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.
The Operations Room 
Thanks for sharing this. Especially because there are so few FACTS avaiable, opinions are surfacing all over. And with that, we get many flawed ones like the Wall Street Journal.
Parts commonization isn’t a lean practice. As you say, it’s just an economics one. At least from a strategic decision standpoint, when you commonize a gas pedal, it’s something the customer doesn’t really notice (unless, obviously, you have a defect). If you commonize an entire vehicle, that certainly impacts the customer and their perception of value.
There are hundreds of cases of companies from Toyota to Caterpillar annoucning supplier reduction targets. They never reach their target, however, because it’s just not that practical.
[…] can send an ops professor to a long soul search. A Toyota mega recall is one of them. Marty already posted on a Wall Street Journal article, which discussed the relationship between lean operations and the […]
Agree with Jamie – one thing that Toyota may have done is lost sight of the Customer Value Statement – a key component in Lean Thinking. And as such, failed to provide adequate testing to ensure that value was delivered to the customer (although one can argue that testing is a non-value added activity, it is not a pure waste, but a necessary one).
[…] “Just in time” parts delivery from suppliers is a practice often associated with lean, but it’s a minor piece. Lean is really a management philosophy and improvement process. This time, the WSJ is blaming the use of common parts – a cost savings move where the same accelerator and other parts are used across multiple models, since who really cares if a Camry gas pedal looks like that of a Matrix? (A good perspective on this can also be found here from Northwestern’s Kellogg school). […]
I have been resisting writing about the Toyota case because so little is actually know about the defect itself, and cause and effect isn’t clear. But I have been getting enough questions about it. I don’t think this changes anything about Toyota’s success. They still have dramatically fewer recalls than others. And of course no one that knows lean would say they were anything close to perfect.
I did write up some of my thoughts and lessons in observing the story on my blog here: http://jamieflinchbaugh.com/2010/02/the-fall-of-the-mighty-toyota/
[…] equaling lean. This is a false mental model, and they were taken to task by The Operations Room in Did lean ops lead to the Toyota recall? and by Mark Graban on Lean Blog. Even worse might be the media bias mental model that appears to […]