Looking to Japan: Mastering The Art Of Lean

You’ve all heard the story we’re about to reference before. Over the years, it has transcended into legend or myth – well, as mythological as you can get in manufacturing. 

It’s the tale of Toyota’s founder, Sakichi Toyoda, his son, Kiichiro Toyoda, and the engineer, Taiichi Ohno, sitting down somewhere between 1948-1975 and creating the famous Toyota Production System (TPS) known today as the Toyota way.

TPS was the incubator through which lean manufacturing strategies, techniques and tools were first pioneered and refined. It focused on three core Japanese philosophical principles: ‘muda’ (wastefulness), ‘mura’ (unevenness) and ‘muri’ (overburden), resulting in the idea of the ‘Seven Wastes’.

Toyota was, and is, a quintessentially Japanese company, with a quintessentially Japanese philosophy; one which prioritises circularity, sustainability and the natural world. For manufacturers to embrace the art of lean successfully, they should ‘lean’ into this reality, as is epitomised by Epson UK.
“We have long adopted the Japanese philosophies of Sho Sho Sei (efficient, compact and precise) and Monozukuri (the art of manufacturing) and have embedded these into our processes and supply chain,” says Taran Rai, Epson UK’s Head of Corporate Sustainability.

“An important goal we’ve set on our journey to 2050 is to become underground resource-free, a key driver of its efforts to implement leaner supply chain processes and circular economy principles.” 

Established in 1942, Epson is a global electronics manufacturer and a titan of Japanese industry, with revenue of US$8.8bn in 2023. Its UK division, Epson UK, was recently awarded platinum status by independent assessor Ecovadis for its substantial sustainability achievements, which have been driven by taking responsibility.

“As members of the Responsible Business Alliance, we ask our suppliers to adhere to a strict code of conduct that aligns to our own environmental vision and additionally passes on sustainability benefits to our customers,” continues Taran. 

Lean manufacturing streamlines processes and minimises the waste of energy and materials. This naturally enhances operational sustainability. But Taran goes one step further, taking the relationship from correlation to causation.
“For manufacturers, adopting lean practices is a critical step for achieving sustainability goals, enhancing operational performance and strengthening their reputation as environmentally responsible companies,” she says.

So, if adopting lean supply chain practices is so attractive and such a critical step in becoming sustainable, why do so many manufacturers struggle to do so? Lack of knowledge and preparation, an absence of benchmarks and blindly copying others are common factors. 

But manufacturers also face strong external forces that are shaping their success, like navigating their economic needs and the scale of Scope 3 emissions.

By taking Taran’s advice and closely examining the context of the lean philosophy, manufacturers have methods at their disposal to overcome these forces.

The economic challenges of going ‘lean’

Lean manufacturing – despite being all about cutting back on unnecessary extras and expenditure – is, ironically, very costly to set up. Maintenance costs increase by around 20% to eliminate waste and implement new ideas. And, according to WCM Consulting, training on the approach alone comes with an average yearly cost of US$100,000 per 100 employees.

In the long-term, the ROI for lean manufacturing becomes crystal clear. But more immediately, manufacturers are in murky waters, trying to keep their heads above mounting financial pressure. 

To alleviate these pressures and avoid compromising on economic needs, Taran recommends manufacturers implement broader circular principles first.

“The circular economy isn’t just a pathway to reaching environmental goals – it’s also a smart business strategy,” she says. “It helps businesses lower operational costs and carbon emissions simultaneously.”

Taran recommends adopting strategies like remanufacturing, incorporating repaired, refurbished or salvaged components to save on waste and cost. She argues that it strikes the right balance between environmental and economic goals and should come after stringent supply chain auditing.

“This is essential because it reveals where inefficiencies and environmental burdens exist,” she says.

“By understanding the full lifecycle of materials – from production to disposal – manufacturers can identify where they can implement circular economy practices like reusing resources​.” 

Once the supply chain has been audited, that’s when manufacturers can truly make meaningful integrations of circular economic practices that will go a long way in achieving both economic and environmental goals – two things that must be balanced for us all to live a healthy, happy and fulfilling life, bringing us back to the concept of circularity itself.

Circularity feels as if it should have emerged from Japanese philosophy as much as lean manufacturing has. Shizen, the Japanese term for nature, refers to spontaneous self-development and the results of that power.

It's about life manifested in the surrounding world – in rivers, forests and stones – as part of an everlasting, spiritual system to which we all belong and eventually return to. 

You’re probably wondering what any of this has to do with circularity and its economic power in a manufacturing context. To better explain, consider what leaders at Panasonic have to say about their work to protect the environment and biodiversity, like the ‘Nawashiro’ Initiative, Bio CO2 Transformation technology ‘Novitek’ and restoration of the Kusatsu Factory’s ‘Forest of Coexistence’.

“As a company, our perspective tends to be limited to things that have a direct impact on our business today,” says Tatuso Ogawa, CTO at Panasonic.

“Based on our firm understanding of ‘the concept that biodiversity underlies all economic activity’, we will thoroughly promote our circular economy initiative. 

“By expanding our perspective to the entirety of nature and the planet, we believe we will be able to create new relationships with partner companies.”

By pursuing broader circularity, manufacturers can embrace lean manufacturing in an economically viable way, better supporting all vital economies on earth including those of nature and biodiversity.

The unique challenges of Scope 3

At the 2023 Japanese Mobility Show, more than 1.1 million people witnessed Japan’s exciting vision for the future of mobility, a display that included the Mazda Iconic SP. When the topic of carbon neutrality came up, CEO Masahiro Moro discussed a concept called ‘Multi-Pathway’. 

“The big theme is carbon neutrality, which is driving the entire mobility transformation,” he said.

“But carbon neutrality is too big for an individual company to go after. It’s a joint effort. So, for the JMS and the G7 Hiroshima summit, we issued a statement about how we are approaching carbon neutrality as a whole industry, which we call multi-pathway.”

Multi-pathway means developing e-fuels, biofuels and liquid hydrogen, enhancing sustainability without sacrificing on quality. EVs like the Mazda 創 Arata, which was recently showcased to the Chinese EV market, embody the multi-pathway approach. 

It means offering diverse solutions, acknowledging the paths that spring forth all around you and the responsibilities you bear in creating and walking down each one. This interconnected philosophy bears many similarities with approaches to Scope 3. 

Scope 3 emissions – indirect greenhouse gas emissions across the entire value and supply chain – present unique challenges for manufacturers. Firstly, for the majority, these emissions far outweigh their Scope 1 and 2 emissions – those that originate from direct operations and their energy consumption. 

But it’s not really the fact that Scope 3 emissions are generally higher that makes them such a problem. 

Taran explains: “While manufacturers can more easily control and reduce Scope 1 and 2 emissions, tackling Scope 3 emissions, which arise from the entire network of suppliers, partners and product life cycles, can have a far more significant impact on reducing their overall carbon footprint.”

To confront this, she argues that manufacturers must do two key things:  “Set clear, early goals to reduce emissions within their own operations” and “take a proactive role in cultivating a more responsible supply chain”.

What does this more proactive role look like? Well, firstly Taran advises manufacturers to conduct a thorough analysis of their entire supply chain, from sourcing raw materials to product-end-of-life. Then comes the task of adopting greener practices like remanufacturing, embracing renewable energy and monitoring overall energy use. 

“As with any process, measures you implement now likely won’t be perfect the first-time round,” she adds. “It takes review and continual dissection to make something work efficiently and sustainability within supply practices should be treated no differently.

“Consistent improvement will help to refine how you manufacture and open communication with your wider supply chain on these improvements, paving the way towards achieving your own environmental goals.”

This process of review, dissection and discussion will also increase broader transparency within the supply chain, which is beneficial as it pertains to sustainability.

“All of this helps to build a transparent and responsible supply chain, ensuring that sustainability commitments are upheld across every stage of production and distribution,” Taran adds, concluding with a final note of advice.

“This can seem like a big task to take on alone, which is why collaborating with suppliers who share a commitment to sustainability is key,” she advises. 

“Lean supply chain practices play a pivotal role in achieving these objectives and together, these goals provide a clear roadmap for Epson’s approach to sustainability.”

To read the full story in the magazine click HERE

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