Afterthought – Toyota’s Lean Mistake

Today’s Machining World Archive: March 2010, Vol. 6, Issue 02

By Lloyd Graff

For me, lean manufacturing is like the Talmud, the Jewish commentaries on the Bible. You can find an explanation for everything if you stretch far enough.

Lean is getting a bad rap these days because its great champion, Toyota Corporation, is under siege for lapses in quality. I wrote a “Swarfblog” column on February 2, attributing some of Toyota’s current misery to their commitment to lean and received the expected brickbats from the lean proselytizers. After talking to several leanists, I admit that they are right—but so am I.

If you define lean manufacturing as an approach to problem solving that establishes procedures to remove wasteful processes in the making of product, it is hard to blame Toyota for embracing lean unequivocally.

But if you take a more nuanced view, that a tunnel vision approach to lower inventory and a less expensive standard is the company’s goal, you may end up with a four million-car recall that jeopardizes the entire Toyota vehicle brand.

The huge irony of Toyota’s sticky gas pedal debacle is that it came right after it took over the mantle of world’s biggest car company. Is Toyota the new Microsoft, offering its flawed version of Vista when Apple was already eating its lunch in the under 30 market demographic?

My critique of lean manufacturing derives from the observation of just-in-time manufacturing becoming the mantra of the contract machining world over the last 20 years.

I do understand why big manufacturing companies want product delivered on an “as need” basis. Contract shops have adapted by buying CNC equipment, which is well suited to make small lots with quick changeover. But in the real world of imperfect predictability of demand, design error and failure of suppliers to deliver good product, the contract shop becomes the buffer against disaster. Big companies commit to big yearly quantities and then ask for product sporadically.

In an immaculately lean world, everybody makes things on demand, but the dirty secret of lean is that it depends on small firms shrewdly holding crucial inventory.

What do you do if you are running a funny stainless concoction that Schmolz + Bickenbach produces once a quarter? If you are smart, you stock extra material, which crimps cash flow.

One of the most successful machining firms I know breaks most lean commandments. They make aircraft components primarily from aluminum. They stock tons of extra bars in the Southern California sun where they occupy some of the most expensive Los Angeles industrial space, vying with Disney when new buildings become available in the neighborhood. They keep a huge inventory of finished product because their value added proposition is that they always have their product in stock, even if they sell two pieces a year. They consider their “unleanness” a virtue.

This company produces much of their key products on CAM operated multi-spindle screw machines and has been consistently moving jobs to the screw machines from
their CNCs.

Does this mean lean manufacturing is overrated? Certainly not, but it is an argument for diversity of approach, and not being wedded to practices that reduce immediate availability in a world that expects goods to be available on demand.

When Toyota landed in a public relations pickle because they had focused on fat floor mats causing the gas pedal problem rather than admitting to an imperfect pedal design, they picked a medium sized contract manufacturer in Grand Rapids, Michigan, to bail them out. Grand Rapids Spring and Stamping sprang into action to make the fix, running 24 hours a day. Obviously, Grand Rapids Spring and Stamping had the extra capacity available to help Toyota through its lean moments.

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