Henry Towne, past President of the American Society of Mechanical Engineers, wrote in the foreword to Frederick Winslow Taylor's Shop Management (1911), "We are justly proud of the high wage rates which prevail throughout our country, and jealous of any interference with them by the products of the cheaper labor of other countries. Īmerican industrialists recognized the threat of cheap offshore labor to American workers during the 1910s, and explicitly stated the goal of what is now called lean manufacturing as a countermeasure. In this way, inventory levels were kept low, investment in in-process inventories was at a minimum, and the investment in purchased natural resources was quickly turned around so that additional materials were purchased." Plenert goes on to explain Toyota's key role in developing this lean or JIT production methodology. in which the only materials housed in the factory were those on which work was currently being done. Thus, the Japanese "leaned out" their processes. Japan had high unemployment, which meant that labor efficiency methods were not an obvious pathway to industrial success. The Japanese islands lack natural resources with which to build products.Ĥ.
Japan lacked space to build big factories loaded with inventory.ģ. Japan's lack of cash made it difficult for industry to finance the big-batch, large inventory production methods common elsewhereĢ. During Japan's post–World War II rebuilding of industry:ġ. Plenert offers four reasons, paraphrased here. The exact reasons for adoption of JIT in Japan are unclear, but it has been suggested it started with a requirement to solve the lack of standardization. The resulting methods were researched from the mid-20th century and dubbed "Lean" by John Krafcik in 1988, and then were defined in The Machine that Changed the World and further detailed by James Womack and Daniel Jones in Lean Thinking (1996). A successful operation depends on a company having regular outputs, high-quality processes, and reliable suppliers.įredrick Taylor and Henry Ford documented their observations relating to these topics, and Shigeo Shingo and Taiichi Ohno applied their enhanced thoughts on the subject at Toyota in the 1930s. It may also impact negatively on workers due to added stress and inflexible conditions. The downside is that it requires producers to forecast demand accurately as the benefits can be nullified by minor delays in the supply chain. By receiving goods only as they need them for the production process, it reduces inventory costs and wastage, and increases productivity and profit.
The term "Lean" was coined in 1988 by John Krafcik, and defined in 1996 by James Womack and Daniel Jones to consist of five key principles: "Precisely specify value by specific product, identify the value stream for each product, make value flow without interruptions, let customer pull value from the producer, and pursue perfection." Ĭompanies employ the strategy to increase efficiency. It is derived from Toyota's 1930 operating model " The Toyota Way" ( Toyota Production System, TPS). Lean manufacturing (also known as lean production, just-in-time manufacturing and just-in-time production, or JIT) is a production method aimed primarily at reducing times within the production system as well as response times from suppliers and to customers.