in Japan low demand meant that manufacturers faced price resistance, so if the selling price is fixed how can one increase the profit mark-up? Obviously by reducing costs and hence a large focus of the system that Toyota implemented was to do with cost reduction.To aid in cost reduction Toyota instituted production levelling - eliminating unevenness in the flow of items. So if a component which required assembly had an associated requirement of 100 during a 25 day working month then 4 were assembled per day, one every two hours in an eight hour working day. Levelling was also applied to the flow of finished goods out of the factory and to the flow of raw materials into the factory.Toyota changed their factory layout. Previously all machines of the same type, e.g. presses, were together in the same area of the factory. This meant that items had to be transported back and forth as they needed processing on different machines. To eliminate this transportation different machines were clustered together so items could move smoothly from one machine to another as they were processed. This meant that workers had to become skilled on more than one machine - previously workers were skilled at operating just one type of machine. Although this initially met resistance from the workforce it was eventually overcome.Whilst we may think today that Japan has harmonious industrial relations with management and workers working together for the common good the fact is that, in the past, this has not been true. In the immediate post Second World War period, for example, Japan had one of the worse strike records in the world. Toyota had a strike in 1950 for example. In 1953 the car maker Nissan suffered a four month strike - involving a lockout and barbed wire barricades to prevent workers returning to work. That dispute ended with the formation of a company backed union, formed initially by members of the Nissan accounting department. Striking workers who ...
