Lean Supply Chain Management Essentials

Lot sIzIng 135

situation, since leveling mix means that both the same capacity and the same materials

(through the entire bill of materials [BOM] structure) will be used in each interval.

Toyota does this without a finished goods stock by having firm orders from the

dealers out beyond the production lead time, indeed beyond the lead time for much of

the supply chain. Because the dealers do not have real demand this far in advance, any

forecasting mistakes end up on the dealer lot as finished goods, but this doesn’t mean

that all parts will be in the finished goods inventory, although the possibility exists for

any model and option combination to end up in finished goods.

For manufacturers without this kind of future visibility, however, the usual ...