When operating with the objective to be lean, the companies need to seek out where the wastage is being incurred in the business operations and rooting out the sources of the wastage. Through the Toyota Production System the automobile companies can make the entire operations of the business lean from the aspect of material handling, the movement and the transportation of the material as well as the over stocking of the material which can generate high inventory management costs and the under stocking of material which can result in excess time being wasted in the idle status of the machinery while waiting for urgent procurement of materials.
These sources of wastage can be determined in the supply and distribution of the finished goods as well where the inventory of finished goods has to be eliminated so that the dealers can directly collect the finished goods form the assembly lines and store them with them selves on their facilities. Jaguar and Land Rover have switched to the pull mechanism through which lean operations are being managed. The ford company stated that “one of the big challenges was in looking at the supply chain and insuring that we optimize the best total cost solution that takes into account the frequency of delivery of freight versus the inventory in the supply chain. That’s a big challenge and you need to be looking at each individual part to make sure that you’re making the best decision. And equally making sure that the way the material is ultimately presented for fitting into the vehicle is absolutely packaged and presented with top quality precision.” (Haight, 2003)
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