What is the purpose of a factory? The obvious answer is that a factory is there for the purpose of making things. We can further inquire into the purpose of making things and come up with various answers that basically boil down to “serving the needs of customers”. We make things because people buy those things and hopefully at least some of the time, also need them. But some people do not see the purpose of a factory as making things at all. That factories make things is just a byproduct of their real purpose.
To some the purpose of factories is to absorb costs, to house inventories or provide an excuse to import the majority of the product content from faraway places, to be attached, boxed and moved to another storage location. To others factories are three dimensional playgrounds on which to map various transactions and commands of ERP systems. And to those who are even less interested in such details, the purpose of factories is to make money. Within the planned economies of the former Soviet Union and communist eastern block states, factories existed more to create employment, feed the propaganda machine or to bolster political careers of those who set and met production targets not linked to market demand.
And somewhere in the midst of this continuum is Toyota.
From Toyota’s website on their CSR policy:
Toyota believes that “making things is about developing people”. Thus, Toyota undertakes human resource development based on on-the-job training. Toyota also strives to create workplaces with abundant vitality while establishing and improving educational systems that focus on sharing and conveying appropriate values in accordance with the Toyota Way.
When people believe that making things is about making money it becomes obvious fairly quickly that there are better ways to make money than to handle actual goods. In fact, the trend among global manufacturing companies has been to move steadily away from actually making anything and towards so-called core competencies of designing, marketing and managing supply chains. Rather than benefiting the lower tier suppliers who can take on the manufacturing for these global brands, the danger is that manufacturers of all sizes forget the purposes of their factories.
History will be the judge, but for a time even Toyota may have placed market share and vehicle production volume ahead of its founder’s true purpose for making things.
When the purpose of a factory is developing people, entirely different questions can be asked. Which people are we developing? How many? Where? And for how long? What is the net economic and social benefit of developing these people, and what is the cost? With the exception of factories operated with the purpose of providing employment for people who have disabilities that limit their employment options, such questions are almost never asked. This is peculiar, as there is not an enterprise, for profit or non, public or private, that does not share one common denominator: people.
When the focus is on making money we lose sight of cause and effect, make short-sighted decisions, cut corners, cut training budgets, relocate factories away from the people and communities we were supposed to be developing. When the purpose of a factory is on developing people, and both making things and making money are a means, much can be improved in both how we make things and in how we develop people.
Many organizations say they will achieve their goals for profit, growth and so forth “through people” but too often this sounds tacked on at the end as a nod to people engagement. As radical as it may seem, the organization that truly puts people first, “through making things and money” may be the capitalist enterprise of the future.
Making things is not about making things, making things is about whatever people want to it to be about. We must use our morals, values as a society and good judgment to guide us in defining our purpose. Making things should be about making people happy.