"The Machine That Changed the World"

2024 Reading List: Book 1 of 50 complete. 49 to go.

“The Machine That Changed the World” by Daniel Roos, Daniel T. Jones, and James P. Womack

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I categorized this book as a study on “Value Creation” — one of The Five Functions of Business.

Let's talk about what that means before diving in.

"Value Creation" is one of the five functions of business—and I'd go as far as saying it is the most essential function. Without it, none of the other functions are justified.

The value that is created by businesses is the solutions for their customers' problems. Said differently, the value that a business creates is precisely what the customer is paying for.

And now the book...

Of my 113 highlights, here are my top 9 highlights and takeaways.

“As Taiichi Ohno noted, “Without standards there can be no kaizen.” The work process itself, along with the management process, must be absolutely standardized by managers, and by manufacturing and industrial engineers as well, before a work team can have any hope of improving it. Standardization in this context means creating a precise and commonly understood way to conduct every essential step in every process.”

Kaizen, meaning continuous improvement. This highlight, about Standardization, is what I noted as the infrastructural cornerstone to continuous improvement. “A precise and commonly understood way to conduct every essential step in every process.”

“…for the lean-production system to succeed, it needs dedicated generalists willing to learn many skills and apply them in a team setting.”

The question of “what is a generalist?” is relative. For example… compared to what? I suspect being a “master generalist” is of extreme value for the operationalized organization. Meanwhile, for the solopreneur who desires to remain an artist of sorts, I might recommend the pursuit of being a “master specialist.”

“We (Toyota) believe that our production system, with its many nuances, can be learned by anyone… but it takes ten years of practice under expert guidance.”

Ten years. As I read this, I had this overwhelming feeling that men and women of my generation (millennials), myself included, still need to develop a lens for this type of patience as it relates to our professional careers. Better yet, under “expert guidance.” This obviously speaks volumes about finding a model to exemplify and spending the 10,000 hours of honing simply in an effort to produce a better quality product at a competitive price, with better-than-market profits. Consistent alignment.

“It is impossible to establish lean production on a global basis when you have not mastered it at home.”

I think this “first principle” can be applied liberally. Said differently, it is impossible to establish lean production on a new product when you have not mastered it with your “bread and butter.”

“Every employee begins by working on the production line for some period of time. For example, while visiting the Honda plant in Marysville, Ohio, recently, we asked to meet with the external affairs director, the person at Honda who handles relations with governments and the general public. He was unavailable, we were told: He had just joined the company and was busy assembling cars. The best lean producers believe that the point of production is where value is truly added, not through indirect managerial activities, and that all employees need to understand this fact as soon as they enter the company.”

Value creation is what the customer pays for. That’s it. Resource management is important, but it’s not why the business exists. Keeping everyone’s eye on the actual prize is necessary. Here’s another highlight I had on this topic: “University-trained mechanical, electrical, and materials engineers start their careers in an interesting way at many of the Japanese lean producers. They assemble cars.”

“Lean producers do occasionally fire suppliers, but not capriciously. Suppliers are never kept in the dark about their performance. Far from it. In fact, all the Japanese manufacturers maintain relatively simple supplier grading systems. The suppliers receive scores based primarily on the number of defective parts found on the assembly line, the percentage of on-time deliveries in the proper quantity and sequence, and performance in reducing costs. Suppliers regularly compare their scores with those of their competitors, discuss the findings, and highlight problem areas for attention, often with the help of engineers loaned from the assembler. The scoring system is not simply a statistical exercise. It also assesses the supplier’s attitude and willingness to improve. Only if there is no sign of improvement will the supplier, in the end, be fired. As one assembler purchasing agent remarked in an interview: ‘We will stick with any supplier as long as we think they are making an earnest effort to improve. It’s only when we think they have given up that we bring the relationship to an end.’”

Great customers fire good suppliers when there is no sign of improvement. Great customers won’t, and shouldn’t, lower their standards.

“The Japanese use fewer people partly because efficient organization requires fewer bodies, but also because there is so little turnover in the Japanese teams.”

A flywheel effect. Lean production requires fewer people. Fewer people can be invested in and focused on. Fewer people need to be replaced. The invested-in-fewer-people can continue to produce lean production which requires fewer people… and so on.

“There are four basic differences in design methods employed by mass and lean producers. These are differences in leadership, teamwork, communication, and simultaneous development. Taken together, lean techniques in these four areas make it possible to do a better job faster with less effort."

These four basic differences are the types of work that “resource management” (executive, management, etc.) roles should be focused on in their organization.

“In a lean plant, such as Takaoka, all information—daily production targets, cars produced so far that day, equipment breakdowns, personnel shortages, overtime requirements, and so forth—are displayed on andon boards (lighted electronic displays) that are visible from every work station. Every time anything goes wrong anywhere in the plant, any employee who knows how to help runs to lend a hand.”

Make work visible. If it’s not visible, it’s not clear. Clarity creates actions. Confusion and ignorance create stagnancy.

My review?

Here's my scale:

1. Strong, would not recommend
2. Inclined not to recommend
3. Inclined to recommend
4. Strong, would recommend
5. Must read

As this book relates to The Five Functions of Business, I give it a 4 out of 5.

It's a great read but a little outdated. My only hesitation in recommending it is that when readers are informed of the statistics throughout the book (all related to the early 1990's and before), they would not have a notion of what the more recent history statistics look like. Suppose you were to understand today's automotive industry and compare it to 3 or 4 decades ago. In that case, the rate of improvement is even more dramatic and astonishing.

The added chapter from the 2007 revision agrees and gives a reason for this fact: "Machine was an earnest effort to cover a vast territory from a considerable distance. At the time we wrote this book, Toyota and Honda operated mostly in Japan and the range of research and writing on the details of their value creation systems was limited. Because this book has found a large and enduring audience in business and engineering schools, where it often serves as a core text on state-of-the-art business management, we are particularly anxious to bring the historical and technical details up-to-date."