Problems overcome

This presentation looks at the developments of production systems from the start of the 19th Century onwards. It deals with the main features and how with each progression improvements are made or problems are overcome. The first system I address is the Hybrid or ‘late craft system’ this system uses the idea of interchangeable parts, so less skilled assembly workers could be used and the substitution of machinery for labour. The subsequent division of labour was concerned with manufacturers dividing processes into separate tasks each requiring different levels of skill and strength.

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Therefore, workers would only do work suited to their skill and strength rather than tasks which were beneath them. The next phase of development was This was followedTmass production and Fordism. Fordism was an organisation innovation that gave personal mobility at low cost but once in place many more opportunities for technical innovation came about. One of the major innovations was the transition from stationary assembly line to moving ones in 1914, which decreased production time by up to 88% on certain processes.

However Fordism had its problems, one being the extremely high turn over of workers, due to the boring and repetitive nature of the work. To overcome this the ‘5 – dollar day’ was introduced which effectively doubled wages. An inevitable feature of Fordism was the number of defective cars produced but instead of increasing skills they added an inspection and ‘rework’ department at the end of the line, but defective cars still got though. Fordism is characterised by early radical product innovation, resulting in many competing designs, then a series of process innovations and scaling up lead to a dominant design.

Next mergers and bankruptcies led to a few market leaders in the industry. After which incremental innovation prevails. During this dynamic process many things adjusted, initially processes were flexible and inefficient, they become more rigid until towards the end the process has become fixed and very efficient. The equipment used starts off general until specific equipment is used and automation is prevalent. There are many other examples, which follow this trend for example competitive emphasis, materials and the structure of factories.

The last type of production process I focused on was the lean production systems of post Second World War Japan. Taiichi Ohno (pioneer of this process) felt that Fordism was wasteful and carried out many experiments to try and improve it. The main changes he brought about were firstly, to use more responsible, skilled and highly motivated production workers and secondly to allow workers the right and means to stop and remedy a fault as they worked. By the 1970s & 1980s the lean production system out-performed Fordism in many ways none more so than quality.

The innovation of close supply chains was arguably as important as the lean production system. Communication between the ‘first-tier’ supplier was multiple and frequent in Japan but narrow and minimal elsewhere, contracts were obligated rather than containing detailed clauses and there was no inspection of the supplier in contrast to thorough inspection in the West. This made for an increased sense of commitment, which aided Japans firms greatly. Discussion topic arising from the chapter

The chapter talks about interchangeable parts as a key feature of mass production but does not go into details which make up a good interchangeable part, nor does it state which specific part had the most effect. The chapter cited the Womack et al point of view that interchangeable parts and division of labour had a greater effect of increasing productivity than the introduction of the moving assembly line, despite attracting less attention. His main reason for this was that assembly lines proved to be more highly visible and thus acquired more interest.

However, I disagree with this. I feel that the first radical change in production techniques i. e. the introduction of division of labour and interchangeable parts would have been such a large change that it would have acquired far more attention. On the other hand, when Ford introduced the moving assembly line production practices were changing so much people were almost expecting revolutionary changes and would not have given much attention to a new method unless it was especially significant.

Consequently, I feel the moving assembly line was one of, if not the most important transformation in the production process. Fordism was mainly an organisational innovation. This is also true of most of other productivity enhancing innovations. As a result, the technological innovations in the automobile industry were neglected and only covered in brief. Despite this fact I feel that Freeman and Soete dismissed the importance of these types of innovations.

They were important not just as innovations in their own right, but they also affected company strategy. When General Motors became dominant, a major innovation may have bankrupted Ford and Chrysler the second and third largest firms at the time. This probably would have had adverse consequences on General Motors because at the time the US government were intent on preventing monopolies and would have broken the company up into separate parts. An inevitable feature of Fordism were the huge amount of defective cars, which were being produced.

Ford’s answer to this was not to increase the skills of the labour but add an inspect and rework department at the end of the assembly line. This, however, did not work and defective cars still got though. A better approach would have been to rectify the problem at source, rather than adding what, in my opinion, was a rather add-hoc way of fixing a fundamental problem. It appears he was more concerned with a quick and cheap fix rather than searching for a long-term solution.

When Toyota and more specifically Taiichi Ohno tackled the problem at source it proved to be a more effective approach. Increasing the skill of the workers and giving them the opportunity to fix faults as they went, resulted in far better quality control and consequently cars with fewer faults. Before American and Europe can follow in the footsteps of Japan and take advantage of lean production, there needs to be some institutional changes and the culture of these countries needs to adjust. Only then can these innovations be transferred and even improved upon.