I often wonder how products are made, not just cars but all machines, and I am curious about the factories that make them. They must make them at such a rate that there is a flow of the components going in and the products coming out. Years ago when I started writing my podcasts I learned about one methodology and I thought it was time to write a basic overview to give you a flavour of what happens in a factory.
“Just in Time” manufacturing, like many concepts in the auto industry, has been around for 90 years or so. Henry Ford used an early version when he developed the first true moving production line and he didn’t want lots of money tied up in inventory – but he had to bear in mind poor delivery methods which meant that he needed more inventory in storage than his production lines needed. One option was to build the components on-site rather than buying from a supplier and getting them to the line as they were needed.
After World War 2, Toyota sent a team to look at the Ford system and they took some ideas from the production line they saw. Another input was from a document the team had read about how American supermarkets worked and the simple idea of when something is removed from the store shelf, it is replaced ready for the next customer. The engineers put the customer at the heart of their own process – the basis for the Toyota Production System (TPS), an amalgamation of ideas.
Analytical work was done in conjunction with an American, William Deming, who had relocated to Japan after the war. He was a statistician who had helped US industry make improvements for the war effort and he went over to Japan to work on rebuilding the manufacturing industry in a totally smashed country. He was invited by the Japanese Union of Scientists and Engineers to teach statistical control – managing the quality and use of components to improve productivity, efficiency and profits. This was a huge success in a country in desperate need of foreign currency, jobs and economic growth. It enabled the factories to produce product for sale the world over and made many companies very powerful.
An interesting fact is that during the 1980s, Ford recruited Deming to help them in a similar way to improve efficiencies and product quality. I see this as a full circle thanks to Ford being the originator of the moving production line in the 1920s and allowing Toyota to visit (before they became a major competitor).
The TPS is based on Muri, Mura and Muda or overburden, inconsistency and waste. The 7 possible points of waste are:
2. Motion (of the operator or machine).
3. Waiting (of the operator or machine).
5. The build process.
6. Inventory (raw materials).
7. Correction (rework or scrap).
What this has done for many manufacturing companies is to look at the most efficient way of building products with the minimum of waste. In the TPS, the production line workers have ownership of their section and they have the ability to stop the line when an error occurs but also input into the process so that errors can be eliminated. This is an extension of Just in Time called Kaizen and is a powerful social by-product of the system as well as a formal method of improvement.
In some respects Just in Time production is just common sense, however when companies try and get products out quickly they often start to cut corners and the process bogs down, or they try and build products based on political interference that causes costs to rise sharply. Read my article on Hillman and their model called the Imp! A classic example of failure due to external influences.
Just in Time helps to smooth out the processes and reduces costs. Reducing costs should help to increase profits – provided the product sells (i.e. has value to the customer). It is not only car manufacturers benefiting from these methodologies, the suppliers use them as do many other industries, in fact the device you are using now to read this was probably manufactured using a Just in Time methodology.
Like many concepts, it has had several names apart from Just in Time or the Toyota Production System: you may hear of Quick Response Manufacturing, Lean Manufacturing or even Cycle Time Manufacturing. All these common methodologies are clear in their focus – make the products quickly and efficiently with the highest quality whilst reducing waste.
Car manufacturers today have taken this a stage further – they are not only concerned about the waste produced in manufacturing the actual vehicle, they are also concerned about other waste – electricity, gas, water and even the re-use of logistic components. Today in an annual report you can read about how a factory uses solar panels or a waste water treatment plant to improve the environmental impact of the facility.
We can all learn from these processes in our working lives – we often just need recognition that there is a problem in the first place!