The Machine that Changed the World

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The Machine that Changed the World

• Henry C. Co
• Technology and Operations Management,
• California Polytechnic and State University

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Craft Production

• Panhard et Levassor
• Skilled craftsmen/small volume.
• Independent contractors design/manufacture
  components for assembly in small craft shops.
• Same blueprints yet each car was a prototype.
• Chauffeurs/professional mechanics- maintained.

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• Disadvantages
• Dimensional creeping high cost/inconsistent
  quality.
• Limited resources to pursue fundamental
  innovation.
• Lack of economies of scale.

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Mass Production

• Ford, 1908
• Interchangeable parts.
• Division of labor.
• New job descriptions
• operators, assemblers, foremen, industrial
  engineers, manufacturing engineers, product
  engineers, housekeeping workers, repairmen,
  inspectors, rework team, etc.
• Time-motion study.
• Dedicated equipment MHS maximizes output.
• User-friendly owner-driven/repair.
• Decentralized divisions (Sloan).
• Big-3s market share in 1955 95.
• Job assignment work tasks labor unions.

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Mass Production Organization

• Ford (vertical integration bureaucracy)
• Reduced delivery tolerance uncertainties
• Low cost -- high volume, standardized items
• Financing internally for total control.
• Sloan (decentralized profit center)
• Small corporate headquarters divisions.
• Many mechanical components standardized.
• External appearances altered annually.
• Labor relations
• Interchangeable labor.
• Hectic boring work -- high turnover.
• Paternalistic (higher pay slowed turnover).
• Hire fire (cyclical industry).
• Europe caught on 30 years after Ford.

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Lean Using Less Resources

• half human effort.
• half space.
• half investment in tools.
• half RD hours to develop new product.
• half (or less) inventory
• much less defects,
• while producing a greater variety of products.
• Womack, et al

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Evolution of Manufacturing
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Birth of Lean Production

• Toyota (Taichi Ohno).
• American occupation after WW II
• Domestic market -- high variety (luxury, large
  small trucks, small cars) at small volume.
• Tough labor law under Macarthur/ strong workers
  position/ management right to layoff severely
  restricted.
• Macarthur's move to cut inflation caused
  depression.

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• No temporary immigrants, no overworked underpaid
  minorities.
• War-ravaged Japan lacked capital foreign
  exchange.
• Established American European competitors ready
  to defend their established markets.

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How Toyota Responded Quick setup in metal
stamping
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How Toyota RespondedLifetime Employment Toyota
Community

• Lifetime Employment
• Depression (1940s) Kichiro Toyoda fired 1/4 of
  workforce workers occupied factory strong labor
  union positioned to win strike.
• K. Toyoda resigned Guarantees remaining
  employees lifetime employment, pay grade by
  seniority, bonus based on company's
  profitability.
• Employees agreed on flexible work assignment (If
  we are going to take you on for life, you have to
  do you part by doing jobs that need doing).
• Toyota community
• Employees members access to housing, recreation,
  etc.

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Elements of Lean Production
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Premise Elimination of Muda

• Overproduction muda -- just in case production
  due to unreliable expectations.
• Waiting muda -- waiting for a specialist or
  special equipment.
• Conveyance muda -- poor layout.
• Processing muda -- manufacturing processes not
  properly rationalized causing low productivity.
• Inventory muda -- unnecessary safety-stocks at
  various manufacturing stages.
• Motion muda -- poor methods.
• Defective-units muda -- rejects at various
  manufacturing stages.

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Inventory Hides Problems!
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JIT Building Blocks

• Product design.
• Process design.
• Personnel/organizationalelements.
• Manufacturing planning and control.

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Product Design

• Standard parts.
• Modular design..
• Quality.

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Process Design

• Small lot sizes.
• Setup time reduction.
• Manufacturing cells.
• Limited work in process.
• Quality improvement.
• Production flexibility.
• Little inventory storage.

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Benefits of Small Lot Sizes
Reduces inventory
Less rework
Less storage space
Problems are more apparent
Increases product flexibility
Easier to balance operations
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Production Flexibility

• Reduce downtime by reducing changeover time.
• Use preventive maintenance to reduce breakdowns.
• Cross-train workers to help clear bottlenecks.
• Reserve capacity for important customers.

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Organizational Elements

• Workers as assets.
• Cross-trained workers.
• Continuous improvement.
• Cost accounting.
• Leadership/project management.

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MPC

• Level loading.
• Pull systems.
• Visual systems.
• Close vendor relationships.
• Reduced transaction processing.

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Pull/Push Systems

• Pull system System for moving work where a
  workstation pulls output from the preceding
  station as needed. (e.g. Kanban).
• Push system System for moving work where output
  is pushed to the next station as it is completed.

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Kanban System

• Kanban is the Japanese word for card.
• Paperless production control system
• Authority to pull, or produce comes from a
  downstream process.

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Benefits of JIT Systems

• Reduced levels of inventories.
• Reduced space requirements.
• Increased product quality.
• Reduced lead times.
• Greater flexibility in product mix.
• Smoother production flow.
• Increased productivity levels.
• Worker participation in problem solving.
• Pressure for good vendor relationships.
• Reduced need for indirect labor.