IENG 451 / 452 Lean Processes: Roots & Contributions IENG 451 - Lecture 14 Lean Processes: Roots & Contributions 5/29/2018 IENG 451 Operational Strategies (c) 2016 D.H. Jensen

IENG 451 Operational Strategies Roots of Lean Systems Craft Production System (circa 1900) Customized for the Customer Owner/Entrepreneur coordinates (like a general contractor) Design engineers Small machine shops Contract manufacturers Equipment is general purpose, mostly manually operated Production volume is low Prices are high Characteristic Problems Have to be rich to buy an automobile Each one was a prototype Quality levels were unpredictable Improvements were not shared, sometimes seen as threats 5/29/2018 IENG 451 Operational Strategies

F. W. Taylor & Lillian Gilbreth Scientific Management (circa 1910) Replace rule-of-thumb work methods with methods based on a scientific study of the tasks. Scientifically select, train, and develop each employee rather than passively leaving them to train themselves. Provide "Detailed instruction and supervision of each worker in the performance of that worker's discrete task" Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks. Contributions to Lean Standardized Work – best (& easiest) way to do the job Reduced Cycle Time Time & Motion Study Measurement and Analysis for Continual Improvement Predecessor to DMAIC 5/29/2018 IENG 451 Operational Strategies

IENG 451 Operational Strategies Henry Ford Ford Manufacturing System (circa 1907) Interchangeability of parts and ease of assembly. Standardized gage use. Reduction of parts & simplification of assembly Delivery of parts to the work area Cycle time reduction from hours (1908) to minutes (1913) Moving assembly line – stationary worker Contributions to Lean Interchangeability and ease of part assembly Reduction of required worker actions Moving assembly line (production synchronization) https://commons.wikimedia.org/w/index.php?curid=531177 5/29/2018 IENG 451 Operational Strategies

IENG 451 Operational Strategies Alfred P. Sloan General Motors (circa 1937) Managerial and Marketing Innovations Decentralization of operations Standard measures to report to senior management Management “by the numbers” Separation of Management and Labor Generally Accepted Accounting Principles (GAAP) Contributions to Lean Professional Management Data-driven decision making Rise of mass production labor movement Widened gap between shop floor and management GAAP came to encourage excessive inventories 5/29/2018 IENG 451 Operational Strategies

Eiji Toyoda & Taiichi Ohno Toyota Motor Company (circa 1950) Visited River Rouge Plant to address Japanese automobile market constraints Market was small, but demanded a wide range of products Capital was too scarce for investment in the latest technology Established automakers could compete on price Japanese labor laws strongly favored unions Conclusions Mass production would not work for Toyota … however, “There are some possibilities to improve the production system” Historic Bargain Contributions to Lean Lifetime employment for labor and management Pay steeply graded to seniority Bonuses tie pay to company profitability 5/29/2018 IENG 451 Operational Strategies

Lean is Toyota’s Response to “New” Necessities Fragmented Markets Tough Competition Fixed / Falling Prices Rapid Technological Change High Capital Costs Need for Capable Workers … this goes beyond manufacturing automobiles … 5/29/2018 IENG 451 Operational Strategies

IENG 451 Operational Strategies Questions & Issues 5/29/2018 IENG 451 Operational Strategies (c) 2016 D.H. Jensen