Lean Implementation: Insights from Henry Ford and Taiichi Ohno

Posted by on Sep 1, 2019 in Lean, overproduction | 0 comments

 


Henry Ford and Taiichi Ohno were pioneers in Lean implementation.  But with all their success, why is it that less than 20% of manufactures are able to successfully implement Lean?  This article will try to show how you must take the basic concepts of lean and apply them to each specific environment to be successful.

Both Ford and Ohno were obsessed with creating flow.  The reason being that improving flow contributed to more revenue, better cash flow, and more profitability.  Neither were obsessed with cost savings.  In their analysis, controlling inventory was key to improving flow.  Flow means that inventories are moving.  When inventory isn’t moving it accumulates and takes up space.  Ford controlled inventory by limiting the space where work in process inventory was stored.  This became one of the key concepts in the development of the assembly line (flow line method).  In addition, it was readily accepted that flow lines at the time must be implemented only in environments where the required quantities justify dedication of equipment to a single product.  This became one of the issues that Ohno had to overcome because at that time, the market demand in Japan was for small quantities of a variety of cars.  Therefore, Ohno could not dedicate lines at Toyota because not all components are available for assembly while the allotted space is already full creating gridlock.

Ohno’s genius and tenacity required him to design and implement an application that was suitable for Toyota’s environment, where it is not feasible to dedicate equipment to the production of a component.  What he envisioned is the mechanism that would guide his operation when not to produce, that would limit the amount allowed to accumulate for each component.  Thus he developed the Kanban system.

Kanban is a system where a card travels with a container of material specifying the component code name and number of units per container.  When a work center takes the container for further processing, the card is passed back to the preceding work center.  This is a signal to that work center that it is appropriate to produce one container of parts specified by the card.  It tells them what to produce, but more important what not to produce.  Kanban then is the mechanism in the system that prevents the operation from over-production and how Ohno expanded Ford’s concepts by changing the process of limiting space to one that limits the amount of inventory.

With Kanban implemented, work centers were now forced to frequently switch from producing one component to another and the problem now became how to balance the flow.  The small quantities required per container now caused the work centers to frequently change from one component to another and the change-over times were greater than the time to run the required number of parts.  Ohno then focused on efforts to reduce change-over times and over a period of time succeeded in getting them to single digits.  For example, die changes went from about three hours in the 1940’s to less than one hour and as low as 15 minutes in the 1950’s to 3 minutes in the 1960’s.  As change-over times came down, Ohno continued to reduce the number of containers in the system along with the number of units in the container.

In summary, both Ford and Ohno followed the four following concepts of flow:

  1. Improving flow and reducing lead time is a primary objective of operations.
  2. Improving flow must translate into a practice that guides the operation when not to produce.  Ford limited space; Ohno limited the number of containers and the number of units in each container.
  3. Local efficiencies must be abolished, i.e., the convention that every worker and every work center have to be busy 100% of the time to be effective.
  4. A focusing process to balance flow.  Ford used direct observation of the space allotted for each container while Ohno used the gradual reduction of the number of containers and eventually the number of parts per container.

Toyota’s success in implementing lean shows the difference between an application and the fundamental concepts on which the application is based.  The concepts are generic, but the application of those concepts require their translation into a specific environment.

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