Lean Production

Conceptual Overview

Lean production is based on the Toyota Production System, developed by Taiichi Ohno and Shigeo Shingo to permit Toyota to compete against globally dominant automakers in spite of lower economies of scale and general access to resources. Mass production as practiced by these dominant players at the time called for high resource utilization, considered process variability as normal, and consequently built up large in-process inventories. In 1990, James Womack, Daniel Jones, and Daniel Roos published the book The Machine that Changed the World, in which the Toyota Production System concepts were extended to the global context under the new name of lean production.

Shifting from mass to lean production is accomplished through a set of practices that are geared to give management control over inventory levels and variability. These practices do not define lean production, however: Lean can be implemented in other ways, and the deployment of the practices does not automatically result in leanness.

Through lean production principles, Toyota gained substantial market share in a way that violated most traditional assumptions about competitive strategy. (Toyota's change in competitiveness through learning how to run lean can be considered as one of the motivations for the development of the resource-based view theory of firm competitiveness.)

A key breakthrough of the Toyota Production System was the concept of just-in-time manufacturing (JIT), in which goods were to be produced only as needed rather than to keep machines busy or to cover for any quality problem or unplanned downtime that might arise. Extra production was viewed as waste rather than value added. JIT and the Toyota Production System resulted in a new emphasis on setup-time reduction to eliminate the overproduction caused by large production batch sizes.

Waste in the form of quality problems was attacked through practices that include statistical process control, analysis by teams of workers, and an emphasis on continuous improvement (kaizen). The combination of practices used to attack quality problems is often referred to as Total Quality Management. Downtime was attacked through practices under the banner of total preventive maintenance.

Traveling between workstations (prevalent in job shops) was reduced through reorganizing workstations into cells. Workers in cells or on a production line are organized into teams, with some decisionmaking authority shifted to the team level.

A lean production practice entitled heijunka calls for sequencing production so that items requiring more work are systematically alternated with those requiring less work. The objective of heijunka is to minimize the impact of demand variability on the production line.

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