Lean is used extensively by the automotive supplier industry and Lean thinking enables automotive manufacturers to survive in their cutthroat business environment. Automotive suppliers must continuously improve their performance to retain the business of automakers. However, seldom do Woodworking Manufacturers force their suppliers to be competitive beyond price.
Automotive manufacturers are typically much larger than the suppliers. Consider Ford, GM, Toyota, and VW against Cummins, Continental, and Delphi. The former group of companies is significantly bigger than the latter. In woodworking, most distributors and mills are typically an order of magnitude bigger than most Woodworking Manufacturers who are usually small to medium sized family businesses (sub $100 million). So, it’s possible that woodworking manufacturers have less bargaining power, however, considering the cutthroat competition among distributors that is not the case.
As it turns out the issue is a lack of understanding and inexperience with the JIT (Just in Time) tools automotive manufacturers use to achieve this level of performance. Woodworking manufacturers are facing stiffer competition than ever, putting a serious strain on their profitability. The application of JIT tools used by automotive suppliers in woodworking companies will help improve the overall profitability of the industry and increase industry attractiveness.
JIT is said to be a model system of the manufacturing industry that was formulated by Mr. Taiichi Ohno as the Toyota Production System. Behind the creation of JIT was the issue of whether the Japanese auto industry could survive after the war. Facing the presence of the U.S. auto industry that produced twice as much as the Japanese auto industry did, the Japanese government actually discussed whether or not auto manufacturers were really needed in Japan.
Mr. Ohno pursued a theme that seemed impossible, at that time, if judged by common sense. He tried to use a high-mix low-volume production system to counter the overwhelmingly strong mass production system of the U.S. He didn’t try to challenge the U.S. by management strategies and production activities involving the entire company including the head office, but instead he just focused on the factory system. His basic concept was that production management, which is an indirect business process, is regarded as a “guest” of the factory and it is the workers at the factory themselves who directly make the decisions. The management function is excluded from this operation system. Mr. Ohno said that it was the structure of the U.S. supermarkets that gave him the idea of incorporating this “automatic nervous system function” into production activities. Specifically, the idea he referred to was that customers purchased products when they needed them and for the amount that they needed. In response, the supermarkets would replenish these products only for that amount in small batches.
If the replenishment cycle time is shortened, the number of products to replenish will be reduced and there will be fewer inventories held for a long time. Also, the time that raw materials and work-in-process items are held in the factory, i.e. the lead time, will shorten. This JIT operation is designed as the automatic nervous system that reacts to information called “Kanban” issued from previous processes to later processes every minute. As the reactions of the automatic nervous system are transmitted to the muscles and the muscles create movements, without giving information to the brain, suspension and resumption of operations are done by mutual dependence through the sharing of information among the various members. As this production system evolves, the system then shifts from “one-by-one production” to “flow production”. Furthermore, as the capacity of the operations increases for each process then synchronization among operations takes place during the process from prototype production to mass production.”
In short, JIT in the Toyota Production System gave the Japanese auto industry an edge in the market and made it the giant that it is today. JIT has since been adopted by many companies in the manufacturing industry, except for woodworking.
How exactly can JIT be implemented by woodworking manufacturers and continuously improved?
- Increase your knowledge of JIT –
- Read books and articles on the topic.
- Talk to JIT experts/consultants.
- Speak with others who may currently or have in the past implemented JIT in their shops.
- Pick the right partner – JIT must not be an afterthought or a “me too” for the supplier but a source of competitive advantage.
- Research their website – Does is talk about JIT? Current Case Studies/White Papers?
- Talk to their salespeople – Are they familiar with the concepts of JIT?
- Technical capability – Will JIT efforts be supported by a solid technology platform?
- Breadth of product roster – Can they support JIT for a broad range of products or are they limited in their scope?
- Depth of product/industry knowledge – Is the supplier seen as an expert on the topic?
- Streamline the way you source – Often
- Optimal Warehouse stocking
- No shipping fees
- We listen and learn about your business
- Competitive Edge
What are the challenges these companies face with their Lean programs and how are they responding?
