We then learned that Toyota led the way in the development of the Japanese approach. We heard of something called the Toyota Production System which was the model for all that had happened in Japanese manufacturing. We heard of Taiichi Ohno, the production engineer responsible for this breakthrough.

The list below highlights what our Japanese counterparts had done.

Making something in large batches has several negative effects. The first thing which Westerners recognised was that stock levels are partly a function of order sizes. We had a formula for economic batch sizing in which the cost of set-up was offset against the cost of holding the stock. Our theoretical average stock level was half the order quantity + whatever element of safety stock we had built into our plans so reducing the order size would reduce our average stock.

There were, however, other considerations. A piece of plant cannot be immediately responsive to all demands upon it if it makes parts in greater quantities than are required at the time. Responsiveness, and hence service to our customers (whether they be external or the subsequent operations within our own plant) requires that we manufacture components in small batches.

We knew that smooth workloads make management of the manufacturing process far easier and had established smooth finished product plans with the adoption of Master Production Scheduling. However, no matter how smooth our final assembly plans, we still had lumpiness elsewhere.

The major contributor to parts being made in large batches is, of course, set-up times. Shigeo Shingo, a quality consultant hired by Toyota, had set about effectively eliminating set-ups. The accounting conventions that led Western businesses to make significant quantities of parts that may not be used were also shown to be ludicrous.

A major element of Western manufacturing’s inventory was that which we held in case of problems. We held safety stocks to allow us to continue manufacturing should some of the components or raw materials in our stores be found to be defective.

Ohno and his colleagues, ironically, had listened to the American quality gurus, W. Edwards Deming and Joseph Juran, who had advised Japanese industry as it recovered after World War II. Among the key concepts learned by the Japanese and neglected for many years in the West were:

Deming’s teaching that we cannot inspect quality in a product but must build it into the manufacturing process.

Juran’s definition of the internal customer. If we each give service to our internal customer then we will ultimately take care of the end customer.

By applying these teachings and aggressively eliminating all sources of non-compliance the Japanese moved quality onto a completely different plane. Where the West continued to measure percentage defect rates our competitors were working in parts per million.

As well as addressing the manufacturing processes, we learned that the JIT approach considered other contributors to improved quality. Is the component designed in such a way as to make it easy to produce or can we simplify it and reduce the chances of a defect? We began to think of «design for manufacture» and combining the previously separate functions of design engineering and production engineering.

We heard about things called «quality circles» where people in different areas of the business came together to investigate problems and work as a team to solve them – rather than follow our own approach of each area attempting to blame another. Perhaps most disturbingly we heard that inspectors were a thing of the past. All had now been trained as quality engineers and were in fact working as process improvement specialists so that their old function was no longer required.