Standing on the shoulder of the giants

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It is easy to trace the popularity of Lean production to Toyota’s success. Toyota’s success is undeniable. Toyota now manufactures as many cars as the traditional leader – GM – and does it while making profits. Over the last five years, Toyota’s average net profit over sales was 70% higher than the industry average, while GM is losing money.1 The success of Toyota is fully attributed to the Toyota Production System (TPS).2 At least this is the conviction of Toyota’s management – the stated number one challenge of Toyota is to pass TPS on as the company’s DNA to the next generation.

Given that Toyota is the flagship of Japan’s industry, one should expect that Lean would be widely implemented in Japan. Surprisingly, this is not the case. It is commonly known in Japan that less than 20% of the manufacturers have implemented Lean. How come?

It is not because they did not try to implement it. Many companies in Japan put serious efforts into trying to implement Lean but failed. One such company is Hitachi Tool Engineering. Their inability to implement Lean cannot be explained by a lack of serious efforts. This company repeatedly tried to implement Lean but the deterioration in production performance forced them to go back to the more traditional ways of managing production.

Likewise, the fact that most of Japanese industry did not implement Lean cannot be attributed to a lack of sufficient knowledge. Toyota was more than generous in sharing their knowledge. This company put all the TPS knowledge in the public domain and even went as far as inviting their direct competitors to visit their plants. Hitachi, like so many other companies, was using the available knowledge and was not shy about hiring the help of the best experts available.

There is an explanation to these companies’ failure to implement Lean; an explanation that is apparent to any objective observer of a company like Hitachi Tool Engineering. The failure is due to the fundamental difference in the production environments. When Taiichi Ohno developed TPS, he didn’t do it in the abstract; he developed it for his company. It is no wonder that the powerful application that Ohno developed might not work in fundamentally different production environments.

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