“Taiichi Ohno,” Iwata told us, “said, ‘We need to do something extraordinary to compete, to produce efficiently. We need to reduce the input and produce the same output to improve efficiency and productivity.’ Taiichi Ohno thought the only efficient way was to produce what was needed.
“In most cases, though, companies make more than what is needed. We add extra; we overproduce. In addition, we deliver too quickly. Such a system of cushioned quantities and schedules makes warehouses necessary to store the goods made in excess quantities and delivered too early. Companies I have visited produce more than what is needed, and they have inventory but still miss deliveries. Because of this wasteful situation we need Just in Time.”
This strict philosophy demands that we know how to get our work force to produce exactly what is needed, in the amount needed, when it is needed.
Fielding a team of multi-skilled players
Mr. Iwata concluded his teaching session by saying, “People are multi-skilled, but suddenly when they go to work, they develop the habit of only doing one thing. Can you evenly divide the time of production between different jobs that need to be done? The answer is ‘no.’You cannot do that because of the great variability between many human operations. You need multiple-skilled people. They all need to be able to do three jobs — their own jobs, the previous job, and the next job.” Just in Time, then, is not simply about inventory scheduling, but how people are put to use.
“You should submit wisdom to the company. If you don’t have any wisdom to contribute, submit sweat. If nothing else, work hard and don’t sleep. Or resign.”
—Taiichi Ohno
Chihiro Nakao, a co-founder of Shingijutsu and a student of Taiichi Ohno, pointed out during a 2004 talk that employees and managers both must have clarity around what a given job really is, who the customer is, and what product they want. Hospital employees, for example, ultimately are not paid to drag carts through hallways. Whether they are surgeons, nurses, technicians, or admissions clerks, they are paid to help cure patients. Too much focus on individual tasks, rather than the true job of filling the customer’s need, obscures potential, segregates work groups instead of integrating them, and limits individual contributions.
It’s not always easy, of course, to change how you employ people. The people themselves resist what is unfamiliar simply because it’s not what they’re used to, or because they’ve learned to mistrust any change at all as a potential threat. Layoffs, plant closings, salary cuts, furloughs, mergers, and relocations have all contributed to this mistrust, and attitudes about change will generally reflect the nature of recent change in the company. If you are implementing lean production because your company is struggling or in crisis, you’ve got a solid motivation, but don’t be surprised by resistance. Yet you don’t need to talk to employees for very long to understand that, when defensiveness and turf-protection can be taken out of the equation, most people prefer jobs with variety and challenge. Human beings generally enjoy using different skills and contributing in multiple ways, rather than being regarded almost like machines themselves, endlessly installing identical bolts or shepherding the same process ad nauseam.
Taiichi Ohno eliminated job classifications at Toyota to give workers greater flexibility. He compared the way a factory should operate for the company to the way the human body operates for an individual. Specifically, the human body functions in good health when it is properly cared for, exercised frequently, and treated with respect. As anyone familiar with repetitive-use injuries knows, that respect includes not requiring a given part to do the same thing, over and over again, for too long without introducing variety. When the body is healthy, however, the autonomic nervous system responds even when we are asleep, and it is only when a problem arises that we become conscious of our bodies. Then we respond by making corrections. The same thing happens in a factory or a business; we should have a system in place that automatically responds when problems arise.
Our competitive advantage is us
Since my career at Boeing began in 1978, I’ve seen a lot of changes as well as a lot of things that never seem to change. My job, and my privilege, has been to learn from the best and the brightest in the world, to help create a vision of lean, world-class production, and to help get that vision implemented at Boeing and elsewhere.
I’ve come to the conclusion that real competitive advantage lies in how we develop and focus human potential on the way we do business. And developing and focusing human potential is not easy. It’s difficult to change managers who are used to the old, autocratic ways of management by control. It’s difficult to simplify long-entrenched bureaucratic processes. It’s difficult to flatten and streamline organizations when those involved fight desperately to protect their turf. And it’s difficult to earn the trust of employees and genuinely empower them to make needed changes and improvements.
When I mention empowerment, I run the risk of using a buzzword that is rapidly losing meaning. When it comes to gaining a competitive advantage, I’m talking about the empowerment that counts most: the freedom to challenge and change standard operating procedures, workflow design, and bureaucratic procedures. This is the freedom that is most often denied to first-level employees.
All these difficulties challenge us. But difficulty should not dissuade us from embarking on a journey that can yield such rich rewards. Many have gone before us and prevailed.
Just in Time is not new
Just in Time is the secret weapon that can lead to lean, world-class production, but it is not new. Most human endeavors can be viewed as production systems, and our ancestors have employed just-in-time production systems throughout history to ensure survival and victory. Indeed, humans continuously improve production techniques because our success and survival depend on that improvement.
In the late sixteenth century, for instance, the Republic of Venice developed the world’s first large-scale assembly line and industrial plant. The Republic could not possibly afford to maintain a peacetime fleet large enough to repel attackers, but it certainly needed one that it could deploy if it were threatened. So it created a plant that stood ready to build an entire fleet of warships on short notice. The plant, which employed 1,500 workers on 60 acres, once set 100 ships afloat in just six weeks. This phenomenal output resulted from highly effective production techniques that were nothing short of enlightened, even by today’s standards.
Two centuries later, production of weapons again confirmed the value of effective manufacturing systems. While in France, Thomas Jefferson had seen how the French used standardized parts in the manufacture of firearms. As vice president, Jefferson persuaded the U.S. military to require interchangeability of parts in a 1798 contract for 10,000 muskets. Eli Whitney of cotton gin fame rose to the challenge. To quickly provide high-quality muskets to the nation’s forces, Whitney’s factory in Connecticut used advanced production techniques such as ordered and integrated workflow, standard interchangeable parts, focused factory areas, dedicated machines, and error-proofing mechanisms to minimize product variations across craftsmen.2
A book first published in England in 1859 is known to have inspired Sakichi Toyoda, founder of Toyoda Automatic Loom Works, the parent firm of the Toyota Group. As already noted, Henry Ford, a contemporary of Toyoda, also pioneered efforts to improve manufacturing efficiency. Ford focused on the total elimination of non-value-added wastes. As a result, he was able to mine iron ore on a Monday and, using that very same iron ore, produce a car coming off the assembly line on Thursday afternoon. Although his emergency was not a military one, Ford was trying to build and dominate a brand-new industry. He was quite literally trying to change the world. Like the other forerunners of just-in-time manufacturing, Ford implemented lean methods to survive and prevailed, this time on the commercial battlefield.
The concept of lean manufacturing, so earnestly studied by American industry today, derives mainly from the Toyota Production System, which got its start about 1950 when Toyoda’s nephew and eventual successor, Eiji Toyoda, followed his uncle’s example and visited the Ford Motor Company plant in Rouge, MI.
The younger Toyoda learned a lot from Ford, particularly from Ford’s mistakes, and the resulting production system,