1. UNIVERSITY OF HOHENHEIM
Institute of Marketing & Management
Department for International Management
Prof. Dr. Alexander Gerybadze
Strategy & Organization of Global Firms (MIM)
Winter Term 2013/14
(93) Lean Product Design of Complex Products
Doubravka Vodárková
591551
Investigation Paper
Stuttgart, 19 December 2013

2. 2
Content
Research Problem and Results............................................................................................. 3
1.1 Mass production and Henry Ford..................................................................................... 3
1.2 Lean product development .............................................................................................. 3
2.1 Toyota and lean manufacturing ....................................................................................... 5
2.2 Just in time...................................................................................................................... 5
2.3 TPS………………………………………………………………………………………………...6
Eliminating Waste.................................................................................................................. 7
Conclusions........................................................................................................................... 7
4. References / Literatur- und Datenquellen .......................................................................... 9

3. 3
Research Problem and Results
In this short paper it will be discussed the manufacturing development in the automobile
industry, especially the mass production and lean production development. It will be
observed the difference between these two methods and their success on the market.
1.1 Mass production and Henry Ford
The automobile industry is one of the biggest manufacturing activities with
production of 84,100,167 cars (year 2012) in the whole world.
Firstly the automobile industry came with the craft production. The craft producers used
highly skilled workers and simple flexible tools to make exactly what the consumer asked for
one item at a time. (P.Womack, 1990)
Craft production had the following characteristics:
A work force was highly skilled in design, machine operations, and fitting.
Organizations were extremely decentralized, although concentrated within a single city.
The use of general-purpose machine tools to perform drilling, grinding, and other operations
on metal wood. The production was low volume – only 1,000 or fewer automobiles a year,
and only a few were built to the same design.
However this production method was too expensive and the goods produced by the craft
method cost too much and people could not afford them. (P.Womack, 1990)
That was the reason why Henry Ford came with the idea of “mass production”. He really
understood the disadvantages of craft production. He started to produce cars that were
easily manufactured, and also user-friendly. (P.Womack, 1990)
The key to mass production was not the moving, or continuous, assembly line. Rather, it was
the complete and consistent interchangeability of parts and the simplicity of attaching them to
each other. These were the manufacturing innovations that made the assembly line possible.
Taken together, interchangeability, simplicity, and ease of attachment gave Ford tremendous
advantages over his competition.
He decided that the assembler would perform only a single task and move from vehicle to
vehicle around the assembly hall. Ford just wanted to produce the entire car in one place and
sell it to the whole world (P.Womack, 1990)
1.2 Lean product development
The lean producer combines the advantages of craft and mass production. They wanted to
avoid high cost and make the products simply and faster with good quality.
Lean producers employ teams of multi skilled workers at all levels of the organization and
use highly flexible, increasingly automated machines to produce volumes of products in
enormous variety. (P.Womack, 1990)

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This type of production achieves its highest efficiency, quality, and flexibility when all
activities from design to assembly occur in the same place. For this reason, lean producers
in the 1990s will need to create top-to-bottom, paper-concept to finished-car manufacturing
system in the three great markets of the world – North America, Europe, and East Asia.
(P.Womack, 1990)
The field of production has seen two major revolutions during the last century. The first was
the invention of a moving assembly line by Henry Ford. The moving line was made possible
by splitting and balancing the work among the sequential processes and implementing a
common pace for all processes. The key to success was the ability to split the complex
craftwork into separate tasks of short and equal duration. The model-T moving line cut the
former craft-based production cost and throughput time tenfold, with the corresponding vast
increase in Ford’s profits. "Lean Production" was the second revolution.
It was an elegant generalization of the Just-in-Time and Toyota Production Systems b, who
formulated the method in terms of five following (W. Oppenheim, 2004)
Lean Principles:
1. Define value to the program stakeholders
2. Plan the value-adding stream of work activities from raw materials until the product
delivery while eliminating waste
3. Organize the value stream as an uninterrupted flow of work pulsed by the rhythm of takt
time and proceeding without rework or backflow.
4. Organize the pull of the work-in-progress as needed and when needed by all receiving
workstations
5. Pursue “perfection,” i.e., the process of never ending improvements
Table I. Contrasting Craft Work and Lean Work (W. Oppenheim, 2004)

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2.1 Toyota and lean manufacturing
Lean production or lean thinking has its origin in the philosophy of achieving improvements in
most economical ways with special focus on reducing waste. This concept became one of
the most important concepts in quality improvement activities primarily originated by Taiichi
Ohno’s famous production philosophy from Toyota in the early 1950s. (J. Dahlgaard, 2006).
The focus at Toyota, according to Taiichi Ohno, was “the absolute elimination of waste,”
where waste is anything that prevents the value-added flow of material from raw material to
finished goods .(Craig Woll)
2.2 Just in time
Ohno invented another system to reduce the waste. It was called just-in-time (JiT) or Kanban
system. Ohno knew how much waste was produced under the mass production system. For
instance, there was high inventory cost to keep a large number of parts that were later found
to be defective, when installed at the assembly plant (Womack et al., 1990, p. 60). From this
observation, Ohno developed a new way to co-ordinate the flow of parts within the supply
system on a day-to-day basis, thus the parts would only be produced at each previous step
to supply the immediate demand of the next step.
The JiT concepts aims to produce and deliver the right parts, in the right amount, at the right
time using the minimum necessary resources. This system reduces inventory, and strives to
prevents both early and over production. Producing in a JIT fabion exposes problems
quickly. With less inventory in a system the “rocks” are quickly exposed in production that are
disrupting flow. Most companies shy away problems and use inventory to hide these problem
and avoid potential disruptions. In Toyota however the opposite logic is applied. By reducing
inventory you expose the real problems in a production process quickly and focus need for
improvement. This notion of surfacing problems and abnormalities is a critical concept in
TPS.
JiT system later on became much more efficient, when they used a kind of card (Kanban) as
a tool for information exchange between different production lines. Focusing on quantity in
production, Toyota increased radically productivity, and in 1959, Toyota produced for the first
time 100,000 cars a year. (Jens J. Dahlgaard, 2006).
Toyota’s lean production is also known as “the Toyota Production System” or “TPS”.
Toyota Production System was not a traditional quality assurance system as, e.g. an
ISO9000- based quality system. It was first of all a human-based system where people were
involved with continuous improvements, and the foundation for the system was leadership
and empowerment through education and training. TPS became so competitive that Toyota
and other Japanese car manufacturers increased their market shares all over the Word.
TQM is a company culture characterized by increased customer satisfaction through

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continuous improvements, in which all employees actively participate.
2.3 TPS
The goal of the Toyota Production System is to provide products at world class quality levels
to meet the expectations of customers, and to be a model of corporate responsibility within
industry and the surrounding community. The Toyota Production System historically has had
four basic aims that are consistent with these values and objectives: The four goals are as
follows:
1. Provide world class quality and service to the customer.
2. Develop each employee’s potential, based on mutual respect, trust and cooperation.
3. Reduce cost through the elimination of waste and maximize profit
4. Develop flexible production standards based on market demand. The graphic presented
below models the Toyota Production System. The purpose of this document is to describe
the major sub-systems that comprise TPS, as well as explain the key concepts and tools
associated with the system.
Table II. (TPS Handbook, Art of Lean, Inc.,www.artoflean.com)

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Eliminating Waste
It requires constant effort at cost reduction to maintain continuous profits in manufacturing.
The prime way to reduce costs is to produce, in a timely fashion, only those products which
have been sold and to eliminate all waste in manufacturing them. There are various ways to
analyze and implement cost reduction, from the start of designing all the way through to
manufacturing and sales. One of the goals of the TPS is to locate waste and eliminate it. It is
possible to uncover a very large amount of waste by observing team members, equipment,
materials and organization in the actual production line. In every case, waste never improves
value; it only increases cost. Continuous improvement focuses on the elimination of seven
major types of waste. (TPS Handbook, Art of Lean, Inc.,www.artoflean.com)
CORRECTION(scarp)
OVER-PRODUCTION
WAITING
CONVEYANCE
PROCESSING
INVENTORY
MOTION
Conclusions
We learned that there were different approaches in manufacturing during the last hundred
years. The automobile industry moved from craft production to lean production with the high
quality products cuting the cost and waste. Its a big step forward. Lean production should be
viewed as a strategy for achieving value leadership. It goes well beyond cost cutting. First,
lean production dramatically raises the threshold of acceptable quality to a level that mass
production, cannot easily match. Second, lean production offers over-expanding product
variety and rapid responses to changing consumer tastes, something low-wage mass
production finds hard to counter except through ever lower prices. Lean production also
dramatically lowers the amount of high-wage effort needed to produce a product of a given
description, and it keeps reducing it through continuous incremental improvement. This
means competition from low wage workers is not a threat. Finally, lean production can fully
utilize automation in ways mass production cannot, further reducing the advantage of low
wages.Producing high-quality products is paramount for any manufacturing industry and,
therefore, must be given priority. Customers will never continue purchasing a product if its
quality is poor. In the case of automobile parts manufacturing, safety is considered especially
important. Taking shortcuts, doing shoddy work, or in the extreme case, putting a faulty
product on a vehicle in the market amounts to an antisocial act, and can have devastating

8. 8
consequences for the company. The mission is to supply customers (internal and external)
with trouble-free products. To do this,Toyoyta produces products that conform exactly to
design quality specifications. Defect-free parts eliminate the wastes of rework and scrap,
which in turn reduce costs. Reducing o costs allow Toyota to remain competitive in an
aggressive global market, and increase market share.

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4. References / Literatur- und Datenquellen
Jens J. Dahlgaard, Su Mi Dahlgaard-Park, Lean production, six sigma quality, TQM and
company culture, The TQM Magazine Vol. 18 No. 3, 2006 pp. 263-281, Emerald Group
Publishing Limited 0954-478X DOI 10.1108/09544780610659998
Nick Oliver, Rick Delbridge, James Lowe, Lean Production Practices:International
Comparisons in the Auto Components Industry
Bohdan W. Oppenheim, Lean Product Development Flow, Department of Mechanical
Engineering, Loyola Marymount University, Los Angeles, CA 90045-8145, LEAN PRODUCT
DEVELOPMENT FLOW, Received 22 December 2003; Accepted 21 July 2004, DOI
10.1002/sys.20014
Craig Woll, PhD, Toyota Production System (TPS)
TPS Handbook, Art of Lean, Inc.,www.artoflean.com
James P.Womack, Daniel T.Jones, Daniel Roos, The Machine That Changed The World,
1990, Macmillan Publishing Company, ISBN: 0-89256-350-8

10. Appendix / 1