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Toyota is seen as the worldwide leader in lean manufacturing, of just-in-time supply chains that deliver parts to manufacturing facilities exactly when they’re needed. In fact, its lean manufacturing systems have been analyzed and copied by a wide range of manufacturers including some of Toyota’s competitors.
Such lean manufacturing systems rely heavily on information systems which predict demand based on incoming signals from sales channels, and coordinate parts manufacture and delivery from a wide range of partners. The ultimate goal is to create very little slack in the supply chain and eliminate excess inventory.
It was interesting, therefore to read an article in the Wall Street Journal this week, which put forward the theory that Toyota’s vaunted lean manufacturing system could be partly to blame for the mess it currently finds itself in as a result of a problem with faulty accelerator pedals.
The article states: “Toyota’s recent problems highlight how certain elements of this (lean manufacturing) approach – eliminating overlap by using common parts and designs across multiple product lines, and reducing the number of suppliers to procure parts in greater scale – can backfire when quality control issues arise.”
The argument goes on to say that because Toyota standardized the manufacturing of the gas pedals largely with one manufacturer, and because that part was used in multiple vehicles, it compounded the problem.
Well, that’s one way of looking at it. But here’s another. Toyota’s just-in-time supply chain means that it does not have a huge inventory of gas pedals which will now need to be written off. It also meant that it was able to halt production of the faulty mechanisms. In a relatively short timeframe, it came up with a redesign and that redesign is now being implemented at the part manufacturer. Soon the newly designed parts will begin arriving at plants to be installed on new vehicles and at Toyota dealerships to be implemented on recalled vehicles.
Rather than a liability, I see this as a significant advantage of lean manufacturing.
To be sure, Toyota is in a mess over this recall issue. It remains to be seen how much damage will be caused to its reputation and market share. But one thing is also certain, if any organization can learn from this disaster, it’s Toyota.
The car manufacturer has turned the process of learning from mistakes and eliminating waste, a practice it refers to as “kaizen”, into an art form.
In time I suspect Toyota will not only repair the damage from this recall incident, but it will likely set an example for the rest of the industry on how to change its systems to more quickly and more efficiently respond to a major faulty part crisis.
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