1 © 2003 Levinson Productivity Systems, P.C. Lean Enterprise: William A. Levinson, P.E., MBA Levinson Productivity

© 2003 Levinson Productivity Systems, P.C.

http://www.ct-yankee.com/lean/usa.ppt1

Lean Enterprise:

William A. Levinson, P.E., MBA

Levinson Productivity Systems, P.C.

www.ct-yankee.com 570-824-1986

http://www.ct-yankee.com/lean/usa.ppt

Made in the USA



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Overview

• It can be proven unequivocally that lean enterprise originated in the United States (not in Japan, as is commonly believed).

• Change management benefits:• Unquestionable bottom-line results:

sell lean to upper management in "the language of money."

• American workers are more likely to buy into "Made in the USA" concepts than kaizen, poka-yoke, jidoka, etc.

• Technical benefits:• Historical principles are still valid and

they are now fundamental elements of what we call lean enterprise.



Outline

• Background: military origins of quality and productivity concepts

• Benjamin Franklin's lean enterprise concepts influence on Henry Ford

• Frank Gilbreth and motion efficiency• Frederick Winslow Taylor and scientific

management• Henry Ford and the lean enterprise

• Ford's bottom line: sell lean to upper management in "the language of money"

• Lean techniques at the original Ford Motor Company

• Ford and supply chain management• Ford and ISO 14000• Ford and solutions to today's health care crisis

• Conclusion



Military Origins of Productivity and

Quality Techniques

"The United States government has already spent millions and used many of the best of minds on the subject of motion study as applied to war; the motions of the sword, gun, and bayonet drill are wonderfully perfect from the standpoint of the requirements of their use. This same study should be applied to the arts of peace." Frank Gilbreth, 1911, Motion Study



Muda (Waste) = von Clauzewitz's Friction

• General Carl von Clausewitz's On War (1831) defined friction as "…the force that makes the apparently easy so difficult. … countless minor incidents— the kind you can never really foresee— combine to lower the general level of performance, so that one always falls short of the intended goal."

• Henry Ford (Moving Forward, 1930): "It is the little things that are hard to see— the awkward little methods of doing things that have grown up and which no one notices. And since manufacturing is solely a matter of detail, these little things develop, when added together, into very big things."



Motion Efficiency and Setup Time Reduction

• The ability to shoot more quickly at someone who was shooting back was a powerful incentive for armies to develop these techniques.• The musket cartridge, with its premeasured

powder charge, externalized the setup operation (a key concept of SMED) of measuring out each charge of gunpowder. This was being done 400 or more years ago.

• Loading drills prescribed the "one best way," or standard, for loading muskets. Soldiers were (per von Steuben's drill manual of 1779) to count a second between each motion: a forerunner of takt time?



More on Takt Time

• The concept of rhythmic timing, or getting everyone to work at the same pace, is very old.• Drums everyone marches at the

same speed. (Synchronous flow manufacturing's drum-buffer rope)

• Sailor's songs on wooden ships provided rhythm for group tasks.

• Music coordinates some very complex performances:

• Ballet dancers perform different routines that must, however, keep pace with one another.

• Marching bands can make very complex formations during, for example, football halftime performances.



Benjamin Franklin's Lean Enterprise

Concepts

"Nothing has happened in our history to render out of date the business philosophy of Benjamin Franklin. Poor Richard's Almanac is still the best business compendium."

—Henry Ford, 1922. Ford Ideals



Franklin on Inventory

• Purchasing departments are sometimes measured on their ability to get "good deals" from suppliers. Franklin warned of what is likely to happen:

"You call them goods; but, if you do not take care, they will prove evils to some of you. You expect they will be sold cheap, and, perhaps, they may [be bought] for less than they cost; but, if you have no occasion for them, they must be dear to you."

• Readers of The Goal will appreciate this concept!• Principle adopted by Henry Ford



The Value of Time

• "If time be of all things the most precious, wasting time must be,' as Poor Richard says, 'the greatest prodigality;' since, 'Lost time is never found again; and what we call time enough always proves little enough:' • Readers of Goldratt and Cox's The

Goal will recognize this concept as, "Time lost at the constraint is lost forever."

• F.W. Taylor identified the false economy of maximizing tool life instead of cutting (production) rate.



The Value of Time, contd.

• Henry Ford, 1922, My Life and Work: "If a device would save in time just 10 per cent. or increase results 10 per cent., then its absence is always a 10 per cent. tax.

…Save ten steps a day for each of twelve thousand employees and you will have saved fifty miles of wasted motion and misspent energy."



Franklin on Friction

For want of a nail a shoe was lost,

for want of a shoe a horse was lost,

for want of a horse a rider was lost,

for want of a rider an army was lost,

for want of an army a battle was lost,

for want of a battle the war was lost

for want of the war the kingdom was lost,

and all for the want of a little horseshoe nail.

• A defective part that costs a few cents can make a final assembly nonconforming or, even worse, result in a field failure. The idea is the same.

• Ford: snap gages, go/no-go gages rejected such parts automatically.



Frank Gilbreth and Motion Efficiency



A Friction Classic

• Most of us are familiar with the story about how under-achievers install a light bulb. One holds the bulb while three others turn the ladder.

• It's funny because no one could be this stupid, right?



Bricklaying, through late Nineteenth Century

The brick weighs about five pounds (2.3 kg). How much is the worker actually raising and lowering every time he bends over for another brick?



Bricklaying, through late Nineteenth Century

• The brick weighs about five pounds (2.3 kg). How much is the worker actually raising and lowering every time he bends over for another brick?



Bricklaying, after Frank Gilbreth

• The joke about the underachievers and the light bulb isn't so funny any more.

• Lesson: waste can, by long habit ("living with it," "working around it") become built into a job.



Bricklaying, after Frank Gilbreth

• The joke about the underachievers and the light bulb isn't so funny any more.

• Lesson: waste can, by long habit ("living with it," "working around it") become built into a job.



In case you think I made this up...

• Top: "The usual method of providing the bricklayer with material" (Gilbreth, Motion Study, 1911. The photo is dated 9/5/1906, believed to be in the public domain).

• Bottom: "Non‑stooping scaffold designed so that uprights are out of the bricklayer's way whenever reaching for brick and mortar at the same time"



Animation of fabric folding operation

Henry Ford principle: "Pedestrianism is not a highly-paid line of work."

This shows the value of videotaping real operations (e.g. for kaizen blitz, SMED).



Fabric Folding Operation

This shows the value of videotaping real operations (e.g. for kaizen blitz, SMED).

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Fabric folding, contd.

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Frederick Winslow Taylor and Scientific

Management

Standardization and Best Practice Deployment



Standardization and Best Practice Deployment

• Standardization and best practice deployment are key features of Six Sigma. Both are also basic principles of scientific management.• Standardization holds the gains from

continuous improvement, thus avoiding the two-steps-forward-and-one-back problem.

• Taylor speculated that trade workers often improved their jobs, but the knowledge was lost when they died or retired.

• Best practice deployment applies improvements to all relevant operations in the business.



Henry Ford and the Lean

Enterprise

Ford developed motion efficiency and scientific

management into a comprehensive lean

enterprise system that equals or surpasses

anything that exists today.



Ford and Change Management

Use the history of Henry Ford's lean enterprise system to gain buy-in from upper management and front-line workers



Ford's Bottom Line and the Language of Money

• The Ford Motor Company (and the industries that grew to support it) was directly responsible for making the United States the wealthiest and most powerful nation on earth.• The U.S. surpassed the British Empire

during the 1910s.• During the Model T's 19 years of

production, it created more prosperity than the estimated wealth of 35 of the country's 48 states (Ford, 1930, Moving Forward).

• This figure did not include railway workers, rubber workers, oil workers, and others for whom the Model T created jobs.



When the Going Got Tough…

…the Ford lean enterprise system kept going.

• The Ford Motor Company sold 1.25 million cars during the 1920-1921 depression that followed the First World War and the 1918 influenza epidemic: five times as many cars as the company sold during 1913-1914.

• How would this system have performed in comparison to others in 2000-2003?



Ford and the Front-Line Worker

• Henry Ford was not a professor, "guru," or consultant.• Ford was a self-taught mechanic and

then an engineer at Detroit Edison before he began to make automobiles.

• He spent considerable time on the shop floor with front-line workers.

• Ford wrote in a very practical and hands-on manner.• His principles and workplace examples

are easily understandable by anyone in a modern workforce— perhaps more so than many modern lean manufacturing books.



Lean: Made in the USA or "Who do you think taught Japan how to make cars?"

• Taiichi Ohno, the father of the Toyota production system, said openly that he got the idea from Henry Ford's book and the American supermarket.• Ford's Today and Tomorrow (1926)

describes the benefits of just-in-time (JIT) manufacturing explicitly.

• In a supermarket, replenishment of shelf stock is triggered by depletion; it is a "pull" system.

• Taylor influenced Shigeo Shingo



Lean Methods and Management at the

Ford Motor Company

The original Ford Motor Company had a

comprehensive lean enterprise system that equals or surpasses

anything that exists today.



Ford and Muda (Waste)

• Henry Ford's ability to recognize waste on sight, and to teach this skill to his organization, may have been his chief success secret.• Culture at Ford's River Rouge plant,

regarding waste: "It worried the men."

• If it doesn't add value, it's waste.• "We will not put into our establishment

anything that is useless. We will not put up elaborate buildings as monuments to our success. The interest on the investment and the cost of their upkeep only serve to add uselessly to the cost of what is produced— so these monuments of success are apt to end as tombs" (Ford, 1922, My Life and Work)



I waited my wholelife for that

executive suite.

The world's first "monuments of success"

were actually tombs.

The ancient Egyptians bypassed the phase of using these "elaborate buildings" to house living executives; they stocked them directly with dead ones.



Kaizen, Standardization, and Best Practice

Deployment

"To standardize a method is to choose out of many methods the best one, and use it. …Today's best, which superseded yesterday's, will be superseded by tomorrow's best."

"An operation in our plant at Barcelona has to be carried through exactly as in Detroit— the benefit of our experience cannot be thrown away. A man on the assembly line at Detroit ought to be able to step into the assembly line at Oklahoma City or São Paulo, Brazil."

—Henry Ford, 1926, Today and Tomorrow



Just-In-Time (JIT)

Ford described the following principles explicitly:

1. Materials arrive exactly, and only, when the production line needs them.

2. Materials go, not from dock to stock, but from dock to factory floor.

3. JIT requires reliable transportation and a supporting logistics system.

• Bad transportation (e.g. lack of a good freight management system) requires the plant to keep more inventory.

• Ford created a very impressive freight management system (FMS) to address this issue.

4. Inventory reduction frees capital.

5. Cycle time reduction frees capital.



Ford on Design for Manufacture (DFM)

"Start with an article that suits and then study to find some way of eliminating the entirely useless parts. This applies to everything— a shoe, a dress, a house, a piece of machinery, a railroad, a steamship, an airplane. As we cut out useless parts and simplify necessary ones, we also cut down the cost of making."

"But also it is to be remembered that all the parts are designed so that they can be most easily made."



5S-CANDO at Ford

• Ford, Today and Tomorrow (1926) on a new mine: "The first job was to clean up— that is always the first thing to do in order to find out what you are about. … We cannot afford to have dirt around— it is too expensive. … everything is painted and kept painted a light color, so the least bit of dirt will show. We do not paint to cover up dirt— we paint white or light gray in order that cleanliness may be the order of things and not the exception."

• Norwood's Ford: Men and Methods (1931) shows how the River Rouge plant anticipated Disney theme parks (which provide convenient waste containers everywhere) by providing waste containers within six steps of any position on the shop floor.



Stopping the Line

• Workers at the River Rouge plant were authorized to stop the line (a practice later adopted by the Japanese) if there was a problem.• This lit an alarm light in a control

booth. If the light stayed on for more than two minutes, the attention of a "trouble mechanic" was required.

• Even if the workers on the line could fix the stoppage in less time, the cause was still recorded for future action.

• Closed-loop corrective action• Tie-in with computerized maintenance

management system concept



Ford and Supply Chain Management

Supply chain management recognizes the dependence of a lean manufacturer on its

own suppliers and distribution systems.



Ford on Supplier Development

• "The man finally consented to try to manufacture at exactly one half his former price. Then, for the first time in his life, he began to learn how to do business. …he found he could make cost reductions here, there, and everywhere, and the upshot of it was that he made more money out of the low price than he had ever made out of the high price, and his workmen have received a higher wage" (Henry Ford, 1926, Today and Tomorrow).

• The supplier had wanted $152 per body. Ford's Charles Sorensen built a model for $50 in labor and materials. The supplier then agreed to accept $72 per body.



Ford's Freight Management System (FMS)

• Norwood's Ford: Men and Methods (1931, 20-24) gives an outstanding summary of what a good FMS does. • The Ford logistics system was a "continent-

spanning conveyor."• Deliveries were coordinated, scheduled

precisely, and apparently just-in-time.• Supply was never to exceed or fall short of

requirements.• "Using that multitude of additional links offered

by rail, highway, water, and air, it has butt-welded them with their own time-tables and picketed them with telegraphic checkings as watchful as the straw bosses who supervise progression along the conveyor lines of the shop."

• Per Ford, the location of any rail car could be determined to within an hour.



Ford and ISO 14000

ISO 14000 is, if used properly, a moneymaker as

opposed to a costly and time-consuming annoyance



The Basic Concept

• "He perfected new processes— the very smoke which had once poured from his chimneys was now made into automobile parts" (Sinclair).

• "It is not possible long to continue to get something for nothing, but it is possible to get something from what was once considered nothing" (Ford, 1926).



Meat Packer's Principle: "Use Everything but the

Squeal"



Waste to Profit

• Henry Ford:• A wood distillation plant turned scrap

wood into methyl alcohol, charcoal, tar, and fuel gas.

• $12000/day could pay 2000 workers @$6/day (Ford's relatively high minimum wage) in 1926.

• Charcoal briquettes from sawmill chips (Kingsford charcoal)

• Blast furnace slag cement and paving material

• A paper plant converted waste paper into binder board and cardboard.

• Fumes from a coating operation were recovered by adsorption in charcoal and reused.



Make Parts, Not Machining Chips

• "The machine shop produces about 14,000 [piston] rings per day say 1240 pounds of finished rings from 13,000 pounds of ring stock, 11,760 pounds of stock, worth $294 wasted for the pleasure of cutting it into chips and using snap-ring piston packing" (Arnold and Faroute, 1915, Ford Methods and the Ford Shops).• Ford was well aware of this problem,

and he changed processes and designs to eliminate it.

• Less machining less cutting fluid to purchase and dispose of.



The Solution

• "Our objective is always to minimize the subsequent machining" (Ford, 1926, 69).• Dieter (1983) points out the virtues of

"chipless machining." The idea is to make the part as close to its final shape as possible, to minimize subsequent machining.

• Ford pointed out that cast parts require considerable (on the order of 30%) machining.

• Forge or cast small parts and then assemble them into the desired large one.

• Tie-in with Design for Manufacture



Keep Your Eye on the Doughnut's Hole

• Doughnut = the product• Hole = whatever is thrown away

• Example: metal sheet with six stamped holes (product)

Workers ask, "What was in those holes?"

Most people saw scrap for remelting and reuse. Ford's workers saw radiator caps. Pressing two disks made a very strong radiator cap.



The Doughnut's Hole, continued

• This concept cannot be overemphasized.• Culture at Ford's River Rouge plant,

regarding waste: "It worried the men."

• Workers should pay close attention to "holes" and ask questions.• "Where did the metal go that was in

those cutout sections of the part?"• "What becomes of cutting fluids,

solvents, and lubricants?"• "What goes up the smokestack?"• Metal chips or sawdust should always

invite attention!



Reuse Packaging

• "Why should a crate or a packing box once used be considered only as so much waste to be smashed and burned?" (Ford, 1926, 125)• Ford allegedly asked a supplier to

package shipments in boxes whose boards had to be specific sizes. The latter became Model T floorboards.

• Ford's River Rouge plant often knocked down containers and sent them back "for another load."

• Cardboard boxes can be folded flat and sent back for the same purpose.



Ford and Health Care

The same kind of management which permits a factory to give the fullest service will permit a hospital to give the fullest service, and at a price so low as to be within the reach of everyone. (1)

It is simply a matter of transferring those precision methods, so well established in the Ford shops, into hospital work. (2)



Solving the Health Care Crisis

• Industrial quality and productivity techniques have the potential to reduce health care costs by 30 to 50 percent while improving its quality.• Blanton Godfrey, former CEO of the

Juran Institute: "Health care providers' cost of poor quality is estimated to be as high as 30-50 percent of the total paid for health care. For some companies the cost of employee health insurance is now higher than profits."

• AIAG supports the use of ISO 9000 in hospitals.



Conclusion

1. Lean enterprise is an American innovation.• Use Henry Ford's bottom line to sell

lean to upper management in the language of money.

• Use Ford's down-to-earth and hands-on approach, along with lean's "Made in USA" label to sell lean to front-line workers.

2. Ford showed how to make money through ISO 14000 (before ISO 14000 existed)

3. Industrial methods can reduce health care costs significantly.

Documents

1 © 2003 Levinson Productivity Systems, P.C. Lean Enterprise: William A. Levinson, P.E., MBA Levinson Productivity