HOW AN AMERICAN GROCERY CHAIN WAS THE INSPIRATION FOR TOYOTA’S LEAN MANUFACTURING

CONTINUOUS IMPROVEMENT WITH TONY

Newsletter, Volume 13, August 15, 2024

?In my opinion two great men revolutionized manufacturing in the twentieth century; Henry Ford responsible for perfecting the modern assembly line, and Taiichi Ohno the founder of the Toyota Production System that created Just-in-Time and Lean. While this is widely known and accepted, what is less known is how Taiichi Ohno was inspired to transform Toyota in post-World War Two Japan. The story is fascinating but difficult to separate fact from legend.

The origins of Japan’s high quality and reliable cars can be traced back to Dr. W. Edwards Deming, who helped to bring about Japan’s economic revival after the devastation of World War II. Starting in 1950, Deming championed Japan’s improved product designs, improved product quality, and robust statistical methods for product testing, including statistical process controls.

The other major and legionary event of the 1950s came about by accident when Toyota engineers came to the United States to visit Ford’s River Rouge Factory production lines. While the engineers enjoyed their visit to Ford, they were more impressed by what they witnessed at the local Piggly Wigley grocery store. Piggly Wiggly is credited with inventing the modern grocery store with self-service, shopping baskets, and checkout stands. In the 1950s Piggly Wiggly maintained 4,000 SKUs (stock keeping units), which was four times higher than the SKUs its competitors carried. The Toyota visitors were most impressed with the just-in-time (JIT) inventory, which offered fresh produce, meats, and dairy products. This was unlike anything they had in Japan with its small markets and limited selections.

The cumulative effect of automobile assembly lines, Dr. Demmings, and Piggly Wiggly grocery stores forged the foundations of the Toyota Production System (TPS). Toyota revolutionized manufacturing by building to customer demand and continuously attacking waste of all types to improve quality and process times. Toyota’s continuous flow manufacturing made traditional batch manufacturing obsolete in the automotive industry. In order to compete, American manufacturers were compelled to embrace the new system called JIT, and later, Lean.

Prediction

During the COVID-19 pandemic, Lean and Just-in-Time (JIT) methodologies faced significant criticism. They were blamed for causing massive disruptions in global supply chains and critical shortages of basic commodities. It seemed logical to predict that many organizations would abandon Lean and JIT in favor of more traditional approaches that prioritize safety stocks to hedge against disruptions. While some organizations did revert to these traditional methods, they incurred heavy costs due to excess inventories.

The prediction is that Lean and JIT will continue to be dominant forces in Supply Chain Management. However, what will change are the short-sighted sourcing practices based on global labor arbitrage—buying at the lowest price regardless of the risks involved. The growing tensions between China and the US will accelerate onshoring and nearshoring, along with the use of AI to automate domestic manufacturing. This evolution will be known as Smart Manufacturing and Industry 4.0.

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Cheers, Tony

?

Anthony Tarantino, PhD

Six Sigma Master Black Belt, CPM (ISM), CPIM (APICS)

Adjunct Professor, Santa Clara University – Smart Mfg. & Industry 4.0

Author of Wiley's Smart Manufacturing, the Lean Six Sigma Way Amazon Links

Senior Advisor to IM Republic, ?https://imrepublic.com

?(562) 818-3275?? ?[email protected] ? ?Anthony Tarantino