0 lean history
TRANSCRIPT
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?
Cost Reduction 2
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
Cost Reduction 3
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)
Cost Reduction 5
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
Cost Reduction 7
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
Cost Reduction 8
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.
Cost Reduction 9
(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)
Cost Reduction 10
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)
Cost Reduction 11
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
Cost Reduction 12
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?
Cost Reduction 13
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
Cost Reduction 14