0 Lean History

ENGR 344 Cost Reduction in

Manufacturing

A brief history of Manufacturing and

developments leading to the present

Cost Reduction 1

Questions 1. What does cost-reduction (aka lean) mean?

2. When and where did lean originate? What is the history of lean?

3. Where does lean apply in business today? What professions?

4. Who is responsible for lean in companies today?

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Historical Milestones 1712, Thomas Newcomen develops steam engine

1775, Boring machine developed by Wilkinson (England) to produce

cylinders for James Watt’s steam engine

1785, Concept of interchangeable parts in guns by LeBlanc (France),

however Eli Whitney (cotton gin, 1794) credited for IP concept in 1798

1800’s – gasoline engine, industrial revolution – mechanization,

technology as the primary driver

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Lean Historical Milestones Early 1900’s, Henry Ford creates efficient assembly lines – mass

production – Model-T referenced as first example of lean production

with simple design and interchangeable parts

1913 – Ford implements a continuous-flow (moving) assembly line,

slashing cycle times. For separates skilled trades from assemblers to

speed up training.

1920 – Ford produces more than 2 million vehicles per year and cuts

costs by 2/3

Cost Reduction 4(mises.org)

Lean Historical Milestones In the 1920s, Ford Motor Company’s operation embodied the key

elements of scientific management (Frederick W. Taylor, 1856-1915):○ standardized product designs○ mass production○ low manufacturing costs○ mechanized assembly lines○ specialization of labor○ interchangeable parts

1926 – Toyoda Loom Works, evolution of Jidoka

1937 – TMC born (looms trucks for military finally automobiles)

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Lean Historical Milestones Fords centralized management approach (and desire to mass produce

everything) led to the decline of FMC in the 1930’s – GM became the

auto leader

WWII – Japan attacks Pearl Harbor (Dec. 7, 1941)

1940’s - Ohno (Taiichi Ohno, Toyota’s chief production engineer)

experiments with U.S. presses and perfects SMED (quick changeover)

Attacks on Japan (August 6 & 9, 1945), Shortly after Assistance to

broken Japan

1950 – Eiji Toyoda, Japanese engineer, visits FMC with Taiichi Ohno,

beginning the Lean Manufacturing Revolution

Cost Reduction 6(totalqualitymanagement.files.wordpress.com)

Lean Historical Milestones“In thirteen years of effort, the Toyota Motor Company had, by 1950, produced

2,685 automobiles, compared with the 7000 the Rouge [Ford Rouge Plant in

Detroit] was pouring out in a single day…. This was soon to change.”

(Womack, Jones, & Roos, 1990, p. 48)

Early 1950’s – U.S. automotive is mighty – U.S. and Europe embrace mass

production and automation (Ohno see’s waste)

1950’s – 1960, Lean Manufacturing revolution is born

While U.S. focuses on mass production, at TMC Ohno institutes defect

prevention, teamwork, problem signaling, pull production, flow control, small

lot sizes, supplier integration

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Lean Historical Milestones 1961, Unimate, First robot in production – part of the automation

revolution, human replacement concept

Early 1970’s, microprocessor technology developed – programmable

automation made possible

1973 – Fuel prices increase dramatically. Consumers preferences

change: Want fuel efficiency, compact size

Ohno and Eiji Toyoda’s 20-year focus on productivity, quality, and

responsiveness (aka Just-In-Time) come to play

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Lean Historical Milestones 1980’s - Quality Revolution, 6ó born, Toyota grows in popularity, U.S.

automobile manufacturers begin to see negative shift

U.S. focuses on technology (automates waste at record rate)

1988 – International Motor Vehicle Program (IMVP)/MIT researcher,

John Krafcik, coined the term Lean: Lean Production uses half the

human effort, space, tools, engineering hours to develop new

products as mass production. Lean production has less inventory,

fewer defects, and produces greater variety of products.

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(www.autofieldguide.com)

Lean Historical Milestones Late 1980’s – Toyota is legitimate threat, fuel efficiency and customer

preferences are critical success factors, JIT and TQM become important

to U.S

1990’s - Customer focus (customer is always right), Global Marketplace:

outsourcing and international trade fully embraced, TQM more

emphasized

1990’s – Evolution of Six Sigma/DMAIC (Motorola), Lean manufacturing

significantly grows in popularity, but implementation is difficult

2000 – Lean Six Sigma, lean is applied to fields other than manufacturing

(e.g. construction)

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Now Present – TMC is worlds largest automobile manufacturer

Present – Lean applied to all fields, service industries, supply

chains, business processes….e.g. Lean Office, Lean Healthcare,

Lean Farming, Lean Construction, Lean Accounting, Lean Graphic

Communications…

Present – Lean successes are apparent in some companies, yet

most companies struggle with implementation

Present – Telecommunications/internet leveled playing field in

global marketplace, business conducted anywhere @ anytime

Present - Green emphasis

Present – Employers want people who are motivated, trainable,

educated, skilled (but with operations management abilities)

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Now Present – GM automaker (and suppliers) struggle to stay afloat

Present – Manufacturing/Construction impacted (mfg 9.3-12% of

U.S. GDP as opposed to about 20% in 1980’s)

Present – U.S. is in debt (China) and is losing market share

Present – Keeping jobs in U.S. a focus: 1 out of 3 college

graduates lands job (2009 NACE), U.S. education in turmoil,

population is aging – healthcare in crisis, skills have become

specialized, country is divided politically, cost of living increasing

while salaries are decreasing, green emphasized while costs are

being scrutinized, world population continues to grow

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Future? Irony when we look at 70+ years of history

Much of U.S. problems are seen as consequences of short-term

planning

Today, Efficiency as the primary driver, NOT technology

So, ….where do you think the U.S. will we be in 10 years?

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References

Womack, J. P., Jones, D. T., & Roos, D. (1990). The machine that changed the world: The story of lean production. New York: HarperCollins.

Image References: John Krafcik - http://www.autofieldguide.com/articles/010502.html Taiichi Ohno -

http://totalqualitymanagement.files.wordpress.com/2008/11/taiichi-ohno.jpg

Henry Ford - http://mises.org/images4/HenryFord-Model-T.jpg

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