Lean manufacturing history – The Ford System

Lean manufacturing is mastered at Toyota. But roots of Toyota can be found in Henry Ford’s system of line assembly. In the Ford system they manufactured automobiles in large quantities of standard designs. It made the system highly efficient, delivering a product with low cost.

Corner stone of the Ford system is the standardized product. This lead to the standard processes. Workers can be trained easily. Anyone can become a worker in the Ford plant within no time. They had to perform only a small part of the full job like tightening a screw or oiling a part. Moving assembly line made it possible to manufacture in the phase Ford wants not the other way around. In other words workers had to adapt to the speed of the conveyer. This will remove the personal element from the production line. The full system was in a harmonization with the rhythm of the assembly line.

The same aspects bought Ford the efficiencies, created its downfall. People wanted vehicles to meet their requirements, not the other way around. So the main assumption of the system, standard product was not in demand anymore. Hence the systems had to change, but Ford refused to change.

On the other hand Toyota executives who studied the Ford system managed to identify the problems that system had. With the unique requirements of Japanese market they had to look for the ways to deliver variety of products within short time periods. This lead to the unique Toyota Production System (TPS).

Instead of the manufacturing and then looking for the market, Toyota designed a system to look at the market demand and deliver what they want when they want. This was known as the Just In Time or JIT manufacturing system. Toyota created a unique pull manufacturing system instead of the Ford push manufacturing system which then became the backbone of lean manufacturing.

What would it feel to work in Toyota

Every lean manufacturer would like to work for Toyota at least to experience in first hand how they work. The Toyota production system caught the attention of manufacturers all around the world in past two decades. Most of the manufacturers are trying to implement lean methods in their organizations to improve performance. Their model is Toyota.

What would you think when thinking about lean manufacturing environment? One comes with a great new idea. Managers and workers get together to discuss the idea. Then the decision is taken to implement and then the decision is implemented. This would be the perception most of the people have on Toyota and lean manufacturing. But the reality might be something different.

In Toyota, resistance to change, conservative approach to work is present. This was nicely explained in the book “The Toyota Way” by Jeffery K Liker when he describes the development of Lexus the luxury brand of Toyota. From the beginning where the requirement was identified, to the identification of the specifications and to the designing and manufacturing the engine and till to the end Liker describes the challenges faced by people at all levels.

When you read this book I am sure your perceptions on Toyota will be challenged. You will understand Toyota is not much different to the traditional organization by many aspects. You might start to think that your way of operation is even better. But Toyota has very important difference to the traditional organization. They have a culture where every problem is analyzed and decisions are made by living the values of this culture. This culture is built on lean thinking and lead by leaders who clearly understand the values of the system.

Unlike many traditional organizations, when Toyota hits a roadblock, they have a clear system and method of thinking to guide them. In “Toyota way” Liker has explained how these concepts and principles have used in solving problems. This makes the difference. Thankful to the efforts of all the engineers and marketers involved, Lexus is the best selling luxury vehicle brand in US.

Lean manufacturing, SAP, Kanban, Heijunka and factory logic

In a recent post in ARC web they announced the acquisition of Factory Logic Inc by SAP the leading ERP solution of the world. To understand the importance of this acquisition we have to understand SAP and Factory Logic and the need for them to become one and operate as one.

SAP is the worlds leading ERP solution. Without a doubt it is a winner in the world of ERP. So compacted and integrated and durable, SAP implementations include the biggest companies in the world. Visit SAP website to get more details on their SAP implementations. Among all of these implementations there is one which standout in lean manufacturing context. Toyota is also known to be on SAP. So no need to say the acceptability of SAP as a software which can be used even in a lean environment. On the other hand, on the same news page ARC declares SAP as a leader in eKanban market based on a survey conducted by them. Kanban being one of the prime tools of lean manufacturing this shows the importance SAP has given to their lean customers. This is very interesting indeed.

On the other hand Factory Logic is known as a good Advanced Planning and Scheduling software. This is known as Heijunka or workload balancing. So the combination of successful ERP, ekanban and a Heijunka system is going to be better for all the parties involved. SAP, Factory Logic and more importantly the lean manufacturers using SAP as their ERP will definitely benefit from this move.

Apart from the business perspective of this story, I believe this implies something more interesting to all the manufacturers around the world. Even SAP is trying to cater lean manufacturers. This means there is a strong trend towards lean manufacturing all around the world. The worlds leading ERP is trying to cater this market. I am so interested about this trend. If you are a traditional manufacturer it is the time to have look at lean and the opportunities it can open up for you before the rest of your competitors does.

What is lean manufacturing?

Interesting question isn’t it? Lots of people talk about lean manufacturing, but when it comes to defining it, it is not easy. In fact lean is a philosophy which evolved for many years based on some simple concepts. Understanding these concepts and principles will help us in understanding the lean manufacturing itself.
Lean manufacturing is a manufacturing methodology where wastes are identified and removed continuously from the system in order to create value. Earlier the term just in time manufacturing is used to identify similar concepts. In Toyota’s website they define Jikoda and Just In Time as main pillars of lean manufacturing. Jikoda is the concept where if there is a defect it is identified and solved immediately. For an example if there is a problem in machine, the production line will be stopped and the problem will be fixed immediately. JIT or the Just In Time is the manufacturing philosophy where goods are made available in the correct quantities in the correct time and in the correct place.

History of lean manufacturing has a very closer link to the Henry Ford’s early line assembly system. Sakichi Toyoda who was the founder of Toyoda group and the inventor of automatic loom stopping system converted his business into automobile manufacturing in 1930’s. His son Kichiro visited Ford manufacturing facility and got the understanding of the concepts behind it and more importantly the problems incorporated to that system. This is a very strong evidence to prove the closer relationship between Ford system and Toyota system.

Although the concepts were developed by the owners themselves in the initial stages, the real guru of lean manufacturing is considered as Taiichi Ohno. He understood the principles behind lean and then developed them to suit the requirements of Toyota. Concepts and tools like Total Productive Maintenance (TPM), Single Minute Exchange Of Dies (SMED), TAKT time, KanBan, Kaizen, Pokayoke, Jikoda, which are very important to the success of any lean manufacturer are developed over the time to facilitate this manufacturing philosophy.
Definition of waste, maintaining customer supplier relationship internally and externally, empowerment and respect to people, idea generation and using of ideas generated by employees to the betterment of the organization, organic management structures, ability to adopt to the fast changing situations, looking into the bigger picture by avoiding sub optimization, simplicity are among the key features of any lean system.

Today the lean concepts have reached many other industries including healthcare, service providers and even military. The variety of organizations that are practicing lean concepts in them goes to show the universal applicability of lean concepts or lean thinking. Lean technologies may be unique to the implementation but the lean thinking is universal.

It is important to understand that lean is not about just tweaking the current systems. It is a conceptual change to the system. This requires lots of change management and care for people. People are the most important resource for any lean manufacturer. If any manufacturer wants to cut down in number of heads it should not be in the name of lean. Lean is not about cutting corners either. It is about elimination of waste from the system continuously. Many implementations of lean fail due to the lack of understanding on basic lean concepts and general knowledge, not because of the problems in lean itself.

Now the lean has gone over its manufacturing premises and lean manufacturers are now becoming lean enterprises. Lean enterprises consist of customers and suppliers of the manufacturer. They help each other in the process of value creation and ultimately getting rewarded collectively for their efforts. Large amounts of wastes do exist in interfaces where each party separated in the supply chain. In today’s competitive markets most of the manufacturers are willing to reach their suppliers and customers and treat them as partners not as separate parties. In fact it is very hard to become a lean manufacturer without having a good supplier base at least.

Lean has a great potential for the future. Lean concepts can be used in almost all the areas. Achievable of lean including low prices, high quality, ability to supply on demand, waste free way of manufacturing and eco friendliness and human resource development are the requirements of future.

Lean manufacturing beyond it’s boundaries – A journey towards lean enterprise

Lean manufacturing is explained as a great way of reducing wastes and improving the efficiencies in an organization. But as it sounds lean manufacturing is more focused towards the organization and improving its functionalities. But in the real world your customers, suppliers and also other parties who has some sort of connection with your organization can do much more than you think in improving your efficiencies.

Some researches have shown that around $250 to $400 Billion are wasted annually in North American industries alone due to the inefficiencies in supply chain. They estimate this amount would be as big as $1 trillion worldwide. (Source : Creating the Lean Enterprise By David Baum). So to exploit the real potential of your organization you must go beyond the boundaries of your premises.

Lean manufacturing concepts are now extending towards lean enterprise concepts. In a lean enterprise full supply chain is integrated. Lean manufacturing principles are used to achieve waste elimination objectives. Seamless integration of the activities along the supply chain will save huge amounts of money, time and effort.

Has lean manufacturing developed all these systems alone?

It is well known that lean manufacturing was influenced by many concepts developed in the same time period as lean manufacturing. Therefore we can see lean manufacturing has many close relationships with many other popular concepts. We have discussed in detail about the relationship lean manufacturing has with Henry Fords line assembly system. But this is not the only system which has close relationship with lean manufacturing.

One concept which lean manufacturing has a very close relationship with is the TQM or the Total Quality management. Sometimes it is very hard to differentiate between these two systems on there surface. But this is not to say they are the same concept. Total Quality Management has a much more quality focused approach in improving the system while lean manufacturing is more towards improving the total system by taking all the aspects into consideration. Another concept lean manufacturing has a close connection with is Six Sigma concept. Six Sigma concept is very much similar to the TQM concept. But there are some colorful features added to the system.

I have written a series of TQM and some other articles describing these relationships on my main websites. To read more about you can visit lean manufacturing tools and technique section of my web http://www.leanmanufacturingconcepts.com