Go through the case given and answer the questions thatfollow:
Toyota's history goes back to 1897, when Sakichi Toyoda(Sakichi) diversified into the handloom machinery business from hisfamily traditional business of carpentry. He founded ToyodaAutomatic Loom Works (TALW) in 1926 for manufacturing automaticlooms. Sakichi invented a loom that stopped automatically when anyof the threads snapped. This concept of designing equipment to stopso that defects could be fixed immediately formed the basis of theToyota Production System (TPS) that went on to become a majorfactor in the company’s success.
In 1933, Sakichi established an automobile department withinTALW and the first passenger car prototype was developed in1935.
Sakichi's son Kiichiro Toyoda (Kiichiro) convinced him to enterthe automobile business. After this the production of Model AAbegan and Toyota Motor Corporation was established in 1937.Kiichiro visited the Ford Motor Company in Detroit to study the USautomotive industry. He saw that an average US worker's productionwas nine times that of a Japanese worker. He realized that theproductivity of the Japanese automobile industry had to beincreased if it were to compete globally.
Back in Japan, he customized the Ford production system to suitJapanese market. He also devised a system wherein each process inthe assembly line of production would produce only the number ofparts needed at the next step on the production line, which madelogistics management easier as material was procured according toconsumption. This system was referred to as Just-in-Time (JIT),within the Toyota Group.
The JIT production was defined as 'producing only necessary unitsin a necessary quantity at a necessary time resulting in decreasedexcess inventories and excess workforce, thereby increasingproductivity.'
Kiichiro realized that by relying solely on the central planningapproach, it would be very difficult to implement JIT in all theprocesses for an automobile. Hence, TPS followed the productionflow conversely. People working in one process went to thepreceding one to withdraw the necessary units in the necessaryquantities at the necessary time...
Just-In-Time Production System:
Developed by the Japanese, the JIT production system was one ofthe most significant production management approaches of thepost-World War II era. The system comprised a set of activitiesaimed at increasing production volume through the optimum use ofinventories of raw materials, work-in-process, and finished goods.In a JIT production system, a workstation gets a part just in time,completes its work and the part is moved through the systemquickly.
JIT was based on the principle of producing only what is neededand nothing more than needed. The Japanese believed that anythingproduced over the quantity required was a waste...
JIT In TOYOTA
In the early 1930s, the technology used by American automobilecompanies was superior to that used by Japanese companies. Kiichirotherefore decided to learn new automobile production techniquesfrom American manufacturers. He soon realized that to catch up withthe Americans, he had to master basic production techniques. Hethen reorganized the production system in Toyota in a unique way.This reorganization eventually led to the development of JITconcept...
FUTURE OF JIT:
Although many automobile companies around the world adopted JIT,the system was far from perfect and difficult to implement. It wasbased on the key assumption that sources and channels of supplywere reliable and dependable at all times. Analysts felt that itdid not take into account the possibility of labor strikes atautomotive plants. Moreover, JIT involved high set up costs andSpecial training and reorganization of policies and procedures inthe company were necessary to implement JIT. The supplier relationsof the company also needed to be improved to ensure timelydelivery. In the absence of good supplier relations, JIT increasedthe risk of inventory shortage...
Questions:
2. Do you feel the concept of JIT is applicable to anysector or only to organizations in manufacturing automobiles?Provide your answer with reasoning.
