Machine That Changed the World The Story of Lean Production-Toyota's Secret Weapon in the Global Car Wars that is Revolutionizing World Industry

1: THE INDUSTRY OF INDUSTRIES IN TRANSITION Forty years ago Peter Drucker dubbed it "the industry of industries." Today, automobile manufacturing is still the world's largest manufacturing activity, with nearly 50 million new vehicles produced each year. Most of us own one, many of us own several, and, although we may be unaware of it, these cars and trucks are an important part of our everyday lives. Yet the auto industry is even more important to us than it appears. Twice in this century it has changed our most fundamental ideas of how we make things. And how we make things dictates not only how we work but what we buy, how we think, and the way we live. After World War I, Henry Ford and General Motors' Alfred Sloan moved world manufacture from centuries of craft production -- led by European firms -- into the age of mass production. Largely as a result, the United States soon dominated the global economy. After World War II, Eiji Toyoda and Taiichi Ohno at the Toyota Motor Company in Japan pioneered the concept of lean production. The rise of Japan to its current economic preeminence quickly followed, as other Japanese companies and industries copied this remarkable system. Manufacturers around the world are now trying to embrace lean production, but they're finding the going rough. The companies that first mastered this system were all headquartered in one country -- Japan. As lean production has spread to North America and Western Europe under their aegis, trade wars and growing resistance to foreign investment have followed. Today, we hear constantly that the world faces a massive overcapacity crisis -- estimated by some industry executives at more than 8 million units in excess of current world sales of about 50 million units. This is, in fact, a misnomer. The world has an acute shortage of competitive lean-production capacity and a vast glut of uncompetitive mass-production capacity. The crisis is caused by the former threatening the latter. Many Western companies now understand lean production, and at least one is well along the path to introducing it. However, superimposing lean-production methods on existing mass-production systems causes great pain and dislocation. In the absence of a crisis threatening the very survival of the company, only limited progress seems to be possible. General Motors is the most striking example. This gigantic company is still the world's largest industrial concern and was without doubt the best at mass production, a system it helped to create. Now, in the age of lean production, it finds itself with too many managers, too many workers, and too many plants. Yet GM has not yet faced a life-or-death crisis, as the Ford Motor Company did in the early 1980s, and thus it has not been able to change. This book is an effort to ease the necessary transition from mass production to lean. By focusing on the global auto industry, we explain in simple, concrete terms what lean production is, where it came from, how it really works, and how it can spread to all corners of the globe for everyone's mutual benefit. But why should we care if world manufacturers jettison decades of mass production to embrace lean production? Because the adoption of lean production, as it inevitably spreads beyond the auto industry, will change everything in almost every industry -- choices for consumers, the nature of work, the fortune of companies, and, ultimately, the fate of nations. What is lean production? Perhaps the best way to describe this innovative production system is to contrast it with craft production and mass production, the two other methods humans have devised to make things. The craft producer uses highly skilled workers and simple but flexible tools to make exactly what the consumer asks for -- one item at a time. Custom furniture, works of decorative art, and a few exotic sports cars provide currentWomack, James P. is the author of 'Machine That Changed the World The Story of Lean Production-Toyota's Secret Weapon in the Global Car Wars that is Revolutionizing World Industry', published 2007 under ISBN 9780743299794 and ISBN 0743299795.