THE IMPACT OF WORLD-CLASS MANUFACTURING PRACTICES ON SMALL MANUFACTURERS - by
David K. Johnson

Lean Manufacturing Principles and Techniques

Lean manufacturing, also known as pull manufacturing, flow manufacturing, the Toyota production system, or just-in-time manufacturing, is a methodology of adding value while identifying and eliminating waste within a manufacturing system. During the 1970s and 1980s many Japanese companies gained strategic advantages over their American counterparts through the use of lean manufacturing techniques. As U.S. companies benchmarked themselves against their Japanese competitors, they became aware of lean manufacturing, more commonly known at that time as just-in-time (JIT) manufacturing. Initial efforts to implement JIT in the U.S. often resulted in only limited success due to the “me too” way in which it was often initially implemented. The limited success experienced by early U.S. adopters of lean manufacturing can be explained in part by the fact that the financial background of top management in many U.S. companies leads them to initially see JIT from an “accounting perspective”. This perspective unfortunately ignores the primary benefits of implementing just-in-time or lean manufacturing. While it is true that reducing inventory frees up cash, which can be reinvested in higher return aspects of the business, this should not be the primary motivation for implementing JIT. In order for JIT to be successful it must be implemented as a continuous improvement tool, and not just as a method of freeing up cash by reducing inventory.

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Copyright © 2005. David K. Johnson. All Rights Reserved.