Toyota Production System vs. Ford method ------------------------------------------- Henry Ford's goals: - make a car that everyone can own - to do this, cost must be relentlessly driven down - employee turnover was very high, so training had to be minimal => assembly line - machines were expensive, so must be kept busy - control over all aspects of raw materials and production allowed costs to be controlled - owned coal mines, railroads, steel mills - first Model T's cost $825 in 1908, down to $360 by 1916 ($7020 in 2008 dollars) - cost reduction depended on making exactly one model of car, almost no options. - when consumers starting wanting variety, Model T's fell out of fashion. Toyota's goals: - after WW2, materials and capital were both scarce in Japan - Toyota couldn't buy material for large batches of cars - To make small batches of cars, they had to develop methods to make them efficiently, one at a time - this lead eventually to these principles: eliminate waste: - overproduction - delay - transport - processing - inventory - wasted motions - defective parts processes: improve product design for mfg efficiency inspection: use inspection to eliminate defects transport: reduce it by plant layout improvements delay: reduce stock and inventories, equalize and synchronize inventory: order-based production, single-piece flow - extend system to part suppliers 21st Century approach: - major disasters and accidents have revealed the danger in a completely stockless supply chain, with a small list of suppliers. (Thai floods, Japan earthquake & tsunami, Austrian plant fire) - Solution is to maintain redundant suppliers in widely separated regions, drawing parts from each at similar rates. Buffer stocks have also been increased slightly.