Review of the book "The machine that changed the world"

Machine_that_Changed_Book summary

The Machine That Changed The World

James P.Womack, Daniel T.Jones, Daniel Roos

Introduction

This classic book explains the evolution of lean manufacturing practices in the automobile industry. As the

authors put it, the off repeated statement that the world faces a massive overcapacity crisis in automobile

production is a misnomer. The reality is that the world has an acute shortage of competitive lean-production

capacity and a vast glut of uncompetitive mass-production capacity.

The automobile industry has come a long way since the days of craft production. The craft producer used

highly skilled workers and simple but flexible tools to make exactly what the consumer asked for one item at

a time. Goods produced by the craft method cost too much for people to afford. So mass production was

developed at the beginning of the twentieth century as an alternative.

Mass-producers began to use narrowly skilled professionals to design products made by unskilled or

semiskilled workers tending expensive, single-purpose machines. These churned out standardized products

in very high volume. The machinery was expensive and intolerant of disruption. So the mass-producer

added many buffers - extra supplies, extra workers, and extra space to ensure smooth production. The

consumer got a cheaper product but at the expense of variety. Moreover, most employees found work boring

and dispiriting.

Today, lean producers led by Toyota have emerged as global leaders. The lean producer, combines the

advantages of craft and mass production, while avoiding the high cost of the former and the rigidity of the

latter. Lean producers employ teams of multi skilled workers at all levels of the organization and use highly

flexible, increasingly automated machines to produce volumes of products in enormous variety.

The most striking difference between mass production and lean production lies in their ultimate objectives.

Mass-producers set a limited goal for themselves. This translates into an acceptable number of defects, a

maximum acceptable level of inventories and a narrow range of standardized products. To do better, they

argue, would cost too much or exceed inherent human capabilities.

Lean producers, set their sights explicitly on perfection: continually declining costs, zero defects, zero

inventories, and endless product variety. No lean producer may have achieved perfection and none ever will.

But the endless quest for perfection, on the part of lean producers, continues to generate surprising results.

Henry Ford and the rise of Mass Production

Craft production had the following characteristics:

A work force that was highly skilled in design, machine operations, and fitting.

Organizations that were extremely decentralized, although concentrated within a single city.

The use of general-purpose machine tools to perform drilling, grinding, and other operations on

metal wood.

A very low production volume – 1,000 or fewer automobiles a year, only a few of which were built to

the same design.

It was Henry Ford who really understood the drawbacks of craft production. With his Model T, Ford

achieved two objectives. He had a car that could be easily manufactured, and that was, also user-friendly.

Almost anyone could drive and repair the car without a chauffeur or mechanic.

The key to mass production was not the moving, or continuous, assembly line. Rather, it was the complete

Page 1

Machine_that_Changed_Book summary

and consistent interchangeability of parts and the simplicity of attaching them to each other. These were the

manufacturing innovations that made the assembly line possible. Taken together, interchangeability,

simplicity, and ease of attachment gave Ford tremendous advantages over his competition. Besides cutting

costs, he could also eliminate the skilled fitters who had always formed the bulk of every assembler ’s labor

force.

The assemblers/fitters performed the same set of activities over and over at their stationary assembly stands.

They had to get the necessary parts, file them down so they would fit and then bolt them in place. Ford made

this process more efficient by delivering the parts to each work station. Now the assemblers could remain at

the same spot all day.

Then, around 1908, Ford finally achieved perfect part interchangeability. He decided that the assembler

would perform only a single task and move from vehicle to vehicle around the assembly hall. By August

1913, just before the moving assembly line was introduced, the task cycle for the average Ford assembler had

been reduced from 514 to 2.3 minutes.

Ford soon recognized the problem with moving the worker from assembly stand to assembly stand. Walking

took time and jam-ups frequently resulted as faster workers overtook the slower workers in front of them. In

1913, Ford introduced the moving assembly line, which brought the car part to the stationary worker. This

innovation cut cycle time from 2.3 minutes to 1.19 minutes.

Ford wanted to produce the entire car in one place and sell it to the whole world. But the shipping systems

of the day were unable to transport huge volumes of finished automobiles economically without damaging

them. There were also trade barriers. So Ford decided to design, engineer, and produce his parts centrally in

Detroit. The cars, were assembled in remote locations. By 1926, Ford automobiles were assembled in more

than thirty-six cities in the United States and in nineteen foreign countries.

But Ford quickly realised that one standard product just wasn ’t suited to all world markets. For example, to

Americans, Ford’s Model T seemed like a small car, particularly after the East Texas oil discoveries pushed

gasoline prices down and made longer travel by car economically feasible. However, in England and in

other European countries, with their crowded cities and narrow roads, the Model T seemed much larger. In

addition, when the Europeans failed to find any oil at home, they began to tax gasoline heavily in the 1920s

to reduce imports. The Europeans soon began to clamor for a smaller car.

Moreover, massive direct investment in foreign countries created resentment of Ford ’s dominance of local

industry. In England, for example, where Ford had become the leading auto manufacturer by 1915, his

pacifism in World War I was roundly denounced, and the company ’s local English managers finally

convinced Detroit to sell a large minority stake in the business to Englishmen to diffuse hostility. Ford

encountered barriers in Germany and France as well after World War I, as tariffs were steadily raised on parts

and complete vehicles. As a result, by the early 1930s, Ford had established three fully integrated

manufacturing systems in England, Germany, and France. These companies offered customisd products to

suit national tastes and were run by native managers who tried to maintain their autonomy.

Sloan’s approach

At General Motors, Alfred Sloan ’s innovative thinking seemed to resolve the conflict between the need for

standardization to cut manufacturing costs and the model diversity required by consumers. He achieved

both goals by standardizing many mechanical items, such as pumps and generators, across the company ’s

entire product range and by producing these over many years with dedicated production tools. At the same

time, he annually altered the external appearance of each car and introduced an endless series of “hang-on

features,” such as automatic transmissions, air conditioning, and radios, which could be installed in existing

body designs to sustain consumer interest.

Ford’s factory practices, combined Sloan ’s marketing and management techniques, and organized labor ’s

new role in controlling job assignments and work tasks, took mass production to its final mature form. For

decades, this system was the norm. The U.S. car companies dominated the world automotive industry, and

the U.S. market accounted for bulk of the world ’s auto sales. Companies in practically every other industry

adopted similar methods, leaving behind a few craft firms in low-volume niches.

Page 2

Machine_that_Changed_Book summary

Three giant enterprises – Ford, GM, and Chrysler accounted for bulk of all sales, and six models accounted

for 80 percent of all cars sold. All vestiges of craft production once the way of all industry, were now gone in

the United States.

The decline of US car makers

By 1955, the Big Three American firms were losing their competitive advantage. Mass production had

become commonplace in countries across the world. In Europe, the diffusion of the technology had taken

place somewhat slowly. The basic ideas underlying mass production had, been freely available in Europe for

years before the onset of World War II. However, the economic chaos and narrow nationalism existing there

during the 1920s and early 1930s, along with a strong attachment to the craft-production traditions,

prevented them from spreading very far. At the end of the 1930s, Volkswagen and Fiat began ambitious

...