Lean Production
...one hand, but tremendously positive in the continual improvement philosophy of the lean production system. 3. How did the Japanese organized their supply system, and how did it differ from the U.S. and E.U. approach? Which where the consequences of both systems? The above question is best answered by structuring each of the two approaches as follows: The mass-production approach „X Engineer staffs designed most of the car parts. „X Blueprints are given to suppliers through a bid, with only the following concerns: „Ï Lowest price. „Ï Quality (maximum number of defective parts). „Ï Delivered at a given time. „X Shared parts (tires, batteries) also through bid, with following concerns and results: „Ï Price, quality and time. „Ï Existing designs just modified to meet new specs. „Ï Short term relation between supplier and car producer. Consequences of mass-production approach „X Suppliers working on blueprints have no opportunity or incentive to suggest improvements. „X Just keep head down and keep working. „X Suppliers have no information about the rest of the car: „Ï No chance whatsoever of contributing to the process improvement. „X Suppliers are organized in a vertical chain and competing against each other: „Ï No horizontal communication is possible this way. „Ï Technology and manufacturing techniques are not shared. „X Quality is based on maximum number of defective parts: „Ï Must firms meet this number. „Ï Hard to improve quality. „X Supplier¡¦s tools are inflexible (¡§stamping process¡¨). „X Large numbers of one part are produced to keep stock to avoid delays in delivery: „Ï High inventory costs. „Ï Defective parts detected until they reach assembly plant. The Lean Production Approach „X Suppliers organized in functional tiers. „X Different responsibilities are assigned to firms in each tier: „Ï First tier suppliers are responsible for working with the product development team. „Ï Integral part of new product development. „X The suppliers work with performance specifications: „Ï First prototype is developed and delivered. „Ï If performance is in accordance with specs. The order is placed. „X Engineering decisions are responsibility of the supplier. „X Suppliers are encouraged to exchange information to improve the design process. „X First tier supplier formed a second tier supplier under itself: „Ï To manufacture individual parts. „Ï Not specialist in product engineering but in process engineering and plant operation. „X Must of suppliers are semi independent. „X Encouraged to perform work for other assemblers and industries. „X Personnel are shared between supplier and manufacturer. Result Of Lean Production Approach „X Suppliers are independent and profitable. „X Suppliers are intimately involved in product development. „X Suppliers rely on manufacturer for financing: „Ï To develop new manufacturing technologies. „X Capability to implement ¡§just in time¡¨ or ¡§KANBAN¡¨ system: „Ï Parts will only be produced in each previous step to provide the demand of the next step. „X Inventories practically disappear: „Ï Every member of the production process is focused on anticipating problems before they become serious enough 4. What does ¡§just in time delivery¡¨ (JIT) mean? JIT is a process aimed at increasing value-added and eliminating waste by providing the environment to perfect and simplify the processes. Just-in-time manufacturing means producing the necessary items in necessary quantities at the necessary time. It is a philosophy of continuous improvement in which non-value-adding activities (or wastes) are iden...