The focus of the article is the development and implementation of lean manufacturing. The aircraft manufacturer, Boeing, took this type of approach during the production of the 737 craft in 1999. The company was able to reduce the necessary inventory levels by requiring that the available materials be present only during the actual phase of production requiring those materials thereby reducing the size of storage facility and costs related to maintaining inventory. This process streamlines the demands placed on the finite time allotted per worker. .
Toyota Motors also implemented lean manufacturing. This enabled flexibility when faced with changing demands allowing the company to produce more vehicles or fewer vehicles as the consumers buying habits changed. Toyota was successful and in doing so was outcompeting the U.S. based manufacturers. The domestic automakers lobbied Congress as were able to enact limitations on foreign automakers in an attempt to remain competitive. Eventually, Toyota began manufacturing their products inside the U.S. to thwart the regulations that were put in place to hamper them. Toyota eventually overtook the American automakers and is now the largest firm worldwide.
1. What is the opportunity cost associated with having a worker wander across the factory floor from task to task or in search of tools and parts?.
A workers time can be viewed as a measurement of expected productivity, or time is money. Every worker that is searching for parts and materials is one that is not currently producing. The sum of time spent on activities other than production can be translated as the sum of lost production. By instituting procedures like lean manufacturing, less time is spent on activities that are nonproductive and more time is spent producing which will increase profitability of workers and their employers.
2. Explain how lean manufacturing improves the economy's efficiency in allocation.
