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Beyond the Giants (5)

Updated: Oct 12, 2022

Conditions for survival in the manufacturing industry in VUCA era

Satoru Murakami

CEO Goal-System consultants Inc.,


Three manufacturing giants,Henry Ford, Taiichi Ohno, and Eliyahu Goldratt.-1 History of the transition of manufacturing mechanism, Ford, Toyota, TOC


Hello, this is Satoru Murakami from Goal System Consulting.

From this week, let's look back on the history of manufacturing management.  


A life where you can get whatever you want, which we take for granted today. This is the result of the innovation caused by the Industrial Revolution in England in the 18th century. Before the industrialization due to this Industrial Revolution, when trying to produce any product, each part was individually combined one by one and made by hand one by one.


Today, if we want to assemble a personal computer, we can easily assemble a personal computer with various specifications because the compatibility of the parts is guaranteed by going to the PC shop and purchasing the parts. The roots of this mechanism, "part compatibility," which allows any of the same parts to be assembled in the same way, was completed in the United States in the 19th century.


This made it possible for unskilled workers to divide the work into smaller and simpler tasks. Then, in the 20th century, when scientific management was developed by Frederick Winslow Taylor and Frank Bunker Gilbreth, it became possible to dramatically improve production efficiency by breaking down the work into smaller pieces and improving them. This scientific management method (Taylor system) was also introduced to Ford Motor Company, and a method of breaking down work into simple tasks and synchronizing them with a conveyor was devised.


"Taking only two days from putting iron ore in the blast furnace until the finished car came out," and realized a tremendous improvement in productivity with the mechanism of synchronous integrated production. The T-type Ford was produced over 15 million units from 1909 to his 18 years, and the Ford production method was an epoch-making production method at that time, producing "as much as possible" and "as fast as possible".


After that, Japanese companies that learned from Henry Ford's way of thinking will fly to the world from the burnt fields after the war. Taking the supermarket inventory replenishment method as a hint, the Toyota Production System was born, which produces multiple models without sacrificing the production flow. Improvements by various ingenuity to speed up the flow, such as Kanban, Andon, leveling production, synchronous production at tact time, automation with Ninben, just-in-time, multi-vehicle mixed line, thorough elimination of waste, etc.


Ongoing basis, Toyota will gradually increase its international competitiveness. In the 1970s, when the American manufacturing industry settled in an overwhelming advantage and neglected to make efforts to improve quality, Japanese companies entered the American market with incredibly high-quality products.


This is because Japanese companies learned from the cutting-edge management technology of the United States, such as the teachings of Dr. Deming, an authority on quality control, and promoted improvement (KAIZEN) activities involving front-line employees. As a result, automobiles, televisions, and machine tools in any case, Japanese products were cheap, had few breakdowns, and could be used with peace of mind.


I think the 1970s and 1980s were a time when the business model of the Japanese manufacturing industry, which had caught up with and overtook the United States, reached a peak. It was an era when many products such as automobiles, TVs, home appliances, and semiconductors dominated the market with overwhelming competitiveness. As a result, amid intensifying trade friction, Japanese studies were actively conducted, and in 1979, Professor Ezra Vogel of Harvard University published "Japan as Number One" and became a bestseller in Japan. As a result, we also had the illusion that Japan had become the world's largest economy.


And in the United States in the 1980s, "learn from Japan" is booming. Calmly researching Japanese manufacturing, Toyota production system is "lean manufacturing (TPS)", Japanese quality control is "Six Sigma", etc., the essence is systematized in Western style and spread as a new American style management method.


The Toyota Production System, which was renamed Lean Manufacturing, was thoroughly researched by James P. Womack of MIT (Massachusetts Institute of Technology) and his book "Lean Manufacturing Changes the Global Automotive Industry" (1990).


It spread all over the United States, in addition, Toyota Motor Corporation, the head family, also established the Toyota Supplier Support Center (TSSC) in the United States in consideration of intensifying trade friction, and by widely disclosing and instructing its know-how, it will become even more widespread.


After that, we thoroughly researched the Toyota Production System, and the TOC (Theory of constraints) was born in a completely different way. In the mid-1980s, TOC pioneer Dr. Eliyahu Goldratt was in the limelight with the novel The Goal, which focuses on factory improvement.


The capacity of the production line is determined by the bottleneck. A production control method was proposed, in order to improve the productivity of the factory, it is necessary to maximize the capacity of the bottleneck. He said that only the bottleneck is scheduled in detail and other processes are subordinate to the bottleneck. For many companies that do not produce good results with TPS, the simplicity of DBR is extremely attractive compared to TPS, which requires precise management, and TOC that concentrates only on the bottleneck process is highly expected.


Next time, I will look back on three giants, Henry Ford I of Ford Motors, Taiichi Ohno of Toyota Motor Company, and Eliyahu Goldratt of TOC.





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