From Taylorism to Lean

1962

General Motors open the

Fremont Assembly Plant

1982

Fremont Plant Shut Down

• labor relations almost completely broken down
• workers drinking and gambling on the job

Congress threatens to restrict imports

1984

Toyota and General Motors join to open NUMMI

Toyota agrees to re-hire union leaders from Fremont Assembly Plant

Workers

fly

Japan to learn the TPS

• NUMMI plant producing near-perfect quality cars
• some of the best quality in America
• as good as those coming from Japan
• at a much lower cost than Freemont Assembly had achieved
• Lee had been right in his bet

Three month later

"It was the system that made it bad, not the people"

Highest priority: quality

TPS Principle

• Andon Cord stops production
• Activated by workers or equipement
• Now part of the Lean approach

TPS Revolution

Primary task of managers: help workers

Workers have the power to stop the line

They should be involved in how to improve the system

Recurring theme: teamwork

Frederick Taylor

1856-1915

Scientific Management

"Taylorism"

• Management job: analyze the work and break it down into discrete tasks
• Tasks are performed by specialized workers
• Workers need to understand nothing more than how to do their particular specialzed task as efficiently as possible
• Fundamentally thinks of organizations as machines
• High level of managerial control over employee work practices
• High ratio of managers / laborers
• Obsolete by the 1930s

TPS

• Workers and managers collaborate across functions to constently improve - and sometimes radically redesign - the system
• High trust culture focused on continuous improvement (kaizen)
• Everybody is aligned in their goal of building high quality product

Taylorism

Makes workers into cogs in a machine, paid simply to perform preplanned actions as quickly as possible

TPS

Requires workers to pursue mastery through continuous improvement, imbues them with a higher purpose - ever higher levels of quality, value and customer service - and provides a level of autonomy by empowering them to experiment with improvement ideas and to implement those that work

Rick Madrid

worked both at the Fremont plant both before and during the NUMMI era

TPS changed my life from being depressed, bored - and like my son said, it changed my attitude. It changed all for the better.

Straightforward ?

• Changes to hierarchy
• Removal of visible trappings and privileges of management
• No more ties at the plant, to emphasize the fact that everybody was part of the same team
• Everybody has to learn all the jobs required of their team and rotate through them
  

Van Nuys plant

• Same problems as in Fremont
• Failed to adopt the system
• Workers and managers rebelled in face of changes
• They simply "didn't believe that otherwise it would shut down"
• Closed in 1992

General Motors

• Took 15 years to decide they needed to seriously prioritize implementing the TPS
• Further 10 years to actualy implement it
• It was too late
• GM bankrupts in 2009

2010

• So that they can innovate even faster
• It's now the only brand that can upgrade cars

NUMMI becomes a Tesla factory

A Lean Enterprise is Primarily a Human System