The Triumph of Lean Production

Posted on April 10, 2007 by John Hunter

The triumph of lean production by Steve Schifferes

Laura pulls a cord, stopping the production line – and prompting her five fellow workers on trim line three to crowd round. They soon see why it is not screwed in properly and fix the problem. “I don’t like to let something like that go,” she says. “That’s really important for people who buy our cars.” Workers at the Toyota plant in Georgetown, Kentucky, pull the cord 2,000 times a week – and their care is what makes Toyota one of the most reliable, and most desired, brands in the US.

In contrast, workers at Ford’s brand-new truck plant in Dearborn, Michigan, pull the cord only twice a week

Just think about that Toyota’s Georgetown plant (seen by many as one of the best examples of lean manufacturing) stops the line 2,000 a week. Do you think your organizations systems are as well designed as the Georgetown plant? Does your organization stop to examine what needs to be improved with anything approaching that level (granted Georgetown is large but even so…)?

Related: Andon definition – Jidoka definition – Ford and Managing the Supplier Relationship – The Georgetown Kentucky Way – Toyota’s New Texas Plant

More than 400 trucks a day come in and out of Toyota’s Georgetown plant, with a separate logistics company organising the shipments from Toyota’s 300 suppliers – most located in neighbouring states within half a day’s drive of the plant. Toyota aims to build long-term relationships with its suppliers, many of whom it has taken a stake in, and says it now produces 80% of its parts within North America.

Good lean thinking.

GM says its supplier relationships are critical and it needs to bring them into its global manufacturing system. But it also admits that, with the company losing billions, it is squeezing the suppliers to lower their prices. “We are putting cost pressures on our suppliers, but costs are critical to our survival, and we are facing the same pressures as they are,” says Mr Cowger.

As a result, many suppliers like Delphi plan to shift much of their production out of the US, to Mexico or East Asia, where labour costs are lower. According to Stephen D’Arcy of PricewaterhouseCoopers, China will eventually become the preferred location for most suppliers – once they can meet local needs.

Where does that guess come from? Thinking Toyota’s gain in market share was a fluke and GM’s management style will win out and then all GM’s cars will be created with Chinese supplied parts? Unlikely. In one sense, I do think there will be a great increase in car parts manufactured in China. What? Those parts needed for the Chinese car market.

This entry was posted in Lean thinking, Management, Management Articles, Manufacturing, Toyota Production System (TPS). Bookmark the permalink.