Page 288 - (DK) The Business Book

286 INTRODUCTION

arket globalization and who developed innovative ways of nothing; if there is not enough stock
fast-paced technological improving quality and efficiency at to meet demand, customers may
M change have raised the same time. In the 1950s, the search out alternative suppliers.
customer expectations, and Union of Japanese Scientists and Cost reduction is the holy grail
companies can succeed or fail Engineers invited him to lecture to of production managers, and one
depending on their ability to deliver hundreds of top-level executives, way to achieve this is to simplify
the right goods at the right price, at who quickly put his ideas to production methods. This involves
the right time, via the right practical use. Toyota was among removing unnecessary and costly
distribution channels. the many businesses who steps, or innovating so that stages
If getting it wrong can be costly, implemented his methods. The become faster or less wasteful.
getting it right takes time. It means company’s approach ultimately grew Entrepreneur Michael Dell saved
constantly evaluating every part of into the “just-in-time” production time and money by cutting out the
the production process to see system that is widely used today. retailer and letting customers design
where it can be made more efficient Stock control plays a large part their own computers; these were
without a perceived drop in quality in the “just-in-time” system, and is produced to order (“just in time”)
or sales. Henry Ford was the first vital to a balanced cash flow. Too and sold directly to the end user.
industrialist to recognize the value much stock in the warehouse
of offering customers “more for represents money that is doing Creativity and innovation
less,” and made it his business to Innovation can come from any part
make improvements to his cars of the business. The Japanese idea
every year, while simultaneously of kaizen—meaning continuous
dropping their price. Today, many improvement—is an ancient
use a “low cost, good quality” philosophy, but it was first used in
strategy to attract customers, Manufacturing is more than an industrial setting by Toyota in
especially during times of recession. just putting parts together. the 1950s. Founder Elji Toyoda
It’s coming up with ideas, expected all employees—from the
Low-cost efficiency factory floor to senior executives—
testing principles and
One of the most effective ways of to constantly come up with ideas
perfecting the engineering,
lowering costs while maintaining for improving products or production.
as well as final assembly.
value is to reduce waste. Known as James Dyson This idea took hold around the
“lean production,” it entails world. Companies recognized value
UK inventor (1947–)
identifying and cutting waste in setting up teams to increase
across the process, from production creativity. However, large companies
to delivery. Lean production often limit innovation—or at least
developed from the ideas of Joseph the testing of its validity—to an
Juran, a management consultant R&D (research and development)