The lean movement has two main phases, its Japanese origins and later its global propagation. The latter phase divides again into two recognisable “eras”: just in time and lean. In Part 1 of this two-part article, Richard J. Schonberger, one of the ‘founding fathers’ of lean, mostly concentrates on the JIT period. Although this was enormously busy and fruitful with plentiful documentation, much of it appears to be scarcely known, forgotten, or muddled.
Getting history right is always important for the sake of learning from it. That seems especially true of management initiatives, where faddism reigns and yesterday’s initiative is quickly set aside, along with useful lessons. Lean’s historical lessons, on things gone right and wrong on the lean journey, deserve a better fate, which is the reason for this article.
There are good indicators of things gone wrong. Broad-brush evidence comes from the “leanness studies”, which show, for some 1,600 global companies, up and down cycles in long-term inventory turnover – a dominant lean metric. A down (worsening) trend in recent years shows up clearly, indicating that industry is generally fattening up rather than getting lean. More arresting than the inventory findings are numerous specific cases: manufacturers that gained global stature in lean pursuits in one decade lost it somewhere a decade or more later, and had to restart: learning and implementing the lean agenda all over again. In Part 2, I’ll provide examples of those cases as well as more on lean’s up-and-down performance cycles.
Our discussion, largely on JIT developments from 1977 into the early 1990s, intermixes milestone events, organisations, authors, and key educational and training materials. For the lean era, fresher in people’s minds, we visit only a few highlights, mainly to trace the transition from JIT and to note persistent issues and challenges needing further discussion, which commences in Part 2.
Limitations: This non-comprehensive treatment of JIT and lean limits its focus to manufacturing – though most of the content applies to services as well. We also exclude JIT/lean’s close partner, quality – except to point out here that JIT was, at first, often matched up with total quality control, as JIT/TQC; and that lean marched alongside total quality management (TQM), evolving later into six sigma, as in lean six sigma. Lastly, Googling to find source materials from way back in the 1980s is mostly futile. So I rely heavily on my own book library and bulging file folders of articles and case-study reports. They are fairly complete, as I’ve been a member of most of the pertinent professional organisations (acronyms: IIE, APICS, AME, SME, ASQ, POM, etc.) and subscriber to most of the relevant periodicals over the three decades.
JUST-IN-TIME PRODUCTION: WHAT WE FORGOT TO REMEMBER
Earliest years. The advent of lean is largely attributed to Toyota and its suppliers, circa 1950 to 1970. Called just-in-time production or Toyota Production System (TPS), it was largely unknown in the West until 1977when it was in described in a US trade magazine, and also by Toyota managers as a chapter in an English-language book.
1979-1986. In an early effort to get JIT rolling, a grant in 1979 by the American Production and Inventory Control Society (APICS) founded the Repetitive Manufacturing Group (RMG), which became a key player in JIT’s deployment. With members from large manufacturers, the RMG’s purpose was to learn why US producers were getting clobbered by Japanese makers. In 1980 the RMG cosponsored a conference in Detroit at Ford World Headquarters. Principle speaker Fujio Cho (later, president of Toyota Motor Corp.) left the audience stirred up about JIT at Toyota and its prospects in the West.
In 1981 the RMG met in Lincoln, Nebraska, the U.S. home of Kawasaki motorcycles. It was a “proof-of-concept” meeting to study Kawasaki’s welldeveloped JIT production system, a clone of Toyota’s. After this eye-opening experience, proving “it works over here”, many returned to their companies (General Electric, Ford, Black & Decker, others) to head their own JIT initiatives, several later becoming top-echelon manufacturing consultants. RMG leader Professor Robert Hall (Indiana University) had organised the event based on information from Professor Richard Schonberger (University of Nebraska), who had learned of the plant’s advanced JIT from plant tours hosted by a former student, then a professional at Kawasaki.
In 1982 the RMG staged workshops at Omark Industries and Hewlett-Packard- Greeley (Colorado). At Omark (Portland, Oregon), CEO Jack Warne – who had inhaled JIT in visits to Japan – led the first company-wide conversion (all its 17 plants in the U.S., Canada, and Puerto Rico) to what it called Zero Inventory Production System. Whereas Kawasaki was strong on JIT as applied to assembly, ZIPS at Omark (products from saw chains to ammunition to log-handling equipment) featured applications in hardmetal machining, including quick machine setups and relayouts into machining cells that reduced thousands of feet of material travel to a few feet.
The H-P workshop showed off cellular assembly, kanban squares, highinvolvement cell teams, and so forth. Earlier, six H-P managers had been videotaped building a mock product from Styrofoam and masking tape, first in large batches, then in pull/one-piece flow in a tight cellular configuration, dramatically demonstrating JIT’s superiority over batch manufacturing. The video, Stockless Production, was sold by H-P for JIT training at hundreds of companies and universities. Later, other companies devised their own hands-on batch-vs.-JIT simulations (for example with Legos), becoming dominant JIT/lean training tools from the 1980s to the present.
As for people, in 1982 Arthur Andersen consultants David Nellemann, Leighton Smith, and Masakatsu Mori made JIT presentations at numerous public conferences, some of the programmes of which also included Hall or Schonberger, who were criss-crossing the US doing the same.
By 1983, a few academics had hitched themselves to the JIT bandwagon: Hall and Schonberger; Professor John Bicheno, University of Witwatersrand (“Wits”), South Africa; and Professor Horst Wildemann, Universität Passau, Germany. That year, for example, Schonberger delivered JIT seminars and short talks at 64 events, half on-site at manufacturers, in the US and Canada, plus Singapore (seminar hosted by Singapore Productivity Board), and Germany (at a Wildemann-organised conclave of a wide swath of German industry). Hall was similarly engaged, including presentations at dozens of APICS chapters. Bicheno, head of Industrial Engineering, established with colleagues the Wits Just in Time Club, which held regular meetings, arranged plant visits, and made a video on JIT in South Africa.
Another JIT entity formed by APICS to study the roots of Japanese competitiveness was, in 1983, the Automotive Industry Action Group (AIAG). That year AIAG co-sponsored “Two Major ‘Just-in-Time’ Conferences” in Detroit. A four-hour video of conference presentations, sold to 1,100 buyers, provided enough funds for AIAG to separate from APICS (eventually, backed by corporate memberships, the AIAG became, and still is, a standard-setting body of the auto industry).
In 1984, JIT was further internationalised, judging by my own ‘road shows’, which took me to Canada (many times), UK, Ireland, Netherlands, France, Germany, Malaysia, and the Philippines.
The following year the RMG split from APICS, primarily because APICS revolved around production and inventory control, whereas JIT cut a wider swath. RMG re-launched itself as the Association for Manufacturing Excellence Through Just-in-Time; “Through Just-in-Time” was quickly dropped, making it the AME.
Meanwhile, many JIT articles and books, in English, were being churned out, at first on concepts, then many case-study reports on applications. Prominent early articles were by Hall, Schonberger, Ken Wantuck, Taiichi Ohno, and Yasuhiro Monden (all in 1981); Nellemann and Smith of Arthur Anderson (1982); Schonberger and co-authors, on JIT purchasing (1983, 1984). Books were by Ohno (1981), Schonberger, and Shigeo Shingo (1982), and Hall (1983).
Other resources include: RMG’s Just-in-Time Technical Development Newsletter, 1983-1984, a source for case-studies on JIT implementations. In 1985, when RMG became AME, the Newsletter became AME’s Target magazine, still today churning out JIT/ lean-implementation case studies. Also in 1984 the IIE released Just in Time, an 8-cassette audio tape package taken from a Schonberger seminar. In 1985 Proconseil (a French consultancy) had put its kanban simulation game into use for company training; translated into English, it was used extensively in US seminars beginning in 1986.
In the second half of the 1980s, JIT was busy spreading its wings, but then showing signs of fatigue. Evidence of this shows up in long-term multi-company inventoryturnover trends – improving dramatically through most of the 1980s, then tapering off and worsening in the late 1980s and into the 1990s. A similar ‘lean fatigue’ pattern showed itself in later years (more on this in Part 2).
SIGNS OF JIT’S MATURATION INCLUDE:
- On 8-9 April 1986, IFS Conferences Ltd. hosted, in London, the First International Conference on Just in Time Manufacturing.
- The AME board ruled in 1986 that no consultants could serve on its board. This unusual decision, requiring some board members to resign, may have been aimed at elevating and preserving AME’s credibility and objectivity – and that of its Target magazine.
- In 1988 the Shingo Prize for Excellence in Manufacturing was established at Utah State University; its annual awards to factories were/are based on JIT/lean criteria and the works of JIT pioneer Shigeo Shingo.
- New books deepened and widened topical coverage in JIT: David Lu, 1985; Schonberger, Monden, 1986; Hall, Suzaki, Schonberger, Ohno, John Costanza, Chris Voss (U.K.), 1987; Edward Hay, Richard Lubben, 1988; Wantuck, 1989; and Harmon and Peterson, 1990.
Other new books were focused on JIT-enhancing changes in primary business functions. The table below includes five examples, with contrasting conventional (batch) treatments and revised practices induced by JIT. It could be argued that each practice in the conventional column was detrimental even in the absence of JIT. The revised treatments under JIT were mutually beneficial.
Books instrumental in bringing about these kinds of changes were, prominently: G. Boothroyd and P. Dewhurst, 1987, on design for manufacture and assembly (DFMA), which simplifies and quickens JIT implementation; and T. Johnson and R. Kaplan, 1988, on JIT-enforced changes in management accounting.
TRANSITION TO LEAN
The transition away from just in time began in 1990 when the term ‘lean production’ was introduced in The Machine That Changed the World, which reported findings from a $5 million MIT-based comparative study of the world’s automotive assembly plants. The book provided a needed stimulus to the fading JIT movement. Although it introduced no new or different concepts and methodologies, the research basis was extensive, and directed toward the world’s most widely-watched industry. Perhaps because the book was crammed with its research data and findings, it found no room for referencing the JIT books of the 1980s. In view of the hundreds of thousands of sales of The Machine That Changed the World, the absence of mention of the JIT era made it go away all the quicker.
Moreover, just in time was shopworn. In the 1980s most JIT references either added the word “production” or it was simply understood to mean just-in-time production. Gradually and publically, though, “inventory” replaced “production”, and today business media nearly always call it just-in-time inventory – commonly meaning not factory inventory but rather that from suppliers. Hearing that all the time, most lean practitioners have come to regard JIT as just the inventory or supply aspect of lean. It’s no wonder that lean’s JIT era has been so forgotten.
That forgetting, however, generally does not hold among academics in operations management, whose research keeps them better in touch with terms and meanings. Also, my impression is that JIT production survives in much of East Asia, including Japan, partly because different languages tend to be barriers to the terminological flipping that goes on in English.
My own early reaction to “lean” was favorable; it was similar to the word “frugal” in my 1987 Harvard Business Review article, Frugal Manufacturing. Now, lean, too, seems shop-worn. As for replacement terms, whatever may emerge surely should have the word “time” in it, which ironically would bring us full circle. The following four books are in that spirit:
- George Stalk, Jr., and Thomas M. Hout, Competing Against Time: How Time-Based Competitive is Reshaping Global Markets, 1990 (sequel in book form to Stalk’s widely-cited article Time – The Next Source of Competitive Advantage, Harvard Business Review, 1988).
- Philip R. Thomas, Getting Competitive: Middle Managers and the Cycle Time Ethic, 1991.
- Rajan Suri, Quick Response Manufacturing: A Companywide Approach to Reducing Lead Times, 1998.
- Rajan Suri, It’s About Time: The Competitive Advantage of Quick Response Manufacturing, 2010.
Of these, the first and the last are most notable. Dr. Suri “is founding director of the Center for Quick Response Manufacturing, a consortium of 300 companies that have worked with the university [of Wisconsin on] QRM strategies”. So said Industry Week in putting Suri into its 2nd annual (2010) Manufacturing Hall of Fame. However the same or different QRM may be from JIT/lean, Suri has created a stir with it.
But in one industry “quick response” is old hat. By 1990, in apparel and textiles, QR had become a major movement, with an annual conference and periodical – backed up by a large consortium. Still today, the most notable example of end-to-end lean is probably apparel, with Inditex (Zara) of Spain and H&M of Sweden being standout achievers.
Stalk’s works offer a pathway to uplift JIT/ lean from the mode of merely operational to grandly strategic – because JIT/lean’s forte, reducing waiting time and providing quicker response along the value chain, is customer-rewarding and competitively advantageous. That was the gist of Stalk’s article, reinforced in his book, with casestudy examples at Honda, Toyota, Harley- Davidson, Milliken, Federal Express, and Wal-Mart.
In their early years, JIT and lean may have been treated by some CEOs as strategic components of their business plans. Then, inexorably, executives delegate it down the hierarchy. In lean’s case, erosion of high-level support is probably quicker that it was for JIT, because of an extra burden lean has been carrying: it came to be defined and promoted primarily in terms of waste reduction. While a good idea, and easily taught to front-line operatives to obtain their involvement, waste reduction has a decidedly low-level ring to it. In the JIT era eliminating/ reducing the “7 wastes” was treated as one of the good methodologies, along with the 5 whys, multi-skilling, supplier reduction, quick setup, and so on – and not JIT’s defining characteristic.
Regardless of all that, a critical weakness and tragic shortcoming of the JIT/lean movement is the failure to recognise and capitalise on what George Stalk had laid out for us: strategic rationale for doing it.
There’s more to this story. To be continued in Part 2.