Production Systems
Just In Time vs TPS vs Lean Production Systems
Just in time (JIT) is a manufacturing philosophy that allows companies to increase efficiency and decrease wastage. Materials are received only as they are needed in the production process. Through this strategy, companies are able to reduce inventory costs. As the name implies, materials arrive just when they are needed. Apart from reducing the cost of inventory, JIT has the further advantage of keeping production runs very small, thereby facilitating a quick and easy change over from one product type to another. Storage costs and the cost of raw materials are also kept low. JIT, however has the disadvantage that breakdown in the supply of one component may disrupt the entire workflow. JIT is closely related to the Toyota production system (TPS), and some researchers use the two terms interchangeably. TPS is a system developed by Toyota. It is a holistic and integrated production system, which is hinged on the elimination of waste “muda” (Bergenwall, Chen, & White, 2012). The TPS is much similar to JIT. It, however, goes further to include an automation with a human touch. Bergenwall, Chen, & White (2012), highlight that there are fourteen principles of the TPS. Besides material and inventory, TPS further attends to quality, scheduling and customer satisfaction. Lean is another closely related system which the literature indicates developed from Toyota. As a production system, its aim is to eliminate waste through the elimination of non-value adding activities. According to Lean.org, the key tenet underpinning lean is the maximization of value for customers, by capitalizing on efficiencies, through the use of fewer resources (Lean.org, n.d). TPS and lean offer similar advantages to JIT production, and further suffer from the same limitations.
The production systems described above are clossely related. They are all hinged on the precept of the elimination of wastes in the production process. The aim in each of these Production Systems is to improve efficiencies, by reducing inventories. These systems rely on accurate forecasting by organization. For Nissan, the adoption of these systems would haave numerous advantages and several disadvantages. In a sense, Nissan already adopts a JIT approach, where it builds to stock in several atraategic SKUs, and builds to order for the rest. The advantages of the approach have already been discussed, and would apply to Nissan. The main disadvantage that Nissan might face is a disruption to its global production process in case of a breakdown in the production activities in one area of production. The same shortcomings would apply to a TPS or lean approach.
The triple bottom line is a sustainability philosophy that has three dimensions. These are economic (profit), social (people), and environment (planet). Consideration of the triple bottomline is essential for organizations due to the changing global dynamics including changes in markets, people’s values and consideration for future generations (Bergenwall, Chen, & White, 2012). The integration of the triple bottom line in management can allow organizations, such as Nissan, to achieve sustainable development (Markley & Davis, 2007). The concept can also allow organizations to obtain a competitive advantage. Nissan can apply this concept to improve its operations management by attending to each of the components. For instance, people are increasingly becoming aware and sensitized to issues of environmental degradation. By developing vehicles that are more ecologically friendly, Nissan can avoid product rejection in the market, or increase product acceptance. This will further lead to economic benefits. It may even secure a competitive advantage where customers will opt for the more ecologically friendly alternative.
The ISO 14000 is a management standard that deals with environmental protection. The ISO 14000 provides companies and organizations with tools which they can use to enhance their environmental responsibility (ISO, 2016). According to its official global website, Nissan has put in place mechanisms that with targets and is implementing action plans within each area of its activities (Nissan, 2016). Nissan has been successful in its environmental protection endeavors, having received ISO 14001 certification in 2011. This certification was the culmination of the roll out of the Nissan Green Program 2010, which was launched in 2006 (Nissan, 2011). Kermally notes that as early as 1995, Nissan was using money saved from the recycling of plastic off-cuts was being used to pay for a switch to environmentally friendly water-based paints (Kermally, 2007). Nissan integrates ISO 14000 standards through environmental managers. One of its most notable programs is the Nissan Green Shop certification system, which is based on the ISO 14001 certification (Nissan, 2016). Through this program, environmental managers at dealerships ensure the proper and green disposal of end of life vehicles.
Nissan can further improve its reputation through corporate responsibility practices. Corporate responsibility represents a shift from the traditional corporate social responsibility, and has a much wider outlook than the latter. In particular, corporate responsibility demands that a company be responsible for its decisions and actions by exercising transparency and ethical behaviors, including corporate responsibility reporting (Plessis, Hargovan, Bagaric, & Harris, 2014). Corporate responsibility reporting is one of the ways through which Nissan can improve its corporate responsibility. Another way is through social responsiveness, which is a more flexible means of responding to the needs of the community (Blowfield & Murray, 2011). For example, in the case study, Nissan could have achieved this by contributing towards search, rescue and renovation operations.
References
Bergenwall, A. L., Chen, C., & White, R. E. (2012). TPS’s process design in American automotive plants and its effects on the triple bottom line and sustainability. International Journal of Production Economics, 140(1), 374-384.
Blowfield, M., & Murray, A. (2011). Corporate Responsibility. Oxford: OUP Oxford.
ISO. (2016). ISO 14000 – Environmental management. Retrieved from ISO: http://www.iso.org/iso/iso14000
Kermally, S. (2007). Management Ideas. New York: Taylor & Francis.
Lean.org. (n.d). What is Lean. Retrieved from Lean Enterprise Institute: http://www.lean.org/WhatsLean/
Markley, M. J., & Davis, L. (2007). Exploring future competitive advantage through sustainable supply chains. International Journal of Physical Distribution & Logistics Management, 37(9), 763-774.
Nissan. (2011, January). News Releases. Retrieved from Nissan: http://www.nissan-global.com/EN/NEWS/2011/_STORY/110120-02-e.html
Nissan. (2016). Environmental Activities. Retrieved from Nissan: http://www.nissan-global.com/EN/ENVIRONMENT/APPROACH/MANAGEMENT/
Plessis, J. J., Hargovan, A., Bagaric, M., & Harris, J. (2014). Principles of Contemporary Corporate Governance. Cambridge: Cambridge University Press.
