Muri applies to convoluted and unnecessary routings, physical transfer, and distances paper files may have to travel for a process to complete.
  • Genchi Gembutsu means going to the actual scene (genchi) and confirming the actual scene (gembutsu). Observation of service processes at the point where it is actually delivered may unearth a host of problems such as lack of training, unnecessary steps, or a number of other areas that would benefit from small but significant process improvement ideas.

This is a glimpse of manufacturing techniques that Japan has so intellectually created and so profoundly practiced in its manufacturing systems that even with no natural resources, it has acquired the status of one of the most industrialized nations. Can we learn from Japan?

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight.