đ
Just in Time by Toyota: The Smartest Production System in The World - YouTube
Channel: Alex Berman - Cold Email and B2B Lead Generation
[0]
Iâm Alex Berman and youâre watching SELLING
BREAKDOWNS.
[4]
Whenever you buy a complex piece of equipment
such as a TV or a car, do you ever wonder;
[8]
how exactly it all came together?
[10]
Well, ever since the industrial revolution,
that âhowâ has been a vital question for
[15]
many businesses.
[16]
Today, weâre going to look at how in post-war
Japan, Toyota helped to create one of the
[20]
smartest production systems that we have,
named âJust In Timeâ.
[24]
Weâll look at how it works and how you can
apply the philosophy and practises to many
[28]
other areas of business.
[30]
After World War 2, Japan faced some difficult
problems; they didnât have a lot of cash,
[35]
resources were scarce, and there wasnât
a lot of free land to expand factories.
[39]
However, Taiichi Ohno at Toyota managed to
turn these problems into advantages by slowly
[44]
creating the Just In Time system.
[46]
The idea didnât all come at once, itâs
more that through the 50s and 60s, various
[51]
changes were implemented and improved until
the 70s were the wider world began to realise
[55]
the benefits and adopted a similar approach.
[58]
So, what is Just In Time?
[62]
The philosophy is to make the entire production
system only work with what it needs and to
[66]
minimise wait times between each stage.
[69]
The big saving is normally around inventory.
[71]
Before Just In Time, a company would keep
a warehouse filled with the parts and raw
[75]
materials it needed.
[76]
When supplies were getting low, they would
reorder when they had just enough to keep
[79]
going until the new delivery came.
[82]
But Toyota realised; what if you just keep
making that same order, as soon as the next
[86]
one arrives?
[87]
That way, you never need to keep this stockpile
of spare parts.
[91]
The cost savings were huge since warehousing
is seriously expensive; you need to pay for
[95]
a massive space, power, staff, security, and
for parts that are just sitting there, waiting,
[100]
not making you money or adding value to your
product.
[103]
And this is the core of Just In Time; you
look at each area of production and ask âis
[107]
this adding value to the product?â
[109]
If it isnât, maybe thereâs a better way
to do it.
[112]
You cut everything down to itâs most efficient
form, with almost no room for error, which
[116]
is where the risk in Just In Time lies.
[119]
Toyota used Japanâs relatively small size
to its advantage.
[123]
You could rely on suppliers delivering exactly
on time because they only had to travel small
[128]
distances.
[130]
If you get problems with supply then it can
shut down the whole system.
[133]
But itâs normally worth the risk; the savings
are huge, on inventory and staff costs.
[137]
More than this though, you are forced to create
a working philosophy that there is no room
[141]
for error; you donât have spare parts or
spare time so you have to make sure everything
[145]
functions perfectly.
[147]
Often efficiency comes at the cost of quality,
but not in this case.
[150]
In Just In Time; you are forced into quality
in order to be efficient.
[154]
Thatâs why itâs applicable to many other
areas of business.
[157]
The best way to think about it is if we simplify
everything to two approaches; Just In Time
[163]
and Just In Case.
[165]
With Just In Case, you are trying to minimise
risk by always giving yourself a buffer.
[169]
Youâll carry extra stock so you can swap
out faulty items.
[172]
Youâll over-staff certain areas because
theyâve occasionally had too much work to
[175]
deal with.
[176]
Youâll support a service that just a few
customers ask for.
[179]
With Just In Time, you donât simply cut
these areas and cross your fingers that nothing
[183]
bad happens.
[184]
No, you work out how you can avoid them happening
in the first place.
[188]
Because this is money that is wasted unless
a bad thing happens, youâre effectively
[191]
investing in mistakes.
[193]
Better quality control means staff can trust
the stock they have so they donât need a
[197]
back up.
[198]
As for workloads, the only reason one department
is hit by a workload they canât handle is
[202]
because there is not enough visibility between
departments.
[205]
If your sales team know the capacity of production
and its current status, then they wonât
[209]
put in an order that canât be filled.
[211]
And as for offering a service with limited
customer appeal, well, maybe you cut it out
[215]
completely or just find a way to merge it
with other services so the resources it requires
[220]
are absolutely minimal.
[222]
When done well, the Just In Time philosophy
should be good for moral too because the whole
[226]
point of it is telling your staff âIâm
trusting you to perform consistentlyâ and
[230]
I think most of us respond well to that kind
of respect.
[234]
Wanna learn more about business theory and
history?
[236]
Be sure to like and subscribe to be notified
of our next segment.
Most Recent Videos:
You can go back to the homepage right here: Homepage