Gemba Keiei Chapter 17: The Goal – Improve Productivity Ten-Fold

Taiichi Ohno recounts when he first learned in 1937 that the American worker was 9 times more productive than the Japanese worker. Taiichi Ohno heard this from a Mitsubishi Electric factory manager who had recently returned from a tour of Germany and America. The 300 person factory in Germany had three times the output of a Japanese factory. The American factory that the factory manager had visited had three times the productivity of the German factory. The American factory was therefore was 9 times more productive than the Japanese.

In those days Japanese used production equipment built in America or Europe. The difference in equipment immediately after World War II may have caused a large gap in productivity, but this was before World War II when the Japanese had heavily invested in foreign technology. One can imagine Taiichi Ohno scratching his head, thinking “There must be another reason.”

The GHQ of the American occupying forces announced that American productivity was 8 times greater than Japanese productivity. Since this number was an average across industries, and American automobile manufacturing is a leading industry they must be more productive, thought Ohno, and concluded that the goal was to improve productivity ten-fold. How can we possibly improve productivity ten-fold? It was this question over many years that drove Taiichi Ohno to develop the Toyota Production System.

At that time (and perhaps even now) no one was approaching productivity improvement with a goal of 100% to 1000%. It was not as if you could go to see Ford and GM and copy what they were doing and catch up right away. Taiichi Ohno says, “We needed to totally change our thinking. That was the spark that led to the Ohno System.”

Back in those days the final assembly factory at Toyota had a conveyor. The old-timers in the assembly section all had been taught by Kiichiro Toyoda that just in time was the best way for parts to assemble. However in reality the parts were delivered when completed, so that engines would be brought to the assembly when they had been built, but there would not be enough steering wheels. As a result there was an “intermediate warehouse” with lots of parts but not much that you could assemble into a finished automobile.

The production signal was not managed so each department would build and deliver on their own schedule. It was not until the 17th or 18th of the month that the final assembly would have enough to begin putting cars together. They did 30 days’ work in 10 days, so they needed 3 times as many people. If heijunka could be used to smooth out the mix and volume of production perhaps one-third of the people could do the same work, thought Taiichi Ohno.

By producing and delivering parts just in time so that parts needed arrived when they were needed it was actually easy to improve productivity by 300%. After that was done, looking more carefully at the process and finding ways to do kaizen, it was not hard to increase the productivity to 500% improvement from the beginning.

Taiichi Ohno explains that the workers in the assembly area felt they were being worked harder, but that this was a misconception. Assembly work is very labor intensive and when one-third of the people achieved the same output they concluded they must be working harder. In fact the assembly line was often stopped as there were no parts to assemble. People tended to keep busy doing other things. People confused “motion” with “work”. This is common even today.

One of the quirks of the Japanese language is that many times subject of the sentence or the verb can be left out. It is up to the reader to fill in the blank or understand from context what is being said. The title of this chapter does not make it clear whether the goal was or the goal is to improve productivity ten-fold. You have to answer that question for yourself.

2 Comments

  1. Barry Johnson

    July 8, 2008 - 7:32 am

    Do you mean “1947” (not “1937”) int he first sentence?

  2. Jon Miller

    July 8, 2008 - 7:45 am

    No, in his book Taiichi Ohno was recalling an experience from 1937 when he learned about the large productivity gap between Japan and the US. There was another similar study done after the end of WWII by the US occupation that showed a gap of 8 times productivity.