Toyota Revolutionized the Car Industry—Who’s Next?

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There’s a reason that the federal government had to prop up ailing General Motors and Chrysler a few years back: Being a profitable automobile manufacturer is tough, particularly in a difficult economy.

For starters, the average vehicle tips the scales at over 4,000 pounds. This requires car manufacturers, at a very basic level, to design a supply chain network and logistical infrastructure that can accommodate the sheer size and weight of the equipment and machinery they’re dealing with. Which isn’t easy, considering that a company like Ford moved 2.5 million vehicles in 2013 alone.

By adopting clever manufacturing tactics and best practices, however, car manufacturers are able to significantly reduce waste and streamline efficiencies on the assembly line. Perhaps one of the most classic examples of this concept can be found in Toyota’s decision to adopt the just-in-time (JIT) approach to its manufacturing functions.

Toyota Takes Just-in-Time to the Next Level

Realizing the necessity of reducing waste as much as possible and optimizing all manufacturing processes, the Toyota Manufacturing Company took a page from Henry Ford’s playbook and adopted the JIT approach when assembling its cars in the post-World War II world.

The Japanese auto market was on the brink of collapse in the 1950s as their American counterparts flourished. Recognizing that they were on the brink of extinction, Toyota’s company brass told employees they had to improve manufacturing processes and eliminate as much waste as possible if they wanted to keep their paychecks.

taiichicabeza_thumbThen an engineer at Toyota, inspired by his trips to America, Taiichi Ohno persistently pressed his superiors to adopt the JIT approach to manufacturing. It didn’t make sense to him that the Japanese car manufacturer had to stockpile massive amounts of equipment and car parts despite the fact that those components might sit and collect dust for awhile. Under their old method, production was pushed from the materials on hand rather than pulled from the demand of what was needed to complete cars.

JIT, on the other hand, allows production to keep pace with demand. At a very basic level, here’s how it works:

  • Raw materials and components are supplied to the production line the moment they’re needed.
  • With less inventory on hand, companies have more cash and credit available to invest in other facets of the business.
  • On top of that, since they don’t have to stockpile massive amounts of equipment, they have more factory space to work with.
  • JIT requires continuous monitoring of the demand of raw materials; visual signals—called “Kanban”—are put into place along various steps of production to ensure accurate demand is always known (these signals can be as simple as putting a component on a shelf when it’s needed and taking it down when it’s not).
  • When done correctly, JIT ensures that businesses can keep up with demand as cost-effectively as possible.

Smooth JIT processes allow businesses to continuously move forward with production at an optimized level. The end result? The ability to keep pace with what customers want while drastically reducing waste—if not eliminating it altogether.

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Ohno’s Persistence Pays Off

When figuring out how to improve the production process, Ohno repeatedly asked his superiors a simple question: “Why?”

You can almost imagine these kinds of conversations: “Why do we stockpile so many raw materials that we don’t need right away?” A prideful executive might have responded that such is simply the way things have been done over the years.

Ohno’s response: “But why?” And the cycle continues.

This persistence, at its very core, requires management to come up with actual answers as to why certain processes are in place. And oftentimes, this search for explanations can reveal the source of bottlenecks or other inefficiencies, resulting in decision makers realizing what needs to be changed.

Of course, Toyota’s JIT method didn’t take off over night. Rather, it was developed over the course of a couple decades. But thanks to Ohno’s persistence, Toyota has become a classic example of the success that can result from adopting JIT philosophies—and of the importance of thinking outside the box while accepting the necessities of change.

Looking Ahead: What’s Next for the Car Industry?

It’s critical for businesses to do everything that is within their power to reduce their operating costs—particularly in today’s difficult economic climate. With this in mind, can the concept of JIT be even more refined?

6282e1e0bec74016917f52ed73689ec2It appears likely thanks to new technologies like 3D printing. To date, people have used the technology to build everything from prosthetic hands to apartment buildings. So why couldn’t automotive juggernauts use it too?

Believe it or not, some smaller car manufacturers are already integrating 3D printing into their production lines. The technology—which is still relatively new, and therefore relatively expensive (but getting cheaper)—allows engineers to design parts on a computer that can then be “printed” in whatever material the designer has in mind: rubber, steel, glass or plastic, for example. Those products can then be built into the manufacturing process just like components forged the old-fashioned way.

While the versatility the technology provides is nothing to scoff at, it’s worth noting that 3D printing is an extensively time-consuming process. But just like anything else, proper planning can help forward-thinking manufacturers absorb that limitation.

So why couldn’t 3D printing be used to revolutionize the JIT process? Rather than worrying about having to ship products and have them arrive the moment they’re needed, manufacturers could figure out a way to print them on-premises the moment they’re needed.

Only time will tell whether or not they do. But wouldn’t you bank on it?

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