Making Things is Not About Making Things

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.

8 Comments

  1. John Santomer

    December 14, 2010 - 9:49 pm

    Dear Jon,
    I would want to think that this is as easy as it can get. We must also remember that factory owners are people themselves and it is difficult to sway the major stakeholders to such purpose. It is not saying though that these people are immoral, lacking values and good judgment. As with most capitalist, a great majority gravitate to timely returns and profit from their investments. They would probably have good intentions but the misaligned purpose could root from the people whom the investors have placed their good intention on. The same people investors have given jobs and work in their factories. People who also have good intentions of maximizing the returns and profits for the stakeholders’ investments. People who intend to do good in their jobs thinking they are doing it for the best interest of the investors/major stakeholders. Where is the wrong in that?

  2. Jon Miller

    December 15, 2010 - 12:03 am

    Hi John
    I understand your point fully. To be blunt though, the wrong in that comes when we define “investors/major stakeholders” too narrowly. Capitalism does not have as a purpose leaving the world a better place for the next generation. Whether that is wrong or not may be a matter of opinion.

  3. Matt Wrye

    December 15, 2010 - 6:21 am

    Jon –
    Great post. Making people has a by-product of making product when it is done right. Again, this gets into worrying about the process and the results will come. This is the opposite of how business traditionally looks at things, which is focus on the results no matter the process.

  4. Karen Wilhelm

    December 15, 2010 - 10:21 am

    Aren’t there mutual funds that buy companies that are more benign than average, and investors who look for companies they can turn around by implanting Toyota-style management? Of course, the answer is, not enough to make a difference.
    Wouldn’t it be interesting if investors were among the people developed by the company?

  5. Jon Miller

    December 15, 2010 - 10:53 am

    Hi Karen
    That would be great if investors were among the people developed by the company. Terrific idea. Many companies with a mission do this in one way or another, sometimes in negative ways and sometimes positive. I guess the key is linking the development back to a greater good.
    Thanks for the article link. It’s very well done but but the first two sentences are worrying, “Make no mistake about it. The lean journey is all about generating shareholder value.” It’s not incorrect, but the article can be taken out of context to mean lean is all about shareholder value, which is where we get into trouble.

  6. John Santomer

    December 15, 2010 - 11:14 pm

    Dear Jon,
    I am neither a major stakeholder or an investor but I remember once a major stakeholder advised me that lean thinking and Kaizen principles are all good-in writing but never really make it to the real world. Lean princiles are as good as it reads in text but is totally different in real life.
    Shareholders, investors, stakeholders and capitalists are all human and as such are also prone to human frailties. I do feel that if we were to prove and disprove such thinking – featured companies who have prospered in their lean initiatives, have sustained and surpassed their initial goals; other than Toyota will be good in your next blogs. This would give us benchmarks to measure up to and prove that lean is actually thriving. Even diamonds have levels of clarity/impurities in their grades.

  7. Yufi Priyo

    December 30, 2010 - 9:55 pm

    Dear Jon
    Agreed, corporate success depends on how the owner of the company to manage, organize people who work for the company. Building a mindset that in accordance with company vision, get in the habit of positive according to the work culture in the company and pay tribute to the work and contribution to the company.
    “Make peope before product”: Matsushita. Delivering the company achieved tremendous success not only successful companies in Japan but around the world with high quality products and is recognized by the international community.