From the course: Stay Lean with Kanban
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Kanban and JIT manufacturing
- In the early 20th century, the United States built a lot of large warehouses. That's why for most of the 20th century, you see the U.S. relying on large inventory manufacturing. A car company could build 1,000 cars, and then the cars would sit on parking lots until someone decides to buy them. But this type of system doesn't work well if you're an island nation like Japan. For one, space is much more difficult to find. It's also costly for all the different manufacturers to buy large warehouses. It's all time-consuming. Remember that the manufacturer has to carry the entire cost of their inventory, so a car manufacturer would build 1,000 cars and then may have to wait months to recoup their investment. That's why in the 1960s, Japanese companies started experimenting with something called just-in-time manufacturing. Here a manufacturer would create cars in much smaller batches. So instead of 1,000 cars, a Japanese manufacturer might just make 100. Then they would take these small…
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