SA: Walker dispute reveals manufacturing achilles heel
By Tim Dornin, National Motoring Correspondent
ADELAIDE, April 26 AAP - It's a system that has its origins in post World War II Japan.
Now embraced by the car industry worldwide, just-in-time production has helped transformthe automotive sector into a ruthlessly efficient manufacturing beast.
But it also remains its achilles heel, capable of bringing factories to a halt overnight.
The weaknesses in the system were exposed again this week when a dispute at Adelaide-basedexhaust manufacturer, Walker Australia, stopped car production at Holden and Ford andthreatened to do the same at Mitsubishi and Toyota.
It was the fourth time since August last year that Australia's car makers had feltthe impact of industrial strife at a component producer.
The most damaging of those was the two-week dispute at Sydney firm Tristar which forcedHolden, Ford and Mitsubishi to close down last year at a cost to the industry of about$500 million.
The problem for car companies is that the same manufacturing system which has helpedreduce costs dramatically, also means they are totally reliant on regular deliveries fromtheir suppliers.
The just-in-time process was largely the brainchild of Toyota executive Taiichi Ohno.
At Toyota it was called Kanban and the idea was to have components delivered to assemblylines only as they were needed.
Previously car makers held big stocks of parts in large warehouses, which costs millionsof dollars to establish, operate and maintain.
It took Toyota 20 years to fully implement the system and even longer for United Statescar makers to embrace it with real enthusiasm.
But now it's entrenched across the automotive world.
In many cases component companies are encouraged to establish their own operationsas close as possible to those of the car makers they supply, allowing for deliveries asregular as every 20 minutes.
Ford Australia has even gone a step further, selling off space within its Victorianmanufacturing facility to key component suppliers to allow them to set up their own operationsand deliver straight to the car assembly line.
What that means is no packaging, no delivery trucks and even cheaper prices.
In Ford's case the new Falcon, due for release in September, will get its seats froman Air International operation inside the company's Campellfield factory.
Ford president Geoff Polites described the new operation as a another step in the evolutionof the just-in-time process.
"Rather than waiting for parts to be transported from locations across the country,we can transfer Air International components directly to the production line as they areneeded," he said.
"Having the Air International team on site will ensure maximum productivity with ahuge reduction in waiting times, a lowering of transport costs and help with our drivetoward maximum efficiency."
That's great while everything is working as it should, but when an industrial disputestops the production of components, as it did in Adelaide this week, then car productionstops too.
And it's all the more frustrating for car makers when finding a solution is out of their hands.
AAP tjd/cd/sb
KEYWORD: MOTOR WALKER (AAP NEWS ANALYSIS)
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