Continuous Improvement: The Lessons of History(or, There is nothing new under the sun)

SCM 352Dr. Ron Lembke

Cotton Gin at Work

Eli Whitney• introduced interchangeable

parts in large musket contract for U.S. Army

• Interchangeable parts the true secret of Ford’s success

• Made possible by advances in measurement and tool steel

Beginning of Standards

• iPhone/Android? PC/Mac?• Before standardized parts, need Screws• 1860s Machine Tool industry: Silicon Valley of its

day• All screws custom made by tool & die shops

according to what they thought best• William Sellers: 1864 “On a Uniform System of

Screw Threads”

Sellers vs. Whitworth

• 3 cutters & 2 lathes vs. 1 cutter & 1 lathe• Simple geometry vs. difficult• Rounded top vs. straight: ease of manufacturing, ease of assembly

Not Just What you Know

• Machine tool makers didn’t want to be commoditized like gun makers• The standard people expect to win usually does.• Navy Board found it superior, asked Singer Sewing

Machine, Baldwin Locomotive which would win (already adopted).• Pennsylvania RR adopted (Sellers on the Board)• British tanks & trucks couldn’t be repaired in

WWII because Britain adopted Whitworth

Frederick W. Taylor• Frederick W. Taylor:

• Father of “Scientific Management”• Find ways to improve work environment and

work processes• Quantify, measure & track everything:Time required to haul wheelbarrow:

B p aL

0 51 0 004827

127. . .distance hauled

Factory Life

“Schmidt”

Taylor’s Factory

Frank and Lillian Gilbreth• Systematically study a work environment and find the

best way to achieve a particular task• With Taylor, pioneered “industrial engineering” -- time

and motion studies• “Cheaper by the Dozen”

Motion Capture

• Lights illuminate key motion joints• For Computer Generation, convert to 3D

Barry Zito

Chronocyclegraph light-1914

Bricklayer

Typesetter

Drill Press

Pencil Holder• Color coded slots• Groove for grabbing pencil

Ergonomic chairs

Andrew Carnegie

• Telegraph operator to RR division superintendent• Adopted latest technology, built first steel

plant laid out to optimize flow• Focused on knowing, lowering unit cost• Raise prices with everyone else in booms,

slash prices in recession

Andrew CarnegieProduction: US England

1868 8,500 111,0001902 9,138,000

1,862,000

Steel Prices: (per ton)1870 $1001890 $12

How? Continuous Process Improvement

The Richest Man in the World• Found out strike organizers, fired before• 1886 “Triumphant Democracy”, Forum magazine-

workers’ right to unionize• 1889 “Gospel of Wealth:” rich need to help the

poor ($25m annual income)• 1892 Homestead strike: 12 hour gunfight,

Pinkerton defeated (12 died), state militia called in, strike breakers hired• 1901 sells out to J.P. Morgan: $480m• Built 2,500 libraries. “The man who dies rich dies

disgraced.”• 1919 dies, having given away 90%

Skibo Castle

Henry Ford

• Continuous Process Improvement• Advances in metal cutting allowed him to cut pre-hardened steel,

produce identical parts• Standardized parts facilitated standardization of jobs, moving assembly

line• Model T: 1908 $850

1920’s: $250

Ford’s Rouge Plant

Vertical Integration• Owned forests, iron mines, rubber plantation, coal mines, ships,

railroad lines• Dock facilities, blast furnaces, foundries, rolling mills, stamping

plants, an engine plant, glass manufacturing, a tire plant, its own power plant, and 90 miles of RR track

• 1927 Model A Production begins• 15,000,000 cars in 15 years• 120,000 employees in WWII

Details to the Max

In his autobiographies “My Life and Work” (1922), and “Today and Tomorrow” (1926), Ford gives great detail on innovations he and his company have made, including:

• Glass making, Artificial leather• Steering wheels out of Fordite• heat treating -- saved $36m in 4 years (1922)• Forging parts, wiremaking• Riveting, bronze bushings, springs

Managing Workers• “It is a reciprocal relation -- the boss is the partner of his

worker, the worker is partner of his boss. Both are indispensable.”

-- MLAW p. 117

Paying for Good Employees• “One frequently hears that wages have to be cut because of

competition, but competition is never really met by lowering wages. The only way to get a low-cost product is to pay a high price for a high grade of human service and to see to it through management that you get that service.” T&T p. 43

Mindless Work

• “Repetitive Labour -- the doing of one thing over and over again and always in the same way -- is a terrifying prospect to a certain kind of mind. It is terrifying to me. I could not possibly do the same thing day in and day out, but to other minds, perhaps I might say to the majority of minds, repetitive operations hold no terrors. In fact, to some types of mind thought is absolutely appalling. To them the ideal job is one where their creative instinct need not be expressed.” MLAW p. 103

Mindless WorkWhen you come right down to it, most jobs are repetitive. A business man has a routine that he follows with great exactness; the work of a bank president is nearly all routine; the work of under officers and clerks in a bank is purely routine. Indeed, for most purposes and most people, it is necessary to establish something in the way of a routine and to make most motions purely repetitive -- otherwise the individual will not get enough done to be able to live off his own exertions. -- MLAW pp 103-4.

Shigeo Shingo and Toyota• Toyota’s quest for Quality• Focused on allowing product to flow through the plant as evenly as

possible.• Kanban and JIT are two important ways to achieve this

Continuous process improvement

1977 1989

The Lessons of History

• Continuously improving your products, your services is the only way you will survive• Ignore your customers, and they’ll go away

• Those who do not learn from the past are doomed to repeat it.