Production Methods Evolution

Organization: From Mass to Lean Production

Concepts will be studied with the help of case studies.

The automotive industry is chosen because it provides a historically didactic presentation of these concepts.

1.1. The Automobile Industry in Transition

The auto industry is a major industrial activity, with more than 50 million vehicles produced each year.

Twice in the last century, this industry has changed our notions of how to produce goods.

After the 1st World War, Alfred Sloan (GM) and Henry Ford (Ford) led a major change: from centuries of Craft Production (with leadership from European industries) to the era of Mass Production (early U.S. leadership).

After the 2nd World War, Eiji Toyoda and Taiichi Ohno of Toyota in Japan pioneered the concept of Lean Production. With other Japanese companies copying this system, Japan soon jumped into current economic prominence.

Comparative History:

• Craft Production
• Mass Production
• Lean Production

Craft Production: Features

• Highly skilled workers
• Simple and flexible tools
• One item at a time, tailored to the customer's wishes
• Examples: furniture made to order, works of decorative art, some models of supercars.

Craft Production: Result

• Goods produced were very expensive, leading to the rise of Mass Production.

Mass Production: Features

• Workers with lower qualifications
• Complex and expensive machines
• High production volume of each item
• Requires buffer supplies, workers, and extra space to ensure continuity of production

Mass Production: Result

• Changing the product is too expensive; standard models remain for as long as possible.
• Goods produced are very cheap but with little variety.
• Methods of work are tedious.

Lean Production: Features

• Merges aspects of the two previous methods.
• Avoids the high cost of the craft process.
• Prevents the rigidity of the mass production process.
• Employs multiskilled workers at all levels of the organization.
• Uses more flexible and automated machines.

Lean Production: Result

• Production of large volumes of products with a wide variety.

Lean Production was a term defined by researcher John Krafcik. It is "Lean" by employing smaller quantities of everything compared to mass production methods.

Benefits of Lean Production

• Less stress for factory workers
• Less space for manufacturing
• Less investment in tools
• Less time for planning and development of new products
• Less inventory at the manufacturing site
• Fewer defects in workmanship
• Broader and ever-increasing range of products

Differences in Mentality (Mass vs. Lean)

Mass:

• Objective: Limited goal, which is"good enough"
• Quantity: Tolerable defects.
• Inventory: Maximum acceptable inventory.
• Product Range: Limited range of standard products.

Lean:

• Objectives: Declining costs.
• Quality: Lack of defective items.
• Inventory: No stock.
• Product Range: Wide range of new products.

For the worker, the main advantage is that the processes for each product differ, making the job more challenging and less monotonous than the process related to mass production.

This makes the work more stimulating.

1.2. Rise and Fall of Mass Production

History:

• 1894: S.EX.A. Evelyn Henry Ellis, a wealthy English Member of Parliament, went to buy a car.
• He couldn't find one at a dealership or any store because none existed in England.
• He went to the tool factory "Panhard and Levassor" or "P & L" in France.
• 1887: P & L obtained a license to manufacture the Gottlieb Daimler engine.
• Early 1890s: P & L manufactures several hundred cars a year.
• This was a case of craftsmanship with skilled artisans who hand-assembled a small number of cars.
• Parts came from craft shops throughout Paris.
• Customer contacts were made by the owners.
• No two cars were exactly alike (metallurgical processes of the time did not allow this).

Ellis's Requests:

• Accepted the engine and chassis.
• Asked for the body from a car plant.
• Requested controls and the steering wheel in the center of the car.

Ellis's Test Drive:

• He hired a mechanic and a driver and spent a good amount of time in Paris to try the car (which was a prototype).