The Machine That Changed The World

Twenty years ago a book revolutionised the auto-industry paradigm – for those who were paying attention at least.

Image: Simon and Schuster

First published in 1990, three enthusiastic researchers set about collating data related to how the motor industry operates, positing how to improve matters, espousing the principle of lean, over mass production. 

James P. Womack, Daniel T. Jones and Daniel Roos created the International Motor Vehicle Programme (IMVP) at the Massachusetts Institute of Technology (MIT). Not merely a database of who was building what and how many but a full in-depth analysis into the car making business. 

Funding for global research would be task number one. Limiting individual contributions to 5% of the $5M raised from global carmakers, component suppliers and governments, placing monies in just one account and openly inviting two-way correspondence guaranteed their independence whilst also nullifying any form of sponsored influence.

And their team went deep, from shop floor to boardroom, from Australian trade and industry to Volvo. Not wishing to spoil the ending, this is not a book gushing over how Toyota won in the lean production game. Nor do the writers pull punches. The Americans as much as the European car makers engender downcast reports, employing outdated methods whilst still practicing mass production. For those frail of stomach, best have the antacids to hand.

Disseminated over ten chapters regarding the rise and fall of mass production, dealing with design, detail and customers, concluding with the required transition to lean production methods. Written in an un-laboured manner, the authors avoid jargon and maintain diplomatic relations without hindering the facts; they champion what was then considered alien to most, apart from Toyota.

With H. Ford and A. Sloan’s relentless emphasis on mass production in what became the car industry’s blossoming years, others became keen on following the trend. André Citroën and Gianni Agnelli popped over to witness Ford’s Highland Park plant in order to found their own comparative ventures. Kiichiro Toyoda, Eiji’s uncle also made a Michigan trip in 1929 recording his visit as “most interesting.

Only after the second bout of world hostilities were over did one person seek an alternative. Taiichi Ohno not only visited Ford’s Rouge plant in Detroit in the spring of 1950, he stayed for three fact finding months, touring every facility inch. Observing conditions, morale, procedures and noting just how much waste, not only materially but also in terms of manpower, was created. Reporting back in Japan to Eiji Toyoda who expressed great interest in refining the car assembling process. 

Engineer Ohno’s beginnings were simple – small teams led by a foreman, all having line stopping responsibility and then the slashing of waste. The principles were simple yet it took Ohno over twenty years of trial and error to perfect – and a sea-change with personnel.

Ford, GM and the European’s had evolved mass production, slowly. Henry wanted and almost achieved complete in-house control of supply and manufacture. Alfred took the de-centralised route with GM owned, committee led companies – both car giants seeing only the line running – pump them out fast, deal with errors later, if at all. Ohno took great pains to eliminate mistakes beforehand, one process at a time. His Seven Wastes of Production being listed as, transportation, waiting, motion, processing, inventory, defects and overproduction. 

By the 1970’s, The Toyota Production System had also been honed to Lean Production. By the mid 1980’s, the writing was on the wall for mass production. One example being GM’s Framingham plant where the study found it took more workers more time to build one car with more costly defects. The similar Takaoka plant, whilst not perfect, far out-produced their American counterpart. Toyota endlessly refined the procedures, slashing where necessary yet rewarding and encouraging positive relations with staff, the supply chain and the most important figure – the customer.

IMVP research found many US and European dealers having little product understanding and even less interest in the customer. Compare and contrast with the Toyota way – several channels with each focussed on one type of car – be that family, sports or higher end.

Mainly owned by Toyota, this kept the direct money flow cyclical. For example, channel employees were required to visit a Corolla university on courses purely devoted to understanding and selling the product. Also at the time of researching, a Japanese customer would be contacted either by a door to door salesman or directly telephoned, inviting them to avail of a new car deal.

This one salesperson would arrange their part exchange, insurance and any other documentation for the new car (including parking permit – without one, no sale) and personally deliver the car well within two weeks of the order, commission free. They also revealed a commonly felt theme that the only way to avoid the three yearly (or sooner) call from the salesman was to emigrate. Sales people almost became family members, remembering birthdays, anniversaries, etc. Did your dealer go that far in 1987?

Through the the 330 pages, the authors heap deserved praise upon lean production methods, lambasting the wasteful mass production to which many manufacturers dogmatically remained wedded, to their detriment.

Peppered by easily read graphs offering irrefutable illustration, ponder over this Western Europe market share analysis from 1989: VW was top of the tree with 15%, second, just 0.2 down was Fiat (including Alfa Romeo and Lancia). Mercedes-Benz were seventh with 3.2%. Rover next at 3.1%, BMW ninth with 2.8%. How times change.

But as is the way, nothing in production or life stays the same. Researched nearly forty years ago, sagely written with credible foresight and managing to influence some change, the authors could never have imagined what lay ahead. Namely, the fall and rise of GM and the eventual encompassing of lean production by all assembling parties (with varying results). Not the Japanese’ own wobbles or China’s automotive rise. Nor the Korean car empire, now threatening the lean production originators’ plans. And of course, that other global game-changing machine – the internet. 

Nevertheless, the book remains a highly regarded business tool, inasmuch an absorbing read itself for those interested. The history and insight the authors have unearthed offer a fascinating view into the otherwise secretive world of the auto-assemblers. 

Thanks to Bill Malcolm for pressing the initial die, all three authors and Ohno-san for his unending quest for better-made cars. 

Author: Andrew Miles

Beyond hope there lie dreams; after those, custard creams?

13 thoughts on “The Machine That Changed The World”

  1. Thank you, Andrew, for reminding me about this book, which is now firmly on my reading list.

    1. Only £7.99 in paperback form on Amazon (other online booksellers are available).

  2. Nice summary.

    Two questions!

    You mention the fall and rise of GM. Wasn’t it more like, they fell, caught their step for a bit, slipped again and kept falling?

    Could you clarify a point for me please? Are you saying you see the Koreans as threatening lean production?

    1. Hi there JT

      Sorry for the delayed response; I think the ‘Press stored my responses in a cul-de-sac.

      Your comments regarding GM are pertinent and quite correct. However, focussing on this one topic would’ve filled another book, never mind a “quick” review of the state of play within Detroit.

      As to the Korean saga, no, I believe they are refining production in ways that at the time the book was written, the Japanese had little interest in their neighbours wares. We’ve seen from Daniel’s piece on Small Beginnings where the Korean work ethic appears a level beyond what Toyota were managing. Yes, the Japanese were introducing methods along with engineering know-how but look how long it took them to perfect. The Korean version in the modern day has re-evaluated proceedings to the point that they can now offer more variety, with confidence and verve. Look at Kia’s and Hyundai’s line ups – of course the similarities between them are close to negligible but between them, they pour cold water on offerings from Stellantis, GM and Ford. The Korean vehicles may not be everyone’s cup of tea but no-one seems to have told them to stop. One example being the soon to head for Europe, Genesis brand which I personally think might be onto something. Like the book, though – who can tell?

  3. Good stuff Andrew!
    Prior to retiring the Project I was working on, with a Contract value of circa £1Billion, introduced a Lean Construction “expert”who was tasked with changing Team behaviour. Unfortunately the Team had been designing and constructing the Project for about 4 years at the point and had a very tight programme to meet as well.
    The Client, who thought up this approach, couldn’t seem to grasp the general lack of enthusiasm for running with his idea and didn’t like the thought of it affecting the programme either. The expert disappeared after a while…..

    Shame really, I felt, because the processes were well thought out and would likely have brought benefits if only they had been introduced much earlier. Management eh!

  4. Thanks for this Andrew, excellent and thought provoking article.

    I’ve gone ahead and bought the book *- I’ve heard a lot about lean over the years much of which I suspect was BS – looking forward to a bit of self education – never too late!

    *Plenty on ebay if you want to save a few quid.

  5. About ten years ago I was working on a multinational project aimed at providing tools to help SMEs modernise. At one conference one of the participants banged on endlesssly and admiringly about Toyota’s production methods, to the point where I was getting just a little weary of lean production. I ended up sitting beside him at dinner, so in the end I asked him what he drove himself. ‘Oh? A Volvo’… (To be fair, for all I know Volvo are highly efficient, and in any case I guess it’s possible to produce a good car inefficiently!)
    I would agree with Mike though that there is a certain amount of snake oil around lean and agile techniques. Working in the software industry one tends to see quite a bit of it. For problem domains where they are appropriate they can work very well. What they are not, though, is easy to apply. It takes focus and discipline, and requires everybody to buy into a particular culture, which is much harder to do than applying a rules-driven process.

    1. True.

      I found the article below interesting and timely. The problem I see with genuinely lean production is that it’s okay as long as nothing too out of the ordinary happens.

      There are some sectors where holding stock is advisable; in such cases, there may be a battle over who is going to fund the stockholding. There – I’ve managed not to mention PPE or bog roll once. Doh!

    2. Hi Michael

      You mention the possibility of producing a good car inefficiently. Mercedes consistently demonstrated that for a number of years not an impossibly long time ago. They sure don’t do it any more!

      Regarding the culture needed, there is the saying that a fish rots from the head. I was told that by a senior executive from a Japanese auto manufacturer. He was referring to the principle that quality has to come from the top of the organisation, right from the leadership (the head). If the organisational leadership is not quality oriented, then despite any wonderful speeches, talking sessions, seminars, motivational activities and the like, the rest of the organisation will follow what the leadership demonstrates by its action or lack thereof. That is, the employees reflect the culture of the management. If the leadership and hence, management, is rotten, then the rest will follow soon enough and rot. Rotting starts at the head and progresses into the body from there. The converse is also stated. Quality develops from the top down and progresses right through “the body” from there.

      Is there any manufacturer, indeed any leadership whatsoever, anywhere in Europe or even in the USA which has this culture of quality? Answers on a postcard!

    3. JT: It´s not just quality. Everything about a company emanates from the board-room. And if the board room is ineffectual, the national character will dominate. I see Fiat, FoMoCO and GM as examples of corporations whose character reflects the national condition; France might not be in as bad shape as it looks since its automotive sector seems to be able to make decent cars; a company like Ryanair is plainly a reflection of Michael O´Leary´s brusque personality and McLaren seems to be a reflection of its pushy, perfectionist boss Bobby McLaren (joke alert). In the case of GM´s long slow decline you can see how it lost its self-determination to shareholder value and perhaps became a vehicle for parasitic opportunists who acted not in the interest of GM but their own personal interest.

  6. The publication of the book coincided with major shocks to the world economy. . Lean Production and W Edwards Deming were the buzzwords of that era of crashing economies company failures , and downsizing . the computer industry was a major casualty, the old guard of IBM and the seven dwarfs were financially decimated by the Intel-based PC and Microsoft Windows. Many companies tried to reorganise on lean thinking as the solution., lean thinking cannot be introduced overnight, it required such a major change to the established culture of a business

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