The Toyota Way: 14 Management Principles From the World's Greatest Manufacturer

by Jeffrey K. Liker

What is the ideal way to organize your equipment and processes? In traditional mass production thinking (the way most companies are organized), the answer seems obvious: group similar machines and similarly skilled people together. So mass production thinking sets up departments of mechanical engineering, electrical engineering, accounting, purchasing, and manufacturing as well as departments for stamping, welding, wire soldering, assembly, and the like. The following were the perceived benefits of grouping similarly skilled people and equipment together: 1. Economies of scale. First and foremost, mass production thinking was about squeezing the most production possible at the lowest cost per unit out of every piece of equipment or every worker in a manual operation. Having one huge stamping press to meet the needs of all the factory's products would lead to the smallest capital cost per piece. And then you wanted to run that press flat-out 100% of the time to get the greatest asset utilization. Similarly, by organizing people into departments, you can focus on best practices in each professional specialty and squeeze the highest productivity (or innovation) possible out of each person. 2. Apparent flexibility in scheduling. When you put all the welders together in one department, it's easier for the welding department manager to schedule available machines and welders to any job that comes up. If you create one-piece flow cells, you take those welding machines and...