Managing Supply Chains

Jan 18th, 2010

Going back 20 years, the national bestseller The Machine that Changed the World: The Story of Lean Productionby Womack, Jones, and Roos devotes three chapters to supply chain coordination, dealing with customers, and managing the lean enterprise. The main ideas in these chapters have been translated into action in the Toyota supply chain setting. It […]

Jan 17th, 2010

Learning requires optimism and the spirit to take up challenges. The Toyota Way document states that: “We accept the challenges with a creative spirit and the courage to realize our own dreams without losing drive or energy. We approach our work vigorously, with optimism and a sincere belief in the value of our contribution.” It […]

Jan 16th, 2010

A classic problem studied by researchers from many fields is how firms allocate resources to the exploration of new possibilities versus the exploitation of known certainties. The returns of exploration are more long term, uncertain, and therefore risky. As March22 puts it: what is good in the long term is not always good in the […]

Jan 15th, 2010

How does continuous improvement take place in a supply chain? In our view, continuous improvement is learning and implementing the lessons learned; thus, much of what has been written about continuous improvement can be subsumed into the broader context of organizational learning. As we shall demonstrate, many of the methods used by Toyota in its […]

Jan 14th, 2010

At a very broad level, Toyota believes that continuous improvement and respect for people are at the core of its philosophy. Careful reading of the Toyota Way guidelines reveals what is meant by respect: respect for customers, respect for society, respect for suppliers and dealers, and respect for employees. The Toyota Way document puts it […]

Jan 13th, 2010

When inventories accumulate in a supply chain at different stages, they make demand less visible and the reaction to changes slower than if there were less inventory. (This topic is covered in detail in Beer Game and the Toyota Supply Chain.) Inventory might indicate a slow-moving product, defective items, problems with transportation, picking and packing […]

Jan 12th, 2010

Most firms have realized the importance of standardizing tasks; however, the degree of standardization often stops at the tasks that directly relate to producing a product or, to a lesser extent, service. For example, how to machine a part is often documented at length simply because an industrial engineer and a stopwatch can achieve the […]

Jan 11th, 2010

The virtues of stopping to fix problems are well known. In a supply chain, that method might not work the best. In the seat example above, it is not possible to stop the line to fix the problem each time a defective seat is noticed. Doing so will take too long and be too costly. […]

Jan 10th, 2010

Heijunka—the leveling of the workload—serves many purposes. First, it is a prerequisite to having continuous flow and pull production. Second, at the supply chain level, it reduces artificial demand fluctuations, or the bullwhip effect. Third, it provides visibility into systematic changes such as shift in product mix or slowing of demand, and allows the planner […]

Jan 9th, 2010

By making the flow in the supply chain at the global level even and uniform to the most practical extent, the designers of the supply chain are able to detect systematic variations quickly. This detection is based on managing random variations using well-designed systems and processes that adjust to the random variations with small and […]

Jan 6th, 2010

The ingredients of the Toyota Way are unique and effective. To sequence their description, this chapter’s layout follows Liker’s approach. Examples specific to how Toyota applies these principles to managing its supply chain are drawn from previous chapters in this book. The trade-offs that are implicit in making these decisions are also illustrated. Long-Term Philosophy […]

Jan 5th, 2010

The Toyota Way is made up of four major elements: long-term philosophy, right process, development of people, and continuous solving of root problems. Taken together, they are the secret recipe for continuous improvement, for creating value, and for developing people that will continue the mission of creating value into the future. In the paragraphs that […]