The rise of Lean Production

BY JAMES P.WOMACK, DANIEL T.JONES, DANIEL ROOS - 2015-12-18

It was the Japanese who set out to change the rules of the game. By purchasing a few used American presses
and endlessly experimenting from the late 1940s onward, Ohno eventually perfected his technique for quick
die changes. By the late 1950s, he had reduced the time required to change dies from a day to an
astonishing three minutes. He also eliminated the need for die-change specialists. In the process, he made
an unexpected discovery. It actually cost less per part to make small batches of stampings than to run off
enormous lots. Making small batches eliminated the carrying cost of the huge inventories of finished parts
that mass-production systems required. It also caused stamping mistakes to show up almost instantly.
The consequences of this latter discovery were enormous. It made those in the stamping shop much more
concerned about quality, and it eliminated the waste of large numbers of defective parts – which had to be
repaired at great expense, or even discarded – that were discovered only long after manufacture. But to make
this system work at all, Ohno needed both an extremely skilled and a highly motivated work force. If workers
failed to anticipate problems before they occurred and didn ’t take the initiative to devise solutions, the work
of the whole factory could easily come to a halt.

Ford’s system assumed that assembly-line workers would perform one or two simple tasks, repetitively. The
foreman did not perform assembly tasks himself but instead ensured that the line workers followed orders.
These orders or instructions were devised by the industrial engineer, who was also responsible for improving
the process.

Special repairmen repaired tools. Housekeepers periodically cleaned the work area. Special inspectors
checked quality, and defective work, once discovered, was rectified in a rework area after the end of the line.
A final category of worker, the utility man, completed the division of labor. Since even high wages were
unable to prevent double-digit absenteeism in most mass-production assembly plants, companies needed a
large group of utility workers on hand to fill in for those employees who didn ’t show up each morning.
Managers at headquarters generally graded factory management on two criteria – yield and quality. Yield
was the number of cars actually produced in relation to the scheduled number. Quality was measured after
vehicles with defective parts had been repaired. Factory managers knew the assigned production target had
to be met at all costs. Mistakes could, if necessary, be fixed in the rework area, after the end of the line but
before the cars reached the quality checker from headquarters stationed at the shipping dock. Therefore, it
was crucial not to stop the line unless absolutely necessary. Letting cars go on down the line with a
misaligned part was perfectly okay, because this type of defect could be rectified in the rework area, but
minutes and cars lost to a line stoppage could only be made up with expensive overtime at the end of the
shift.

Ohno, who visited Detroit repeatedly just after the war, quickly realised this whole system was rife with
muda, (waste). None of the specialists beyond the assembly worker was actually adding any value to the car.
Ohno was convinced that assembly workers could probably do most of the functions of the specialists and
do them much better because of their direct acquaintance with conditions on the line.

Ohno began to experiment. The first step was to group workers into teams with a team leader rather than a
foreman. The teams were given a set of assembly steps, their price of the line, and told to work together on
how best to perform the necessary operations. The team leader would do assembly tasks as well as
coordinate the team, and, in particular, would fill in for any absent worker concepts unheard of in
mass-production plants.

Ohno next gave the team the job of housekeeping, minor tool repair, and quality-checking. Finally, as the
last step, after the teams were running smoothly, he set time aside periodically for the team to suggest ways
collectively to improve the process.

When it came to “rework,” Ohno reasoned that the mass-production practice of passing on errors to keep the
line running caused errors to multiply endlessly. Ohno placed a cord above every work station and instructed
workers to stop the whole assembly line immediately if a problem emerged that they couldn ’t fix. Then the
whole team would come over to work on the problem. Production workers were taught to trace systematically
every error back to its ultimate cause then to devise a fix, so that it would never occur again.
Not surprisingly, as Ohno began to experiment with these ideas, his production line stopped all the time.
However, as the work teams gained experience identifying and tracing problems to their ultimate cause, the
number of errors began to drop dramatically. Today, in Toyota plants, where every worker can stop the line,
yields approach 100 percent. The line practically never stops.

Toyota did not wish to vertically integrate its suppliers into a single, large bureaucracy. Neither did it want
completely independent vendors. Instead, Toyota spun its in-house supply operations off into
quasi-independent first-tier supplier companies in which Toyota retained a fraction of the equity and
developed similar relationships with other suppliers who had been completely independent. As the process
proceeded, Toyota ’s first-tier suppliers acquired much of the rest of the equity in each other.
Ohno developed a new way to coordinate the flow of parts within the supply system on a day-to-day basis,
called kanban. Parts would only be produced at each previous step to supply the immediate demand of the
next step. This simple idea was enormously difficult to implement in practice because it eliminated
practically all inventories. When one small part of the vast production system failed, the whole system came
to a stop. This was precisely the power of Ohno’s idea. It removed all safety nets and focused every member
of the vast production process on anticipating problems before they became serious enough to stop
everything.

The dealer became part of the production system as Toyota gradually stopped building cars in advance for
unknown buyers and converted to a building-to-order system in which the dealer was the first step in the
kanban system, sending orders for presold cars to the factory for delivery to specific customers in two to three
weeks.

Toyota had come to grip with the principles of lean production by the early 1960s.

Acknowledgement:

'The Machine That Changed The World' book by James P.Womack, Daniel T.Jones, Daniel Roos


 
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