Every now and then I see a headline that is really compelling, such as this from today’s Wall Street Journal (Jan 30) “How Lean Manufacturing Can Backfire“. The article, of course, relates to Toyota’s recall of millions of vehicles for accelerator problems and the subsequent shut down of manufacturing of the effected vehicles. Here is its argument in a nutshell:
Born in the factories of Toyota Motor Corp. and adopted by nearly all manufacturers around the world, “lean manufacturing” eliminates waste, creates efficiencies and helps companies continuously shave production costs.
But Toyota’s recent problems highlight how certain elements of this approach—eliminating overlap by using common parts and designs across multiple product lines, and reducing the number of suppliers to procure parts in greater scale—can backfire when quality-control issues arise.
I must admit that I find this story a little depressing. It is not just because it suggests a misunderstanding of lean operations. It is more that apparently someone who is too young to remember the Chevy Citation and its X-body siblings is now old enough to write for a major newspaper. I had driver’s ed on a Citation. This article proves that I am old.
My advancing years aside, I see the flaw in the argument is its assumption that everything Toyota does is rooted in lean operations as opposed to being standard practices driven by the simple economics of developing and producing complicated products. Reusing components across models is simply a reality in auto manufacturing. It did not originate with Toyota. The Citation and its ilk prove this. These cars are from the darkest days of Detroit and were utterly interchangeable despite being labeled as Chevrolets, Buicks, Pontiacs and Oldsmobiles. They had largely the same mechanicals and seemingly the same sheet metal. If anything, Toyota generally trumped the Big 3 in standardizing components that customers generally wouldn’t focus on (gas peddles and air conditioning compressors) as opposed to engines and interior trim (although US producers have learned this lesson).
This focus on re-use or standardization is not special to the auto industry. PC makers have been able to offer wider and wider variety by having components such as disk drives that are built on common platforms so they can be swapped in and out. Appliance makers build refrigerators on common platforms to achieve economies of scale in expensive steps (e.g., designing and building motors) while offering variety in cheaper dimensions (e.g, shelf configurations). Evan software firms put an emphasis on reusing code.
If anything, the remarkable thing about the Toyota recall is that it is in fact remarkable. Given the amount of components shared across models of one car maker plus related parts supplied across multiple car makers it is amazing that such large scale failures are relatively rare. The firms involved clearly recognize the challenges involved and work to manage and contain the inherent risks.