Manufacturing management practices have undergone significant evolution during the course of 20th century. The culmination of these is the guiding principle of excellence in manufacturing. The oil crises in 1973 followed by recession affected governments, businesses and business world over. By 1974, Japan’s economy had collapsed to a state of zero growth and many companies were suffering. But at Toyota Motor Company, although profits suffered, greater earnings were sustained in 1975, 1976 and 1977 than at other companies. The widening gap between it and other companies was because the production system followed at Toyota was different from conventional production systems which were followed in other companies. This has now been popularly known as ‘Toyota Production System (TPS). The basis of Toyota Production system is the absolute elimination of waste.
The two pillars needed to support the system are:
• just –in- time
• Autonomation or automation with human touch.
Just-in-time means that, in a flow process, the right parts needed in assembly reach the assembly line at the time they are needed and only in the amount needed. A company establishing this flow throughout can approach zero inventory. From the standpoint of production management, this is an ideal state. However, with a product made of thousands of parts, like the automobile, the number of processes involved is enormous. Obviously, it is extremely difficult to apply just-in-time to the production plan of every process in an orderly way. The earlier investment in Toyota Production System (TPS) was mostly in the areas of quality. A very body of knowledge, tools, techniques and special procedures were developed to effectively address the quality-cost trade off.
The core philosophy of JIT is to provide an organizational framework to continuously reveal opportunities for elimination of non-value added activities IT systems have brought to the limelight the distinction between value-added and non-value added activities . If due to poor design of the factory layout, jobs travel a few kilometers before being converted into saleable products, customers may not be interested in paying for the excess transportation. Just –in time requires a great deal of organizational discipline J IT requires not only changes in the way a company handles its inventory but also changes in its culture. JIT is a manufacturing system whose goal is to optimize processes and procedures by continuously pursuing waste reduction. The following seven types of waste identified by Shigeo Shingo are as follows:
• Waste of overproduction
• Waste of waiting
• Waste of transportation
• Waste of processing itself
• Waste of stocks
• Waste of motion
• Waste of making defective products
These seven wastes are targets for reduction through continuous improvement in the production system.
