The Machine That Changed The World

How Lean Production Revolutionized The Global Car Wars

Authors
James P. Womack
Daniel T. Jones
Daniel Roos

1
 INTRODUCTION

• The Machine that Changed the World, published in 1991, has been critically and popularly hailed as the
definitive source on Japanese manufacturing methods commonly called lean production.

• James Womack, Daniel Jones and Daniel Roos revealed the Japanese techniques in this book by studying
for several years in the field automotive manufacture.

• Their research was sponsored by the International Motor Vehicle Program (IMVP) at Massachusetts
Institute of Technology(MIT) as a part of a worldwide auto manufacturing benchmarking study.

2
 The Machine That Changed The World
• In order to establish a context for discussing lean production, the authors first discussed the details of
the two main non-systems techniques of manufacturing, craft production and mass production.

There are 3 types of productions in Automobile industry.

1. Craft production : A workforce that is highly skilled in design, machine operations & fitting. This type of
production has low Volume -1000 or fewer automobiles per year. Only few vehicles were look alike since
craft techniques gives lot of variations. Ex : Aston Martin company has produced 10,000 cars over the past
65 years.

• Mass production : A workforce which is not highly skilled but production volume is high having same
standard design and product for manufacturing.

3. Lean production. : A workforce that is highly skilled and has high production volume with different design
and products for manufacturing.

3
 The Machine That Changed The World

• This story starts with old world craft production, which established its dominance in Europe in the years
before the industrial revolution. In that time, finely skilled craftsmen with general tools made products to
exact customer standards(Requirements). Products, especially complex ones like automobiles, required
much customization and fitting by craftsman in order to maintain function and quality. As a result craft
production was had very low efficiencies and resulted in only small numbers of consumer products entering
the upper classes.

• Henry Ford’s assembly line methodology revolutionized production in the early 20th century by
introducing mass production to the manufacturing world. Unskilled workers assembled large numbers of
standardized parts into automobiles in a series of short tasks.

• Productivity under Ford’s mass production increased substantially beyond what was obtainable through
craft techniques. Ford’s methods quickly overwhelmed craft producers because unit costs fell rapidly with
the increased productivity. As costs fell craft producers could no longer compete.

4
 The Machine That Changed The World

• One of the most important aspects of Ford’s ideology was the high level of division of labour. Workers
performed assembly, while industrial engineers and management personnel handled line organization and
optimization.

• Diversification and division of labour went beyond the assembly plant as well. Internal to the automotive
firm, separate departments designed vehicles, engineered parts and created marketing strategies.

• Many times these separate entities had conflicting goals leading to corporate infighting. Similar conditions
prevailed externally as well, division of labour resulted in very independent supplier firms, manufacturing
sites and dealerships.

5
 The Machine That Changed The World

Drawbacks Of Mass Production

• Managing the large manufacturing operations associated with automobiles remained complicated despite
the management techniques. Often times, there was little or no communication between divisions,
departments and even between workers. Each division, group or worker concentrated on producing their
parts to the required productivity and quality with little regard to the interests of their surrounding divisions.

• There were several problems with this lack of coordination and communication. Large buffer inventories
were required between manufacturing operations (and between suppliers and the assembler and even
engineering departments) due to differing running rates.

6
 The Machine That Changed The World

The Rise Of Lean Production

• In 1937 Toyota Motor Company was founded by Toyoda family ( Toyoda means “abundant rice field” later
changed to Toyota which has no meaning in Japanese). Most of the events had been disastrous for the
company as they built trucks Largely with craft methods.

• In 1950, a young Japanese engineer Eiji Toyoda set out three month pilgrimage to Ford’s Rouge Plant in Detroit
then most Efficient manufacturing facility in the world. After the visit Eiji Toyoda along with production genius
Taiichi Ohno concluded That the Mass production could never work in japan.

• From this tentative beginning were born what Toyota came to call the “The Toyota Production System” and,
ultimately Lean Production.

7
 The Machine That Changed The World
The Birthplace Of Lean Production
• Japan domestic market was tiny & demanded a wide range of vehicles

Examples:
1) Luxury cars for government officials
2) Large trucks to carry goods to market
3) Small trucks for japans small farmers.
4) small cars suitable for Japan's crowded cities and high energy prices.

8
 The Machine That Changed The World
Lean Production : A Concrete Example
General practice in Mass production :
• Large sheet roll is blanked to produce a stack of flat banks slightly Larger than the final part .
• This blanks are pressed inside two massive dies to form three dimensional shape of car in a series of
presses.
• From Ohno’s perspective, this presses were massive & expensive and were designed to operate at about
12 strokes/min, 3 shifts a day to make million or more parts in a year. But in Toyota’s entire production
was few thousands vehicles a year.
• This massive dies could be changed for making many parts, but a slight mismatch in the alignment
resulted in wrinkles and sometimes rejection.
• To avoid this problems specialists were assigned to change dies. It took around full day to change,
sometimes same presses were used to stamp same parts for months & years as volume was high after
World War 2.
• To Ohno this solution was no solution at all. His idea was to develop simple die changing techniques &
change dies frequently – every 2 or 3 hours versus 2 to 3 months- using rollers to move dies in and out of
position and simple adjustment mechanisms.
• Since this technique was easy to master and production workers were idle during the die changes, he hit
upon the idea of letting the production workers perform the die changes.
9
 The Machine That Changed The World
• After many trials and experimentations in 1940s, Ohno eventually perfected his technique for quick
changes.
• By the late 1950s, he had reduced the time required to change the dies from a day to an astonishing 3
minutes and eliminated the need for die change specialists.
• In this process , he made an unexpected discovery it actually costs less per part to make small batches of
stampings than to run off enormous lots.
• There were two reasons for this phenomenon;
1) Making small batches eliminated the carrying cost of the huge inventories of finished parts.
2) Making only a few parts before assembling them into a car caused stamping mistakes to show up
instantly.
• This made those in stamping shop much more concerned about quality, and it eliminated the wastage of
large number of defective parts-which had to be repaired at great expense or even discarded.
• To make this system work, ideally produced 2 hours or less inventory Ohno needed both an extremely
skilled & highly motivated workforce.

10
 The Machine That Changed The World
Mass Production Vs. Lean
General Motors Framingham Plant Vs. Toyota Takaoka
Assembly Plant, 1986
GM Framingham Toyota Takaoka

Gross Assembly Hrs

40.7 18
per car

Adjusted Assembly hrs per car 31 16

Assembly defects per 100 cars 130 45

Assembly space per car per square
8.1 4.8
feet/vehicle/year
Inventories of parts (Avg) 2 weeks 2 hours
11
Assembly Plant Quality, Volume Producers,1989

12
Assembly Plant Quality, Volume Producers,1989

13
 The Machine That Changed The World
The truly lean plant has 2 key organizational features

• It transfers maximum number of tasks & responsibilities to those workers actually adding value to the
product.

• It has in place a system for detecting defects that quickly traces every problem , one discovered to its
ultimate cause.

14
 The Machine That Changed The World

Conclusion

• The best lean producers believe that the point of production is where value is truly added ,not through
indirect managerial activities, and that all employees need to understand the fact as soon as they enter
the company.

• Lean production is a superior way for humans to make things . It provides better products In wider
variety at lower cost. Equally important, it provides more challenging and fulfilling work for employees
at every level from the factory to headquarters.

15
THANK YOU

16