> Just IN tiime, is such a SIMple principlee, but the purSUIT of the ELIMination of waste...
Tab closed, thanks for the transcript.
That's what manufacturers had done ever since Ford tried to scale up his initial (very Toyota-esque) operation, and scaled it incorrectly but managed to inspire hordes of other manufacturers to repeat his mistakes.
The novelty of Toyota et al. was not that they asked the what if question, but that they answered it unconventionally: they worked on making the supply chains more reliable instead of adding buffers.
That's what makes this next move counter-intuitive to so many people: when Toyota encountered a supply chain that couldn't be made more reliable, they chose the previously-conventional response, apparently in defiance of their whole thing. Except it wasn't.
You're right in that it is simple, but in trying to show that you're making it too simple.
Just stockpiling is not really an answer as much as it's trying to just do the least amount of problem solving and thinking.
Edit: found the video: https://www.youtube.com/watch?v=b1JlYZQG3lI&t=804s
At 13 min. 24 seconds:
> Just in time is such a simple principle, but the pursuit of the elimination of waste is now the central mission of any major manufacturer.
> However, most did it wrong. Manufacturers globally saw the headline “elimination of inventory leads to massive efficiency gains” and jumped on that without actually determining what made it work for Toyota.
> They ignored that Japan's small physical size made for short domestic supply chains, less vulnerable to things going wrong.
> They ignored the company's production leveling: finding the average daily demand and producing that regardless of short-term changes and demands.
> They ignored the fact that eliminating excess inventory is different from eliminating all inventory.
> They ignored the principle of growing strong teams of cross-functional workers predicated on respecting people.
> They ignored the culture of stopping and fixing problems to get things right the first time.
> They ignored huge swaths of the Toyota Way and created a system that’s less effective and less resilient but can impress shareholders through short-term savings.
> How Toyota has effectively implemented this system fills books but many are just reading the covers.
> Even Toyota though is not perfect.
> In 2011 japan was rocked by a 9.0 magnitude earthquake the fourth strongest ever recorded anywhere. Not only did this cause immense destruction to life and property but it also led Toyota to recognize a flaw in its own system.
> As japan recovered some supply chains were quick to as well. For example, securing plastic resin for door panel production is not difficult: there are plenty of manufacturers globally creating easily substitutable alternatives.
> That’s not the case with, say, semiconductors: the hugely expensive facilities that create these chips require years to construct and after the 2011 earthquake it took many months to mend them back to operating status.
> This surfaced a truth that had never been fully considered: not all supply chains are made equal. Plastic resin can handle supply chain disruption, semiconductors cannot. Therefore Toyota made changes: all along, their mission was not to eliminate inventory full stop; it was to eliminate excess inventory.
> Supply chain disruption is inevitable. It's inevitable in the same way that Titanic's flawed design would eventually encounter an iceberg, or the structural economic vulnerabilities of 2008 would eventually collide with a market panic. Therefore semiconductor inventory is not excess because inevitably, due to the inevitability of disruption, excess semiconductor inventory will eventually become necessary.
> Recognizing this, Toyota in recent years has started to build up a stockpile of two to six months worth of chips and that's why the company is the only major vehicle manufacturer that is unfazed by the semiconductor shortage.
> Toyota followed its own principles. It did not stray from them, and it did not reinvent them. It’s no surprise that Toyota excels at implementing its own system, but it is a surprise that the entire manufacturing world has so wholeheartedly embraced flawed implementation of the system.