The genius of Toyota is that they now operate fundamentally on the "pull" system, where customer demand pulls to have products created rather than the traditional approach of "pushing" products on the consumer and hoping there will be demand for them.
Using the pull concept, Toyota redefined their entire management system to create only customer value when that value was demanded, and eliminate all waste: Lean Management. They have taken the idea to such extremes now that if you need spare parts at a Toyota dealer, you will find that only a few parts are stocked, and when the stock runs low they produce new parts on demand. These guys are unbeatable using the old way of doing business - they can do their work with this approach twice as fast with half the labor required and radically higher quality.
Several other manufacturers have taken on Lean as well, such as Porsche. For those who don't, it will only be a downhill slide into oblivion against the Lean competition.
Comments
The genius of Toyota is that they now operate fundamentally on the "pull" system, where customer demand pulls to have products created rather than the traditional approach of "pushing" products on the consumer and hoping there will be demand for them.
Using the pull concept, Toyota redefined their entire management system to create only customer value when that value was demanded, and eliminate all waste: Lean Management. They have taken the idea to such extremes now that if you need spare parts at a Toyota dealer, you will find that only a few parts are stocked, and when the stock runs low they produce new parts on demand. These guys are unbeatable using the old way of doing business - they can do their work with this approach twice as fast with half the labor required and radically higher quality.
Several other manufacturers have taken on Lean as well, such as Porsche. For those who don't, it will only be a downhill slide into oblivion against the Lean competition.
Supply chain management is an advanced field. Inventory levels are computed to an optimum from many inputs.
This buzzword cheerleading for "pull" and "lean" is just silly. Some consultant types want to sell books and conferences with tidy little concepts.
Very low inventory means no buffer. 9/11 or Katrina shuts you down completely.