According to figures from the “Industrial Management” magazine published in 1979, it shows that one of Toyota’s component suppliers may have used:
- 70% of the space of its warehouses
- 30% of its production capacity for other activities using the Kanban method.
Toyota’s 1976–1977 Annual Report published the following figures:
Monthly turnover: 195,600 million yen
Total stock: 26,300 million yen
- Raw materials 6,800 million yen
- Semi-finished products 9,600 million yen
- Consumables and tools 5,800 million yen
- Finished products 4,100 million yen
Based on 20 days of monthly production, the stock value compared to turnover is approximately 3 days. Without implementing the Kanban method, Toyota’s stock would have been 30 days of turnover, as it is in the automotive industry as a whole:
Monthly turnover / 20 days x 30 days = 293,400 million yen
The savings achieved by Toyota by applying the Kanban method are multiple and impressive
- Increased cash flow of over 250,000 million yen,
- Decrease in financial expenses on inventory (10%), i.e. approx. 29,340 million yen,
- Savings on storage (buildings, equipment),
- Savings related to the handling of stock,
- Savings on obsolete stock, etc.
How has Majorette improved its performance using the Kanban method? To be continued in the next episode…
