Transcript PACC440 LeanProdMach..
Lean Production
Based On The Book
“The Machine That Changed The World”
By
Womack, Jones & Roos MIT’s 5 Year $5 Million Research Project On The Automobile Industry
Copyright, Ansari, Bell, Klammer and Lawrence, Management Accounting: A Strategic Focus, Irwin-McGraw-Hill, 1999.
Manufacturing Differences
Ford Model T - 1908
Toyota - 1955
Standardized “interchangeable” parts produced by gauges Parts “simpler” to attach
Customized parts produced by computer-aided flexible machining cells
Higher skill level for assembly needed
Skilled interchangeable labor force
Life-time guarantees to trained labor force
Low variety and high volume products
High variety and low volume products After the fact quality control
Quality “first time”; the 5 Why’s
Copyright, Ansari, Bell, Klammer and Lawrence, Management Accounting: A Strategic Focus, Irwin-McGraw-Hill, 1999.
Manufacturing Differences (Cont.)
Ford Model T - 1908
Toyota - 1955
Division /specialization of labor
Work teams with flexible job descriptions and multiple skills
Vertical integration of most parts Dedicated machines; long set up time Management stock price focused and short-run oriented
Suppliers as partners in development Set-up time from 8 hrs to 3 mins Management customer focused and long-run oriented
Copyright, Ansari, Bell, Klammer and Lawrence, Management Accounting: A Strategic Focus, Irwin-McGraw-Hill, 1999.
GM v. NUMMI v.Toyota
Single Site Statistics-- 1987
Statistic GM Farmingham NUMMI Fremont Toyota Takaoka
Assembly Hours per Car 31 19
Assembly Defects per 100 Cars 135 45
Assembly Space Sq. Ft per Car per Yr.
8.1
7.0
2 weeks 2 days Inventories of Parts (average)
Copyright, Ansari, Bell, Klammer and Lawrence, Management Accounting: A Strategic Focus, Irwin-McGraw-Hill, 1999.
16 45 4.8
2 hours
Relations with Suppliers
Mass Production
Lean Production
Adversaries
Not part of design process
Contracts awarded on competitive bidding
Future price increases after “foot in the door”
Same product over time Secretive to other suppliers Short term relationship
Team members
Part of design process
Contracts on ability to meet target costs
Future cost savings shared
Better product over time
Active supplier associations
Long term relationship
Copyright, Ansari, Bell, Klammer and Lawrence, Management Accounting: A Strategic Focus, Irwin-McGraw-Hill, 1999.
People Differences
Mass Production
Lean Production
Variable cost
Limited Skill Set
Follow Procedures
Drones
Individual
People Are Expenses
Short Term Relationship
Functional Leader
Fixed Cost
Flexible
Innovate
Problem Solvers
Team Member
People Are Assets
Long Term Relationship
Project Leader
Copyright, Ansari, Bell, Klammer and Lawrence, Management Accounting: A Strategic Focus, Irwin-McGraw-Hill, 1999.
Career Path Differences Example - Engineer
Mass Production
Lean Production
Entry Level:
Functional Focus Only
Path:
Drive Train Jr. Engineer
Drive Train Dept. Manager
Drive Train Sr. Engineer
Drive Train Dept. Manager
Short Term Relationship
Entry Level:
Assby, Mktg., Engineering
Path:
Drive Train
Body
Project Team
Special Development
Long Term Relationship
Copyright, Ansari, Bell, Klammer and Lawrence, Management Accounting: A Strategic Focus, Irwin-McGraw-Hill, 1999.
Other Differences
Mass Production
Lean Production
Retain Shareholders with Cosmetic Quarterlies
During Downsizing Each Stakeholder is on their own
Quality Circles Are an Assigned Extra Duty
JIT - Push Inventory to Others in the Chain
Process Improvements by Specialists Brought In
Interlock Ownership, e.g. Pension Fund Owners
During Downsizing help Find “Safe Haven”
Quality Circles Are for Team Problem Solving
JIT - Reduce Inventory Throughout the Chain
Process Improvements by the Team Members
Copyright, Ansari, Bell, Klammer and Lawrence, Management Accounting: A Strategic Focus, Irwin-McGraw-Hill, 1999.
Marketing / Distribution Automotive Industry
Mass Production
Lean Production
Independent dealer Not involved in product development No link to factory Sold from inventory “Herb Tarlick” salespeople No formal training One time sale Infrequent mktg. survey Short term relationship
Company owned Full involvement in product development Direct link to factory
Made to custom order Knowledgeable salespeople
Full product training
Life time loyalty Constant feedback
Long term relationship
Copyright, Ansari, Bell, Klammer and Lawrence, Management Accounting: A Strategic Focus, Irwin-McGraw-Hill, 1999.
Key Message
Lean Production requires all organizational elements and relationships to be in harmony with the production process. Success requires forging long term “win-win” relationships with all stakeholders.
Employees Suppliers Customers Shareholders Dealers
Recyclers