Lean stands firm

Posted on 21 Mar 2011 by The Manufacturer

Responding to the questions raised in ‘Should lean tremor?’ Jane Gray gives evidence in support of the durability of lean principles in the face of even the most disruptive natural disasters.

It is not unusual after a natural disaster of great magnitude for questions to be raised about the potential dangers raised by moving manufacturing supply chains onto a system of just-in-time, minimum inventory, lean operations. But are such rumblings really necessary?

The blog ‘Should lean tremor’ which was posted on the TM website earlier today went so far as to suggest that the recent earthquake and subsequent tsunami in Japan should cause even the parent organisation of lean thinking, Toyota, to consider whether its well established philosophy had made it more vulnerable to the consequences of the disaster and jeopardised its supply chain operations. If this is how we are to measure confidence in lean then I can state categorically that lean stands firm.

At a major press event held in Sweden last week by Toyota, senior management acknowledged the blow that the earthquake had meant for the company and confirmed that all Japanese plants would remain out of action until March 18. However, while concern was expressed for the operational wellbeing of local suppliers and the potential drain that the renewal of commercial activity would have on the fragile energy infrastructure in the effected region, an ever present pride in the ability that lean thinking, agility and adaptability has given the company allowed management to remain confident of the company’s ability to recoup any losses.

The event in Sweden marked the launch of a diverse range of new material handling products from Toyota which included advanced automated sytems and software accessories. Furthermore a growing part of Toyota’s material handling offerings is based on their ability to give insight into the Toyota Way and the company’s approach to production.

Speaking to TM at Toyota Material Handling Europe’s executive vice president marketing, Andrew Elliot said: “Since the recession there has been a rising interest in the Toyota Production System. TPS is important and integral to us and it is equally important that we explain ourselves to those we work with. We are proud of the TPS ethos.” At no point during the celebration of new products and offerings was any doubt cast over the company’s total dedication to this ethos which, as a factory tour swiftly proved, is a way of life for everyone involved.

Similar queries to lean logic as those raised in the afore mentioned blog were raised last year when the Icelandic volcano disputed the operations of almost every major industry in Europe, but did we see the world desert lean? No, in fact, as Anand Sharma proved in his article ‘All smoke, no fire’ in the September 2010, it was only the leanest companies and supply chains who were able to diversify supply routes and manufacturing options quickly and efficiently in order to avoid maximum damage. Those with endless capital stored up in just-in-case inventory suffered through their lack of manoeuvrability and rigid logistical structures.

As Sharma stated “supply chains have a long way to go before they can be considered ‘too lean’”. In his justification he referenced one of the company’s who have yet again suffered due to the recent Japanese disaster – Nissan. He related how: “Nissan Motor Co. had to shut down production lines in Japan. But for the first quarter, ending June 30, 2010, Nissan sold more vehicles compared to the same period in 2009 and net revenue increased 35.3%.”

The fact is the lean thinking gives company’s far more flexibility in springing back from the disasters that will inevitably happen from time to time. Lean thinking gives a greater understanding of capacity planning and how to optimise production. It ensures that organisations know how value flows in their own operations and, for more advance lean thinkers, in the operations of their partners and suppliers. With this knowledge they know how to plan and prioritise recovery and are skilled in the problem solving techniques which allow issues to be swarmed and resolved. This is a lean organisation’s bread and butter as Stephen Spear, a renowned authority on operational excellence and organisational success, would confirm.