How companies store things – level 2

03-03-2022 07:00

In the past, it was usual that companies kept enough material and products in stock. This way they could easily work with any market changes.

That idea changed in the 1970s. Taiichi Ohno was a Japanese engineer and businessman. When he worked for the company Toyota, he came up with a new system, which saved the company a lot of money. Toyota ordered only the material and parts that it needed at that time.

The system worked very well, and many other companies started to use it, too. Then problems came if materials came late, or if it was necessary to make too many products in a short time.

This problem happened during the pandemic, too, and it was the reason why many companies closed down for some time. Some companies already started to increase their stock as they were afraid of similar problems in the future.

Difficult words: stock (what a company keeps, and it is ready to sell it), market (the activity of buying and selling things), increase (to make something bigger).

You can watch the original video in the Level 3 section.

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