Humans Steal Jobs From Robots at Toyota

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APRIL 22, 2014

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Inside Toyota Motor Corp.’s oldest plant, there’s a corner where humans have taken over from robots in pounding glowing lumps of metal into crankshafts, reports BusinessWeek(April 7, 2014). “We need to become more solid and get back to basics, to sharpen our manual skills and further develop them,” said a company exec. “When I was a novice, experienced masters used to be called gods, and they could make anything.” These “gods” are making a comeback at Toyota, the company that long set the pace for manufacturing prowess. Toyota’s next step forward is counter-intuitive in an age of automation: Humans are taking the place of machines in plants across Japan so workers can develop new skills and figure out ways to improve production lines and the car-building process.

“Toyota views their people who work in a plant like this as craftsmen who need to continue to refine their art and skill level,” said Jeff Liker, who has written 8 books on Toyota. Learning how to make car parts from scratch gives younger workers insights they otherwise wouldn’t get from picking parts from bins and conveyor belts, or pressing buttons on machines. At about 100 manual-intensive workspaces  across Toyota’s factories in Japan, these lessons can then be applied to reprogram machines to cut down on waste and improve processes. At the forging division of Toyota’s Honsha plant, workers twist, turn and hammer metal into crankshafts instead of using the typically automated process. Experiences there have led to innovations in reducing levels of scrap by 10% and shortening the production line length 96%.

Though Toyota doesn’t envision the day it will rid itself of robots — 760 of them take part in virtually all of the production process at its Motomachi plant – it has introduced multiple lines dedicated to manual labor in each of Toyota’s factories in Japan. Says one manager: “To be the master of the machine, you have to have the knowledge and the skills to teach the machine.”  Adds a University of Tokyo professor:   “Fully automated machines don’t evolve on their own. Sticking to a specific mechanization may lead to omission of kaizen and improvement.”

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

Reducing the Risk of Supply Chain Disruptions

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APRIL 20, 2014

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MIT SloanFor supply chain executives, recent years have been notable for major supply chain disruptions that have highlighted vulnerabilities for individual companies and for entire industries globally. (The Japanese tsunami in 2011 left the world auto industry reeling for months. Thailand’s 2011 floods affected the supply chains of computer manufacturers dependent on hard disks. The 2010 eruption of a volcano in Iceland disrupted millions of air travelers and affected time-sensitive air shipments.) This excellent article in the MIT Sloan Management Review (Spring, 2014), by Professors Sunil Chopra and ManMohan Sodhi, is worth the 23 minutes it will take you to read it–especially if you teach Chapter 11 and Supp.11 in our text.

Today’s managers, they write, know that they need to protect their supply chains from serious and costly disruptions, but the most obvious solutions — increasing inventory, adding capacity at different locations and having multiple suppliers — undermine efforts to improve supply chain cost efficiency. While managers appreciate the impact of supply chain disruptions, they have done very little to prevent such incidents or mitigate theirimpacts.This is because solutions to reduce risk mean little unless they are weighed against supply chain cost efficiency. Financial performance is, we know, what pays the bills.

Supply chain efficiency, which is directed at improving a company’s financial performance, is different from supply chain resilience, whose goal is risk reduction. Although both require dealing with risks, recurrent risks (such as demand fluctuations) require companies to focus on efficiency in improving the way they match supply and demand, while disruptive risks require companies to build resilience despite additional cost.

The authors suggest two strategies for reducing supply chain fragility through containment while simultaneously improving financial performance: (1) segmenting the supply chain or (2) regionalizing the supply chain. In many instances, though, reducing disruption risk involves higher costs. The reason executives are reluctant to deal with supply chain risk comes from the perception that risk reduction will reduce cost efficiency significantly. Managers can do much to ensure that loss of cost efficiency is minimal while the risk reduction is substantial by avoiding excessive concentration of resources like suppliers or capacity. And nudging trade-offs in favor of less concentration by overestimating the probability of disruptions can be much better in the long run compared to underestimating or ignoring the likelihood of disruptions.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

Queuing Up For TSA’s Fast Security Line

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APRIL 18, 2014

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The TSA wants to speed up this line. Really.

Fliers gripe that getting through airport security lines can be too slow. Now, it may be fliers who are slow to sign up for a program to speed them through the lines. The Transportation Security Administration is aggressively trying to encourage more people to sign up for TSA Precheck, reports The Wall Street Journal (April 17, 2014). 

Precheck, launched in 2011, is much-loved among travelers because they don’t have to take off their shoes and jackets, don’t have to pull liquids and laptops out of baggage, and can walk through metal detectors without a full-body scan. By doing background checks on Precheck enrollees and scanning law-enforcement databases, TSA offers what is essentially pre-9/11 screening to “trusted travelers.”

TSA wants lots more people enrolled in Precheck to make better use of its designated security lanes, which currently number 590 at 118 U.S. airports. “It’s one of the last great bargains the U.S. government is offering,” TSA Administrator John Pistole has joked. To entice travelers into Precheck and test TSA’s ability to handle more people, the agency has been selecting regular passengers to go through Precheck security lanes and get it printed on their boarding passes. Selection is based on criteria like passengers’ travel history and the route being flown. TSA officers trained in behavior detection also can move passengers they deem low risk from regular queues into Precheck lanes.

Pistole said he has heard the complaints about Precheck lanes getting clogged, and TSA has already decided to stop moving travelers 75 years of age and older into Precheck service, unless they are enrolled, because they sometimes can take 10 minutes to move through. “It used to be great, but recently the Precheck lines have been the slowest of all the lines,” said Northeastern University OM Professor Fred Van Bennekom, who has timed TSA lines. “Sometimes there’s almost no one in regular lines and we’re all backed up at Precheck.”

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.