The essence of Lean Thinking is the identification and elimination of waste in any and all administrative and manufacturing processes in any production system. Waste is any element or activity in the production system that does not provide value to the customer. Value is anything that the customer is willing to pay for. Customers pay for the final product so they deserve price reductions achieved through cost reductions gained from eliminating wastes in the order fulfillment process. Waste Elimination is an immediate, simple and effective strategy to impress customers, cut operating costs and improve profit margins. Even a jobshop that makes hundreds of different components or assemblies is like Toyota! There is waste to be found in their administrative and manufacturing processes, and therefore savings to be gained by eliminating or reducing those wastes.

Still, I contend that any high-mix low-volume (HMLV) SME, in particular, any jobshop is fundamentally different from the assembly facility of an OEM like Toyota, Ford, Maytag, Alcoa, Boeing or John Deere. I hope there will be argument when I say that the customer base, organizational culture and leadership, clout with customers and suppliers, etc. of any jobshop with annual sales in the $5 million to $100 million range is going to be radically different from that of Toyota!

Therefore, even as it is essential that jobshops embrace the philosophy and principles of Lean Thinking, they must also carefully select a manufacturing strategy that suits them. In turn, their choice of manufacturing strategy will force them to significantly change the methods and tools they use. Because, frankly, the majority of the popular "Lean Tools" were never designed to handle the operating conditions and constraints of HMLV manufacturing facilities.

What makes a jobshop different from Toyota?

The primary difference is the product mix. A typical jobshop is a HIGH-mix and VARIABLE-volume manufacturer of a large variety of components. Whereas, Toyota is a LOW-mix HIGH-volume manufacturer of a few assembled products. Consequently, while it is easy to recognize "Value Streams" at Toyota and many of their Tier 1 suppliers, this is a challenge in the case of a jobshop where 100's, if not 1000's, of different routings need to be grouped into process families.

Yet another significant difference between a jobshop and any of Toyota's assembly facilities is that jobshops tend to have their equipment grouped by function i.e. the layout tends to be a Process Layout. In reality, this layout has historically been adopted by jobshops in the belief that it makes them flexible. That is far from the truth! The Process Layout is the root cause for the classic batch-and-queue production that results in high levels of the Seven Types of Waste, and worse, causes the daily chaos on the shopfloor of any jobshop. In fact, if you read Taichi Ohno's book Toyota Production System, you will find that he often says throughout his book that he designed every Toyota facility so that the equipment in the manufacturing facility was laid out as per the logical sequence/s of manufacturing and assembly steps for their products!

And here are some more fundamental differences between a jobshop and an assembly facility – volatility in demand and delivery dates, high variety of products, highly variable setup times and cycle times between different routings, diverse customer base, limited ability to train the workforce, limited finances to hire full-time staff devoted to Continuous Improvement, complex production control and scheduling, limited influence on supplier delivery schedules, tendency for product mix to "migrate" as customer base changes (or new Sales and Marketing staff join the company), etc. I'm sure you will be able to add to this already long list, so please do!

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