Learning From World-Class Manufacturers

Reading the copious business literature on World-Class Manufacturing, Lean Manufacturing and its derivative terms, you might be forgiven for thinking that best practice can be defined, taught and implemented as a structured project; draw a value stream map of your current state, define the proposed future state and then implement it. Unfortunately, that is not the way it works and to develop a more realistic perspective on implementing best practice, we have to acknowledge that best practice in manufacturing has evolved over the last century and continues to evolve.

As we outlined in the previous chapter, the first stage in the development of World-Class Manufacturing capabilities is to ensure that we can meet the quality requirements of our customers. Although Toyota, that doyen of World-Class Manufacturing, started developing its lean system in the 1930’s, the company was still facing quality issues in the 1950’s and it took the influence of Dr Edwards Deming and the American approach of Total Quality Control to stabilise its quality performance.

In this chapter we will describe how companies have implemented what has come to be known as ‘Lean Manufacturing’, based on study of the Toyota Production System. As we mentioned in Chapter 1, the Toyota Production System evolved during the 1950’s and 1960’s so that by the time of the Oil Crisis in the early 1970’s, Toyota was able to ride out the crisis unlike any other major Japanese manufacturer. Rather than evolving their own systems, many companies and consultants have attempted to construct road-maps to implement a TPS-like system in their own environment.

If we regard Total Quality/Six Sigma as one movement or approach taken by World-Class Manufacturers, and TPS/JIT/Lean as another, then Total Productive Maintenance (TPM) can be seen as a third approach, although there are grounds for saying that TPM is simply the TQC approach applied specifically to equipment. Although TQC has its roots in the work of Americans such as Dr Deming, and the Lean approach can be traced back to Henry Ford, TPM does appear to originate in Japan.

When a manufacturer becomes Lean, the approach does not stop within the confines of the factory; it needs to extend out beyond and encompass suppliers. Managers and employees need to consider how they can bring Lean to their suppliers. One of the approaches of Lean manufacturing is the importance of having flow, so it is vital that this is achieved beyond the factory and back up the value stream to suppliers. This chapter will examine the implications of Lean production for supply chain management and will use case studies from automotive and engineering companies to illustrate the approach.

This chapter covers the subject of delivery performance and the two elements that comprise it, namely delivery lead time and delivery reliability. The chapter starts by examining the concept of lead time and indicates the various ways in which it can be reduced. It then explores the concept of flow and looks at the need for manufacturers to achieve flow through their manufacturing facilities. The latter part of the chapter discusses delivery reliability and how it can be improved.

In today’s consumer and industrial markets, it is increasingly important for manufacturing companies to have flexible production facilities – to have a flexible factory (Szwejczewski and Cousens, 2006). Customer order patterns in both the industrial and commercial sectors have become more uncertain; the reasons behind this unpredictable demand are varied. Customers in industries as diverse as retail, computers and car manufacturing will only buy materials and components at the moment they are needed. New technologies can make old stock worthless overnight, and can also create urgent demand for what is novel. The most responsive operation will win the contract and in doing so, will set new expectations for flexibility – expectations that all competitors must subsequently aim to meet. Flexibility (alongside cost, quality and delivery) is now a strategic objective and can bring competitive advantage; companies need to be more flexible. This chapter covers the subject of flexibility and in particular the two types of flexibility: volume and mix.

In many markets, the need to innovate is becoming more important. Much has been written about the need for companies to focus on developing and launching new products; many a CEO has been heard to say metaphorically “we must innovate or die”. We see lots of product innovation around us today; it is one of the key factors behind the success of many leading companies. While the importance of product development is not in doubt, a one-dimensional focus on products can detract a company from the profit and growth potential of the other types of innovation. This is not a book about innovation per se but it is important to recognise that manufacturing has an important role to play in this area. This chapter is concerned with the issue of innovation; it examines the various ways a manufacturer can innovate and especially the importance of process innovation.

This chapter covers the concept of the value chain and explores the options open to a company if it wants to move up the value chain – getting closer to the customer.

In this book we have described how World-Class Manufacturing processes have evolved over the last century, since Henry Ford introduced his moving assembly line in 1913 and Toyota began automotive production in the 1930’s. We have also shown how each individual company’s approach has evolved, building on initial implementations and developing it further. The question is whether there is a model for managing this developmental process, or whether we must just let evolution take its course. Does an implementation always start with the same few steps or is it more complex than that?