When Eiji Toyoda and his managers took their 12-week study tour of U.S plants in 1950, they were expecting to be dazzled by their manufacturing progress. Instead they were surprised that the development of mass production techniques hadn’t changed much since the 1930s. In fact, the production system had many inherent flaws. What they saw was lots of equipment making large amounts of products that were stored in inventory, only to be later moved to another department where big equipment processed the product, and so on to the next step. They saw how these discrete process steps were based on large volumes, with interruptions between these steps causing large amounts of material to sit in inventory and wait. They saw the high cost of the equipment and its so-called efficiency in reducing the cost per piece, with workers keeping busy by keeping the equipment busy. They looked at traditional accounting measures that rewarded managers who cranked out lots of parts and kept machines and workers busy, resulting in a lot of overproduction and a very uneven flow, with defects hidden in these large batches that could go undiscovered for weeks. Entire workplaces were disorganized and out of control. With big forklift trucks moving mountains of materials everywhere, the factories often looked more like warehouses. To say the least, they were not impressed. In fact, they saw an opportunity to catch up.
Fortunately for Ohno, his assignment from Eiji Toyoda to “catch up with Ford’s productivity” didn’t mean competing head-on with Ford. He just had to focus on improving Toyota’s manufacturing within the protected Japanese market—a daunting assignment nonetheless. So Ohno did what any good manager would have done in his situation: he benchmarked the competition through further visits to the U.S. He also studied Ford’s article, Today and Tomorrow. After all, one of the major components that Ohno believed Toyota needed to master was continuous flow and the best example of that at the time was Ford’s moving assembly line. Henry Ford had broken the tradition of craft production by devising a new mass production paradigm to fill the needs of the early 20th century. A key enabler of mass production’s success was the development of precision machine tools and interchangeable parts (Womack, Jones, Roos, 1991). Using principles from the scientific management movement pioneered by Frederick Taylor, Ford also relied heavily on time studies, very specialized tasks for workers, and a separation between the planning done by engineers and the work performed by workers.
In his article Ford also preached the importance of creating continuous material flow throughout the manufacturing process, standardizing processes, and eliminating waste. But while he preached it, his company didn’t always practice it. His company turned out millions of black Model T’s and later Model A’s using wasteful batch production methods that built up huge banks of work-in-process inventory throughout the value chain, pushing product onto the next stage of production (Womack, Jones, Roos, 1991). Toyota saw this as an inherent flaw in Ford’s mass production system. Toyota did not have the luxury of creating waste, it lacked warehouse and factory space and money, and it didn’t produce large volumes of just one type of vehicle. But it determined it could use Ford’s original idea of continuous material flow (as illustrated by the assembly line) to develop a system of one-piece flow that flexibly changed according to customer demand and was efficient at the same time. Flexibility required marshaling the ingenuity of the workers to continually improve processes.