I often enjoy the “Top Supply Chain and Logistics News” segment from the Wall Street Journal. Good, quick updates on a range of relevant supply chain topics that are hard to find easily from a single source.
In the February 6th column they had a strange comment on what they called “just in time” that drew a couple incorrect narratives worth commenting on. Here’s the full section:
Just-in-time may be losing just a bit of its luster. Recent scandals at a range of Japanese manufacturers and suppliers have left cracks in the country’s reputation for flawless manufacturing and efficiency, threatening to accelerate an erosion of Japan’s global market share for factory-made goods and undermining management principles that have guided businesses and supply chains world-wide. Kobe Steel Ltd., Mitsubishi Materials Corp. and Subaru Corp. have admitted in to manipulating quality inspections, the WSJ’s Alastair Gale and Sean McLain write, and Takata Corp. declared bankruptcy last year after admitting to supplying defective vehicle air bags. The problems call into question some of the world’s most influential theories of management and manufacturing, including ideas such as “continuous improvement” in areas such as inventory that seek to streamline activities down to only the essentials. In practice, the ideas meant to impose discipline in production also have added stresses to supply chains under pressure to match the costs and efficiencies of overseas competitors.
You can read the full article here: Today’s Top Supply Chain and Logistics News From WSJ
‘There are occasions when we are forced to prioritize a quick shipment over quality.’ – Takashi Ueda, a 24-year-old who works for a Kobe Steel subcontractor.
The entire segment reads like a grab bag of catchphrases, but these errors were stark:
- Referring to the management system as “just in time”. Improvement by tools initiatives from the 80’s and 90’s took parts of the Toyota System like Total Productive Maintenance (TPM), and Just in Time (JIT), sold them as revolutionary change, and failed miserably. Lean is still working to get back to what TPS is, but at least it looks to apply the full system. If Just in Time as a standalone approach hasn’t lost its luster by now we’re in trouble.
- Equating a system from one company to an entire country’s industry, and confusing system with management practices. Japanese manufacturing is not Toyota. Different elements may be applied and practiced in various levels of similarity, but they’re not the same. You wouldn’t say that American manufacturing is the Ford system. On top of that, one of the key principles in the Toyota system is that quality comes first and many layers of the system are applied to built in quality. Any manager or management decision that pushes otherwise is a failure. The quote provided is a clear example. Blaming the system for bad management decisions and practices is an easy mistake, but an incorrect conclusion.
- Presenting “continuous improvement” as bad with no alternative. Setting aside the simple application of continuous improvement to inventory, it’s presented as a source of error. Applied incorrectly or with insufficient understanding of how to change it certainly could be, but there’s no real evidence of that here. If continuous improvement is bad, what would be good? For a news journal that covers every market tick up with breathless anticipation and every down move with stark terror I’d think they would lean towards improvement.
It’s tough to create content every day that people want to read, and that accurately reflects the news of the day while placing it in context. However, sloppy reporting like this takes the negative positioning on manufacturing and makes it worse. Executives at certain companies made a range of errors. To incorrectly connect those events to a system with unrelated causality compounds the problem.
Apply lean / the Toyota System the right way, create simultaneous benefits for all stakeholders, and keep improving continuously.