Process Improvement in Manufacturing Industry This chapter critically evaluates the available literature concerning the development of production systems and process improvement in the automotive industry

Process Improvement in Manufacturing Industry

This chapter critically evaluates the available literature concerning the development of production systems and process improvement in the automotive industry. The chapter is divided into 4 sections: section 2.1 introduces and differentiates the different types of production systems in the automotive industry, and elaborates in detail how they were developed and improved over the past century. Section 2.2 defines the Toyota Production System (TPS) and Lean Production, and explores their development. Section
2.3 gives a more accurate definition of the Japanese Kaizen, distinguishes it from other improvement methods and introduces its two implementing practices. Section 2.4 introduces the different perspectives on comparing the different long-term effects of the two improvement practices and describing their mutual relationship in continuous improvement.

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The Improvement of Production Systems in Manufacturing Industry
“Dissatisfaction is the mother of improvement.”
Shingo (1987, p18)

In manufacturing industry, improvement is a logical next step to change the performance of a production system from the status quo to a new stage (Evans, 1993; Handyside, 1997). In order to meet the new production goals and sharpen competitive advantage, focusing on improvement is becoming more important (Liker, 2004) and therefore it is always required in manufacturing industry (Womack and Jones, 1996). The importance of making improvements in manufacturing industry has also been emphasised by several previous studies (Skinner, 1969; Schonberger, 1982b; Womack et al., 1990; Bartezzaghi, 1999; Fullerton and McWatters, 2001; Pavnaskar et al., 2003;
Schonberger, 2006; Colledani et al., 2010).

Achieving continuous improvement through small increments is a ‘world class’ manufacturing practice (Hayes and Wheelwright, 1984) to increase production efficiency (e.g., low cost/high quality) (Womack and Jones, 1996). The improvement of production systems can be a key competitive weapon (Prado, 1997; Hill, 2000, pp., p55; Liker and Meier, 2006). In particular, bringing improvement in all aspects is essential

for meeting the production challenges (Bessant and Caffyn, 1997) and a central topic to ensure the competitiveness of the production system (Colledani et al., 2010).

In case of automotive industry, manufacturing systems have been advanced from the Craft Production to Mass Production, and during the last a few decades to Lean Manufacturing (Figure 2.1).

Figure 2.1 The timeline for improvement in the production systems in the automotive industry (Taylor and Brunt, 2001; Clarke, 2005; American Society of Mechanical Engineers, 2008; Patty and Denton, 2010)

The improvement in Craft Production
Upto the middle of 18th century, manufacturing was small-scale and fundamentally involved manual work, with or without the aid of tools (Patty and Denton, 2010). This type of manufacturing is called Craft Production (Slack et al., 2007). Craft Production is based on a pre- industrialised shop floor production system (Miltenburg, 2005). It is characterised by highly skilled and experienced workers; the use of highly skilled and experienced workers was probably the single most important characteristic at the time (Womack et al., 1990). Hence, improvement was mostly made through apprenticeship training to enhance a worker’s skills and experience (Clarke, 2005).

Craft Production has the advantage of producing unique, highly customised and flexible products (Womack et al., 1990). Nevertheless, the use of general-purpose tools, stationary assemblies and extremely decentralised shop floor (Dennis and Shook, 2007) prevented Craft Production from producing high volumes of products quickly (Hobbs, 2004). Especially in the automotive industry, the production of hand-built cars was time- consuming and costly (Ford, 1926). In Europe, before the onset of Mass

Production, no more than 1000 cars could be built per year, and no two were exactly alike, since each of these cars were built individually and separately to order (Koren, 2010); quality was also inconsistent (Taylor and Brunt, 2001).

Therefore, the main challenges before Craft production was how to build products at lower cost, with consistent quality and at a high speed (Farahani et al., 2011). Just improving workers’ skills and experience was not enough to meet such challenges. Dedicated tools/machines needed to be introduced to boost productivity (Taylor and Brunt, 2001).

Figure 2.2 The Morgan Motor, a modern British craft car producer (The Morgan Motor, 2010)

Craft Production, on later stage, was replaced by the machine-intensive Mass Production system which could make products in larger volume, more quickly and with consistent quality (Hobbs, 2004). Modern Craft Production continues to survive (e.g., Figure 2.2), but is generally limited to niche markets for luxury goods (Dennis and Shook, 2007).

The improvement in Mass Production
Mass Production upgraded the production processes and effectively minimised numerous major problems of Craft Production (Sorensen et al., 2006). It was based on many of Fred Winslow Taylor’s innovations (i.e., standardised work, reduced cycle time, time and motion study, etc.) from the classic text: the Principles of Scientific Management (Taylor, 1911).
Mass Production separated planning from production and let the shop floor employees do only short cycle, repetitive tasks (Dennis and Shook, 2007). Thus, in contrast to

Craft Production, Mass Production is a high-quantity production system (APICS Dictionary 9th Edition, 1998). It uses large and dedicated machines and has a continuous flow of materials (Anderson, 1994). It can produce goods in high volume, in a faster manner (Slack et al., 2007) and with significantly lower costs (Hobbs, 2004) than Craft Production (Womack et al., 1990).

In the case of automotive industry, the Mass Production system (e.g., Figure 2.3) was introduced at the beginning of the 1900s (Williams et al., 1993). In early 1901, Oldsmobile developed the first high-quantity assembly-line to build cars – the Curved- Dashs (Eckermann and Albrecht, 2001). The assembly-line was nevertheless improved substantially by Ford Motors (Patty and Denton, 2010).

(a) A Curved-Dashs by the Oldsmobile in 1901 (Chevedden and Kowalke, 2012, p20)
(b) Ford’s Model-Ns’ production brefore the introduction of a moving assembly-line (Cabadas, 2004, p19)
Figure 2.3 The early Mass Production system

(a) Model-Ts were being produced on a moving assembly-line (Cabadas, 2004, p23)
(b) An example of the standardised parts of the Model-Ts (Collins, 2007, p140) Figure 2.4 The moving assembly-line and standardised parts

In the last leg of 1913, Ford Motors introduced a moving assembly-line at the Highland Park Plant to pace up the production process, and also used interchangeable and

standardised components to ensure quality (Ford, 1926, pp., p83) (Figure 2.4). By 1915, the Highland Park Plant produced around 500,000 Model-Ts per annum (Nersesian, 2000, p. p50). Later, the production line made a total number of 15 million Model-Ts in 19 years (1908-1927); on average approximately 800,000 per year (Williams et al., 1993; Sorensen et al., 2006). The concept of the moving assembly-line and standardised components became the basis of contemporary automotive production (Ohno, 1988a, pp., p93). Womack et al. (1990) complemented Ford’s development of the moving assembly production line and the use of standardised interchangeable components, saying they were some of the great achievements of the automotive industry.

Nevertheless, Mass Production also has major issues. Firstly, the use of dedicated machinery eventually resulted in a notable drop in the average skill level of the workforce, as many skills were made redundant by the machinery (Encyclopaedia Britannica, 1998; Koren, 2010). As a result, skilled workers became less important, and the improvements achieved by Mass Production were mainly achieved from the use of more efficient machinery (Dennis and Shook, 2007, p. p2).

The second effect was that most Mass Production machines were large, only served a single-purpose and were very expensive to purchase (Womack et al., 1990). As Bowden and Higgins (2004, p386) argued, “Fordist production methods were characterised by the use of high cost, specially designed machines… Thus, the end result was high volume production of standardised products”. In comparison to Craft Production, the investment costs of Mass Production had gone up dramatically.

The third effect was that most of these Mass Production machines were expensive to run (Womack et al., 1990), which resulted in complexity on the shop floor (Jones,2001). The Mass Production machines “relied on a seemingly endless supply of natural resources, such as ore, timber, water, grain, cattle, coal, and land” (Clark and Brody, 2009, p465) (Figure 2.5). It required “expensive and complicated forecasting, planning, scheduling and supplier coordination” to keep the machines running (Jones, 2001, p19). For example, Ford used to produce everything for the Model-Ts using a vertically integrated system on its highly centralised shop floor, “this operation extended from the iron ore mines all the way to the finished product” (Murman et al., 2002, p88). Accordingly, as Henry Ford (1926, p82) recalled, “our organization, Ford’s Highland Park Plant, has not enough resources/spaces to make two kinds of motor car under the same roof”.