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Published: May 25, 2005

 
 

Leaning Toward Utopia

They had a lot of ground to cover. General Motors and Ford had posted their first losses ever in 1979; Chrysler was nearing bankruptcy. Oil prices were at an all-time high, and environmentalists were questioning the viability of automobiles in general. The most visibly thriving car industry was in Japan — and Detroit’s leaders, lobbying for tariffs and trade restrictions, argued that they couldn’t compete with that workaholic country where labor unions were cooperative and robots commonplace. The researchers were intuitively suspicious of these arguments, and a year of intensive research into Japanese automobile practices confirmed their skepticism. Rather than automation or company songfests, the secret Japanese weapon that the U.S. carmakers were facing was a distinctive set of methods for moving product seamlessly along the assembly line and into dealers’ hands, responding as quickly as possible to customer orders. And although it appeared that all Japanese companies had the edge on their American and European counterparts, in fact, one Japanese car company stood out: Toyota outperformed not only its Detroit and European rivals, but most other Japanese car companies as well.

The “Future” study, published by MIT Press in 1984, was not designed to differentiate individual companies; it hid Toyota’s production statistics within those for Japan. Even so, the data revealed a 3-to-1 productivity difference between Japan and the U.S. That was enough to attract a few industrial representatives to offer to sponsor a follow-up report. “None of my colleagues will believe you without a lot more analysis,” one Detroit auto executive said. “Why not also include governments worried about revitalizing their motor-vehicle industries, and raise enough funds to really do the job properly?” Dr. Roos, Dr. Womack, and Mr. Jones rapidly organized a new MIT research group, called the International Motor Vehicle Program, and began a five-year, $5 million study focused entirely on the operations differences between Toyota plants — including NUMMI, the New United Motor Manufacturing Inc. plant that GM and Toyota ran together in Fremont, California — and the rest of the industry.

The study was unprecedented in its scale, its mix of industrial and government sponsorship (no single company or government contributed more than 5 percent of the total cost), and its level of access. Auto companies on three continents opened their plants to the researchers. The study concluded that the Toyota production system was even more capable than it had seemed; it could launch new cars three years faster, and for $2,000 less, than the American equivalents. With the publisher-chosen name The Machine That Changed the World, the resulting book (coauthored by Dr. Womack, Mr. Jones, and Dr. Roos) became a management bestseller, with about 700,000 copies in print. Although, as Dr. Womack later noted ruefully, it wasn’t really about the automobile or any other machine — it was about a group of processes that hadn’t yet changed the world — the book made a persuasive case that the Toyota production system would have to be adopted by even the most recalcitrant auto companies or they would fall too far behind to catch up. At the very end of the book, in a two-page epilogue, they hinted that the same would be true for other industries as well.

“Womack and Jones did a lot of work to codify and articulate the basic principles of the Toyota production system,” says George Roth, head of research on organizational change at MIT’s Lean Aerospace Initiative, and a seasoned MIT researcher on organizational learning. “The result was probably the most powerful set of tools and ideas we’ve seen for managing any set of operations.” But as Dr. Roth notes, very few other companies, automotive or otherwise, successfully changed their ways after Machine came out. “Some of them took the ideas but didn’t grasp the ideology that made them work at Toyota, and therefore didn’t get the sustained results.”

 
 
 
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Resources

  1. Victoria Griffith, “Welcome to Tesco, Your ‘Glocal’ Superstore,” s+b, First Quarter 2002; Click here.
  2. Bill Jackson and Conrad Winkler, “Building the Advantaged Supply Network,” s+b, Fall 2004; Click here.
  3. John Micklethwait and Adrian Wooldridge, “The Art and Practice of Japanese Management,” s+b, First Quarter 1997; Click here.
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  5. Lt. Col. Clyde M. Woltman, USMC, “United Technologies Corporation,” in 2001–2002 Common Findings, Secretary of Defense Corporate Fellows Program; Click here.
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  10. James P. Womack and Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (Simon & Schuster, 1996; 2nd ed., Free Press, 2003)
  11. James P. Womack and Daniel T. Jones, Lean Solutions: How Producers and Customers Achieve Mutual Value and Create Wealth (Simon & Schuster, forthcoming)
  12. Institute for Healthcare Improvement: www.ihi.org/ihi
  13. Lean Enterprise Academy: www.leanuk.org
  14. Lean Enterprise Institute: www.lean.org
 
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