2008年11月15日

From Scientific Management To Lean Production

(English only... )
 
I    Introduction

 
      Scientific management has roots in the work of Frederick Winslow Taylor starting in 1880s. The concept became widely known by his book, The principles of Scientific Management (Taylor, 1911). Direct example is the mass production of car, notably Henry Ford’s Model T. Introduction of moving assembly line, interchangeable parts, and division of labour allowed under-skilled workers to replace craftsmen. Reduction of the price of the car enabled increasing number of citizens to purchase their own car.
      The impact gradually changed the other industries as well. Not only manufacturing, but also service industries have adopted the concept and have realized tangible productivity growth. The mass production created the age of mass consumption and changed human life significantly. Until 1950s when lean production emerged in Japan, we have entered the new age that needs new business practice.
      I argue that different circumstances lead to different assumptions and, therefore, different business practice. Basic principles of Lean Manufacturing originated in the principles of scientific management, however the principles are substantially modified to leverage increased capabilities of labour force and to accommodate unstable and rapidly changing market environments. Lean manufacturing is invented to reflect the significant changes of the environment in which factories operate.
  
 
II    The principles of scientific management and their underlying thought


    Underlying thought of Taylor

      The scientific management has emerged from the work of Taylor in the late
nineteenth and early twentieth centuries when people relied on craftsmanship and were less educated. Taylor observed inefficiency that stemmed from both worker and management. Before describing the principles of Scientific Management, it is vital to visit his views on management and workers.
      Firstly, Taylor considered that management is irrational and incompetent and needs help. “Due to the growth in the scale and technical complexity of industry, management lacked information about workers’ abilities and time that is reasonably required to perform industrial tasks” (Rose, 1981). Further, management relied on experienced workers to improve the productivity and to train workers. Taylor portrayed these managers as irrational and incompetent. He insisted management needs special support function, production engineer, which provides necessary specialty as finance department does. He assumed that the engineer can better identify the quickest and the best way and that factory can continue to adopt the way for a long period of time. It was true in the period when the change of industry is slow and the preference of customers is monotone.
      Secondly, Taylor did not expect high intelligence of workers. “He is reported to have told workers that they were not supposed to think, since other people were paid to do that for them” (Rose, 1981). In addition, Taylor frequently used the term, “teach”, when he described the communication with workers. Further, although Taylor recognized workers might be subject to other motivations, he found workers motivation as primary economic. It is not overstatement to say he viewed worker as another type of machine that tend to “slack” and to “soldier”. It is natural in the period when skill level of workers was low and individual differences was not studied even in the filed of psychology.
      He found that workers and management are incapable of finding the best way and need help of others with scientific knowledge. These observations are transformed into strict focus on scientific approach that leads to the principles of scientific management.


    Principles of scientific management

      Taylor argued that scientific analysis of individual tasks can discover “those procedures that produce the maximum output with the minimum input of energies and resources” (Scott & Davis, 2007). In order to achieve the goal, Taylor emphasized four principles of scientific management.
      Firstly, execution of task is separated from research and development of task. Taylor argued that professional engineer who has experience and knowledge of scientific study, instead of management and worker, should assume the rule of developing process and training workers.
      Secondly, the engineer aimed at standardizing each task based on scientific observation. The standardization includes not only the task itself, but also equipment and products associated with the task. The production engineer designed entire manufacturing process and occasionally provided recommendation about organizational structure and routine as well.
      Thirdly, the engineer systematically and scientifically selected and trained workers. Based on scientific observation, production engineer assigned “first-class man” who best fits to the specific requirement of certain task, and trained the person to perform “the quickest and the best way”.
      Finally, the engineer scientifically decided “a fair day’s pay for a fair day’s work” based on individual performance. The incentive is carefully calculated to stimulate economic motivation of workers. Taylor considered wage as the primary reward for workers, and argued that the wage should be higher than average, as long as management can benefit from the increased productivity.
      These principles successfully functioned. The concept of scientific management has been employed in wide range of industries and has increased their productivity. However, it became gradually obvious that the concept has to be modified to adapt the development of society and the advancement of industrialization. Substantial modification has carried out with the history of mass production, followed by the paradigm shift made possible by lean manufacturing.


III    Lean production as the scientific management of new age

    Underlying conditions of lean manufacturing

      The development of lean manufacturing started after the Second World War. It was almost 50 years after the introduction of scientific management. Toyota was operating in the environment with totally different characteristics of workers and preferences of customers from Taylor’s generation.
      Firstly, the socioeconomic status of workers has improved. At the time when Kiichiro Toyoda resigned and the company restarted in 1949, close to handled percent of population could read and write and around 50 percent of them have completed high school education (MEXT, 2008). Further, unlike in the U.S., there were almost no immigrant workers who typically wish to tolerate cruel working conditions. Workers argued that they should engage in management activities and should benefit from the performance of company. Worker was no longer a blind machine. They had more potential to engage in scientific study of manufacturing operation and demanded higher corporate and social status. They are different to the workers whom Taylor observed in the past.
      Secondly, and more importantly, Toyota had to deal with limited production of diversified products. Toyota’s production was small. Toyota’s annual production in 1959 was 100,000 units (Udagawa, 1995).  It was only one third of the annual production of Ford in 1914 (Ford, 2008). However, Toyota decided to produce full range of cars to appeal all segments, rejecting the proposal of MITI to merge car manufacturers in order to prevent domestic competition. As Womack explained in The machine that changed the world (Womack, Jones, Roos, & MIT, 1990), “Toyota’s chief production engineer, Taiichi Ohno, quickly realized that employing Detroit’s tools and Detroit’s methods was not suited to this strategy. … Ohno knew he needed a new approach, and he found it.” Toyota had to invent the way, by which it can efficiently manufacture a wide variety of products in small quantities.
      Toyota was in fundamentally different environment when it developed the core concept of lean manufacturing. It was essential to substantially modify the concept of scientific management in order to leverage increased capabilities of labour force and to accommodate unstable and rapidly changing market environments.


    The principles of scientific management that are modified in Lean manufacturing

     The key features of lean manufacturing include well-known methodologies of production, such as Just-in-time operation that minimizes inventories and assures quality control, Kanban system that allows suppliers to deliver items to the right place on time, Jidoka that aims autonomous defect control, and Kaizen that focuses on continuous improvement mainly through quality circle and purpose-build project team. It is true that the aim of both scientific management and lean manufacturing is to scientifically find the way to improve productivity. However, lean manufacturing modified substantial portion of the principles of scientific management.
      Firstly, division of conception from execution no longer exists in Lean manufacturing. Taylor viewed productivity improvement and quality control as functions for specialized staff. However, Toyota encouraged organizational learning and continuous improvement and achieved high productivity and quality. For example, in NUMMI, “workers made more than 10,000 suggestions in 1991, of which more than 80% were valid and implemented” (Adler, 1993).
      Secondly, the concept of finding the “the quickest and the best way” is largely modified. Time and motion study could find the single best way, but the result of one-time learning was inflexible. “Production in a Toyota factory are rigidly scripted, however enormously flexible and adaptable” (Spear, 1999). Toyota reinterpreted the meaning of the quickest and the best way and redefined it as the quickest and the best way that is flexible enough to accommodate rapid change of market demand.
      Finally, working conditions changed. Taylor considered that worker should specialize in certain task and that group work undermines individual productivity. Further, he viewed wage as the primary motivator and did not expect worker to engage in any decision-making. In Toyota, workers are cross-trained to shift from one task to another. Group work plays important rule in improving productivity and calculating compensation. Hierarchy does exist. However, “the primary purpose and responsibility of the hierarchy is to support the production team” (Adler, 1993). Decisions at Toyota factory are made by broad vertical and horizontal consensus. The working condition improved significantly. Workers are receiving a wide range of intangible rewards from their work.
      Lean manufacturing still holds the core principle of scientific management: scientific study and standardization of procedures, tools, and products. However, Toyota substantially modified most of the principles of scientific management.


IV    Conclusion

      The concept of scientific management evolved around the observation of the early stage of industrialization. Taylor found scientific study and standardization of procedures, tools, and products can increase productivity. It successfully worked in the environment, in which Taylor observed and developed his concept.
      50 years has past and the world has changed when Toyota started to develop the concept of lean manufacturing. It was natural that Toyota tried to significantly modify the principles of scientific management and invented the new approach. In fact, lean manufacturing shares the most fundamental principle of scientific management, improvement of process by scientifically rigorous methodology. However, Lean manufacturing integrated the rule of production engineer to the rule of workers, expanded the concept of “the quickest and the best way” to accommodate the volatility of market need, and changed the way workers participated and are rewarded. As a Toyota manager called, the key to the success of Lean manufacturing was “the intelligent interpretation and application of Taylor’s time-and-motion studies” (Adler, 1993).
      Toyota describes its achievement as follows: “By focusing on smaller production lots and producing only what customers require when they require it, Toyota has developed a flexibility and responsiveness that continues to set the standard for the industry” (Toyota, 2008). It has built the new standard for the industry.


References:

    Adler, P. S. (1993). Time-and-motion regained. Harvard Business Review, 71(1), 97-108.
    Ford (2008). Model T FACTs. History of Ford, 2008, from http://media.ford.com/article_display.cfm?article_id=858
    MEXT (2008). Education Statistics, 2008, from http://www.mext.go.jp/b_menu/toukei/001/05122201/005/004.xls
    Rose, M. (1981). Industrial behaviour : theoretical development since Taylor. Harmondsworth [u.a.]: Penguin Books.
    Scott, W. R., & Davis, G. F. (2007). Organizations and organizing : rational, natural, and open system perspectives. Upper Saddle River, N.J.: Pearson Prentice Hall.
    Spear, S. J. a. B., H.K. (1999). Decoding the DNA of the Toyota production system. Harvard Business Review, 77(5), 96-106.
    Taylor, F. W. (1911). The principles of scientific management: W.W. Norton.
    Toyota (2008). The Toyota Production System Retrieved 27/10/2008, from http://www.toyotainbusiness.com/fleet_content/why_tib/company/tps.aspx
    Udagawa, M. (1995). The Development of Production Management at the Toyota Motor Corporation. Business History, 37(2), 107-119.
    Womack, J. P., Jones, D. T., Roos, D., & MIT (1990). The machine that changed the world. New York: Rawson Associates.
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