Episode #74 is a discussion with Roy Vasher, President of RPV Consulting, LLC and is co-author the book Toyota's Supply Chain Management: A Strategic Approach to Toyota's Renowned System.
Roy works closely with a network of consultants to provide lean information technology and supply chain consulting services. Roy developed deep insight and experience on how to integrate Information Technology to support lean processes by serving as General Manager, Information Systems for Toyota Motor Manufacturing North America. He has strong expertise in leading supply chain innovation in a lean supply chain through the development of robust processes supported by intelligent use of technology for faultless implementation.
Roy left Ford Motor Company and joined Toyota in 1987 to set up and manage the Information Systems department at Toyota's first Greenfield North American plant, Toyota Motor Manufacturing Kentucky. (full bio)
In this podcast, we talk about his book and Toyota's supply chain practices, including the “4Vs”:
- Variety: Determine your variety of offerings based on operational efficiency and market demand
- Velocity: Maintain a steady flow through all processes of the supply chain
- Variability: Manage inconsistencies carefully to reduce cost and improve quality
- Visibility: Ensure the transparency of all processes to enable continuous learning and improvement
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I wonder if I didn't understand this podcast properly. Roy was describing the Toyota supply chain in North America but a lot of the things he described seemed to go in the opposite direction of being Lean. (And I know that Lean is not Toyota or vice versa.) For example he talked about variety and said that you wouldn't want pink cars at the dealer because they might sit around for months not selling. I had always imagined the ultimate lean car dealership as being one with an example of each model for customers to test drive. Customers would choose the model from those at the dealership and then with the dealer choose the modifications and variations that they wanted. That request would go to the manufacturing plant where the pink Camry with the iPod dock, sunroof and shower attachment would be manufactured. With signals to the paint supplier (for pink paint) and other suppliers being sent as the order was placed. This would cascade down the supply chain. Every step would pull from the supplier before it. Having this ultimate lean system you could have as much variety as you liked but without holding stock in the supply chain. But Roy talked about trying to reduce variety. Didn't Ohno try to invent systems that gave variety but with no extra cost? Economy of flow rather then economy of scale.
Hope someone can help.
Best,
Rob
Rob
Thank you for your comment. You are correct to think that in an ideal world that each customer could order his/her car and get unlimited choice. However, the real world is that most dealers sell vehicles from stock and therefore it requires Toyota to have a strategy to limit choice in order to maximize the probability to have have a vehicle that most customers would want in stock. If a customer is willing to wait, the dealer can send a request to the factory to change the spec on a vehicle scheduled for production to match a customers choice.
Also for Scion, Toyota does provide customers more choice to order cars that are customized. Scions are stocked at Ports not at dealers. Therefore, options can be added based on customer choice.
The point is that Toyota attempts to modify it's supply chain to best fit various business models.
Hope this helps.
Roy