1. Why is a visual management approach such an integral part of Autoliv’s lean system?
2. Describe the JIT considerations presented in the chapter as they relate to Autoliv’s manufacturing environment.
3. Which method of workflow is embodied in Autoliv’s system? Why is this approach most suitable to its lean environment?
4. When Autoliv started its lean journey, a number of operational benefits and implementation issues had to be addressed. What were they, and how were they addressed?

Autoliv is a world-class example of lean manufacturing. This Fortune 500 company makes automotive safety components such as seat belts, airbags, and steering wheels, and has over 80 plants in more than 32 countries. Revenues in 2007 topped $6.7 billion. Autoliv’s lean manufacturing environment is called the Autoliv Production System (APS) and is based on the principles of lean manufacturing pioneered by Toyota, one of the world’s largest automobile
manufacturers, and embodied in its Toyota Production System (TPS).

At the heart of Autoliv is a system that focuses on continuous improvement. Based on the “House of Toyota,” Autoliv’s Ogden, Utah, airbag module plant puts the concepts embodied in the house to work every day. The only difference between the Toyota house and the one at Autoliv is that the company has added a third pillar to its house to represent employee involvement in all processes because a culture of involvement, while the norm in Japan, is not always found in the United States.

Autoliv started its lean journey back in 1995. At that time, the Ogden plant was at manufacturing capacity with 22 work cells. Company managers acknowledge that, back then, Autoliv was “broken” and in need of significant and immediate change if it was to survive. This meant that everyone—from senior management to employees and suppliers—needed to be onboard with rebuilding the company. It was not that the company could not fulfill the needs of its automaker customers; however, with increasing demand for both reliable and cost-effective component supplies, pressure to change became obvious. Recognizing the value of Toyota’s approach, senior management made the commitment to embark on its own journey to bring the transformative culture of lean manufacturing to Autoliv.

In 1998, sensei Takashi Harada arrived from Japan to spend 3 years teaching top company managers the principles, techniques, and culture of the lean system. This helped managers create an environment in which continuous improvement could be fostered and revered as an essential activity for longterm success. Because the environment was changing, it made it difficult at first for suppliers to meet Autoliv’s constantly changing and unstable processes. It also made problems visible and forced the company to address and resolve the problems instead of finding ways to work around them as had been done in the past. Daily audits, monthly training, and more in-depth education programs were created to help focus attention on where changes needed to be made. Workers and management were organized into teams that were held accountable for common goals and tasked with working toward common success.

By 2004, the lean culture was integrated into the company, and it now hosts regular visits by other corporations who want to learn from Autoliv’s journey and experiences. Compared to 1995, the space required for a typical work cell has been reduced by 88.5 percent, while the number of cells has grown over 400 percent. This has allowed Autoliv to dramatically increase its production capacity with minimal investment.