LEAN in Economy: a new dimension to JIT for economies in recession

Today, I was going through the concept of Lean Production, as has been pioneered by Toyota through its legendary Toyota Production System, famously known as the TPS. Of its two key concepts, is Just In Time (JIT). Quoting from Toyota worldwide website, JIT is: Making only "what is needed, when it is needed, and in the amount needed!"
But my intention here is not to inform you about either of these. You can google it and will find numerous article and research reports on them. I came across one very deeply inspiring illustration, based on JIT which I share here with you.

Source: The Elsmar Cove Site

To describe it, when the inventory level in the production system is high (which is opposite of what is followed in JIT), the problems of not only the production but the firm as a whole is submerged in it. This leads to only the surfaced problems coming in the eyesight. As an extension of what has been shown here, some problems may actually build one upon the other and create a sea-bed of problems, much like an iceberg (This idea was conveyed to me by my esteemed Operations Management Professor)
To use this model in the current economic downturn that has uncovered the problems (or opportunites in disguise), I propose the following illustration:

(Copyright Image) Click to enlarge

When the Sensex was making its dream-run, no one was bothered about any of the trifle matters that are being taken up. But the same guys have started nitpicking at each and every action of the companies. Even the launch of "People's Car" Tata Nano was not without its skeptics, who wondered if Tata will be able to sell as many as it wished.

Now, coming to the hidden ineffeciencies of the market:

• Business Ineffeciency
• Pareto Ineffeciency
• Production Ineffeciency
• Agency Problem
• Monopoly

Will write in the next post about how an economic recession (as low level of inventory) exposes these ineffeciencies.