Transcript Continuous Process Improvement: The Lessons of History SCM 494 Dr. Ron Tibben-Lembke Growth of Service Economy7050 Services Industry Farming 30101850

Continuous Process
Improvement:
The Lessons of History
SCM 494
Dr. Ron Tibben-Lembke
Growth of Service Economy
80
70
60
50
Services
Industry
Farming
40
30
20
10
0
1850
75
1900
25
50
75
2000
Continuous Process Improvement
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It used to be you had to be “good enough”
Now, you must be looking for ways to make
your customer happy, and meet their future
needs
If you aren’t someone else is, and is going to
take your business
Cotton Gin at Work
Eli Whitney
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introduced interchangeable
parts in large musket contract
for U.S. Army
Interchangeable parts the true
secret of Ford’s success
Made possible by advances in
measurement and tool steel
Beginning of Standards
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Before standardized parts, need Screws
1860s Machine Tool industry: Silicon Valley of
its day
All screws custom made by tool & die shops
according to what they thought best
William Sellers: 1864 “On a Uniform System
of Screw Threads”
Sellers vs. Whitworth
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3 cutters & 2 lathes vs. 1 cutter & 1 lathe
Simple geometry vs. difficult
Rounded top vs. straight: ease of manufacturing, ease of assembly
Not Just What you Know
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Machine tool makers didn’t want to be
commoditized like gun makers
The standard people expect to win usually does.
Navy Board found it superior, asked Singer
Sewing Machine, Baldwin Locomotive which
would win (already adopted).
Pennsylvania RR adopted (Sellers on the Board)
British tanks & trucks couldn’t be repaired in
WWII because Britain adopted Whitworth
Frederick W. Taylor
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Frederick W. Taylor:
Father of “Scientific Management”
 Find ways to improve work environment and work
processes
 Quantify, measure & track everything:
Time required to haul wheelbarrow:
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27 
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B   p  a  0.51  0.0048 distance hauled  127
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L
Factory Life
“Schmidt”
Taylor’s Factory
Frank and Lillian Gilbreth
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Systematically study a work environment and find the best
way to achieve a particular task
With Taylor, pioneered “industrial engineering” -- time and
motion studies
“Cheaper by the Dozen”
Motion Capture
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Lights illuminate key motion joints
For Computer Generation, convert to 3D
Barry Zito
Chronocyclegraph light-1914
Bricklayer
Typesetter
Drill Press
Pencil Holder
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Color coded slots
Groove for grabbing pencil
Ergonomic chairs
Andrew Carnegie
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Telegraph operator to RR division
superintendent
Adopted latest technology, built first steel
plant laid out to optimize flow
Focused on knowing, lowering unit cost
Raise prices with everyone else in booms,
slash prices in recession
Andrew Carnegie
Production:
1868
1902
US
England
8,500
111,000
9,138,000 1,862,000
Steel Prices: (per ton)
1870
$100
1890
$12
How? Continuous Process Improvement
The Richest Man in
the World
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Found out strike organizers, fired before
1886 “Triumphant Democracy”, Forum magazineworkers’ right to unionize
1889 “Gospel of Wealth:” rich need to help the
poor ($25m annual income)
1892 Homestead strike: 12 hour gunfight,
Pinkerton defeated (12 died), state militia called
in, strike breakers hired
1901 sells out to J.P. Morgan: $480m
Built 2,500 libraries. “The man who dies rich dies
disgraced.”
1919 dies, having given away 90%
Skibo Castle
Henry Ford
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Continuous Process Improvement
Advances in metal cutting allowed him to cut prehardened steel, produce identical parts
Standardized parts facilitated standardization of
jobs, moving assembly line
Model T:
1908 $850
1920’s: $250
Ford’s Rouge Plant
Vertical Integration
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Owned forests, iron mines, rubber
plantation, coal mines, ships, railroad lines
Dock facilities, blast furnaces, foundries,
rolling mills, stamping plants, an engine
plant, glass manufacturing, a tire plant, its
own power plant, and 90 miles of RR track
1927 Model A Production begins
15,000,000 cars in 15 years
120,000 employees in WWII
Details to the Max
In his autobiographies “My Life and Work”
(1922), and “Today and Tomorrow” (1926),
Ford gives great detail on innovations he and
his company have made, including:
 Glass making, Artificial leather
 Steering wheels out of Fordite
 heat treating -- saved $36m in 4 years (1922)
 Forging parts, wiremaking
 Riveting, bronze bushings, springs
Managing Workers
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“It is a reciprocal relation -- the boss is the
partner of his worker, the worker is partner of
his boss. Both are indispensable.”
-- MLAW p. 117
Paying for Good Employees
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“One frequently hears that wages have to be
cut because of competition, but competition is
never really met by lowering wages. The only
way to get a low-cost product is to pay a high
price for a high grade of human service and to
see to it through management that you get that
service.” T&T p. 43
Mindless Work
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“Repetitive Labour -- the doing of one thing over and
over again and always in the same way -- is a terrifying
prospect to a certain kind of mind. It is terrifying to
me. I could not possibly do the same thing day in and
day out, but to other minds, perhaps I might say to the
majority of minds, repetitive operations hold no terrors.
In fact, to some types of mind thought is absolutely
appalling. To them the ideal job is one where their
creative instinct need not be expressed.” MLAW p. 103
Mindless Work
When you come right down to it, most jobs are
repetitive. A business man has a routine that he
follows with great exactness; the work of a bank
president is nearly all routine; the work of under
officers and clerks in a bank is purely routine.
Indeed, for most purposes and most people, it is
necessary to establish something in the way of a
routine and to make most motions purely repetitive - otherwise the individual will not get enough done
to be able to live off his own exertions.
-- MLAW pp 103-4.
Guess the Expert(s)
Andrew
Shigeo
Frederick
Henry
Frank & Lillian
1. Product Flow
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“If transportation were perfect and an even
flow of materials could be assured, it would
not be necessary to carry any stock
whatsoever. The carloads of raw materials
would arrive on schedule and in the planned
order and amounts, and go from the railway
cars into production.”
2. Inventory
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“…having a stock of raw material or finished
goods in excess of requirements is a waste-which, like every other waste, turns up in high
prices and low wages. …
We do not own or use a single warehouse!
How we do this will be explained later in this
chapter, but the point now is to direct thought
to the time factor in service.”
3. Volume Buying
“We have found in buying materials that it is not
worth while to buy for other than immediate
needs. We buy only enough to fit into the plan
of production, taking into consideration the
state of transportation at the time.
But we learned long ago never to buy ahead
for speculative purposes…we have found that
thus buying ahead does not pay. It is entering
into a guessing contest. It is not business. …
the gains on one purchase will be offset by the
losses on another … in the end speculation will
kill any manufacturer.
4. Flexibility
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“We believe … that no factory is large enough
to make two kinds of products. Our
organization is not large enough to make two
kinds of motor cars under the same roof.”
5. Standardization
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“Only six years ago, we used around six
hundred different size boxes and crates for
shipping. We studied the shipments and the
boxes, and today, instead of six hundred sizes,
we have fourteen sizes, for each of which a
standard method of packing has been devised.”
The envelope please…
Answer: Henry Ford
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3.
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5.
ML&W p. 143-4
T&T pp. 108-109
ML&W p. 143-4
T&T p. 81
T&T p. 122
The Lessons of History
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Continuously improving your products, your
services is the only way you will survive
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Ignore your customers, and they’ll go away
Those who do not learn from the past are
doomed to repeat it.