Continuous Process Improvement: The Lessons of History

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Continuous Process Improvement The Lessons of
History

• SCM 494
• Dr. Ron Tibben-Lembke

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Growth of Service Economy
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Continuous Process Improvement

• It used to be you had to be good enough
• Now, you must be looking for ways to make your
  customer happy, and meet their future needs
• If you arent someone else is, and is going to
  take your business

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Cotton Gin at Work
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Eli Whitney

• introduced interchangeable parts in large musket
  contract for U.S. Army
• Interchangeable parts the true secret of Fords
  success
• Made possible by advances in measurement and tool
  steel

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Beginning of Standards

• Before standardized parts, need Screws
• 1860s Machine Tool industry Silicon Valley of
  its day
• All screws custom made by tool die shops
  according to what they thought best
• William Sellers 1864 On a Uniform System of
  Screw Threads

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Sellers vs. Whitworth

• 3 cutters 2 lathes vs. 1 cutter 1 lathe
• Simple geometry vs. difficult
• Rounded top vs. straight ease of manufacturing,
  ease of assembly

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Not Just What you Know

• Machine tool makers didnt want to be
  commoditized like gun makers
• The standard people expect to win usually does.
• Navy Board found it superior, asked Singer Sewing
  Machine, Baldwin Locomotive which would win
  (already adopted).
• Pennsylvania RR adopted (Sellers on the Board)
• British tanks trucks couldnt be repaired in
  WWII because Britain adopted Whitworth

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Frederick W. Taylor

• Frederick W. Taylor
• Father of Scientific Management
• Find ways to improve work environment and work
  processes
• Quantify, measure track everything
• Time required to haul wheelbarrow

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Factory Life
Schmidt
Taylors Factory
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Frank and Lillian Gilbreth

• Systematically study a work environment and find
  the best way to achieve a particular task
• With Taylor, pioneered industrial engineering
  -- time and motion studies
• Cheaper by the Dozen

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Motion Capture

• Lights illuminate key motion joints
• For Computer Generation, convert to 3D

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Barry Zito
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Chronocyclegraph light-1914
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Bricklayer
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Typesetter
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Drill Press
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Pencil Holder

• Color coded slots
• Groove for grabbing pencil

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Ergonomic chairs
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Andrew Carnegie

• Telegraph operator to RR division superintendent
• Adopted latest technology, built first steel
  plant laid out to optimize flow
• Focused on knowing, lowering unit cost
• Raise prices with everyone else in booms, slash
  prices in recession

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Andrew Carnegie

• Production US England
• 1868 8,500 111,000
• 1902 9,138,000 1,862,000
• Steel Prices (per ton)
• 1870 100
• 1890 12
• How? Continuous Process Improvement

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The Richest Man in the World

• Found out strike organizers, fired before
• 1886 Triumphant Democracy, Forum magazine-
  workers right to unionize
• 1889 Gospel of Wealth rich need to help the
  poor (25m annual income)
• 1892 Homestead strike 12 hour gunfight,
  Pinkerton defeated (12 died), state militia
  called in, strike breakers hired
• 1901 sells out to J.P. Morgan 480m
• Built 2,500 libraries. The man who dies rich
  dies disgraced.
• 1919 dies, having given away 90

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Skibo Castle
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Henry Ford

• Continuous Process Improvement
• Advances in metal cutting allowed him to cut
  pre-hardened steel, produce identical parts
• Standardized parts facilitated standardization of
  jobs, moving assembly line
• Model T 1908 850
• 1920s 250

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Fords Rouge Plant
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Vertical Integration

• Owned forests, iron mines, rubber plantation,
  coal mines, ships, railroad lines
• Dock facilities, blast furnaces, foundries,
  rolling mills, stamping plants, an engine plant,
  glass manufacturing, a tire plant, its own power
  plant, and 90 miles of RR track
• 1927 Model A Production begins
• 15,000,000 cars in 15 years
• 120,000 employees in WWII

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Details to the Max

• In his autobiographies My Life and Work (1922),
  and Today and Tomorrow (1926), Ford gives great
  detail on innovations he and his company have
  made, including
• Glass making, Artificial leather
• Steering wheels out of Fordite
• heat treating -- saved 36m in 4 years (1922)
• Forging parts, wiremaking
• Riveting, bronze bushings, springs

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Managing Workers

• It is a reciprocal relation -- the boss is the
  partner of his worker, the worker is partner of
  his boss. Both are indispensable.
• -- MLAW p. 117

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Paying for Good Employees

• One frequently hears that wages have to be cut
  because of competition, but competition is never
  really met by lowering wages. The only way to
  get a low-cost product is to pay a high price for
  a high grade of human service and to see to it
  through management that you get that service.
  TT p. 43

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Mindless Work

• Repetitive Labour -- the doing of one thing over
  and over again and always in the same way -- is a
  terrifying prospect to a certain kind of mind.
  It is terrifying to me. I could not possibly do
  the same thing day in and day out, but to other
  minds, perhaps I might say to the majority of
  minds, repetitive operations hold no terrors. In
  fact, to some types of mind thought is absolutely
  appalling. To them the ideal job is one where
  their creative instinct need not be expressed.
  MLAW p. 103

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Mindless Work

• When you come right down to it, most jobs are
  repetitive. A business man has a routine that he
  follows with great exactness the work of a bank
  president is nearly all routine the work of
  under officers and clerks in a bank is purely
  routine. Indeed, for most purposes and most
  people, it is necessary to establish something in
  the way of a routine and to make most motions
  purely repetitive -- otherwise the individual
  will not get enough done to be able to live off
  his own exertions. -- MLAW pp 103-4.

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Guess the Expert(s)
Henry
Andrew
Frederick
Shigeo
Frank Lillian
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1. Product Flow

• If transportation were perfect and an even flow
  of materials could be assured, it would not be
  necessary to carry any stock whatsoever. The
  carloads of raw materials would arrive on
  schedule and in the planned order and amounts,
  and go from the railway cars into production.

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2. Inventory

• having a stock of raw material or finished
  goods in excess of requirements is a
  waste--which, like every other waste, turns up in
  high prices and low wages.
• We do not own or use a single warehouse!
• How we do this will be explained later in this
  chapter, but the point now is to direct thought
  to the time factor in service.

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3. Volume Buying

• We have found in buying materials that it is not
  worth while to buy for other than immediate
  needs. We buy only enough to fit into the plan
  of production, taking into consideration the
  state of transportation at the time.
• But we learned long ago never to buy ahead for
  speculative purposeswe have found that thus
  buying ahead does not pay. It is entering into a
  guessing contest. It is not business. the gains
  on one purchase will be offset by the losses on
  another in the end speculation will kill any
  manufacturer.

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4. Flexibility

• We believe that no factory is large enough to
  make two kinds of products. Our organization is
  not large enough to make two kinds of motor cars
  under the same roof.

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5. Standardization

• Only six years ago, we used around six hundred
  different size boxes and crates for shipping. We
  studied the shipments and the boxes, and today,
  instead of six hundred sizes, we have fourteen
  sizes, for each of which a standard method of
  packing has been devised.

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The envelope please
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Answer Henry Ford

1. MLW p. 143-4
2. TT pp. 108-109
3. MLW p. 143-4
4. TT p. 81
5. TT p. 122

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The Lessons of History

• Continuously improving your products, your
  services is the only way you will survive
• Ignore your customers, and theyll go away
• Those who do not learn from the past are doomed
  to repeat it.