To some people lean manufacturing was invented in Japan and is synonymous with the Toyota Production System – the manufacturing philosophy that enabled Toyota to effectively conquer the global automobile market. Many believe the company’s relentless focus on the elimination of waste almost by definition drives a reduction in workforce, and this is why the vast majority of Toyota is not unionized. A handful are convinced that lean lead to Toyota’s quality stumbles in 2009 into 2010.
Nothing could be further from the truth. Fundamentally lean is about creating value – not just eliminating waste – and empowering people, and it was developed long before Toyota. Long before the 20th century in fact.
Some trace the roots of lean all the way back to the Venice Arsenal in the mid-1500’s when King Henry III of France watched the Arsenal roll complete galley ships off the “production line” every hour. A remarkable achievement enabled by several weeks of assembly time was sequenced into a continuous, standardized flow.
Standardization took root and by 1760 the French understood the significance of standardized designs and the interchangeability of parts to facilitate repairs on the battlefield. Eli Whitney refined the concept when he won a contract to build 10,000 muskets at an unheard of low price. Militaries around the world fine-tuned continuous flow and standardized processes through the 1800’s with the concept making a slow transition into commercial manufacturing.
In 1910 Henry Ford moved his nascent automobile manufacturing operations into Highland Park, which is often called the “birthplace of lean manufacturing.” Continuous flow and standardized processes, coupled with innovative machining practices, enabled highly consistent assembly. Ford often cited the frugality of Benjamin Franklin as an influence on his own business practices, especially Franklin’s advice that avoiding unnecessary costs can be more profitable than increasing sales. In 1911 Sakichi Toyoda visited the United States and witnessed Ford’s Model T production line and returned to Japan to try what he saw on his hand loom weaving machines.
Ford continued to improve with core chassis assembly time rapidly dropping from twelve hours to less than three. That reduced the cost of a vehicle to the point where it became affordable to the masses, which created the demand that helped build Ford’s River Rouge plant – which became the world’s largest assembly operation with over 100,000 employees.
Parallel to the improvements in assembly methods were developments on the quality and human factors aspects of manufacturing.
In 1906 Italian Vilfredo Pareto noticed that 80% of the wealth was in the hands of 20% of the population – and then found that ratio to be surprisingly common throughout the world. J.M. Juran took the Pareto Principle and turned it into a quality control tool that focused on finding and eliminating the most important defects. A few years later Walter Shewhart invented the control chart which allowed for the monitoring of process variables. Shewhart went on to develop the Plan-Do-Study-Act improvement cycle, which W. Edwards Deming then altered to become the Plan-Do-Check-Act (PDCA) cycle still in use today.
At the same time Frank and Lillian Gilbreth were beginning to investigate the impact of human movement on assembly processes. Our friend Sakichi Toyoda over in Japan was also learning how human-induced variability, as well as control, impacted the weaving process.
Then came World War II. Consolidated Aircraft was able to build one B-24 bomber per day. Ford’s Charles Sorensen thought he could improve on that rate and a couple years later the Willow Run plant was able to complete one B-24 per hour. The human aspect of manufacturing became front and center with almost all of the traditional male factory workforce now being deployed overseas. The concept of training within industry (TWI) was born as a method to rapidly and effectively train women to work in the wartime factories. After the war TWI found its way to Japan while it faded away in the U.S., and has only recently been rediscovered back in the States.
The end of the war saw a divergence. In the U.S. Ford adopted the GM style of control management and effectively abandoned lean manufacturing. Meanwhile in Japan Toyota lead the acceleration of the development and implementation of lean methods.
Toyota transitioned from a conglomerate that still included the original loom business to a company focused on the auto market. Taiichi Ohno was promoted to machine shop manager and under his watch Toyota developed the elimination of waste – and creation of value – concept. The human side was especially important to Ohno with increasing amounts of authority and control being transferred to workers directly on the shop floor.
Deming was invited to Japan in the early 1950’s and gave a series of lectures on statistical quality control, demonstrating that improving quality can reduce cost. These concepts were embraced by Toyota and embedded into the Toyota Production System (TPS) leading to Toyota winning the Deming Prize for Quality in 1965. Taichi Ohno and Shigeo Shingo continued to refine and improve TPS with the development of pull systems, kanban, and quick changeover methods. We’ll explain these various concepts later in the book.
By the early 1970’s the rest of the world was beginning to notice, with the first study missions to Japan to see TPS in action. Norman Bodek and Robert Hall published some of the first books in English describing aspects of TPS, and by the mid-1980’s several U.S. companies, notably Danaher, HON, and Jake Brake, were actively trying the “new” concepts.
The term “lean” was first coined by John Krafcik in his MIT master’s thesis on Toyota and then popularized by James Womack and Daniel Jones in the two books that would finally trigger a wider knowledge of TPS, The Machine That Changed the World in 1990 (with Daniel Roos) and Lean Thinking in 1996. Lean Thinking described the core attributes of lean as:
- Specify value from the perspective of the customer.
- Define the value stream for a product, then analyze the steps in that stream to determine which are waste and which are value-added.
- Continuous flow.
- Create pull between process steps – in effect make to order in the exact amount required.
- Drive toward perfection – both in terms of quality and eliminating waste.
Those books, as well as organizations such as The Association for Manufacturing Excellence (AME), drove a widespread acceptance of lean as a path to productivity and profitability.
By the year 2000 lean methods were beginning to move out of manufacturing and into office and administrative environments. Lean healthcare, lean government, and lean construction are particularly popular right now.
Lean has taken some hits recently thanks to the Toyota recalls in 2009 and 2010. Although several independent analyses eventually showed that a significant quality issue never existed, Toyota’s response to the situation was decidedly “non-Toyota.” In effect Toyota had temporarily lost its focus on creating value for the customer, partially as a result of rapid growth that made it difficult to fully instill the Toyota culture into new executives at factories around the world. Recent efforts are hopeful and may be one reason why the Lexus and core Toyota brands were once again two of the top three brands in the 2011 J.D. Powers survey.
Lean sounds so easy, refined, and defined, doesn’t it? Unfortunately it’s not.