The Vehicle Routing Problem (VRP) is one of the most challenging combinatorial optimization tasks. Defined long time ago, this problem consists in designing the optimal set of routes for fleet of vehicles in order to serve a given set of customers. The interest in VRP is motivated by its practical relevance as well as by its considerable difficulty.

The Vehicle Routing Problem (VRP) is a generic name given to a whole class of problems in which a set of routes for a fleet of vehicles based at one or several depots must be determined for a number of geographically dispersed cities or customers. The objective of the VRP is to deliver a set of customers with known demands on minimum-cost vehicle routes originating and terminating at a depot

The VRP is a well known integer programming problem which falls into the category of NP Hard (Non-deterministic Polynomial-time Hard) problems, meaning that the computational effort required to solve this problem increases exponentially with the problem size. For such problems it is often desirable to obtain approximate solutions, so they can be found fast enough and are sufficiently accurate for the purpose. Usually this task is accomplished by using various heuristic methods, which rely on some insight into the problem nature.

This difficult combinatorial problem conceptually lies at the intersection of these two well-studied problems:

  • The Traveling Salesman Problem (TSP): If the capacity of the vehicles C is infinite, we can get an instance of the Multiple Traveling Salesman Problem (MTSP). An MTSP instance can be transformed into an equivalent TSP instance by adjoining to the graph k-1 (being k the number of routes) additional copies of node 0 and its incident edges (there are no edges among the k depot nodes).
  • The Bin Packing Problem (BPP): The question of whether there exists a feasible solution for a given instance of the VRP is an instance of the BPP. The decision version of this problem is conceptually equivalent to a VRP model in which all edge costs are taken to be zero (so that all feasible solutions have the same cost).

Hence, we can think of the first transformation as relaxing the underlying packing (BPP) structure and the second transformation as relaxing the underlying routing (TSP) structure. A feasible solution to the full problem is a TSP tour (in the expanded graph) that also satisfies the packing constraints (i.e., the total demand along each of the k segments joining successive copies of the depot does not exceed C). Because of the interplay between the two underlying models (both of them are NP Hard problems), instances of the Vehicle Routing Problem can be extremely difficult to solve in practice.

The VRP arises naturally  as a central problem in the fields of transportation, distribution and logistics. In some market sectors, transportation means a high percentage of the value added to goods. Therefore, the utilization of computerized methods for transportation often results in significant savings ranging from 5% to 20% in the total costs. Usually, in real world VRPs, many side constraints appear.

Below, it’s described different variants in VRP cases:

1-Capacitated VRP (CPRV)

CVRP is a Vehicle Routing Problem  in which a fixed fleet of delivery vehicles of uniform capacity must service known customer demands for a single commodity from a common depot at minimum transit cost. That is, CVRP is like VRP with the additional constraint that every vehicle must have uniform capacity of a single commodity.

We can find below a formal description for the CVRP:

  • Objective: The objective is to minimize the vehicle fleet and the sum of travel time, and the total demand of commodities for each route may not exceed the capacity of the vehicle which serves that route.
  • Feasibility: A solution is feasible if the total quantity assigned to each route does not exceed the capacity of the vehicle which services the route.

2. Multiple Depot VRP (MDVRP)

A company may have several depots from which it can serve its customers. If the customers are clustered around depots, then the distribution problem should be modeled as a set of independent VRPs. However, if the customers and the depots are intermingled then a Multi-Depot Vehicle Routing Problem should be solved.

A MDVRP requires the assignment of customers to depots. A fleet of vehicles is based at each depot. Each vehicle originate from one depot, service the customers assigned to that depot, and return to the same depot.

The objective of the problem is to service all customers while minimizing the number of vehicles and travel distance.

We can find below a formal description for the MDVRP:

  • Objective: The objective is to minimize the vehicle fleet and the sum of travel time, and the total demand of commodities must be served from several depots.
  • Feasibility: A solution is feasible if each route satisfies the standard VRP constraints and begins and ends at the same depot.

3. Periodic VRP (PVRP)

In classical VRPs, typically the planning period is a single day. In the case of the Period Vehicle Routing Problem (PVRP), the classical VRP is generalized by extending the planning period to M days.

We define the problem as follows:

  • Objective: The objective is to minimize the vehicle fleet and the sum of travel time needed to supply all customers.
  • Feasibility: A solution is feasible if all constraints of VRP are satisfied. Furthermore a vehicle may not return to the depot in the same day it departs. Over the M-day period, each customer must be visited at least once.

4. Split Delivery VRP (SDVRP)

SDVRP is a relaxation of the VRP wherein it is allowed that the same customer can be served by different vehicles if it reduces overall costs. This relaxation is very important if the sizes of the customer orders are as big as the capacity of a vehicle.

  • Objective: The objective is to minimize the vehicle fleet and the sum of travel time needed to supply all customers.
  • Feasibility: A solution is feasible if all constraints of VRP are satisfied except that a customer may be supplied by more than one vehicle.

5-Stochastic VRP (SVRP)

Stochastic VRP (SVRP) are VRPs where one or several components of the problem are random. Three different kinds of SVRP are the next examples:

  • Stochastic customers: Each customer X is present with probability Y and absent with probability 1-Y.
  • Stochastic demands: The demand d of each customer is a random variable.
  • Stochastic times: Service times  and travel times  are random variables.

In SVRP, two stages are made for getting a solution. A first solution is determined before knowing the realizations of the random variables. In a second stage, a recourse or corrective action can be taken when the values of the random variables are known.

  • Objective: The objective is to minimize the vehicle fleet and the sum of travel time needed to supply all customers with random values on each execution for the customers to be served, their demands and/or the service and travel times.
  • Feasibility: When some data are random, it is no longer possible to require that all constraints be satisfied for all realizations of the random variables. So the decision maker may either require the satisfaction of some constraints with a given probability, or the incorporation into the model of corrective actions to be taken when a constraint is violated.

5-VRP with Backhauls

The Vehicle Routing Problem with Backhauls (VRPB) is a VRP in which customers can demand or return some commodities. So in VRPPD it’s needed to take into account that the goods that customers return to the deliver vehicle must fit into it. The critical assumption in that all deliveries must be made on each route before any pickups can be made. This arises from the fact that the vehicles are rear-loaded, and rearrangement of the loads on the tracks at the delivery points is not deemed economical or feasible. The quantities to be delivered and picked-up are fixed and known in advance. VRPB is similar to VRPPD with the restriction that in the case of VRPB all deliveries for each route must be completed before any pickups are made.

  • Objective: The objective is to find such a set of routes that minimizes the total distance traveled.
  • Feasibility: A feasible solution of the problem consists of a set of routes where all deliveries for each route are completed before any pickups are made and the vehicle capacity is not violated by either the linehaul or backhaul points assigned to the route.

6-VRP with Pick-Up and Delivering

The Vehicle Routing Problem with Pick-up and Delivering (VRPPD) is a VRP in which the possibility that customers return some commodities is contemplated. So in VRPPD it’s needed to take into account that the goods that customers return to the deliver vehicle must fit into it. This restriction make the planning problem more difficult and can lead to bad utilization of the vehicles capacities, increased travel distances or a need for more vehicles.

Hence, it is usually to consider restricted situations where all delivery demands start from the depot and all pick-up demands shall be brought back to the depot, so there are no interchanges of goods between the customers. Another alternative is relaxing the restriction that all customers have to be visited exactly once. Another usual simplification is to consider that every vehicle must deliver all the commodities before picking up any goods.

  • Objective: The objective is to minimize the vehicle fleet and the sum of travel time, with the restriction that the vehicle must have enough capacity for transporting the commodities to be delivered and those ones picked-up at customers for returning them to the depot.
  • Feasibility: A solution is feasible if the the total quantity assigned to each route does not exceed the capacity of the vehicle which services the route and the vehicle has enough capacity for picking-up the commodities at customers.

7-VRP with Satellite Facilities

An important aspect of the vehicle routing problem (VRP) that has been largely overlooked is the use of satellite facilities to replenish vehicles during a route. When possible, satellite replenishment allows the drivers to continue making deliveries until the close of their shift without necessarily returning to the central depot. This situation arises primarily in the distribution of fuels and certain retail items.

8-VRP with Time Windows (VRPTW)

The VRPTW is the same problem that VRP with the additional restriction that in VRPTW a time window is associated with each customer v belongs to V, defining an interval (eo,l0) wherein the customer has to be supplied. The interval (eo,l0) at the depot is called the scheduling horizon. Here is a formal description of the problem:

  • Objective: The objective is to minimize the vehicle fleet and the sum of travel time and waiting time needed to supply all customers in their required hours.
  • Feasibility: The VRPTW is, regarding to VRP, characterized by the following additional restrictions:
    • A solution becomes infeasible if a customer is supplied after the upper bound of its time window.
    • A vehicle arriving before the lower limit of the time window causes additional waiting time on the route.
    • Each route must start and end within the time window associated with the depot.
    • In the case of soft time widows, a later service does not affect the feasibility of the solution, but is penalized by adding a value to the objective function.

Solution techniques

the most commonly used techniques for solving Vehicle Routing Problems are listed. Near all of them are heuristics and metaheuristics because no exact algorithm can be guaranteed to find optimal tours within reasonable computing time when the number of cities is large. This is due to the NP-Hardness of the problem. Next we can find a classification of the solution techniques we have considered:

  • Exact Approaches: As the name suggests, this approach proposes to compute every possible solution until one of the bests is reached.
  • Heuristics: Heuristic methods perform a relatively limited exploration of the search space and typically produce good quality solutions within modest computing times.
    • Constructive Methods: Gradually build a feasible solution while keeping an eye on solution cost, but do not contain an improvement phase per se.
    • 2-Phase Algorithm: The problem is decomposed into its two natural components:
        1. Clustering of vertices into feasible routes
        2. Actual route construction
  • Meta-Heuristics: In metaheuristics, the emphasis is on performing a deep exploration of the most promising regions of the solution space. The quality of solutions produced by these methods is much higher than that obtained by classical heuristics.


It exist different companies, which have developed softwares  to get a solution for this problem. Many firms spend a lot money and time to find the best option for their service.

Caliper develop three main different software services:

  • Transcad: is the first and only Geographic Information System (GIS) designed specifically for use by transportation professionals to store, display, manage, and analyze transportation data. TransCAD combines GIS and transportation modeling capabilities in a single integrated platform, providing capabilities that are unmatched by any other package. TransCAD can be used for all modes of transportation, at any scale or level of detail. TransCAD provides:
    • A powerful GIS engine with special extensions for transportation
    • Mapping, visualization, and analysis tools designed for transportation applications
    • Application modules for routing, travel demand forecasting, public transit, logistics, site location, and territory management
  • TransModeler: TransModeler is a powerful and versatile traffic simulation package applicable to a wide array of traffic planning and modeling tasks. TransModeler can simulate all kinds of road networks, from freeways to downtown areas, and can analyze wide area multimodal networks in great detail and with high fidelity. You can model and visualize the behavior of complex traffic systems in a 2-dimensional or 3-dimensional GIS environment to illustrate and evaluate traffic flow dynamics, traffic signal and ITS operations, and overall network performance.TransModeler breaks new ground in ease-of-use for complex simulation applications and integrates with TransCAD, the most popular travel demand forecasting software in the U.S., to provide a complete solution for evaluating the traffic impacts of future planning scenarios. Moreover, the TransModeler mapping, simulation, and animation tools allow you to present study findings to decision-makers in a clear and compelling fashion

  • Maptitude Mapping Software: Maptitude Geographic Information System (GIS) software is the intelligent mapping solution for business, government, and education. Maptitude is a powerful combination of software and geographic data that provides everything you need to realize the benefits of desktop mapping and spatial analysis with a single, easy-to-use package. With Maptitude you can:
    • Create beautiful, informative map displays
    • Enhance reports and presentations with maps that clearly illustrate your message
    • Find geographic patterns that cannot be seen in database tables and spreadsheets
    • Answer geographic questions that impact your operations
    • Share geographic data with your workgroup, department, or organization

AIMMS is an advanced development environment for building optimization based operations research applications and advanced planning systems. It is used by leading companies to support decision making in a wide range of industries in areas such as supply chain management, production planning, logistics, forestry planning and risk-, revenue- and asset- management.

This company has services of  Support, Consulting, workshops, webmeetings, documentation… and it works in different areas of industries, between them, logistics and manufacturing

Win Route  software leverages advanced planning and optimization technologies and was designed in particularly strong interaction with dispatchers, transport managers and study departments. That is why no other solution will match your needs and integrate into your company better than Win Route.

Win Route can calculate your daily planning (operational mode). It can as well examine the cost-effectiveness of your transport strategy (study mode). Win Route helps you understand and control your company transportation cost thereby ensuring you stay ahead of competition.

Slogan: They will keep investing in math and cloud computing with the final goal to support a green economy of mobility. In other words, they want to reduce the operating expenses and boost business of our customers while reducing the social costs generated by their need to move people, food and all other goods. The company conceive our models to fully exploit the growing mass connectivity and mass computational power.

The efficient methods consider only the most reasonable routes. These approaches are called heuristics and require a model of intelligence as a selection criterion. Effective are those heuristics which mimic the nature: have you ever noticed that a line of ants soon bypasses any obstacle via the shortest path around it? Also genetics may play a good reference for heuristics: selecting and merging cheap couples of routes frequently happens to generate increasingly cheaper routes for further coupling till the best route is generated. Smart selection criteria speed up this calculus and enable dynamic applications.

Services: Route optimization in case of:

  • pickup and delivery applications
  • multiple vehicles with limited capacity
  • management of desired/required time windows
  • Management of fixed and variable appointments

Solutions for:

  • Asymmetryc TSP (Traveler Sales Man problem) and VRP (Vehicle Route Problem)
  • Multi-vehicle optimal and load-balanced assignements
  • Solver of routing problems up to thousands of destionations and vehicles
  • Solver of Time Windowed VRP routing problems
  • Solver of multi-dimensional knapsack geographical problems
  • Solver of PickUp&Delivery time windowed problems
  • Integration of optimal tour deliveries (to drivers’ navigators, driving direction, email, list of addresses, …)
  • M2M middleware integration to update the address demand in real time
  • Validation and control via GPS tracking
  • Geofencing; adaptive, self learning and increasingly accurate scheduling of planned tours

Demo case:


`Just-in-time’ is a management philosophy and not a technique.

It originally referred to the production of goods to meet customer demand exactly, in time, quality and quantity, whether the `customer’ is the final purchaser of the product or another process further along the production line.

It has now come to mean producing with minimum waste. “Waste” is taken in its most general sense and includes time and resources as well as materials. Elements of JIT include:

  • Continuous improvement.
    • Attacking fundamental problems – anything that does not add value to the product.
    • Devising systems to identify problems.
    • Striving for simplicity – simpler systems may be easier to understand, easier to manage and less likely to go wrong.
    • A product oriented layout – produces less time spent moving of materials and parts.
    • Quality control at source – each worker is responsible for the quality of their own output.
    • Poka-yoke – `foolproof’ tools, methods, jigs etc. prevent mistakes
    • Preventative maintenance, Total productive maintenance – ensuring machinery and equipment functions perfectly when it is required, and continually improving it.
  • Eliminating waste. There are seven types of waste:
    • waste from overproduction.
    • waste of waiting time.
    • transportation waste.
    • processing waste.
    • inventory waste.
    • waste of motion.
    • waste from product defects.
  • Good housekeeping – workplace cleanliness and organisation.
  • Set-up time reduction – increases flexibility and allows smaller batches. Ideal batch size is 1item. Multi-process handling – a multi-skilled workforce has greater productivity, flexibility and job satisfaction.
  • Levelled / mixed production – to smooth the flow of products through the factory.
  • Kanbans – simple tools to `pull’ products and components through the process.
  • Jidoka (Autonomation) – providing machines with the autonomous capability to use judgement, so workers can do more useful things than standing watching them work.
  • Andon (trouble lights) – to signal problems to initiate corrective action.

Background and history

JIT is a Japanese management philosophy which has been applied in practice since the early 1970s in many Japanese manufacturing organisations. It was first developed and perfected within the Toyota manufacturing plants by Taiichi Ohno as a means of meeting consumer demands with minimum delays . Taiichi Ohno is frequently referred to as the father of JIT.

Toyota was able to meet the increasing challenges for survival through an approach that focused on people, plants and systems. Toyota realised that JIT would only be successful if every individual within the organisation was involved and committed to it, if the plant and processes were arranged for maximum output and efficiency, and if quality and production programs were scheduled to meet demands exactly.

JIT manufacturing has the capacity, when properly adapted to the organisation, to strengthen the organisation’s competitiveness in the marketplace substantially by reducing wastes and improving product quality and efficiency of production.

There are strong cultural aspects associated with the emergence of JIT in Japan. The Japanese work ethic involves the following concepts.

  • Workers are highly motivated to seek constant improvement upon that which already exists. Although high standards are currently being met, there exist even higher standards to achieve.
  • Companies focus on group effort which involves the combining of talents and sharing knowledge, problem-solving skills, ideas and the achievement of a common goal.
  • Work itself takes precedence over leisure. It is not unusual for a Japanese employee to work 14-hour days.
  • Employees tend to remain with one company throughout the course of their career span. This allows the opportunity for them to hone their skills and abilities at a constant rate while offering numerous benefits to the company.

These benefits manifest themselves in employee loyalty, low turnover costs and fulfilment of company goals.

Supplies are delivered right to the production line only when they are needed. For example, a car manufacturing plant might receive exactly the right number and type of tyres for one day’s production, and the supplier would be expected to deliver them to the correct loading bay on the production line within a very narrow time slot.

Advantages of JIT

  • Lower stock holding means a reduction in storage space which saves rent and insurance costs
  • As stock is only obtained when it is needed, less working capital is tied up in stock
  • There is less likelihood of stock perishing, becoming obsolete or out of date
  • Avoids the build-up of unsold finished product that can occur with sudden changes in demand
  • Less time is spent on checking and re-working the product of others as the emphasis is on getting the work right first time

Disadvantages of JIT

  • There is little room for mistakes as minimal stock is kept for re-working faulty product
  • Production is very reliant on suppliers and if stock is not delivered on time, the whole production schedule can be delayed
  • There is no spare finished product available to meet unexpected orders, because all product is made to meet actual orders – however, JIT is a very responsive method of production.

” A company cannot decide to implement JIT; they must earn the right to use JIT by revising their quality procurement systems.”  – John Young, President of Hewlett-Packard.


1. Toyota the Developer of JIT System
Just-in-time manufacturing system has many advantages, but they are vulnerable to unexpected disruptions in supply. A production line can quickly come to a halt if essential parts are unavailable. Toyota, the developer of JIT, found this out the hard way. One Saturday, a fire at Aisin seiki Company’s plant in Aichi Prefecture stopped the delivery of all break parts to Toyota. By Tuesday, Toyota had to close down all of its Japanese assembly line. By the time the supply of break parts had been restored, Toyota had lost an estimated $15 billion in sales.

Source: “Toyota to Recalibrate ,'” International Herald Tribune, February 8, 1997.

2. PCs Just In Time Management
Del Computer Corporation has finally tuned its Just-in-Time system so that an order for a customized personal computer that comes in over the internet at 9 AM. can be on a delivery truck to the customer by 9 P.M. In addition, Dell’s low cost production system allows it to under price its rivals by 10% to 15%. This combination has made Dell the envy of the personal computer industry and has enabled the company to grow at five times the industry rate. How does the company’s just in time system deliver lower costs? “While machines from Compaq and IBM can languish on dealer shelves for two months Dell does not start ordering components and assembling computers until an order is booked. That may sound like no biggie, but the price of PC parts can fall rapidly in just a few months. By ordering right before assembly, Dell figures it s parts, on average, are 60 days newer than those in an IBM or Compaq machine sold at the same time. That can translate into a 6% profit advantage in components alone.”

Source: Gray McWilliams, “Whirlwind on the web, “Business Week, April 7, 1997.

3. Slashing Process Time
American Standards uses cell manufacturing to cut inventories and reduce manufacturing time. At its plant, England, it used to take as long as three weeks to manufacture a vacuum pump and another week to process the paper work for an order. Therefore customers had to place orders in advance. “Today Leeds has switched to manufacturing cells that do every thing from lathing to assembly in quick sequence. The result is a break through in speed. Manufacturing a pump now takes six minutes.”

Source: Shawn Tully, “Raiding a company’s Hidden Cash,” Fortune, August 22, 1994, PP 82-87.




Companies Currently using JIT

  • Harley Davidson
  • Toyota Motor Company
  • General Motors
  • Ford Motor Company
  • Manufacturing Magic
  • Hawthorne Management Consulting
  • Strategy Manufacturing Inc.

Ten Arguments against the JIT Production Revolution

People naturally tend to harbor a mild affinity toward one another. Co-workers tend to harbor a very strong affinity with their system of “the way things are done,” which they have built together over the years. As far as they are concerned, no system could be better for them. They have no desire tochange it. After all, their routine is leveled and is very easy tolive with. Even in the finest-looking factories, life goes on inthe traditional, albeit obsolete, manner.

Improvement starts at the factory:

“Hey Joey, could you roll that set of machines over here?I want to link them up with this process.”

“Hey, no way. Why all the hassle?”

“Haven’t you heard? We’re dropping this lot production stuffand gearing up for one-piece flow.”

“Do you have any idea what kind of quality problems these changes are going to create?”

“Come on, move it. I want you to have this set-up for onepiece production before I come by again.”

“If you say so, but it won’t work.”

The three common excuses encountered at this point boil down to: “I don’t want to change things,” “It’s too much trouble,”and, “I’m afraid I’ll get laid off.”

Aside from these common excuses, I have been able to identify ten arguments against JIT that are often encountered on the path of JIT improvement.


Hence we can see that to have a Total JIT manufacturing system, a company-wide commitment, proper materials, quality, people and equipments must always be made available when needed. In addition; the policies and procedures developed for an internal JIT structure should also be extended into the company’s supplier and customer base to establish the identification of duplication of effort and performance feedback review to continuously reduced wastage and improve quality. By integrating the production process; the supplier, manufacturers and customers become an extension of the manufacturing production process instead of independently isolated processes where in fact in clear sense these three sets of manufacturing stages are inter-related and dependent on one another. Once functioning as individual stages and operating accordingly in isolated perspective; the suppliers, manufacturers and customers can no longer choose to operate in ignorance. The rules of productivity standards have changed to shape the economy and the markets today; every company must be receptive to changes and be dynamically responsive to demand. In general, it can be said that there is no such thing as a KEY in achieving a JIT success; only a LADDER; where a series of continuous steps of dedication in doing the job right every time is all it takes.

JIDOKA: the concept

mayo 10, 2010

JIDOKA: automation with human intelligence (Autonomation)

Jidoka is a Japanese term used for autonomation and being widely used in Toyota Production System (TPS), Lean Manufacturing and Total Productive Maintenance (TPM).  Concept is to authorize the machine operator and in any case if a problem occurs on flow line, operator can stop the flow line. Ultimately defective pieces will not move to the next station. This concept minimizes the production of wasted defects, over production and minimizes wastes. Also its focus is to understand the causes of problems and then taking preventive measures to reduce them.

History of Jidoka is back in early 1900’s, when first loom was stopped due to breakage of thread. This loom was developed by Toyota, and it stops working immediately, if any thread broken.   Taiichi Ohno is considered to be the inventor of this idea and he describes this tool as one pillar of TPS. Shigeo Shingo called it as pre-automation.

The concept of automated line is being used to relieve workers and minimize human related errors. If machine detects any defect or problem, it should stop immediately. The common causes of defect are:

  1. Inappropriate operating procedures
  2. Excessive variation in operations
  3. Defective raw material
  4. Human or Machine error

Jidoka concept was developed due to many reasons, the common reasons are:

  1. Overproduction of goods
  2. Wasted time during manufacturing at the machine
  3. Wastage of time during transportation of defected material from one place to other
  4. Waste of time during defective piece re-processing
  5. Waste of inventory

The purpose of Jidoka implementation is to diagnose the defect immediately and correct it accordingly. Now, human related judgment of component quality is minimized and worker will be only attentive, when machine will be stopped. This concept also helps in sequential inspection of components and ultimately good quality products are produced and also not much burden of final inspection is put on the shoulders of worker. Inspection is carried out by machine and when machine stops working, designated person or skilled person rush towards machine and try to resolve the problem. Jidoka focuses to investigate the root cause of that problem and make necessary arrangements so that this defect may not occur again. Defect prevention can be achieved by using Poka Yoke technique.

Jidoka is being effectively used in TPM, Lean Manufacturing and providing substantial benefits to the organizations. Common benefits obtained by its implementation are:

  1. Helps in detection of  problem at earlier stages
  2. It helps in becoming world class organization
  3. Human intelligence is integrated into automated machinery
  4. Defect free products are produced
  5. Enhances substantial improvement in productivity of the organization

When utilizing Jidoka philosophy, Taiichi Ohno had some specific goals of this tool in mind. But with the advancement in its scope, following goals are being achieved through its application:

  1. Effective  utilization of manpower
  2. Product produced will be of top quality
  3. Shorter delivery time of products
  4. Reduction in equipment failure rate
  5. Improve level of customer satisfaction
  6. Increase quality of final product
  7. Lower costs (Internal, External, and Appraisal cost etc.)

video: jidoka concept.



Jidoka is also called “autonomation”, but not to be confused with “automation”.

Mark Rosenthal of Genie Industries, published in 2002 by the Society of Manufacturing Engineers’ online journal. 

He mentions the 4 steps of jidoka (the first type, general application). These 4 steps are for operating jidoka as a problem detection and response system. The 5 steps to building jidoka equipment are for machine process (second type, narrow application).

There’s more. Officially there are 7 steps to implementing jidoka and the 5 steps of jidoka in 3P are adapted from these. The 7 steps are a subset of the 10 steps of full automation. Confused? At this point our graphics department comes to the rescue:

The X symbols represent manual work, the O symbols represent machine work and the yellow highlight indicates jidoka has been implemented in that step. If you go beyond the yellow area of the 7 steps of “jidoka” to full automation then you have a transfter line or perhaps even “lights out” manufacturing where loading and starting are also automated through sensors between the linked machines.

Steps 2 and 7 from the chart above are missing in the 5 steps to building jidoka equipment that are used in 3P. Pokayoke (step 7 in graph above) in both manual and machine operations is addressed in other ways in the Production Preparation Process so it may have been left out as redundant. Why work holding has been left out, I don’t know. Perhaps work holding was considered a given as part of the 3P equipment design exercise known as Process At A Glance.

The “spiral up” concept was taught to me as “take it a step at a time rather than going from step 1 to 4 right away” in order to ensure that the automation was as simple and low cost as possible. There are many catalog solutions for going from step 1 to 4 that are do not support Lean manufacturing, so 3P thinking is “spiral up”. The steps are usually written as:

5. Automatic unloading
4. Automatic return to home position
3. Automatic stop
2. Automatic feed
1. Automatic processing

You have to count from the bottom to the top because you “spiral up”.

Since the Production Preparation Process is concerned with the design of production processes and production lines from an equipment standpoint with a view to ensuring the product design can be produced at the lowest cost, it makes sense that the second type of jidoka is the main focus of the 5 steps of jidoka. Certainly the first type of jidoka or the discipline of “stop and fix” is part the standard operating procedure for people working in the line also and important to 3P.

ref: Oskar Olofsson, 2009 – Jon Miller (May 4, 2006 09:18 PM) – Society of Manufacturing Engineers’ online journal

Business Definition:

a manufacturing system, developed by Toyota in Japan after World War II, which aims to increase production efficiency by the elimination of waste in all its forms. The Toyota production system was invented, and made to work, by Taiichi Ohno. Japan’s fledgling car-making industry was suffering from poor productivity, and Ohno was brought into Toyota with an initial assignment of catching up with the productivity levels of Ford’s car plants. In analyzing the problem, he decided that although Japanese workers must be working at the same rate as their American counterparts, waste and inefficiency were the main causes of their different productivity levels. Ohno identified waste in a number of forms, including overproduction, waiting time, transportation problems, inefficient processing, inventory, and defective products. The philosophy of TPS is to remove or minimize the influence of all these elements. In order to achieve this, TPS evolved to operate under lean production conditions. It is made up of soft or cultural aspects, such as automation with the human touc autonomationâ and hard, or technical, aspects, which include just-in-time, kanban, and production smoothing. Each aspect is equally important and complementary. TPS has proven itself to be one of the most efficient manufacturing systems in the world but although leading companies have adopted it in one form or another, few have been able to replicate the success of Toyota.


  • over-production
  • motion (of operator or machine)
  • waiting (of operator or machine)
  • conveyance
  • processing itself
  • inventory (raw material)
  • correction (rework and scrap)
  • Lean Manufacturing and the Toyota Production System

    The use of the term “Lean”, in a business or manufacturing environment, describes a philosophy that incorporates a collection of tools and techniques into the business processes to optimize time, human resources, assets, and productivity, while improving the quality level of products and services to their customers. Becoming “Lean” is a commitment to a process and a tremendous learning experience should you attempt to implement Lean principles and practices into your organization.

    The term Lean in the manufacturing environment also refers to the Toyota Production system established by the Toyota Corporation. Within the organization, four prominent gentlemen are credited with developing the system: Sakichi Toyoda, who founded the Toyoda Group in 1902; Kiichiro Toyoda, son of Sakichi Toyoda, who headed the automobile manufacturing operation between 1936 and 1950; Eiji Toyoda, Managing Director between 1950 and 1981 and Chairman between 1981 and 1994; and Taiichi Ohno, the Father of the Kanban System.

    Sakichi Toyoda invented a power loom in 1902 and in 1926 an automatic loom capable of detecting a snapped thread that automatically stopped the loom thus preventing production of poor quality. That same year, 1926, he founded the Toyoda Automatic Loom Works that manufactured automatic looms. In 1937, Sakichi sold his automatic loom patents to a company in England to finance an automobile manufacturing operation with his son Kiichiro managing the new venture. At the same time in Yokohama, Japan, the Ford Motor Company was building Model A cars and trucks with mixed models in a plant converted over from the Model T. At this time, Ford was the largest manufacturer of automobiles in Japan with General Motors as the second largest manufacturer, together producing over 90% of the vehicles manufactured in Japan. The new automotive venture for the Toyoda Group was risky.

    Kiichiro Toyoda, the son of Sakichi, who possessed a greater interest in engines and automobiles then textiles and loom production, convinced his father to establish an automotive operation in 1936. As managing director of the new operation, Kiichiro traveled to the Ford Motor Company in Detroit for a year of studying the American automotive industry. Kiichiro returned to Japan with a strong knowledge of the Ford production system determined to adapt the system to smaller production quantities. In addition to the smaller production quantities, Kiichiro’s system provided for different processes in the assembly sequence of production, the logistics of material simultaneous to production consumption, and a supplier network capable of supplying component material as required. The system was referred to as Just-in-Time within the Toyoda Group.

    Eiji Toyoda, a nephew of Sakichi Toyoda, joined the Toyoda Automatic Loom Works family business after graduating from the University of Tokyo in 1936. In 1950, Eiji was named Managing Director of the Toyoda Automotive Works when the Japanese government forced Kiichiro Toyoda into reorganizing the Toyoda Group. The forced reorganization separated the family businesses and resulted in the resignation of Kiichiro and his entire staff. In the first year as Managing Director, Eiji traveled to the United States to study the American automotive industry and report on American manufacturing methods. After touring the Ford Motor Company operations, Eiji returned to Japan with a desire to redesign the Toyoda Automotive Works plants. An important process learned during the trip was the Ford Motor Company suggestion system. Eiji instituted the concept and it is considered to be one of the major building blocks of the Toyota Production System of continuous improvement (Kaizen).

    In 1957, Eiji renamed the Toyoda automotive operation The Toyota Company and again in 1983 to the Toyota Motor Corporation. In 1982, he established the Toyota Motor Sales USA. In 1986, Eiji returned to the United States to renew his study of the American automotive industry. Upon his return to Japan he presented the employees with new challenges. The Toyota Motor Corporation could not just copy the American automotive industry, but needed to produce superior automobiles, and do it with creativity, resourcefulness, wisdom, and hard work.

    Taiichi Ohno, considered to be the creator of the Toyota Production System and the Father of the Kanban System, joined the Toyoda Automatic Loom Works after graduating from Nogoya Technical High School in 1932. Early in his career, he expanded upon the JIT concepts developed by Kiichito Toyoda to reduce waste, and started experimenting with and developing methodologies to produce needed components and subassemblies in a timely manner to support final assembly. During the chaos of World War II, the Loom Works was converted into a Motors Works and Taiichi Ohno made the transition to car and truck parts production. The war resulted in the leveling of all Toyoda Group Works production facilities, but under the management of Eiji Toyoda, the plants were gradually rebuilt and Taiichi Ohno played a major role in establishing the JIT principles and methodologies developed in the Loom manufacturing processes.

    At the reconstructed Toyoda Group Automotive Operations, Taiichi Ohno managed the machining operations under severe conditions of material shortages as a result of the war. Gradually he developed improved methods of supporting the assembly operations. The systems that were developed( the Toyota Production System), Ohno credited to two concepts. The first concept from Henry Ford’s book Today and Tomorrow published in 1926 provided the basis of a manufacturing production system. The second concept was the supermarket operations in the United States observed during a visit in 1956. The supermarket concept provided the basis of a continuous supply of materials as the supermarket provided a continuous supply of merchandise on the store shelves.

    Two other gentlemen who helped shape the Toyota Production System were Shigeo Shingo, a quality consultant hired by Toyota, who assisted in the implementation of quality initiatives; and Edward Deming who brought Statistical Process Control to Japan.

    The principles and practices of Lean are simplistic and developed over a 90-year period of time. While they have evolved by trial and error over many decades, and many prominent men have contributed to their development, the principles and practices are not easily to implement, which many companies will attest too. Implementation requires a commitment and support by management, and participation of the all personnel within an organization to be successful.

    PERSONAL CASE:  Role of Management in a Lean Manufacturing Environment

    Since this column is meant to link automotive engineers with lean manufacturing, I would like to share my personal experience as a mechanical engineer who started out in the traditional way of manufacturing, and along the way discovered a much better way — the Toyota Production System.

    I will describe what it was like to transplant this philosophy to American soil, in hopes that anyone attempting to change the culture of an existing plant towards “lean manufacturing” can benefit from my experience and observations. In particular, I intend to focus on the role of management in a TPS (or any lean manufacturing) environment.

    In 1964, I took my hot-off-the-press BSME diploma and went to work for GM in their management training program. Later I joined Ford and worked my way up through Quality, Engineering, Maintenance and Manufacturing Management. During this 18-year stint I became acutely aware that our industry was in trouble. We were stuck in doing things the same old way, and that way was not getting the job done. We couldn’t respond to the changing market. Worst of all, the people working in our plants couldn’t make things better, even though they had plenty of good ideas, because they were bogged down by the rigid, traditional structures.

    So I was ready for something new, and I found it — or rather, it found me, when Toyota recruited me to help start up NUMMI — Toyota’s joint venture with GM. For Toyota, it was a cautious first step; they were not at all sure that Americans could learn how to apply the Toyota Production System. But I was convinced that American workers were just as good as workers anywhere, or at least they could be, if they were allowed to perform up to their potential.

    That was in 1984. I was part of the NUMMI team for 15 years, and it was a great experience. TPS proved to be highly successful at NUMMI, in spite of the fact that Toyota took it into a plant that had been closed two years earlier, and hired back most of the same people who had worked there before. Toyota’s way of managing and manufacturing enabled us to make a total turnaround of that plant. Encouraged by NUMMI’s success, Toyota built a plant in Kentucky, where I am now President.

    In my opinion, the key to the successful implementation of TPS at NUMMI, and TMMK, and at the other Toyota plants in North America, has been the total commitment on the part of everyone to make it work. By that I mean, all levels of the organization, from team members to the senior managers, have to be aware of the fundamentals of TPS and have to make their best efforts to practice and improve them day-by-day. This is much easier said than done, and I’ll come back to this point later.

    One of the fundamental elements of TPS that management must be fully committed to is the “customer-first” philosophy. Typically, organizations envision the customer only in terms of the person who purchases the final product at the end of the process. TPS has a different view.

    Essentially, each succeeding process or workstation or department is the customer. In a Toyota plant, we work very hard to ensure that all team members and all departments realize their dual role: they are at once the customers of the previous operation and the suppliers to the next operation downstream.

    For this concept to flourish, there must be no artificial barriers walling off one area from another or one department from another. Rather, the entire organization shares problems and must work together to ensure that a solution is found. Therefore, it is critical for the successful implementation of TPS that all managers support this idea and aggressively seek to solve problems, even if they are not directly within their scope of control. This all-hands-on-deck attitude is essential in a TPS environment.

    The Toyota Production system is an integrated and interdependent system involving many elements. I like to think of it as a triangle, where one side is philosophy, one side is technology; and the other side is management. Cradled in the middle of the triangle is what TPS is really all about – people. Human development is at the very core of TPS. It is often overlooked, as people seize on the more tangible aspects of TPS. Engineers are particularly likely to latch on to tools like kanban, heijunka, and jidoka, and think they have captured the essence of TPS.

    Of course the tools are important. TPS uses the technical elements, such as kanban, just-in-time, small lot delivery, Jidoka or quality in the process, heijunka or leveling of demand, visual control and 5S or clean, orderly worksites, to manage the day-to-day production system as efficiently as possible.

    But the basic tenet of TPS is that people are the most important asset, and, for that reason, management must have a shop-floor focus. Toyota managers are taught that all value-added activities start on the shop floor; therefore the job of managers is to support the team members. Production team members appreciate management on the shop floor only when they can see that we are out there to help them do their jobs, not as part of a command structure, bent on telling them what to do.

    In my experience, the most common roadblock to the successful implementation of TPS is the failure on the part of management – and particularly senior level leaders – to understand TPS as a comprehensive approach to manufacturing and management. Too often, company leaders lack the total commitment to, and understanding of, TPS, that are essential to its adoption, and are unwilling to be involved in its day-to-day implementation and application. TPS is not simply a set of concepts, techniques and methods, which can be implemented by command and control. Rather it is a fully integrated management and manufacturing philosophy and approach which must be practiced throughout the organization from top to bottom and consistently applied and kaizened day in and day out.

    Another common reason TPS implementations fail is that managers try to implement individual elements instead of the entire TPS approach. Since the elements of TPS are integrated and interdependent, any attempt to implement TPS only partially is bound to produce very unsatisfactory results.

    For TPS to work effectively, it needs to be adopted in its entirety; not piecemeal. Each element of TPS will only fully blossom if grown in an environment that contains and nourishes the philosophies and managerial practices needed to support it. I liken this to a greenhouse, where just the right combination of soil, light, temperature, humidity, water and nutrients allow plants to grow and flourish. If any one of these elements is removed, the plants will weaken and eventually die.

    TPS is an interlocking set of three underlying elements: the philosophical underpinnings, the managerial culture and the technical tools. The philosophical underpinnings include a joint shop-floor, customer-first focus, an emphasis on people first, a commitment to continuous improvement or kaizen, and a belief that harmony with the environment is of critical importance. The managerial culture for TPS is rooted in several factors, including developing and sustaining a sense of trust, a commitment to involving those affected by first, teamwork, equal and fair treatment for all, and finally, fact-based decision making and long-term thinking.

    All of these facets of TPS – the philosophical mindset, the managerial culture and the technical tools – must be in place and in practice for TPS to truly flourish and provide the high-quality, high-productivity results it is capable of producing.

    What have I learned from my experience with the Toyota Production System, that I can pass along to you? First, I have learned that the human dimension is the single most important element for success. Management has no more critical role than motivating and engaging large numbers of people to work together toward a common goal. Defining and explaining what that goal is, sharing a path to achieving it, motivating people to take the journey with you, and assisting them by removing obstacles – these are management’s reason for being.

    I’ll never forget the wise advice given me by a man I grew to respect and admire very deeply, Mr. Kan Higashi, who was our second president at NUMMI. When he promoted me to vice president, he said my greatest challenge would be “to lead the organization as if I had no power.” In other words, shape the organization not through the power of will or dictate, but rather through example, through coaching and through understanding and helping others to achieve their goals. This, I truly believe, is the role of management in a healthy, thriving, work environment.


    DELPHI is an automotive parts company headquartered in Troy, Michigan, USA. Delphi is one of the world’s largest automotive parts manufacturers and has approximately 146,600 employees (18,900 in the United States).

    With offices worldwide, the company operates 150 wholly owned manufacturing sites, 44 joint ventures, 53 customer centers and sales offices, and 33 technical centers in 38 countries.

    Delphi is structured into the following groups:

    • Consumer Products
    • Manufacturer Products
    • Aftermarket & Dealer Products

    The company is focusing the organization on the following core strategic product lines:

    • Controls & Security (Body Security, Mechatronics, and Displays)
    • Electrical/Electronic Architecture (Electrical/Electronic Distribution Systems, Connection Systems, and Electrical Centers)
    • Entertainment & Communications (Audio, Navigation, and Telematics)
    • Powertrain (Diesel and Gasoline Engine Management Systems)
    • Safety (Occupant Protection and Safety Electronics)
    • Thermal (Climate Control & Powertrain Cooling)
    Long accustomed to mapping the value streams within factories for the products they make, executives at Delphi Automotive Systems decided to extend their efforts beyond the factory walls. They sought to identify every step involved in getting a product to a customer, including not just manufacturing processes but every action in the supply chain as well.
    Delphi is a global company with about 200 manuifacturing sites and roughly 200000 employees, so it’s not surprising that getting a product to a customer us a complex process too complex, executives found.
    ‘It takes 171 organizations and a total of 288 handsoff just to bring the product to the customer’, said Mark Lorenz, vice president of operations logistics.
    Lorenz, speaking at a conference sponsored by the Management Rountablbe In Dallas, was describing the steps connected with justo one product, which he did not identify. But he did say that Delphi applied lean principles to sumplify and streamline all complexity.
    In the case of a particular product, the numer of organizations involved (both inside and outside Delphi) has been reduced to 73, and now tere are only 82 handsoff. ‘We’re still thinking that’s too may’, Lorenz said.
    In addition, the production process has been streamlined so that only one plant is involved instead of two, which has the added benefit of freeing up capacity in the plant no longer involved.
    The achievemet with that product’s delivery is part of much larger picture at Delphi, where the implementation of lean manufacturing has been expanded to include streamlining the supply chain.
    The approaches taken include working on rates, forming partnerships with supply chain companies, route modeling, and reducing the number of locations involved as well as the number of shippers. In addition, ‘we’ve eliminated probably 40% to 50% of our warehouses, and there are more to take out’, Lorenz explained.
    The result so far, he said, is that Delphi’s total logistics costs, including transportation, customs and duties, freight expenses, and warehousing, have been cu to about 2.5% of revenues, down form a range of five to six percent. ‘We feel that’s a bechamark’, Lorenz declared.
    A major challenge

    Delphi began its lean journey in 1996 and is recognized today as a leader in implementing lean processes. Five of its plants were 2002 winners of the Shingo Prixe for Excellence in Manufacturing.
    Addressing supply chain issues is a big job for Delphi, given the scope of its operations. The company produces more than 130 product lines; Lorenz jokingly referred to Delphi as ‘the Wall-MArt of automotive companies’, with products for dynamics and propulsions, electronics and mobile communication, and safety, thermal and electrical architecture. Each day, Delphi ships 8 million parts with 150000 part numbers to more than 100 customers. In a lighthrearted, Lorenz stated that Burger King sells approximately seven million hamburguers a day with about six part numbers.
    He also offered s supply chain comparison. Three major airports, Chicago, Los Angeles and Dallas, are responsible for 2846 flights, or ship windows, per day, Lorenz said, while Delphi handles 3000 shipments per day, which are 99% on time. A diagram of Delphi’s logistics literally covers the globe.
    To make its manufacturing lean, Delphi created the Delphi Manufacturing System, modeled after the renowned Toyota Production System. For its supply chain, Delphi has established its Global Logistics Network and has been striving  to streamline every aspect of that work.’ We are compressing th size of the supply chain by using value stream mapping’, Lorenz declares.
    Product flow to customers has been realigned so that shipments rarely, rather than regularly, travel form one continent to another.
    Delphi used to work with 35 freight forwardes and 56 carriers. Now it has three global LMCs and 12 ocean carriers; Lorenz says the company would like to reduce that latter figure to nine.
    It’s Information That Counts

    However, the real challenge in transforming the supply cahin was information flow. ‘ If you don’t have good information flow, material flow is just expending’, Lorenz commented.
    Toward that end, Delphi and technology partner Covisint created a supplier portal, a Web page that ‘helped us to eliminate the complexity we had with multi-division communication” between Delphi an it more 5000 global suppliers, he said.
    ‘The supplier portal aso supports our vision fro electronically linking pur supply chain. Through this portal, we expect to improve customer service and improve our ability to achieve cost reductions’, he added. The portal is designed to help streamline procurement, production and shipping.
    For example, Lorenz notes thar even third-tier suppliers can get information through the portal, which gives them a mucha earlier indication of likely orders. ‘The old way, the third-tier supplier may not have seen that for four weeks out’, Lorenz states.
    In addition, Delphi is using a Covisint tool called Inventory Visibility that monitors min/max information.
    ‘We are using information through the portal to forecast where demand is going the next four or five weeks. We are able to smooth out ripples in our manufacturing’, Lorenz said.
    Delphi also offers electronic messaging for suppliers for 2-way communication in addressing supply chain issues, Delphi has not abandoned it focus on eliminating waste from its manufacturing operations. Continous flow, small lot production strategy, elimination of waste, improvements in quality and the other principles of lean manufacturing are still emboided in the Delphi Manufacturing System, which remains the company standard.
    For the future, Delphi reamins absolutely committed to continuing its lean journey, Lorenz stressed, even at a time when worlf problems can threaten supply chain disruptions.
    ‘We have no plans to change our lean philosophy or practices’, he said. ‘Carrying excess inventory is an unnecessary expense’.
    • Mapping the supply chain is essential.
    • Supply chains can be improved by reducing the numbers of organizations involved, handsoffs and warehouses.
    • Smooth information flow is critical.

    An athelete may use a pair of adidas shoes to increase his running speed. As part of global initiative, adidas is using lean manufacturing to increase how quickly those shoes get to the athelte.

    The company makes a broad spectrum of footwear, appareal and accesories at more than 500 factories in 63 countries. Designing, manufacturing and distributing those products takes careful planning, large-sacle production, and complex logistics – and it takes time

    That’s the problem. If adidas takes too mucha time to spot and respond to changing consumer preferences – not to mention manufacture the products – it may miss sales opportunities and/or find itself stuck with foot wear nobody wants.

    That’s why adidas is now tageting a 50% reduction in time-to-maket every year. And that’s why the company  is more than 2 years into learn manufacturing initiative designed to help achieve that goal.

    It’s an effort that already is starting to bear fruit. It used to take 90 days from and initial request for a product to having it delivered. Today, in many cases, it takes only 60 days, according to David Freni, head of strategic planning – global operations for adidas International. Thar broad improvement results from an accumulation of gains in a variety of areas, including dock-to-dock time within factories, “cut-to-box” time, packaged adn delivered inccordance with the original plan.

    The 30-day reduction can make a big difference. “If we have 30 days more to delay the actual commitment of, let’s say,the sizes of a particular color of a particular product, the decission-making process of chosing the correct product improves anywhere from 25 to 55 percent”, Freni says. “What we’re seeing is two things: one is that our customer is ordering the correct thing, more accuracy in terms of size and color, and we’re getting larger orders as well. They’re less risk-averse, willing to commit to more production.”

    Freni believes this will ultimately produce both greater sales for adidas and fewer markdowns, with imporvements of up tp 20 percent in each of those two areas, or a total “window of opportunity” of as much as 40%. It will take several more seasons to see the results, he adds, nothing that a “season” in the footwear industry lasts about six months.

    In August, parent company adidas-Salomon announced a net sales increase of 10 percent in the second quarter. Operatind expenses were 40.2 percent of sales, up 0.4 percentage points. However, inventories were down 12 percent from a year earlier, and receivables were up 4 percent (which was less than sales growth). Net debt decreased 10 percent, the biggest year-over-year debt reduction since the Salomon acquisition.

    The time-to-market initiative involves a coordinated, global effort on the part of adidas and its consultants. A major part of that effort on the part od adidas and its consultants. A major part of that effort has been training that leads to lean implementations in factories around the world. The effort  also involves technology improvements in supply chain planning, and it is beginning to close on the compnany’s internal design process.

    Transforming Factories Worldwide

    adidas outsources most of its manufacturing; the vast majority of factories that make adidas products are owned by other companies. But those companies – nearly 60 of them – are jumping on the adidaslean bandwagon “because of adidas” influene and he amount of capacity they consumed at these factories”, notes Fred Flynn, one of several consultants with Productivity, Inc., who worked with adidas for more than four years.

    “adidas is probably the first company I’m aware of that has taken on such a large responsibility for educationof their tier on suppliers,” Flynn adds.

    It’s a daunting task, not only because of the number of factories involved, bur also because of the size of some operations. One of the largest is a vast complex in Guangdong, China, employing nearly 90.000 people. A second complex nearby emplys another 20.000.

    Operations were traditional batch-queue. For exmaple, a five story building at the site was divided up by process. Cutting of raw materials occured in batches on the first floor. The cut pieces  were bundled and sent to storage in warehouse, then brought back several days later for preparation on another floor. More warehouse storage would follow, until the prepared materials were brought back for sewing on still another floor.

    In China, and everywhere else the consultants went, training has been a critical part of transformantion. Several dozen  managers at a timewent through a four-week training program. That was followed by the consultants working with the graduates to transform the shop floor, creating manufacturing cells. Visual controls have also been established in many operations.

    Results vary among factories, but the benefits are clear. Work in process was reduced by amounts rangin from 54 precent to 98 percent, Flynn says, while lead times went down from 25 percent to 97 percent. Improvements in productivity – pairs per person per hour – also covered a broad range, but averaged about 50 percent, he adds.

    Initially, all the efforts focused on footwear factories. More recently, the initiative has expanded to include apparel factories, which tend to be smaller but are greater in number. Lean efforts were launched not only in China, but also in factories in Taiwan, Istanbul, Tunisia, Vietnam, Indonesia, the Philippines, Bulgaria and Turkey.

    Doing It Right

    “The training is fundamental,” Freni says. “You can relate the success in the factory directly to how well you’ve trained not only senior management people, but down in the factory too. They have to understand how they contribute to the overall picture, and what the overall picture is. If you spend the time up front doing that, then they become part of the soultion.”

    The other key factor, he states, is establishing a baseline, “understanding where you’re at before you start changing things, so you understand hoe you’ve changed things, and how much”

    “Those two things are pretty much the core of getting it right. If you do those two things well, eventually ths shop floor is pushing this and setting new limits. Then you really have a lean enviroment.”

    Stanley Mao is coordinator of lean manufacturing for Apache Footwear in Guangdong, a manufacturer for adidas. In an e-mail reply to  questions about the lean transformation, he commented that “it was very difficult to get pur emloyees involved in lean implementation, due to the fact that they didn’t know what lean was… Therefore, we established a training program to train our supervisros first to let them principles and change their thoughts and minds in different stages. Furthermore, these supervisors (key trainers) were responsible for training their employees step by step to ensure everyone really understands and accpets lean principles.”

    Mao also said benfits at his factoey include “freeing up floor space, reduced, staffing needs and shortened productions cycles. By running one-pair flow in stiching and assembly, WIP has been reduced by about 30 percent.”

    Flynn praises adidas for developing a productive working relationship wiht the consultants. “They did it right”, he says. “The steps they took were the proper steps”. These included educating the consultants about the footwear and apparel business, so that the consultants could customize training materials for the factories.

    He also stresses that adidas followed a traditional – and worthwhile –  direction in its efforts. “The first place you always go is into manufacturing,” he explains. “Because adidas doesn’t have manufacturing, they went to the supplier base”. That’s the same thing anybody would do, even in a small manufacturing operation. You look at the total value stream. Manufacturing is the first place you go. Now they are starting to workk internally. Now their design time is longer than their manufacturing lead time.”

    Freni confirms that “we’re hoping in 2003 we can begin to adress the product creation process.” Some processes have been re-engineered throughout the supply chain, to facilitate rapi prototyping, for example.

    An Ongoing Initiative

    Freni notes that adidas has also been developing new computer  planning systems. “They’ve allowed us to plan the factories more effectivelly,” he states.”We think that through the use of the system we’ll able to plan three to four percent more production in the month it is requested.” Actions have included linking cutomers to central planning operations and moves to forge better links with material suppliers.

    adidas has also established a website specific to lean. There are caht rooms, and best practices are posted.

    In hindsight, Freni believes it would have been helpful early on to have translated more materials into lcal languages. He also believes in avoiding information overloa: “You should give sufficient information, but not more than is needed at various levels. Try to simplify it so people get very good at the portion the have understand, but do not get burdened with, let’s say, theoretical aspects.”

    This initiative is an ongoing effort, and far from mature. Freni notes that, currently, “we’re hopingto stabilize the 60-day timeline. That’s really more an issue of getting the rest of the supply cahin of sales side the adjust to the paradigm”. Flynn notes that adidas is also starting to look at working with its tier two suppliers.

    Beyond achieving the goal of a reduced time-to-maket, Freni sees another gain: “The principal benefit both for us and the factories is we have gotten to understand one another much better. We have clear measurables can communicate in a common language, a lean language. And because we as brand are initiating this training, reaching out to our supply chain partners, we are building a bond that historically has not been a traditional one. A lot of that is built on mutual understanding and clear measurements.”


    • Supply chain improvements is one way to improve time to maket.
    • A large manufacturer can take the lead in educating suppliers.
    • Having the right relationship with cosultants can be valuable.

    fac in China

    Logistics is essentially a planning orientation and framework that seeks to create a single plan for the flow of product and information through a business. Supply cahin management biulds upon this framework and seeks to achieve linklage and co-ordination between the process of toher entities in the pipeline, i.e., suppliers and costumers, and the organization itselfs. Thus, for example, one goal of supply chain management might be to reduce or eliminate the buffers of inventory that exist between organizations in a chain through the sharing  of information on demand and current stock levels. this is the concept of ‘Co-Managed Inventory’ (CMI).

    It will be apparent thar supply chain management involves a significant change from the traditional arm’s-lenght, even adversarial, relationships, that so often  typified buyer/supplier relationships in the past. The focus of supply chain management is on co-operation and trust and the recognition that, properly managed, the ‘whole can be greater than th sum of its parts’.

    The definition of supply chain management that is adopted is:

    The management of upstream and downstream relationships with suppliers and costumers to deliver superior costumer value at less cost to the supply chain as a whole’.

    Thus the focus of supply chain of management is upon the management of relationships in order to achieve a more profitable outcome for all parties in the chain. This brings with it some significant challenges since there may be occasiones when the narrow self interest of one party has to subsemed for the benefit if the chain as a whole

    Whilst the phrase ‘supply cahin management’ is now widely udes, it could e argued  that it should really be termed ‘demand chain management’ to reflect the fact that the chain should be driven by the market, no the suppliers. Equally the word ‘chain’ should be replaced by ‘network‘ since there will normally be multiple suppliers and, indeed, suppliers to supppliers as well as multiple costumners and costumers’ costumers to be included in the total system.

    Extending this idea it has been suggested that a supply chain could more acuratelly de defined as:

    ‘A network of connected and interdependent organisations mutually and co-operatively working together to control, manage and improve the flow of materials and information from suppliers ton end users’

    It will be apparent form the previous comments that the mission of logistics management is to plan and co-ordinate all those activities necessary to achieve desired levels of delivered service and quality at lowest possible cost. Logistics must therefore be seen as the link between the marketplace and the supply base. The scope of logistics spans the organization, from the management of raw materials through to the delivery of the the final product.

    Logistics management, from this total systems viewpoint, is the means whereby the needs of costumers are satisfies through the co-ordination of the materials and  information flows that extend from the marketplace, through the firm and its operations and beyond that to suppliers. To achieve this company-wide integration clearly requires a quite different orientation than the typically encountered in the conventional organization.

    For example, for many years markienting and manufacturing have been seen as largely separete activities within the orgranization. At the best they have coexisted, at worst there has been open warfare. MAnufacturing priorities and objectives have typically benn focused on operating efficiency, achivied through long productions runs, minimized set-ups and change-overs and product standaridization. On the other hand, marketing has sought to achieve competitive advantage through variety, high service levels and frequent product changes.

    In today’s more turbulent enviroment there is no longer any possiblility of manufacturing and markenting acting independently of each other. The internecine disputes sounter-productive to the achievement of averall corporate goals.

    It’s no coincidence that in the recent years both marketing and manufacturing have become the focus of renewed attention. Marketing as a concept and philosophy of costumer orientation noe enjoys a wider acceptance than ever. It is now generally accepeted that eh need to understand and meet costumer requirements is a prerequisite for survival. At the same time, in the search for improved cost competitivities, manufaturing management has been the subject fo a massive revolution. The last decade has seen the rapid introduction of flexible manufacturing systems (FMS), of new approches to inventory based on materials requirements planning (MRP) and just-in-time (JIT) methods, perhaps most important of all, s sutained emphasis on total quality management (TQM).

    Equally there has been a growing recognition of the critical role that procurement plays in creating and sustaining comeptitive advantage as apart of an integrated logistics process. Leading-egde organizations now routinely include supply-sides issues in the development if their strategic plans. Not only is the cost of purchased materials and supplies a significant aprt of total costs in msot organizations, but there is a major opportunity for leveaging the capabilities and competencies of suppliers through closer integration of the buyers’ and suppliers’ logistics processes.

    In this scheme if things, logistics is therefore essentially and integrative concept that seeks to develop a system-wide view of the firm. It is fundemantally a planning concept that seeks to create a framework through which the needs of the marketplacecan be translated into a manufacturing strategy and plan, which in turn links into a strategy and plan for procurement. Ideally there should be a ‘one-plan’ mentality within the bussiness which seeks to replace the conventional stand-alone and separate plans of marketing, distribution, production and procurement. This, quite simply, is the mission of logistics management.

    What about Logistics ?

    abril 12, 2010

    Logisitcs and supply chain of management are not new ideas. From the building of the pyramids to the relief of hunger in Africa, the principles underprinning the effective flow of materials and information to meet the requirements of costumers have altered little.

    Throughout the history of mankind wars have been won and lost through logistics streghts and capabilities – or the lack of them. It has been argued that the defeat of the british in tha American War of Independence can largely be attribuited to logistics failure. The British Army in America depended almost entirely upon British or supplies. At the height of the war  there were 12000 troops overseas and for the most part they had not only to be equipped, but fed from Britain. For the six years of the war the administration of these vital supplies was totally inadequate, affecting the course of operations and the morale of the troops. And organization capable of supplying the army wasn’t developed until 1781 and by then it was too late.

    In the Second World War logistics also played a major role. The Allied Forces’ invasion of Europe was a highly skilled exercise in logistics, as we defeat of Rommel in the desert. Rommel himself once said that ‘… before the fighting proper, the battle is won or lost by the quartermasters’.

    However, whilst the Generals and Field Marshals from the earliest times have understood the critical role of logistics, strangely it is only in the recent past the business organizations have come to recognize the vital impact that logistics management can hve in the achievement if competitive advantage. Partly this lack of recognition springs from the relativity low level of understanding of the benefits of integrated logistics. As really as 1915, Arch Shaw pinted out that:

    ‘The relations between the activities of demand creation and physical supply…illustrate the existence of the two principles of interdependence and balance. Failure to co-ordinate any one of these activities with its group-fellows and also with those in the other group, or undue emphasis or outlay put upon any one of these activities, is certain to upset the equilibrium of forces which means efficient distributions.

    …The physical distribution of the goods is a problem distinct from the creation fo demand…Not a few worthly filures in distribution campaigns have been due to such a lack of co-ordination between demand creation and physical supply…

    Instead of being subsequent problem, this question of supply must be met and answered before the work of distribution begins.’

    It’s paradoxical that it has taken almost 100 years for these basic principles of logistics managements to be widely accepted.

    What is logistics management in the sense that it isunderstood today? There are many ways of defining logistics but underlying  concept might be defined as:

    ‘Logistics is the process of strategically managing the procurement movement and storage of materials, parts and finished invetory (and the related information flows) through the organization and its marketing channels in such a way that current and future profitability are maximized through the cost effective fulfilment of orders’.

    This basic definition will be extended and developed as the book progresses, but it makes and adequate starting point.

    Logistics activities

    abril 12, 2010

    Logstics is comprised of five interdependent activities: costumer response, inventory planning and management, supply, transportation, and warehousing.

    1. Customer Response

    Costumer response links logistics externally to the costumer base and internally to sales and markenting. Costumer response is optimized when the costumer service policy (CSP) yielding the lowest cost of  lost sales, inventory carrying, and distribution is identifies and executed.

    The logistics of customer response includes the activities of

    • Developing and maintaining a customer service policy.
    • Monitoring customer satisfaction.
    • Order entry (OE).
    • Order Processing (OP).
    • Invoicing and collections.

    2. Inventory Planning and Management.

    The objective of inventory planning and management (IP&M) is to determine and maintain the lowest inventory levels possible that will meet the customer service policy requirements stipulated in the customer service policy. The logistics of inventory plannung and management icludes

    • Forecasting.
    • Order quantity engineering.
    • Service level optimization.
    • Replenishment planning.
    • Invetory deployment.

    3. Supply

    Supple is the process of building inventory (through manufacturing and/or procurement) to the targets established in inventory planning. The obejctive of supply management is to minimize the total acquisition cost (TAC) while meeting the availability, response time, and quality requirements stipulated in the customers service policy and the inventory master plan. The logistics os supply includes,

    • Developing and maintaining a Supplier Service Policy (SSP)
    • Sourcing
    • Supplier integration
    • Purchase order processing
    • Buying and payment

    4. Transporation

    Transportation physically links ths sources of supply chosen in sourcing with the customers we have decided to serve chosen as a part of the customer service policy. We reserve transportation for the fourth spot in the logistics activity list because the deliver-to points and response time requirements determined in the customer service policy and the pick-up points  determined in the supply plan must be in place before a transportation scheme can be developed.

    The obejective of transporation is to link all pick-up and deliver-to points within the response time requirements of the customers service policy and the limitations of the transporations infrastructure at the lowest possible cost. The logistics if transportations includes:

    • Network design and optimization.
    • Shipment management.
    • Fleet and container management.
    • Carrier management.
    • Freight management.

    5. Warehousing

    I present warehousing as the last of the five logistics activities because good planning in the other four activities may eliminate the need of warehousing or may suggest the warehousing activity be outsourced. In adittion, a good warehouse plan incorporates ultimately portrays the effciency or inefficiency of the entire supply chain.

    The objective of warehousing is to minimize the cost of labor, space, and equipment, in the warehouse while meeting the cycle time and shipping accuracy requirements of the customers service policy and the storage capacity requirements of the inventory play. The logistics of warehousing includes

    • Receiving
    • Putaway
    • Storage
    • Order picking
    • Shipping