The aim of the Toyota Production System is to ‘produce cars at the rate of demand’. This means ‘get an order, build a car, deliver it, get your money’.
A lean system should pull from the order. Dealers should have one or two examples of each model which are used for test drives and showing off features. When the order is made that should be the trigger to build the car, which should be delivered within a week.
There should be no question of manufacturers having fields full of cars or ever deciding to reduce or increase production. If there are fewer orders then there will be fewer cars made. The system flexes automatically.
In the seven wastes that lean people talk about – they are not applicable to service(!) – there is the waste of over-production. Taiichi Ohno thought that this was the worst waste of them all because it was the cause of many of the other wastes. What he would think of these pictures… (Interesting that there are some Toyota pictures in there. It doesn’t say if they are already sold or not.)
Service is usually a bit different – you can’t have fields full of mortgage applications pre-assessed before the customers come along – but you can still get bottle necks. You can still design a system that does not serve at the rate of demand. The “inventory” will more typically occur just after the order. There will have mortgage applications submitted by customers that are waiting to be looked at instead.
So, ‘serve at the rate of demand’ is still the game. Thus you must still have a fast, flexible system, that absorbs variety. More important you must understand your demand, for it is against that information that you design your system.