The Toyota Production System and Job Shops

For this blog post, I’m turning the reigns over to Dr. Shahrukh Irani to explore how Lean initiatives can be successful in high-mix/low-volume environments and job shops. As an associate professor in the department of Integrated Systems Engineering at Ohio State University, his research at OSU produced JobshopLean.

Lean is Necessary for Every Manufacturer
The goal of any manufacturer is to reduce the total time that customers must wait from the time that they place their order to the time that they receive their order free of defects. The Seven Types of Waste are activities that add:
1. Delays to the time that customers must wait to receive their order.
2. Costs to the price that customers must pay to receive their order.

A High-Mix Low-Volume Manufacturer is not like Toyota 
Without question, the revolutionary Toyota Production System is the gold standard for how any business can pursue cost reduction through waste elimination without headcount reduction. But does a high-mix low-volume manufacturer implement Lean the same way as a low-mix high-volume manufacturer such as Toyota? No -- no Toyota facility makes refrigerators and bicycles on any of their automobile assembly lines. An assembly line that uses a conveyor to move a product (or product family) through a fixed sequence of work stations is inflexible. It could not make other products whose manufacturing routings, bills of materials, and processes used to make the final product are different from those used to make automobiles. Finally, every Toyota assembly line must be just flexible enough only to build a limited variety of automobiles whose annual demand provides sufficient return on investment to justify continued operation of that line.

How a Job Shop Differs from an Assembly Line 
An assembly line and a job shop are radically different manufacturing systems. An assembly line is a low-mix high-volume manufacturing system. A job shop is a high-mix low-volume manufacturing system. Some of the characteristics of a typical job shop that make its production system radically different from the Toyota Production System are:
  • It fulfills orders for a diverse mix of hundreds (sometimes thousands) of different products.
  • Manufacturing routings differ significantly in their equipment requirements, setup times, cycle times, and lot sizes.
  • The facility has a functional layout (i.e. the facility is organized into departments --“process villages”) such that each department carries equipment with identical/similar process capabilities.
  • Demand variability is high.
  • Production schedules are driven by due dates.
  • Due dates are subject to change.
  • Production bottlenecks can shift over time.
  • Finite capacity constraints limit how many orders can be completed on any given machine on any day. 
  • Order quantities can range from low to high.
  • Lead times quoted to customers must be adjusted based on knowledge of the production schedule.
  • The diverse mix of equipment from different manufacturers makes operator training and maintenance more challenging than for an assembly line.
  • It is a challenge to identify the part families in the product mix.
  • Customer loyalty is not guaranteed.
  • It is necessary to be able to serve different markets. In fact, a job shop must deal with the tendency for their product mix to alter as their customer base changes or they hire new sales and marketing staff who bring with them their past business contacts from new sectors of industry.
  • It could be a challenge to recruit and retain talented employees with a strong work ethic, a desire to learn on the job and get cross-trained to operate different machines.
  • There are limited resources for workforce training.
  • It is hard to control the delivery schedule and quality of suppliers.
  • It is hard to negotiate the due dates set by customers.
  • Production control and scheduling is more complex.
What Do You Think?
If you are a high-mix low-volume manufacturer and have customized the implementation of Lean in your facility or you would like to know how, please send us your questions and comments.  Let’s get a conversation going! 

Thank you,  
Dr. Shahrukh Irani

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