Page 234 - The Toyota Way Fieldbook

210 THE TOYOTA WAY FIELDBOOK

a pilot of the software, they discovered that business processes in the plants
were primitive and undisciplined. There were no good processes for collecting
inventory data in real time. As a result, the computer system did not have a real-
time picture of the inventory. The computer system was intended to show how
much inventory there was throughout the plants and allow vendors to see
when the inventory level reached a minimum trigger point so they could ship
to bring parts up to the maximum. This was a crude type of pull system. To
encourage suppliers to follow the system, a performance metric was automati-
cally calculated, measuring what percent of the time the inventory was kept
within the minimum and maximum level.
In contrast, for decades Toyota focused on putting in actual pull systems.
They worked to create right-sized containers and racks to hold the containers.
Strict limits were established on exactly how many parts would go in each bin

TRAP
Strict Reliance on IT Systems Adds Waste
A typical example of IT in companies is the desire to “track” and
“understand” the actual inventory levels in “real time.” Every trans-
action of material is “scanned” into the system (which is often
performed by a value-adding operator—adding to the waste) so
they can have “accurate” inventory. In fact this does not work,
for a number of reasons—namely, errors and omissions—there-
fore it is necessary to have full-time “cycle counters” who roam the
inventory and audit the levels to verify the overall accuracy and
make inventory adjustments. In addition to this costly activity a
physical inventory is taken one or two times per year for all
items. This is a time-consuming ordeal that may take several
days (sometimes on weekends).
In contrast, kanban control the inventory in Toyota, and kanban
are monitored. Physical inventory is performed twice per year,
and the manufacturing operation is stopped for a few hours, at
most, to perform inventory (the storeroom would spend the entire
day, since there are numerous items). Overall, the inventory sys-
tem using “old-fashioned” cards was much less costly and more
effective. Recently at Toyota, electronic kanban systems have
been adopted for sending pull signals to suppliers and even for
replenishing line-side inventory in assembly plants. But there is
also a redundant manual system in the assembly plants to give
visual indicators of parts usage.