Womack and Jones (1990 1-6) famously used the term “lean” on Toyota Motors Corporation referred to Toyota Production System (TPS) in the book The Machine That Changed the World. In the year 1990, the two authors toured various companies in North America, Europe and Japan advocating for companies to convert their mass production practices to lean practices, through presentation of ideas on how to do the same.
A movement of management thinkers then emerged which clearly advocates for organizations to identify and if possible completely cut the huge wastes found in mass production. Lean movement supporters opine that forecasts are always wrong, and therefore they advocate managers to work to reduce order-to-delivery time. They also say that there are no more powerful tools available to companies for eliminating waste and creating value than lean ideas, according to Marchwinski and Shook (2003 21-23).
Lean Manufacturing; Toyota Motors Corporation Case
Toyota Motors Corporation is the most notable successful company in implementation of lean thinking. As a matter of fact, the motor vehicle maker is often used a reference in studying the operations and triumphs of the Lean Thinking management concept. The company introduced the concept of lean manufacturing in its now famous production system, the TPS (Toyota Production System) in the 1980s. The introduction of the concept of lean manufacturing was a move against the grain of the day as the trend of the day by companies was mass production, as Womack and Jones (1996 82-83) mentioned in their book.
Toyota Motors Corp became very successful in the wake of implementation of this shake-up in its processes as to become the largest vehicle manufacturer in the world. One important section where lean thinking was applied by TPS is in processing method.
A batch-and-queue system was converted into to a continuous flow, which had the effect of doubling labor productivity, cut 90% through output time, reduced injuries and cut errors by fifty percent. The introducing a lean manufacturing strategy was brought about by the need to eliminate the huge waste that the company’s chief executive Ohno (1988 17-31) had observed in the production processes of the company, which he pointed out as to be in the processes of Inventory, waiting, transportation, overproduction, over-processing, motion and over-processing.
In lean thinking, the first step to understand what lean thinking is and the resources-together with the activities- that are necessary in creation of that value. Everything else becomes waste once value is identified. The job of determining what value is and what activities add value should be done at a high level, because nobody would want to consider what he or she does as waste. If any breakthroughs are to be made in lean thinking the ability to see waste should be strong. Something is waste if it does not add value directly.
A Toyota Executive, Taiichi Ohno, identified and described the following seven as the types of wastes that are found in any process: Inventory, waiting, transportation, overproduction, over-processing, motion and over-processing. Some authors have added goods and services that do not meet customer’s needs and underutilization of people.
There are five lean principles;
This principle deals with the value that an organization offers to its clients. It is the complete package of services and products that a business enterprise makes use of to serve its customers and penetrate the market from the angle of view of the clients. Only the ultimate customer can define value (Womack and Jones 1996 218). In line with accounting practices, for instance target costing approach, the price the client is willing to pay is a reflection of the value he derives from the product/service. In turn, the value translates to the service and product costs the enterprise must achieve for the clients as well as the stakeholders to be satisfied.
It reckons that the processes of an enterprise crate customer-driven performance as well as excellence. The structures of conventional departmental controls contravene lean thinking as it was it posited by Poppendieck (2002 1-2). A business enterprise must comprehend, control and manage its operations through the value steams or processes of the enterprise.
In manufacturing companies, there are three top-level value streams; the design and problem solve value stream, the value stream of the product, and the value stream that encompasses the enterprise’s controls and transactions. These value streams more often than not extend to cover entities outside the enterprise such as suppliers, partner firms and the customers. In general terms, all the actions that are required to bring a product to the customer are what are referred to as the stream values.
The ideas connected to “flow” have their origins in the Toyota Production System. The lean movement is of the stance that anything that interferes with the flow of services as well as goods out to the customer through the value stream should be designated as waste. The value stream must be studied by an enterprise in order to achieve smooth, uninterrupted flow from production materials to delivered services and products. In this way, an enterprise ruthlessly, eliminates waste from its processes.