April 7, 2010
by Richard Kunst
Toyota’s original vision was to procure and assemble parts into a vehicle, sell it and collect the cash before supplier invoices became due.
Many manufacturers focus on implementing the tools without understanding lean’s true purpose, so let’s revisit why Toyota began to develop the now famous Toyota Production System (TSP).
The Japanese automotive manufacturer concluded it needed to change its production methodology primarily because it was broke. The vision was simple: procure parts, assemble them into a vehicle, sell the vehicle and collect the cash before supplier invoices became due. It was all about the velocity of parts through Toyota’s system and the effective use of labour to make it happen.
With this in mind, folks from Toyota visited the US to witness the effectiveness of the Ford assembly line. During the visit they went to a supermarket and marvelled at the concept of replenishing such a wide array of products. They took those basic concepts back to Japan and tweaked them to support the initial vision of collecting cash before invoices were due.
Measured against the original TPS vision, how are you doing? If we compare your accounts payable plus inventory compared to your accounts receivable and cash balance how effective is your lean program? Are the tools you’re using working to enhance cash flow?
Let’s explore some of the basic tools and how they apply to the vision of velocity.
Focus on the team member. The role of lean tools is to make team members highly productive at their workstations, keeping them clean, comfortable, and well informed with a constant, uninterrupted supply of parts and supplies.
Material conveyance. It’s the primary focus within the TPS and other tools become subservient to the support of its increasing velocity. Toyota doesn’t implement anything unless it supports the velocity of inventory through the entire value stream. Velocity is also extended into the information and communication flows since they have a direct impact on part velocity; hence the use of kanban systems. Material conveyance will automatically prioritize which lean tools to implement and to what extent. If your system focuses on the reduction of WIP inventory, it will result in a cleaner and more effective work area while increasing your agility.
Run bus routes throughout your facility. Put them on standard schedules and their frequency will reflect the inventory level you’re willing to tolerate. Increasing the frequency of bus routes will provide the incentive to increase the effectiveness of other lean tools to help achieve the perfect process.