1. What is Lean Enterprise?
• The vital concept of friction.
• Lean enterprise is a set of synergistic and mutually supporting activities
2. The Birth of JIT and Lean Manufacturing
• Henry Ford, or at least his books, taught the Japanese (including Taiichi Ohno of Toyota) how to make cars! Ford, in fact, developed everything that we know as "lean enterprise" today.
3. Lean Cultural Transformation
4. Lean Manufacturing Techniques
5. The Theory of Constraints
6. Single Unit Processing: One-Piece Flow
7. Synchrnonous Flow Manufacturing
• The hands-on experience of Fairchild Semiconductor's plant in Mountaintop, PA
8. Supply Chain Management
• Supplier development
• Freight management systems (FMS) and third-party logistics (3PL) systems
9. Maximizing Profit in a Constrained Process
• This chapter is the first (that I know of) reference that applies linear programming, simplex method (LP simplex) to Eliyahu Goldratt's theory of constraints. LP simplex optimizes profit subject to constraints such as factory capacity, market constraints, and contractual constraints.
10. Program and Project Management
• Fairchild's Mountaintop plant also had hands-on experience with Goldratt's critical chain.
• The chapter also covers the critical path method (CPM) and program evaluation and review technique (PERT). CPM is related to the theory of constraints.
• Present-value analysis and time-value of money

Some day an intelligent nation will awake to the fact that by scientifically studying the motions in its trades it will obtain the industrial supremacy of the world. We hope that that nation will be the United States. …Certain it is, that if we do not some other people will, and our boasted progress and supremacy will then be but a memory.

—Robert Thurston Kent, editor of Industrial Engineering, introduction to Frank B. Gilbreth's Motion Study (1911)

American manufacturers followed this advice, as Japanese ones did later. Scientific management, a system that evolved into what we now call lean manufacturing, was directly responsible for the United States' ascendancy over the British Empire— an empire whose own foundations rested in manufacturing prowess— early in the 20th century. During the 1910s the Ford Motor Company and the host of industries that grew to support it made the United States into the wealthiest and most powerful nation on earth. Lean and just-in-time (JIT) manufacturing enabled Henry Ford to write (1930, 11), "Our problem has always been to keep profits down and not up."  Japan adopted lean manufacturing and JIT during the 1950s and grew into the second largest economy on earth. The label "Made in Japan," once a proverbial expression for cheap price and poor quality, now commands premium prices and suggests quality and reliability.
This book is about achieving similar results today through lean manufacturing and lean enterprise. Lean manufacturing is a system of synergistic and mutually supporting techniques and activities for running a manufacturing or even a service operation. The techniques and activities differ according to the application at hand but they have the same underlying principle: the elimination of all non-value-adding activities and waste from the business. Lean enterprise extends this concept through the entire value stream or supply chain. The leanest factory cannot achieve its full potential if it has to work with non-lean suppliers and subcontractors.
Just-in-time (JIT) is an important element of the lean toolkit, and there are different ways to implement it. Eliyahu Goldratt's theory of constraints (TOC) and synchronous flow manufacturing (SFM) improve on the original Ford system and traditional kanban systems. The TOC and SFM chapters in this book apply the extensive experience of Fairchild Semiconductor's Mountaintop, Pennsylvania plant.
This book also proves that lean and JIT are American inventions, and the next section provides a brief overview. This is not merely (or even primarily) an interesting historical discussion, it is an extra tool for change management and organizational transformation in American workplaces. Change agents in all countries can, meanwhile, use the unquestioned success of lean manufacturing in the United States and then in Japan as a selling point.

Henry Ford taught Japan how to make cars
The Japanese, who imported lean manufacturing from the United States during the early 20th century, did not capture a large part of our automobile market by discovering how to make better and cheaper cars. They captured it because Henry Ford (or his books) showed them how to make better and cheaper cars, and then we forgot how ourselves. Schonberger (1982, 12) shows, in fact, that Japan even adopted Ford's "Any color you want as long as it's black" approach to gain market share:

They [Japanese firms] got to be giants not by catering to consumer whims but by producing a few models very well, often in market segments that were being ignored by other companies. Low-cost, high-quality production leads to growth in market share (Henry Ford's credo).

The Ford Motor Company introduced just-in-time manufacturing during the first part of the 20th century, and Henry Ford described explicitly the merits of continuous flow and inventory reduction. "While the JIT concept (if not the application) is natural in the flow industries, it took Henry Ford and his lieutenants to get JIT worked out in discrete goods manufacturing" (Schonberger, 1986, 7). Toyota industrialist Taiichi Ohno  credited Ford (and the American supermarket) with the idea.  In fact,

I [Productivity Inc.'s president, Norman Bodek] was first introduced to the concepts of just-in-time (JIT) and the Toyota production system in 1980. Subsequently I had the opportunity to witness its actual application at Toyota on one of our numerous Japanese study missions. There I met Mr. Taiichi Ohno, the system's creator. When bombarded with questions from our group on what inspired his thinking, he just laughed and said he learned it all from Henry Ford's book (Ford, 1926, vii).

All the basic principles of lean manufacturing, as described in Womack's and Jones' (1996) Lean Thinking, appear in Ford's My Life and Work (1922), Today and Tomorrow (1926), and Moving Forward (1930). These books also describe all the quality and productivity improvement techniques that Japan made famous, including kaizen (continuous improvement), poka-yoke (error-proofing), muda (waste) and muri (strain) reduction, and even elements of 5S-CANDO (Levinson, 2002).

Ford's value today
Earlier scientific management practitioners introduced some lean manufacturing techniques but Henry Ford was the first industrialist to weave them into a comprehensive, synergistic, and mutually supporting system. The complete story (Levinson, 2002) has been assembled from the three books by Ford and Samuel Crowther, and many other references. This book's principal focus is lean enterprise plus Dr. Eliyahu Goldratt's theory of constraints (TOC) and the related synchronous flow manufacturing (SFM) production control system, and it presents only a brief overview of the Ford story. It does, however, use many excerpts and examples from Ford because:

• They are often the clearest and sharpest examples and explanations available. Ford, who began his career as a mechanic, lacked an extensive formal education. He was a hands-on person and he wrote from (and to) the very practical perspective of the shop floor— what Masaaki Imai calls gemba, the "real place." He explained both the lean techniques and the principles behind them in concise, down-to-earth, and easily-understandable terms.
• The first chapter will show, for example, that My Life and Work summarizes all the basic principles of just-in-time manufacturing, plus its transportation considerations, in one paragraph.
• The transition to lean enterprise is more than the implementation of physical techniques, it requires cultural transformation and organizational buy-in. Change agents may face questions like, "What will lean manufacturing do for us?" Success sells ideas as well as products, and Ford's success was both unprecedented and unquestionable.
• Ford was the world's first self-made billionaire (in an era when a billion dollars was an inconceivable fortune) and his enterprises transformed the entire world. We are very fortunate that he left posterity some books that described how he did it.
• Microsoft CEO Bill Gates is the only other entrepreneur in history to do something of comparable magnitude in terms of both personal success and historical significance. He did so by making computers everyday tools for the middle class, which is what Ford did with cars.

In summary, the unquestionable results of lean manufacturing are a selling point in any country. Lean manufacturing's "Made in the U.S.A." label is an additional change management asset in the United States. History thus becomes a valuable change management tool.

Book Overview
The first five chapters focus on lean manufacturing. Henry Ford offers an outstanding description of lean enterprise in Chapter 1 and of JIT in Chapter 2. Chapter 4 covers specific techniques and programs for putting it to work. Remember that most of these techniques are synergistic and mutually supporting, not stand-alone actions that can deliver results by themselves.

1. Chapter 1 provides a working definition of lean enterprise and stresses the importance of synergy between lean techniques and activities. It then provides another valuable change management tool, a discussion of the importance of manufacturing to national security and prosperity.
2. Chapter 2 covers the invention of JIT and lean manufacturing. Henry Ford defined the benefits of inventory reduction explicitly. He applied it not only in the factory but also in his supply chain.
3. Chapter 3 covers the requirements for change management, the transformation of the organizational culture. This requires management commitment, job security, and abolition of restrictive job classifications. Lean thinking applies to the entire organization. It is not a euphemism for downsizing, it means reassigning people and resources from useless work to value-adding work. Layoffs lead to soldiering,  or efforts by workers to limit production and prevent further improvements that will make their jobs unnecessary.
4. Chapter 4 covers some specific lean manufacturing methods for making jobs more efficient. The chapter provides more detail about the vital concept of friction, which the Japanese call muda (waste). Waste can conceal itself even in value-adding activities. A goal of lean manufacturing is to discover and remove this waste. Specific examples are given.

The next three chapters cover Eliyahu Goldratt's theory of constraints (TOC), its economic aspects, and its application in synchronous flow manufacturing (SFM). TOC shows why improvement efforts must focus on the constraint operation. Productivity gains elsewhere are mostly illusory, they do not really increase the factory's capacity. Batch-and-queue operations are undesirable even if they do not affect capacity because they increase job lead times and complicate statistical process control (SPC).

1. Chapter 5 treats the Theory of Constraints (TOC) and its economic aspects. TOC says that no business system can deliver a product or service more rapidly than its slowest step, the constraint. This chapter adds the managerial economic aspects of TOC, including the opportunity costs of lost production at the constraint.   It shows why productivity improvement methods like total productive maintenance (TPM) and single-minute exchange of die (SMED) usually yield the most benefit at the constraint.
2. Chapter 6 discusses the merits of single-unit processing. Batch processing is undesirable for several reasons. It complicates production scheduling (see Goldratt and Cox, 1992). Even one batch-and-queue operation increases production lead times in an otherwise smoothly-flowing process. Batch production can degrade quality by introducing an extra layer of variation and it complicates statistical process control (SPC). Batch processing can even preclude reliable estimation of a process' capability indices,  which in turn rules out claims of a Six Sigma process. Small-lot and single-unit processing give quality and productivity problems fewer places to hide.
3. Chapter 7 treats synchronous flow manufacturing (SFM). It defines the drum-buffer-rope (DBR) production system, which is the mainstay of the production control system at Fairchild Semiconductor's plant in Mountaintop, PA. Henry Ford's books leave an open question, especially for readers of Goldratt and Cox's The Goal. Ford's assembly line was essentially a balanced production line, as no operation had excess capacity. It was, in fact, designed to run like a clock, and at close to 100 percent utilization. Why didn't huge piles of inventory accumulate? The answer may lie in the beneficial role of task subdivision in reducing variation in processing times. This mitigates against the inventory generation that the matchsticks-and-dice exercise in The Goal illustrates, and this has valuable implications for today's practitioners.

The next chapter extends lean principles and SFM to the entire chain of suppliers and subcontractors. It covers the vital principles of supply chain management and supplier development.

1. Chapter 8 covers supply chain management, which treats organizations in the supply chain as trading partners whose success depends on that of the entire supply chain. This lean manufacturing concept follows the chapters on TOC and SFM because it includes extension of SFM to the entire supply chain. The constraint, wherever it is, sets the pace for all the trading partners. Relatively short transportation distances facilitate just-in-time delivery in Japan and most of Europe. Innovative transportation management can, however, help achieve JIT deliveries of small lots even across longer distances in the United States and Russia.

The next two chapters cover operations research techniques that support TOC/SFM and project planning

1. Chapter 9 discusses production planning in a constrained factory environment. Linear programming (LP) is a very valuable supporting tool for TOC because it identifies the product mixture that delivers the highest profit subject to limited tool capacity and market demand. It can also account for customer requirements, or orders that must be filled even if they do not yield the most profit. It also focuses capacity improvement and marketing efforts where they will do the most good. It accounts for limits on factory capacity (theory of constraints) plus external constraints and obligations. It allows easy modeling of "what-if" scenarios, such as the effect of elevating a constraint or making a process step unnecessary.
2. Chapter 10 applies the theory of constraints to program and project management. Fairchild's Mountaintop site used TOC techniques to complete a semiconductor factory in record time: 13 months between start of construction and production. The construction of the plant's 8-inch (200 mm) wafer plant is a case study that exemplifies Goldratt's critical chain concept. Project planning techniques like PERT and CPM seek to identify the constraint, or longest path, in a project. Crashing an activity on the critical path, or paying more money to accelerate it, is similar to elevating the constraint in TOC/SFM.

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