A Little Lean History
Up until the mid to late 1800's the majority of manufacturing was done with a craft style of production. The vast majority of products (and services) were done by hand by quasi-independent tradesmen. These tradesmen were typically skilled at design, machining and hand fitting parts as standardization had not come into play yet. They used general purpose machines, production volumes were low and costs were higher. Each tradesman usually worked directly with the customer and the final product was tweaked until the customer was satisfied.
In 1881 Fred Winslow Taylor (1856-1915) published an essay on breaking up industrial metal cutting production into individual and regulated steps, and required works to obey managers in the way they worked. In effect, it separated planning from production and alienated workers from planners. While this began to improve production throughput it created considerable worker resentment.
A well known lawyer, Louis Brandeis coined the term 'scientific management' during a court case while referring to Taylor's work, which greatly publicized it. While his method of performing work was becoming main stream he began to recognize worker resentment and in 1895 he began to publish papers on worker incentives. In 1911 he published 'The Principles of Scientific management'. Taylor innovations include:
- Standardized work by identifying easiest and best way to do a job
- Reduced cycle times
- Time and motion studies - used to develop standardized work
- Measurement and analysis to continually improve a process (forerunner of PDCA)
- Taylor could be credited with the invented of Industrial Engineering
Along came Henry Ford who further built on Taylor's work and could be said to have started the mass production phase of our manufacturing system. Ford was credited with innovations which reduced the aspects of craft production and consequently increased production output and lowered product costs:
- Interchangeability of parts which reduced or eliminated hand fitting and allowed the end user to repair their own vehicles
- Ease of assembly by reducing the overall number of parts
- Reduced cycle time from hours in 1908 to seconds in 1913
- Moving assembly line which greatly reduced the human movement and time to assemble components, while consequently adding line balancing
- Machine tool innovations that allow machining of pre-hardened parts (solved the warping problem which worked against standardization)
- Delivered parts to a moving assembly line
Alfred Sloan further added to the mass production system by improving the accounting system for big business and widened the gap between those on the production floor and management. He was also credited with:
- Decentralized GM into profit centers consisting of auto divisions and part divisions. Each with a general manager that reported to corporate headquarters
- Generally accepted accounting practices (GAAP) where each profit center reported with standard measures to senior management.
- GAAP encouraged waste by building up inventory rather than customer demand.
Workers hated the resulting mass production system and fought for a decade or more to unionize. They were treated by management as a variable cost doing mindless jobs that could be eliminated at ever downturn in sales. The ever widening gap between the production floor workers and management caused the workers to unite and form the United Auto Workers (UAW)
- UAW signed agreement with the big 3 in 1930s
- Seniority governed job assignments and layoffs
- Little sense of partnership in companies between union and management
- Quality took a back seat to production
- Machinery became larger and larger in pursuit of economies of scale
While the development of the mass production system had many faults it also had the roots of the lean production system. Taylor's standardized work practices, and measurement and analysis to continually improve a process are concepts ingrained in the lean production system. Ford also contributed by reducing manual movements, standardizing assembly practice and line balancing. The main downfall of their efforts was to alienate the worker from the decision making process instead of using their valuable knowledge to continuously improve the production processes.
The birth of the lean production system began in the 1950's when Eiji Toyoda, an engineer at Toyoda, visited and studied every inch of the Ford Rouge plant in Detroit. He and his production mastermind Taiichi Ohno concluded that the American system would not work for them. They knew that their small domestic market needed a large variety of vehicle types, investment in huge dedicated machinery would not be possible in a war torn cash strapped economy, and their current state of depression would take another approach to be successful as a auto supplier.
Faced with near bankruptcy conditions the president of Toyoda, Kiichiro Toyoda, proposed eliminating a quarter of its work force which resulted in a major revolt. The Japanese unions, which the occupying Americans had mandated in 1946, and the Toyoda family reach an agreement which resulted in guaranteed life time employment and pay based on profitability in terms of bonuses. This resulted in a totally different management employee relationship, one based on cooperation, flexibility and mutual benefits; in effect they had become partners.
Over the pursuing years Ohno and his team developed practices that involved the workers in every aspect of the production system with the known goal to provide the highest quality and the lowest cost, in the shortest time by continually eliminating waste.
Credits
- Lean Production Simplified 2nd Edition, by Pascal Dennis, CRC Press 2007
- Lean Thinking by James Womack & Daniel Jones, Free Press 2003
