The triumph of lean production

Toyota's lean production

Summary:

            The article is about the difference in manufacturing cars between Toyota and the others. One of the first different is the “andan” which describe a process when the worker pull the cord. According to a worker who worked in a Toyota plant in Georgetown, Kentucky, he said that he has to pull the cord 2000 times a week compare to 2 times a week from Ford. This makes Toyota one of the most reliable and desired brand in US. The “andan” is part of Toyota “lean” production system which can help to make cars much more cheaply and higher quality. In the year of 1998, it took Toyota 50% less hour to make a car than Ford and GM. The difference was so great that GM tried to emulate Toyota in order to close the productivity gap. In 2006, it took Toyota 29 hours to make a car while GM was 33 hours which was a big improvement from 1998. One other advantage of this lean production is that it brought the company closer to what consumers need. At that time, it only took it 18 months to develop a new model, while GM took 3 years. The company always maintains a close relationship with its dealers which allowed them to receive response from its customers faster and apply them to its new products. Another big difference is the relationship with part suppliers. Part suppliers are known to provide 85% of a part that make up a car. While Toyota always has a long-term good relationship with its suppliers which locate within North America, GM had much more difficult dealing with its suppliers because of the cost. In the end, most of GM’s suppliers have to shift outside of USA for lower labor cost.

Toyota model changes

Models in 1955: 25

Average model run: 62 months

Models in 2005: 325

Average model run: 25 months

Opinion:

         I think Toyota should keep and maintain its lean production which made the company more successful than other car companies. In today competitive market, it is obvious that the company needs to stand outside of the crowd in order to be success, just only one small mistake and it has to pay a great price. Its producing system has brought them a lot of benefits and success over these years. Its “lean” production not only allows them to make car cheaper and higher quality, it also satisfies what the customers need. The reason is it always has a good relationship with its dealer. This perception give the company opportunity to accommodate and understand what the consumers need, then apply the changes on new products quicker with its manufacturer system.

Question:

1. Do you think Toyota will remain at the top over other car companies?

2. Do you think other company will succeed by emulating Toyota producing system ?

References:

The triump of lean production. 27 February 2007. BBC News. Retrieved from http://news.bbc.co.uk/2/hi/business/6346315.stm

Photos retrieved from http://news.bbc.co.uk/2/hi/business/6346315.stm