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I get that at the end of the day somebody’s got to make the wheel, and the fire could be anywhere. However, the article suggests that Toyota has to shut down a
by tiahura 5y ago
I get that at the end of the day somebody’s got to make the wheel, and the fire could be anywhere.
However, the article suggests that Toyota has to shut down all operations the minute their plastic doohickey supplier goes down - ie they have 0 buffer. That doesn’t seem optimal. Given that there are dozens or hundreds of suppliers, on any given day, isn’t at least one of them having issues?
- stubish 5y agoThe theory, and the reason Toyota get studied, is that having no buffers means no waste and overall better production. The plastic doohickey supplier is producing plastic doohickeys at an optimal rate, and when supply stops everything stops. The problem is immediately apparent, and all eyes immediately available to fix the problem because all work has stopped. The alternative is a buffer. The plastic doohickey supplier needs to be able to produce plastic doohickeys at a faster rate than Toyota can consume them, to build up that buffer in the first place and to replenish it when problems occur. This extra capacity makes plastic doohickeys more expensive, both because of the excess production capacity and storage logistics. Many believe, including Toyota, that this thinking is the key to their success. It certainly requires good risk management though, identifying points of failure that will just shut down production for a short while vs. points of failure that risk destroying the company (say, a fire in a unique chip manufacturing plant that could take years to rebuild). See Toyota Production System or Lean Manufacturing.