Toyota's JIT Revolution

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JIT in Toyota

In the early 1930s, the technology used by American automobile companies was superior to that used by Japanese companies. Kiichiro therefore decided to learn new automobile production techniques from American manufacturers. He soon realized that to catch up with the Americans, he had to master basic production techniques. He then reorganized the production system in Toyota in a unique way. This reorganization eventually led to the development of JIT concept. In the early 1970s, Taiichi Ohno (Ohno)3 implemented JIT in Toyota's manufacturing plants. The JIT system was aimed at avoiding waste, reducing inventories and increasing production efficiency in order to maintain Toyota's competitive edge. Ohno also believed that customers should receive high quality products in the shortest time. Initially, JIT was used as a method for reducing inventories in Toyota's shipyards, but later it evolved into a management philosophy including a set of techniques (Refer Exhibit II for a comparison between JIT and non-JIT systems).

Kanban⁴ was an essential component of Toyota's JIT concept. The Japanese referred to Kanban as a simple parts-movement system that depended on cards and boxes/containers to take parts from one workstation to another on a production line. Ohno had developed the idea in 1956 from the super markets in the US, which had devised an effective system for replenishment of store shelves based on the quantities picked by the customers. Initially, Ohno used pieces of paper contained in rectangular vinyl envelopes to convey information (called Kanban). In a period spanning three decades, Kanban developed into a sophisticated information system that ensured production in required quantities at the right time in all manufacturing processes within the factory.

The essence of the Kanban concept was that a supplier delivered components to the production line only when required, thus eliminating storage in the production area. Suppliers delivered desired components when they received a card and an empty container, indicating that more parts were needed for production. In case of line interruption, each supplier produced only enough components to fill the container and then stopped. Since Kanban was a chain process in which orders flowed from one process to another, the production or delivery of components was 'pulled' to the production line (Refer Box).

In a pull system, the production of a certain product starts only when a demand or request is made by the buyer. The consumer of the product 'pulls' from the last link of the production chain. This last link pulls its preceding link and so on. In western companies, the push system was considered to be more cost-effective. Push systems were schedule-based projections of what demand was expected to be. Based on historical information (updated on a weekly or monthly basis), a computer program processed the information giving a detailed sub-schedule for buying materials and producing goods. This schedule pushed the production in order to comply with the expected demand. The disadvantage of the push system was that predictions did not always coincide with facts. This resulted in either excess or inadequate inventories.

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3] Toyota was the world's third largest automobile manufacturer in 2000, after General Motors and Ford.
4] A defect detection system that automatically/manually stops the production operation and/or equipment whenever an abnormal or defective condition occurs. Any necessary improvements are made by directing attention to the stopped equipment and the worker who stops the operation. The Jidoka system puts faith in the worker as a thinker and allows all workers the right to stop the line on which they are working.

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