Page 129 - Operations Strategy

104 CHAPTER 3 • SubSTiTuTES foR STRATEgy
It is also worth remembering that when Taiichi Ohno wrote his seminal book on
lean (called Toyota Production System: Beyond Large-Scale Production, and after retiring
from Toyota in 1978) he was able to portray Toyota’s manufacturing plants as embod-
ying a coherent production approach. However, this encouraged observers to focus
on the specific techniques of lean production and de-emphasised the importance of
30 years of ‘trial and error’. The success of Toyota has much to do with the process of fit
(see Chapter 8). Staff at Toyota worked over decades to ensure alignment between their
intended market position and their operations resources. Maybe the real achievement
of Toyota was not so much what they did but how long they stuck at it.

Where does lean fit into operations strategy?

Figure 3.5 summarises some of the elements of the lean approach, again using the four
decision categories in the operations strategy matrix. This shows that the core principles
of the lean approach are contained largely within the supply network and development
and organisation decision areas. This is not surprising given the emphasis on flow (which
is what supply network strategy is partly about) and improvement through waste elimina-
tion (an important part of development and organisation strategy). The role of process
technology strategy is largely to ensure that technology choices support the core elements
of lean through flexibility, reliability and reduced variability. Although there is only one
entry under the category of capacity strategy, it is none the less important. If lean princi-
ples are to be adopted through the supply chain, then to maintain synchronous flow it will
be necessary to tolerate reduced capacity utilisation. Or putting it the other way round,
one cannot allow capacity bottlenecks to disturb smooth and synchronous flow through
the chain. The implication is that, under a lean approach, more capacity may have to be
provided than under a more traditional approach to managing supply chain throughput.

Figure 3.5 lean elements in the four operations strategy decision categories
Resource usage

Sacrifice high Supplier Small flexible Continuous
technology
Quality utilisation for fast development to Emphasis on improvement through
Performance objectives Dependability Integrated supply Reduce process exposes waste Market competitiveness
and dependable
ensure quality and
waste elimination
throughput
delivery conformance
Smooth,
equipment reliability
Speed
synchronised flow
network coordination
variability
to ensure
People motivation
synchronous flow
and involvement
through reduced
Expectation of
bu­ering
continuous
Flexibility
improvement (and
from suppliers
Cost price reductions)
Development
Capacity Supply Process and
strategy network technology
organisation
Decision areas
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