INVENTORY MANAGEMENT HISTORY PART SEVEN

Written by Anton Dolinsky for Almyta Systems. When author's and Almyta Systems names are mentioned, the reproduction is freely allowed.

History of Lean Manufacturing

As you may know, lean manufacturing involves systematically eliminating every kind of waste that can be found in a manufacturing process. The history of lean manufacturing may therefore be said to involve every waste-saving innovation in the history of manufacturing.

The first modern waste-saving innovation in manufacturing was interchangeable parts. For most of human history, manufacturing had been the province of human hands. Actually, the word "manufacturing" itself means "to make with the hands" in Latin. While human hands can make very fine pieces that are detailed to a degree only recently surpassed by machines, hands are not good at making piece B of a set identical to piece A of a set. In any set of hand-made items that are supposed to be identical, one will find numerous problematic differences. The differences may not be problematic if the pieces in question are pots, but if hand-made pieces are components of an assembly, one had best make sure that all the pieces that go into each assembly are made by the same craftsman at the same time, otherwise there is no hope that they will fit together well, or at all.

The solution is to use templates, physical patterns which human-run machines follow to execute almost exactly identical manufacturing processes over and over again. The template principle was likely invented by Honore le Blanc in France in the mid-18th century and was certainly made famous by Eli Whitney, who applied it to gun-making in the early 19th century. Gun parts made by machines following templates were interchangeable. That is, every barrel of a certain kind of gun was manufactured close enough to specifications that it could be fitted to every stock of that kind of gun.

From guns, interchangeable parts spread to all areas of manufacturing and became known as the "American System of Manufacturing" as it spread all over the industrialized world. The American System of Manufacturing was an early example of waste-elimination, since prior to interchangeable parts, a lot of materiel and labor had been lost in the manufacture of parts that could not be fitted together, and in the creation of assembled products consisting of parts that could not be replaced when they broke down, or could only be replaced by a specialist capable of creating a replacement part exactly like the one that had broken down.

The American System of Manufacturing evolved rapidly, and came to dominate world-wide manufacturing. The next major step forward in manufacturing from the point of view of efficiency was "Industrial Engineering", the attempt to apply engineering efficiency principles to labor and the flow of parts through the manufacturing process.

Frederick Winslow Taylor called it "Scientific Management". Scientific Management has many subtleties, but it essentially consists of figuring out the objectively cheapest, quickest, and most accurate way of carrying out each manufacturing process, then of training the workforce to perform the process in that manner. After Taylor, the Gilbreths - Frank and Lillian - used photography to pinpoint wasted worker motions and design more efficient motions. Naturally such tricks were widely resented by workers who objected to being treated like machines. It may be pointed out in the Industrial Engineers' defense, though, that oftentimes their theories were bungled and misapplied - the case being that if a worker actively loathes performing a motion in a certain way, then that way may not be the most efficient way of performing that motion. The human element is considered to be a determining factor in all Industrial Engineering. Even the "Human Relations" mode of manufacturing management is, after all, essentially Industrial Engineering with a smiling face presented to the work force, taking worker psychology into account as a complicated factor in the industrial process.

The automotive industry dominated new developments in Industrial Engineering during the whole of the last century. At the 20th century's start, Henry Ford added the assembly line to the American System of Manufacturing and in a few years became rich and famous beyond the wildest dreams of Croesus. His innovations were copied and improved upon by General Motors. By the outbreak of World War 2 America posessed the finest organizational talent in the world, and was able to reorganize its manufacturing base for war in the time, if we may exagerrate, that it takes a man to throw a used toothpick in the trash can - at least that is how it must have seemed to Albert Speer, Hitler's minister of production and perhaps the only man in the Third Reich who understood just how hopeless the world logistics situation made Germany's situation. Meanwhile Soviet Russia was being helped out by the presence in its lands of manufacturing talent that had been drawn there from America in the 30s, and the presence of the people that talent had trained. America built 300,000 aircraft during World War 2, three times as many as Germany and four times as many as Japan - and the average American aircraft was several times more massive than the average German or Japanese aircraft, America's production being focused on bombers to a far greater degree than Germany's or Japan's.

In post-war Japan, a small company called Toyota, which had manufactured trucks for the Japanese army during the war, sought for a way to make it big. Taiichi Ohno, an engineer at Toyota, and industrial engineer Shigeo Shingo analyzed American production techniques and came up with the concepts that drive Lean Manufacturing: elimination of waste and constant improvement. Ohno and Shingo realized that the American manufacturing processes that had helped defeat Japan could be improved upon, and tailored to the needs of a company like early Toyota, which had little capital and could not afford waste.

Shingo later summed up their discoveries in the statement "Find waste and eliminate it". Some of Shingo's sayings are given here to give a feel for how he and Ohno added an overall philosophy and lightness of touch to what in America had been simply called "Fordism" and taken as the pinnacle of the art of manufacturing by all but a few industrial engineers:

Categorical Principles guide our thinking. Adopt multiple ways of viewing phenomena. Relationships can be divided into two categories: related and unrelated. There are four kinds of related relationships: cause and effect, opposition, similarity, and proximity. When observing a phenomenon ask: Is something causing it, anything similar to it, anything opposing it, anything always appearing in conjunction with it?

A check list wouldn’t be necessary if people never forgot things. Workers who pick up the wrong part are scolded and told to pay more attention. This is as good as asking them to be God. Mistake-proofing recognizes that since humans will inevitably forget things, we should at least make certain that we don’t forget that we have forgotten.

We think we know certain things we perceive. This doesn’t mean that we really understand them. Understanding demands more than simply knowing. Understanding results from a multi-faceted examination which includes realizing why the phenomenon in question must be the way it is.

Improvement involves: Never accept the status quo. Work is more than people in motion. Perceiving and thinking are not the same thing.

If you have an attitude that there are probably some problems, you will inevitably find some. It is difficult to accept problems as challenges, but this mindset will help you to outpace ordinary companies.

Real waste lurkes in places that don’t look like waste. The greatest waste is the waste we don’t see. Do you pay money for banana skins? There are two types of work: that which adds value (fruit) and that which only adds costs (skin). When you buy a banana, you buy both.

An executive had a sign up that said, “Eliminate Waste”. Usually if people find waste, they will get rid of it. The big problem is not noticing something is wasteful. The slogan should read “Find Waste”.

Perceiving and thinking are not the same. Perceiving uses the 5 senses. Thinking is our mental ability to pursue cause and purpose by objectively asking ‘why’ about all phenomena.

Action comes about in response to cycling between perceiving and thinking and finally perceiving and solving. The more the cycle between perceiving and thinking is repeated, the closer we get to the truth. We should always be clear – are we thinking or perceiving about a matter?

When a problem shows up, you should try to reach a solution by thinking about it three times before consulting your superior.

Get a grip on the status quo. The most magnificent improvement scheme is worthless if your perception of the current situation is in error. We tend to think that fictitious facts are real. We do not grasp the real facts or simply hypothesize facts using guesswork, or we ignore changes over time and assume that things are the same as they used to be.

We need to analyze problems based on 5 elements: 1) object; what 2) agent; who 3)method; how 4) space; where 5) time; when. We must not forget to observe both process and operation. Process is the course of change in the object. Operations is the course of change in the agent.

Is outweighs Ought. Feel is not ideal. We often do things by feel. Quality is stabilized when feel is abandoned in favor of quantitative measures.

For humans not to understand ‘not understanding’ is a problem without a remedy. If we don’t understand what we don’t understand, we have no idea what to do about it. The first step in problems solving is clarifying what is not understood.

Time is merely the shadow of motion and no matter how much we complain about the shadows, nothing will happen unless we deal with the substance; the motion which cast the shadows.

The most essential precondition for improvement is the proper pursuit of goals.

Four goals of improvement: 1) make things easier; 2) better; 3) faster; and 4) cheaper. To achieve this we must 1) focus on goals; 2) recognize multiple goals; 3) pursue goals systematically, gradually toward the higher level of underlying goals.

Revolutionary improvement is developed by focusing on source goals. Listen to your operations and machines then ask, ‘what do you need?’ Example: cutting large holes in a sheet of metal. Do you need to cut the entire hole or just the circumference of it? Both do the same thing, only one does it with less work. Example: A fan. Does the air flow more at its center or its outer edges. This type thinking needs to go on in order to improve our processes.

Time is not the same as timing. We need to distinguish between the two. Delays are less a matter of time and more an effect of timing. Look at the purposes of your process.

Understanding why things improve is know-why. It is because of know-why that it possible to apply the same approach in many situations.
Toyota rose to become one of the largest companies in the world on the strength of Shingo and Ohno's innovations. Western companies naturally became interested in the Toyota Production System, Shingo and Ohno's approach. Imported into the West, the approach became known as Lean Manufacturing. It goes under many names, but the core is the same.

We must not expect that Lean Manufacturing is the pinnacle of manufacturing approaches. Something better, or at least more efficient, always takes the place of what was thought, in past days, to be the best.


You can find more inventory related articles here:

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Lean Manufacturing (minimizing waste with TPS and its descendants)
History of Lean Manufacturing
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