The Machine That Changed the World : The Story of Lean Production [Paperback]

This study of the world automotive industry by a group of MIT academics reaches the radical conclusion that the much vaunted Mercedes technicians are actually a throwback to the pre-industrial age, while Toyota is far ahead in costs and quality by building the automobiles correctly the first time. The lesson that it cost more to fix it than to build it correctly should be applicable to a lot of industries--not just manufacturing. The description of the marketing information system that Toyota uses was very enlightening. They involve the entire company in generating marketing feedback. Even dealer sales staff spend time working on the new product teams. Trust me, very few high-tech firms methodically collect feedback from their customers, and none have a system this comprehensive.

This is not just a book about lean production--this is guidance in understanding how your business operates and delivering good products that your customers want.

What Ford's mass production did to craft production and its profound effects on the developed economies in the first half of the last century is an old but interesting story. With the advent of Ford's manufacturing techniques, there was a consolidation in the Auto industry. Within a couple of decades the number of automobile manufacturers fell from over a hundred to less than twenty and the big three cornering over ninety percent of the market share. Detroit became the center of pilgrimage for the rest of the world trying to emulate and replicate this success story in other continents.

Silently, the Japanese led by Toyota were working on a different concept of putting the automobile in the hands of the customer, at better quality, lesser costs, shorter development times and with the ability to offer a wider choice. The statistics collected from these "lean systems" is mind boggling. The competitive advantage that Japan enjoyed over the American system was neither due to lower wages in Japan nor due to higher levels of automation as widely believed. It was primarily the lean machine that was conquering the mass machine.

This book is based on the research done in the 1980's and published around 1990. The authors while acclaiming lean manufacturing as the panacea for the ills of manufacturing systems globally had at the time of the research and the publication of this work, probably ignored the next major change that would sweep across continents. Cars ride on highways, but today's businesses are quickly shifting gear and using a super fast highway for collaborating and for managing their global presence. Thanks to the Internet, the economics of information is transforming the economics of things. Dell is probably a good example of the new business model that could not have been imagined in the 80's. The tearing down of artificial walls across countries and continents also happened in the last decade.

We are badly in need of a repeat research study of the kind done in this book, in the face of the new realities. Global companies run by global citizens serving a global market and using a global currency will probably happen sooner than we expect.