But the Japanese and Korean companies that produce cars in the US do provide for health insurance for their employees and they are still able to operate profitably.

 

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Again,the major issue with domestic car companies is paying the rising health care costs for retirees and funding their pension funds.

If that's the case then that is not a true just in time system. It shouldn't matter how far away a supplier is. We send products to Japan and the far east and neither us or our customers carry huge inventories.

 

So if bad weather or an accident happens with the shipment, the plant has to shut down? :confused:

 

Those are the implications if a true just in time system is employed.

 

I expect that even most Japanese manufacturers have some safety stock to compensate for variability in delivery timing (which increases with shipping distance). And if there is any safety stock, is it a true (i.e. in the purest sense of the term) just in time system?

It seems to me that the big three has over the last twenty years tried to make to many different models. There is tremendous expense in design and tooling for so many different vehicles. It has been reported that GM's workers cost over $70.00 dollars an hour ,compared to Toyota's $40ish an hour,but the UAW president denied this and said that they were comparable.

So if bad weather or an accident happens with the shipment, the plant has to shut down? :confused:

 

Those are the implications if a true just in time system is employed.

 

I expect that even most Japanese manufacturers have some safety stock to compensate for variability in delivery timing (which increases with shipping distance). And if there is any safety stock, is it a true (i.e. in the purest sense of the term) just in time system?

I can tell you that has happened on several occasions with us. For instance, the hurricane that hit Texas put one of our suppliers our of action and we had to shut down a production line for about a month. That meant the customer couldn't get their order from us. Also we have had problems with shipments and euipment that caused the customer to shut down their lines.

 

In a true just in time system, distance and production time are factored in to the normal order. I can tell you that if we produce more than we are supposed too our plant manager will be very upset.

 

We used to do what you said. Produce a safety stock and have extra raw material on hand in case of emergencies. We don't do that any more. During that time our factory wasn't very profitable and we were actually losing money. We were told about a month ago that if we hadn't changed our factory would have been shutdown during this recession.

I can tell you that has happened on several occasions with us. For instance, the hurricane that hit Texas put one of our suppliers our of action and we had to shut down a production line for about a month. That meant the customer couldn't get their order from us. Also we have had problems with shipments and euipment that caused the customer to shut down their lines.

 

In a true just in time system, distance and production time are factored in to the normal order. I can tell you that if we produce more than we are supposed too our plant manager will be very upset.

 

We used to do what you said. Produce a safety stock and have extra raw material on hand in case of emergencies. We don't do that any more. During that time our factory wasn't very profitable and we were actually losing money. We were told about a month ago that if we hadn't changed our factory would have been shutdown during this recession.

Does your company also try to adhere to other principles of the Deming philosophy such as using single source suppliers instead of competitive bidding? I recall that being one of the two most difficult Deming principles for traditional American companies to accept.

 

Another was that Deming preached against merit raises. Everybody is to receive proportionately equal raises - people still terminated for cause - but job performance is not used as a basis for monetary rewards.

 

Deming's ideas have obviously worked for the Japanese companies but I have seen the opposite extreme work as well. Our company's primary customer pays performance bonuses that normally exceed base pay and it is one of the most profitable steel companies in the world. However, that company also follows other Deming principles such as maintaining small inventories of raw materials and products. The company also does not engage in widespread competitive bidding, focusing on quality and dependability instead.

Does your company also try to adhere to other principles of the Deming philosophy such as using single source suppliers instead of competitive bidding? I recall that being one of the two most difficult Deming principles for traditional American companies to accept.

 

Another was that Deming preached against merit raises. Everybody is to receive proportionately equal raises - people still terminated for cause - but job performance is not used as a basis for monetary rewards.

 

Deming's ideas have obviously worked for the Japanese companies but I have seen the opposite extreme work as well. Our company's primary customer pays performance bonuses that normally exceed base pay and it is one of the most profitable steel companies in the world. However, that company also follows other Deming principles such as maintaining small inventories of raw materials and products. The company also does not engage in widespread competitive bidding, focusing on quality and dependability instead.

To be honest, I am unsure of a lot of Deming's ideas, but from what I do understand, the Japanese weren't "disciples of Deming". They followed the ideas of Taiichi Ohno and Shigeo Shingo. Deming was a contemporary to them

To be honest, I am unsure of a lot of Deming's ideas, but from what I do understand, the Japanese weren't "disciples of Deming". They followed the ideas of Taiichi Ohno and Shigeo Shingo. Deming was a contemporary to them

Deming was reverred in Japan. The top award for quality in Japan is the Deming Prize. He spent considerable time in post-war Japan personally training the Japanese in SPC methods. Deming brought SPC to Japan and Ohno was inspired by both Ford and Deming when he created the Toyata Production System. Whether "disciple" is the right word or not, Deming played a key role in the improvement in the quality of Japanese manufactured goods.

 

I attended a four-day seminar presented by Dr. Deming many years ago in Miami and I recall him telling us that the Japanese manufacturers were eager to improve the quality of their products, while the Americans showed very little interest in his ideas because much of our competition's production capacity was destroyed during WWII. Our companies were too busy trying to keep pace with demand to worry about quality. Deming jumped at the chance to visit Japan to teach.

 

One of the examples of SPC that I recall Deming discussing involved Toyota cigarette lighters. The control charts that we were shown were for the diameters of the lighters. The control limits narrowed to the point that Toyota was unable to detect the part to part differences in the diameters with their instruments.

Does your company also try to adhere to other principles of the Deming philosophy such as using single source suppliers instead of competitive bidding? I recall that being one of the two most difficult Deming principles for traditional American companies to accept.

 

Another was that Deming preached against merit raises. Everybody is to receive proportionately equal raises - people still terminated for cause - but job performance is not used as a basis for monetary rewards.

 

Deming's ideas have obviously worked for the Japanese companies but I have seen the opposite extreme work as well. Our company's primary customer pays performance bonuses that normally exceed base pay and it is one of the most profitable steel companies in the world. However, that company also follows other Deming principles such as maintaining small inventories of raw materials and products. The company also does not engage in widespread competitive bidding, focusing on quality and dependability instead.

 

For the raw materials to make our products, yes. About the only time they will change companies is if the one we use stops making the product.

 

You are absolutely correct about the raises. We get yearly raises and they are really proportionately based. Take this year's, I was told that the people who were on the bottom end of the pay scale would get the better raises.

Deming was reverred in Japan. The top award for quality in Japan is the Deming Prize. He spent considerable time in post-war Japan personally training the Japanese in SPC methods. Deming brought SPC to Japan and Ohno was inspired by both Ford and Deming when he created the Toyata Production System. Whether "disciple" is the right word or not, Deming played a key role in the improvement in the quality of Japanese manufactured goods.

 

I attended a four-day seminar presented by Dr. Deming many years ago in Miami and I recall him telling us that the Japanese manufacturers were eager to improve the quality of their products, while the Americans showed very little interest in his ideas because much of our competition's production capacity was destroyed during WWII. Our companies were too busy trying to keep pace with demand to worry about quality. Deming jumped at the chance to visit Japan to teach.

 

One of the examples of SPC that I recall Deming discussing involved Toyota cigarette lighters. The control charts that we were shown were for the diameters of the lighters. The control limits narrowed to the point that Toyota was unable to detect the part to part differences in the diameters with their instruments.

 

I can vouch for this statement. Quality is paramount. I can remember when Honda shipped 250,000 parts back to us because they found 1 bad part.