The Machine that Changed the World by Roos, Womack and Jones

RAF Mildenhall -- Personal Evaluation: Highlights some key concepts, but USAF personnel may have a hard time directly relating the automobile industry to their workspace.

Overview: This book is a classic on the advantages of being lean - Product Design, Manufacturing, and Supply Chain Management - the entire gamut from concept to delivery in the Automobile industry. 

What happened? The authors give their answer based on a five-year study of the worldwide automobile industry that included visits to 90 assembly plants in 17 countries. They go beyond the obvious (and inaccurate, in their view) reasons such as lower wage rates or extensive government assistance in Japan. Their research indicates that the answer lies instead in the type of production system used, regardless of country or product. The authors identify three types of production systems: craft, mass production, and lean production. Lean production, the focus of the book, is the most efficient of the three and was begun in Japan in the 1950s. To set the scene for their description of lean production, which will be a new concept to most readers, the authors first discuss the other two production systems. 

The first cars were custom built by the craft system. Due to the lack of standardized parts, no two cars were the same. The result was an expensive product, available only to the wealthy. Mass production soon replaced craft production. In 1906, Henry Leland first achieved full interchangeability of parts at his Cadillac plant in Detroit. When this advance was coupled with the moving assembly line introduced by Henry Ford in 1913, production costs fell rapidly and a mass market developed. With each task thought out in advance by management specialists, unskilled workers could be employed to do the repetitive assembly line jobs. 

Mass production served the United States well through World War 11 and into the 1950s. Neither industry nor its training ground, the schools of business, questioned the premise that mass production was the best way to manufacture large, standardized quantities of any product, whether it be automobiles, washing machines, television sets, or computers. Academic research concentrated on the undesirable side effects of mass production, such as monotony and tedium (sometimes referred to as the "blue-collar blues"), not on redesigning the production system itself. 

Beginning in Chapter 3, the authors discuss the rise of lean production, the new approach to manufacturing that has shaken the mass production system to its very foundations. The system is based on two assumptions quite contrary to those used by U.S. auto makers. First is the use of labor. In the U.S., assembly-line labor has long been assumed to be both unskilled and a variable cost. Unions emphasized job security in contract negotiations to minimize the effect of layoffs. In lean production, pioneered by Toyota and now used by virtually all Japanese auto makers both in Japan and their U.S. assembly plants, all laborers are assumed to be skilled workers and a fixed cost (no layoffs). 

Second is the use of machines. In the U.S., fixed or Detroit automation became the norm, whereby each machine was dedicated to performing a single task. Although this method optimized machine usage by minimizing setup costs, it also meant the buildup of inventory as parts moved from one machine to the next. In the Toyota system, the same machine was used for several operations. This increased the number of setups but reduced both the number of machines needed and inventory holding costs for batches of parts awaiting processing. There was also a savings in labor, as production workers, not die change specialists, were utilized to do the setups. The results could be impressive: 

By the late 1950s, he [Taiichi Ohno, Toyota's production manager] had reduced the time required to change dies from a day to an astonishing three minutes and eliminated the need for die change specialists. In the process, he made an astonishing discovery-it actually cost less per part to make small batches of stampings than to run off enormous lots. (p. 53) 

In Chapters 4-8, the authors discuss the major components of lean production, comparing each to its equivalent in the mass production system. These components are running the factory, designing the car, coordinating the supply chain, dealing with customers, and managing the lean enterprise. The entire system is designed to meet seemingly contradictory goals: pleasing the customer by offering a wide variety of models while reducing costs. The solution is to find a way to make smaller quantities of a product without increasing cost. This is done by relentless dedication on the part of all employees to reducing costs. For example, inventory holding costs are kept to a minimum through the kanban or just-in-time delivery system. Time spent retooling for a new model is reduced by starting to build major pieces of production equipment before the design of a new car has been completed. As a result, about one-third fewer labor hours are required to produce a Japanese car than a similar American car. 

Can American automobile manufacturers learn the new techniques of lean production? The authors feel they can. Indeed, they conclude on an optimistic note, "the fundamental ideas of lean production are universally applicable anywhere by anyone ... and many non-Japanese companies have already learned this" (p. 9). Among U.S. auto makers, Ford has done the best job so far, especially with its very successful Taurus and Sable models introduced in the mid-1980s. In 1990 GM introduced its new car, Saturn, designed and built specifically to compete with Japanese economy cars. 

Anyone who wonders why the United States is losing its competitive edge should find this book stimulating reading. It gives substantial evidence to back up its contention that mass production is no longer the best method of production. Just as important, it explains the main premises behind both mass production and lean production, showing how each system is made up of many interdependent parts, much like an automobile itself. 

The authors end with the provocative thought that lean production, taken to the extreme, would lead to a lot size of one, effectively returning to the craft production system whereby each car was made to the buyer's specifications.

Food for thought:

Page 99: The truly lean plan has two key organizational features: It transfers the maximum number of tasks and responsibilities to those workers actually adding value to the car on the line, and it has in place a system for detecting defects that quickly traces every problem, once discovered, to its ultimate cause.

Page 119: For example, Toyota executives at the Georgetown, Kentucky, plant say that it will take a decade for the plant to fully master the Toyota Production System. To ensure that no one takes short cuts, they've built up the plant's production rate very slowly, stopping as necessary to get each step right rather than rushing ahead and going back later to rework errors not just in the cars but the entire production organization.