Twenty years ago a book revolutionised the auto-industry paradigm – for those who were paying attention at least.
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 The Americans as much as the European car makers engender downcast reports, employing outdated methods whilst still practicing mass production.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.