The effective reorganization of BMW Group applied to the New MINI
New strategies in the automotive manufacturing processes, sales and marketing
©2003
Bachelorarbeit
84 Seiten
Zusammenfassung
Inhaltsangabe:Abstract:
The story of the automobile manufacturer production can not be told without the story of Henry Ford, who was one of the pioneers constructing his first horseless carriage in 1896.
He incorporated the Ford Motor Company in 1903, proclaiming I will build a car for the great multitude. As predicted he did so in 1908 offering a Model T for $ 950. This model heralds the beginning of the motor age. The car evolved from a former luxury item for the well-to-do to essential transportation for the ordinary man.
Ford also revolutionized automobile manufacturing, in 1914 the Ford plant used innovation production techniques and was able to turn out a complete chassis every 95 minutes. That was a revolution in the automobile manufacturing at the time, because the former production time took about 730 minutes to turn out a complete chassis! Ford achieved that fast production time by using a constantly moving assembly line, subdivision of labor, careful coordination of operations and he began to pay nearly double the wages offered by their competitors.
His innovations made him an international celebrity in the industrial revolution and he was one of the first who thought about effective organization to achieve a higher productivity.
Fords methods that changed the automobile production were perhaps not mainly the introduction of the assembly line, his goal was also to constantly standardizing the use of craftsmen. That firstly resulted in a high product variety despite in fact that they had been made using the same drawing. Secondly a lot of time was spent in fitting the parts together. These facts influenced major loss in productivity and under such circumstances a real mass-production was not possible. But by standardizing components and developing work routines was the first scope for an assembly line approach.
The target of our case study is to present and analyze the changes in companies organizations, applied to the example of BMW.
The opening part will summarize the history of the working and organizing techniques in general. The middle part will focus on the changes in production organization in the automotive industry, followed by the last part analyzing new strategies in Sales & Marketing regarding the rebirth of MINI by the BMW Group.
Zusammenfassung:
Die vorliegende englischsprachige Projektarbeit behandelt das Thema effektive Reorganisation in Produktion, Vertrieb und Marketing in der Automobilindustrie am […]
The story of the automobile manufacturer production can not be told without the story of Henry Ford, who was one of the pioneers constructing his first horseless carriage in 1896.
He incorporated the Ford Motor Company in 1903, proclaiming I will build a car for the great multitude. As predicted he did so in 1908 offering a Model T for $ 950. This model heralds the beginning of the motor age. The car evolved from a former luxury item for the well-to-do to essential transportation for the ordinary man.
Ford also revolutionized automobile manufacturing, in 1914 the Ford plant used innovation production techniques and was able to turn out a complete chassis every 95 minutes. That was a revolution in the automobile manufacturing at the time, because the former production time took about 730 minutes to turn out a complete chassis! Ford achieved that fast production time by using a constantly moving assembly line, subdivision of labor, careful coordination of operations and he began to pay nearly double the wages offered by their competitors.
His innovations made him an international celebrity in the industrial revolution and he was one of the first who thought about effective organization to achieve a higher productivity.
Fords methods that changed the automobile production were perhaps not mainly the introduction of the assembly line, his goal was also to constantly standardizing the use of craftsmen. That firstly resulted in a high product variety despite in fact that they had been made using the same drawing. Secondly a lot of time was spent in fitting the parts together. These facts influenced major loss in productivity and under such circumstances a real mass-production was not possible. But by standardizing components and developing work routines was the first scope for an assembly line approach.
The target of our case study is to present and analyze the changes in companies organizations, applied to the example of BMW.
The opening part will summarize the history of the working and organizing techniques in general. The middle part will focus on the changes in production organization in the automotive industry, followed by the last part analyzing new strategies in Sales & Marketing regarding the rebirth of MINI by the BMW Group.
Zusammenfassung:
Die vorliegende englischsprachige Projektarbeit behandelt das Thema effektive Reorganisation in Produktion, Vertrieb und Marketing in der Automobilindustrie am […]
Leseprobe
Inhaltsverzeichnis
ID 8191
Adari,Johannes; Taube, Pascale; Thrane, Henrik:
The effective reorganization of BMW Group applied to the New MINI
New strategies in the automotive manufacturing processes, sales and marketing
Hamburg: Diplomica GmbH, 2004
Zugl.: Hogeschool Zeeland Vlissingen / NL, Projektarbeit, 2003
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Index of the 4
th
Case Study: Effective Organization
1. Introduction: From Fordism to Taylorism and mass production ... 6
Ford's methods that changed the automobile production were perhaps not
mainly the introduction of the assembly line, his goal was also to constantly
standardizing the use of craftsmen. That firstly resulted in a high product
variety despite in fact that they had been made using the same drawing.
Secondly a lot of time was spent in fitting the parts together. These facts
influenced major loss in productivity and under such circumstances a real
mass-production was not possible. But by standardizing components and
developing work routines was the first scope for an assembly line approach... 7
2. The new trend in the automobile production: lean production ... 9
2.1 Relationships with subcontractors, dealerships and customers ... 10
2.2 Total Quality Management ... 11
2.3 Lean production and the embedding of the Just-in-time processes ... 13
2.4 Lean production and its organization of work... 15
Teamwork was characterized by its gradual and stepwise implementation.
Evolving from a former Taylorism job to a richer job, characterized by a self-
management in autonomous teams, implies a long learning process that
cannot be pushed from top down. ... 17
2.5 Technological practice ... 18
Because price, productivity and quality have always been important
competitive features, more recently delivery periods have become an important
field of competition, plus flexibility to allow for late changes in customer
orders. Beside this, flexibility and innovation also grew in importance in view
of increasing fluctuations in demand response, the ever shortening of product
life cycles and the success or failure of companies internationalization drives
depend on the compatibility between their model, the market and labor
conditions on with the introduction of a information and communication
technology they are getting much closer to achieve these goals... 19
2.6 Some critical voices about lean production ... 19
2.7 Summery and outlook ... 21
Taube,Pascale | Thrane,Henrik | Adari,Johannes-C.: "The effective re-organization of the BMW Group manufacturing"
Page 2 of 79
Companies must be quick off the mark and be able to offer wide ranges of
product variants and to offer a customer-orientated service. At the same time,
this flexibility must be provided at a low cost, if they are to succeed in meeting
these requirements. The implementation of lean production is that companies
must manage all types of resources sparingly, manpower, premises, time,
investments etc. Furthermore a lean production method means, that
subcontractors, retailers and customers must be more closely linked to the
production process. The aim is to shorten lead times, improve quality, while
linking retailers more closely to the production process is designed to improve
analyses of customer needs and requirements... 21
Now they concentrate on the premium sector. Nowadays, BMW is an
automobile company that focus on a logical, clearly structured premium brand
strategy, even with the new BMW MINI. Thus BMW will concentrate on
segments of the world automobile market... 23
3.The BMW manufacturing organization ... 24
3.1 The network ... 27
3.1.1 Flexible network... 28
3.1.2 Product Lifecycle Management (PLM)... 30
3.1.3 External factors in and on the production ... 30
These companies were tied by contracts, delivery in time, delivery on demand,
and delivery on site. All these new terms in regard to logistic and supplier
networking is a result of the ever changing market. The automotive business in
60's, 70's and the 80's is the past, a faint memory of how it used to be. The big
automotive companies had massive storage capacity; storing all the parts for
the car, often made on site. ... 31
This meant that the suppliers, in the past often far away were forced to move
closer to the production and even onto the production, in order, to meet the
demand set by the production line. In the example given with Spartanburg,
most of the 126 companies settled in the vicinity of Spartanburg, often placing
their headquarters there as well... 31
3.2 New trends in automotive manufacturing ... 32
The time it will take to innovate and develop a new model will be reduced by up
to 50% by share the workload with an external partner; who all adds up in
saving costs and tying up resources for long periods of time. So this trend will
Taube,Pascale | Thrane,Henrik | Adari,Johannes-C.: "The effective re-organization of the BMW Group manufacturing"
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continue and the external partners; such as Valmet in Finland, Karmann GmbH
in Germany, Magna Steyr in Austria and Pininfarina in Italy will do their best to
motivate the big companies to take them on board. ... 32
3.2.1 Employing the right people ... 33
3.2.3 Master Performance in Logistics ... 34
3.2.4 Principles of lean production. ... 35
3.2.5 Just-in-time production ... 38
The idea of producing the necessary units in the necessary quantities at the
necessary time is described by the short term Just-in-time. Just-in-time means,
for example, that in the process of assembling the parts to build a car, the
necessary kind of sub-assemblies of the preceding processes should arrive at
the product line at the time needed in the necessary quantities. If Just-in-time
is realized in the entire firm, then unnecessary inventories in the factory will be
completely eliminated, making stores or warehouses unnecessary. The
inventory carrying costs will be diminished, and the ratio of capital turnover
will be increased... 38
3.2.6 Kanban system... 38
3.2.7 Autonamation ... 39
3.2.8 Working by Hand ... 40
3.3 Customer Oriented Sales and Production process ... 41
3.3.1 Online Ordering System ... 41
In the bygone years, we would go the dealership and look at a brochure with
pictures of the car that we wanted to buy. There were a few options available,
different color and maybe the radio were an option. Whereas today this
process has changed. ... 41
3.3.2 Consumer orientated ... 42
3.4 Pioneering on environmental issues ... 42
"All cardboard and paper are recycled, as is all scrap metal from production
parts to beverage containers. Because BMW largely use water-based paints,
solvent use is minimized at their plant. Other materials recycled include wood,
plastic, rubber, paint sludge, fluorescent light tubes, oil and paint. During 2000,
BMW produced 17.8 million pounds of waste and recycled 78% of the total, or
14 million pounds. Future efforts are focused on ways to reduce waste and
improve recycling further. BMW feels that further opportunity exists and are
Taube,Pascale | Thrane,Henrik | Adari,Johannes-C.: "The effective re-organization of the BMW Group manufacturing"
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currently seeking additional opportunities. Help is needed from the political
and government sectors to encourage legitimate recycling businesses to
create local recycling outlets for materials like glass, plastic and other used
products." ... 44
These examples are impressive and we have tried to find the similar
information's from other automotive manufactures, but it did not match, by far,
the steps undertaken by BMW, which is encouraging. ... 44
3.5 Summary... 44
4. Effective reorganization by introducing the New MINI into market... 45
At first we take look at the history of the MINI, helping us to comprehend the
development of this decision. ... 45
4.1 The Rover and MINI history ... 45
The MINI history is strongly connected with the history of the Rover Group... 45
4.1.1 Honda and Rover in the 1980's ... 46
Honda's strong input and support was the reason, Rover managed to turn into
a quality performer step by step. At least Rover became an executive brand
with a high reputation for style, up market quality and reliability, ready to
attract premium brand customers. ... 47
4.1.2 BMW and Rover in the 1990's ... 48
4.2 BMW's reorganization measures ... 51
4.3 BMW establishing in the premium small-size car segment ... 53
4.3.1 Chances in the automobile economic environment ... 53
4.3.2 Risks in the small- and micro-size car segment... 54
Some recent cases of introducing new small cars have shown, the first sales
success is often not long enough to become profitable. Before the new MINI
came to market, some other important manufacturers have tried to introduce
their newly car concepts and had to make negative experiences in the small-
size car segment... 55
4.3.3.BMW's approach: Quality vehicle in the small-size car segment... 55
4.3.4 Summary ... 56
4.4 The MINI brand as a part of a multi-premium-brand strategy... 57
4.4.1 Target groups of the MINI... 57
4.4.2 Presenting new MINI ... 58
4.4.3 Selling the new MINI... 59
Taube,Pascale | Thrane,Henrik | Adari,Johannes-C.: "The effective re-organization of the BMW Group manufacturing"
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4.5 "ARE YOU MINI? " brand image campaign and sales promotion ... 61
4.5.1 Brand building and brand communication in the internet... 61
4.5.2 Rebirth of the MINI brand ... 63
4.5.2.1 Redesign of the MINI brand identity... 63
4.5.2.2 The new MINI pre-launch-dialog campaign ... 64
4.5.2.3 Results of the new MINI brand introduction campaign... 68
4.5.3 Sales organization of the new MINI ... 69
4.5.3.1 Organizing a b2c eBusiness-Strategie... 69
4.5.3.2 Reorganization of the sales network ... 70
4.6 Summary and Outlook ... 71
Bibliography of 4
th
Case: Effective organization ... 73
Wertschöpfung: Die Zukunft des Wachstums (,,the leveraged growth
principle"), in Harvard Business manager, June 2003, p. 22 ff. ... 75
Fixing Japans white-collar economy: a personal view; in Harvard Business
Review Nov. / Dec. 1993 ... 75
Verkaufsförderung: Kunden wieder zu Käufer machen, in Harvard Business
manager, Feb. 2003, p. 23 ff... 78
Total Quality Control: An Overall Organization Improvement Strategy. National
Productivity Review, Vol. 9, No. 1, Winter, 1990 ... 79
Erlebniswelten für Marken, aus: Moderne Markenführung, Grundlagen
Innovative Ansätze Praktische Umsetzungen, Esch, Franz-Rudolf (Hrsg.), 3.
Auflage, 2001, Gabler, S. 185 ff. ... 79
Lean Thinking: Banish waste and create wealth in your corporation
Publication, New York, Simon & Schuster, 1996. ... 79
Taube,Pascale | Thrane,Henrik | Adari,Johannes-C.: "The effective re-organization of the BMW Group manufacturing"
Page 6 of 79
The target of our 4
th
case study is to present and analyze the changes in companies'
organizations, applied to the example of BMW.
The opening part will summarize the history of the working and organizing techniques
in general. The middle part will focus on the changes in production organization in
the automotive industry, followed by the last part analyzing new strategies in Sales &
Marketing regarding the rebirth of MINI by the BMW Group.
1. Introduction: From Fordism to Taylorism and mass production
The story of the automobile manufacturer production can not be told without the story
of Henry Ford, who was one of the pioneers constructing his first horseless carriage
in 1896.
He incorporated the Ford Motor Company in 1903, proclaiming "I will build a car for
the great multitude"
1
. As predicted he did so in 1908 offering a Model T for $ 950.
This model heralds the beginning of the motor age. The car evolved from a former
luxury item for the well-to-do to essential transportation for the ordinary man.
Ford also revolutionized automobile manufacturing, in 1914 the Ford plant used
innovation production techniques and was able to turn out a complete chassis every
95 minutes. That was a revolution in the automobile manufacturing at the time,
because the former production time took about 730 minutes to turn out a complete
chassis! Ford achieved that fast production time by using a constantly moving
assembly line, subdivision of labor, careful coordination of operations and he began
to pay nearly double the wages offered by their competitors.
1
Library of U.S. Congress, Today in History
Taube,Pascale | Thrane,Henrik | Adari,Johannes-C.: "The effective re-organization of the BMW Group manufacturing"
Page 7 of 79
His innovations made him an international celebrity in the industrial revolution and he
was one of the first who thought about "effective organization" to achieve a higher
productivity.
Ford's methods that changed the automobile production were perhaps not mainly the
introduction of the assembly line, his goal was also to constantly standardizing the
use of craftsmen. That firstly resulted in a high product variety despite in fact that
they had been made using the same drawing. Secondly a lot of time was spent in
fitting the parts together. These facts influenced major loss in productivity and under
such circumstances a real mass-production was not possible. But by standardizing
components and developing work routines was the first scope for an assembly line
approach.
With Ford's assembly line "the assembler only had one task to put two nuts on two
bolts or perhaps to attach one wheel to each car"
2
.
Taylor's theory demonstrated what gains in efficiency could be achieved by a division
of labor on a scientific basis. In comparison to Ford's point of view Taylor's scientific
management did not only subdividing of work that had to be done, into manual and
intellectual parts, he also standardized workers movement pattern's in different tasks
down to the tiniest detail. The companies management pointed out systematic
studies of operation parts involved in a given job, they were recommended by the
advocates of "scientific management" using industrial and physiological orientated
psychology. These methods and time-and-motion studies were designed to result in
an increased speed of working operations. An increase of quantities of products
measured per worker and hours took place.
Taylor's work organization was a high hierarchical linear system and it was
developed to increase productivity. With its central departments the specialists who
gave orders from the top to the bottom. None of the workers should spend his time
thinking about what each assembler should do. Therefore a new job was created; the
2
Womack / Jones, Lean Thinking
Taube,Pascale | Thrane,Henrik | Adari,Johannes-C.: "The effective re-organization of the BMW Group manufacturing"
Page 8 of 79
industrial engineer took place and this engineer was responsible for analyzing each
job, he had to make sure that each worker did only those motions essential to the
task. The overall goal can be pointed out as a removal of the human variability.
The productivity results were profound under Taylorism. New departments such as
industrial engineering, personal and quality control were created. That resulted in a
growth in the middle management separating planning from operations. Rational
rules replaced trial and error management, became formalized and efficiency
increased. But there were also some bund of resistance by the old line managers
because of the notion that management now was a science that had to be studied
and nothing one could be born with or inherited. There was a workers resistance too,
because they saw a "dehumanization of work".
Scientific management required for the workers to stop worrying about the divisions
of the fruit of production between wage and profit. Sharing in the prosperity of the firm
by working in the correct way, they have to give up their ideas of time wasting and
had to cooperate with the management, which developed the science and the
workers also had to accept that the management was responsible for determining
what and how it has to be done.
The benefits, mainly for the management arising from scientific management can be
summarized as a rational approach to the organizational work, measurement of path
and an enormous increase in productivity. It also enabled employees to be paid by
results and to get incentive payments. The management was stimulated in a positive
role of leadership of the shop floor. Nevertheless it reduced the worker's role
because planning and control of workplace activities were given exclusively into the
hands of managers.
Therefore in summary; while the scientific management technique had been recently
employed to increase productivity and efficiency, it had also the disadvantages of
ignoring the human aspects of employment. It resulted in boring repetitive jobs with
the introduction of systems with high control.
Taube,Pascale | Thrane,Henrik | Adari,Johannes-C.: "The effective re-organization of the BMW Group manufacturing"
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2. The new trend in the automobile production: lean production
Taylor's changes in production with its enormous success caused a high division of
labor after World War II. But the demand of the markets and customers changed
afterwards.
The demands now turned out in small series with high varieties and the companies
goals now were pointed out to develop new and innovative products. That was the
beginning of the lean production concept, with its first step towards the new market
demands
3
.
Lean production was originally developed for Toyota the well known Japanese auto-
mobile manufacturer. Toyota focused on reducing system response time, so that the
production system could be changed in a short time to adapted markets demands.
The goal was now defined as a made-to-order principle.
Lean production enabled Toyota to deliver on demand, minimize inventory, maximize
the use of multi-skilled employees, flatten the management structure and focus
resources where they were needed.
During the 1980's
this set practice was adapted by many automobile manufacturers
in the U.S. and all over Europe.
There is quite a big difference between the mass-production and lean production.
The prerequisites for lean production are saturated markets and specific customer
requirements in choice and flexible redesign in products.
One of the differences in lean production compared to the former described mass-
production system is; to use fewer resources while increasing production volume
simultaneously. If one of the main principles of mass-production was to rationalize
work, than the main principle of lean production can be found in rationalizing capital.
3
BMW AR 1997
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Another difference was, that a number of processes in a lean production system must
be done simultaneously, while the mass-production operations were cut in to
sequences.
2.1 Relationships with subcontractors, dealerships and customers
Furthermore one aspect in lean production is the focus on the special relationship
with sub-contractors, dealerships and customers. The manufacturer wants to involve
the subcontractors in the development of new products right from the start. The task
is to get lead time and good quality.
As for the dealerships involvement in the process; they have to analyze the
customers needs in order to get a more specific idea of the customers needs,
because the dealerships get the basic information by talking to the customers. Lean
production wants to result in a customer orientated production. The effort has to be
made to establish a long-term relationship between customers and manufacturers.
It can be pointed out that one of the most important task are customers demand in
high product quality. Quality on one side means, that the customer get what they
want, so that they are willing to pay higher prices for good quality products and on
the manufacturers side the aim is to achieve a flawless production. These procedures
are known as "Total Quality Control".
The task is to save money by eliminating flaws and mistakes from the beginning in
the production line. Because a mistake made at the start of production, a snowball
effect well take place in the end, and correcting mistakes takes efforts and cost
money. The task is how to eliminate mistakes in the production and a new kind of
quality control took place in many lean production orientated companies with a "Total
Quality Management".
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2.2 Total Quality Management
Total Quality Management (TQM) incorporates the concept of product quality,
process control, quality assurance and furthermore improvement. That means, it is
the control of all organization processes to satisfy customers demands in an
economical way. But according to Vansina control of the production process
4
, is not
likely to help a business increase its concepts market shares, when the product does
not meet customers requirements. So many of TQM's orientated with the work of Dr.
W. E. Deming who was an American statistician, guided the Japanese industry's
recovery. His opinion focused on finding out customers needs, then to find out and
improve the design, the production process until the quality of their products is
unsurpassed.
According to Dr. Deming a new style of management, which focus from profit to
quality was needed. Furthermore, he reasoned that employees could learn how to
monitor, control and improve their work processes with the application of the scientific
approach. D. Deming was sure that workers were capable with their collective
attention to their work processes to produce products that would meet the customers
expectations. He also pointed out, that the traditional model of "management by
objectives", which emphasizes a chain of command in which objectives were
translated into work standards or quotas. With that "MBO" the performance of
employees was guided according to numerical goals and the result would be
workers, managers and supervisors were only protecting themselves, causing them
to loose sight of the larger purpose of the work by desperate attempts to meet
quotas. With the change in focus, manager's role was to enable employees to do the
best job possible, foreseeing and eliminating barriers that got in their way.
As described by Dr. Deming, organizations are compositions of systems designed to
meet customers needs. Common systems in organizations are human resource
processes such as compensation or financial ones. In such systems tasks and
processes, they are linked together and effect one another. His basic assumptions of
Total Quality Control could be summarized as:
4
Vansina, Total Quality Control
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Work is broken into tasks which are a series of related steps.
Process groups all related task done to accomplish an outcome.
People completing a series of related tasks have interdependent roles in the
organization.
A group of related processes can be regarded as a system.
The practice of defining steps and outcomes in their process and systems by
employee's results in common language and understanding of what their jobs
should be and how they fit into a large picture.
With an application of the scientific approach using flow-charts and work-flow
diagrams; employees can see their independence and that the quality of what
comes out determined by the quality that goes into a process.
One well known slogan of quality movements is called: "Quality begins with the
customer" which means, that customers are the people who receive our work, only
they can tell us what and how they want it. So the philosophy of TQM is customer-
orientated and its goal is to satisfy customers demand in quality.
To get good quality, you to know the quality of what comes out of a process is
effected by the quality of what goes in and what happens at every step along the
way. The result has to be the effort to build quality in every step of process and
system. Beside this, to collaborate and communicate with internal and external
suppliers and customers to determinate their needs.
TQM will be successfully implemented, if employees at every level participate in
decision effecting their work. The most common here is a team; teams range in
scope and responsibility from problem-solving groups to self-managed work teams
that schedule work, assign jobs, hire members, sets standards and volume of the
output.
A participative work culture is encouraged when quality becomes everybody's
responsibility.
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2.3 Lean production and the embedding of the Just-in-time processes
In comparison to the mass-production, manufacturers with a lean production
organization are interested in shortening communication between different depart-
ments, because several processes will take place in parallel. Passing information
between different departments, involved in several processes is an essential need. It
has to result in tearing town barriers in the companies information flows between all
the involved departments.
Lean production companies also has to create a continuing information flow, which
should result in obsolete or in reducing stocks. Because the task is to get the ideal
situation to start production when the product has been ordered. In that case limited
input of resources and stocks can take place and save money defined in a just-in-
time-production.
According to the American Production and Inventory Control System (APICS) the
definition of Just-in-time is: "A philosophy of manufacturing based on planned
elimination of all waste and cautions improvements in productivity"
5
. That means, that
Just-in-time describes the idea how to produce the necessary units, in the necessary
time and to eliminate all sources of waste in productivity.
The task is to improve return on investment by increasing revenues through quality,
delivery and flexibility improvements and simultaneously reducing costs, which will
result in a decrease of companies investment requirements.
The elements of just-in-time can be pointed out on a leveled master schedule. By JIT
implementation the first step has to be that the master schedule must be stabilized
and leveled. That requires a constantly daily production, within the time frame of the
master schedule and a mixed model assembly, so the result is to achieve a demand
on preceding work centers that are nearly constant.
5
Inventory Solutions, Just-in-time Manufacturing
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Next task will be to reduce lot sizes, setup times and to achieve lead times as the key
fact to decrease inventories in a JIT system. That can be aimed through small-group
improvement activities as far as management and worker cooperative efforts.
Because of the cut to the bone of inventories; equipment must be kept in a good
state of repair. Which includes workers are taking responsibility of most of their own
maintenance. Beside this, the workers have to be functional workers, because they
have to operate several machines in a group, shut of the machine and move on to
another one, as well as to setup machines, to do routine maintenance and to inspect
their path.
Because of this flexibility in workers areas of responsibility, they need to become
cross-trained in several different skills and the payment has to be based not only on
seniority even more on job skill levels. To keep the workers motivated, they should be
actively involved in problem-solving activities on the shop-floor, for instance, quality
teams and suggestion systems in which the workers are included. On the other hand,
there has to be an environment of participation created in order to get all employees
to contribute towards problem solving.
Another aspect of JIT is the relationship with the suppliers. They are viewed as a kind
of the external factory and as a part of the production team as well. Very often local
suppliers with their short lead times are preferred, because in some cases deliveries
will be required every day and the deliveries have to be made directly to the
assembly-line without inspection, so in essence, the suppliers have to be very
reliable and they are required to have complete confidence in their quality as well. To
ensure the quality of parts and to establish a long-term relationship with suppliers
there is a tendency to use single-source suppliers as well as a local destination
suppliers.
To summarize the JIT production, marginal related costs are reduced by decreasing
the number of suppliers the main manufacturer deals with, furthermore, their interest
in developing long-term relationships with single-source local suppliers. Eliminating
the need to count individual parts, reducing order scheduling, simplify receiving
systems, which will result in less time and a reduction of inspection sources for the
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main manufacturer. Beside this, the stocking of inventory and the unpacking can be
eliminated.
All aspects together can be summarized into the following point: If JIT principles are
implemented successfully significant competitive advantages can be realized for the
company.
2.4 Lean production and its organization of work
The old principles for the organization of work with Taylor's view on division of labor
and specialization, led to the emergence of numerous departments within the
engineering industry; these were removed from the production line and caused a
specialization pushed to such extremes; that in companies involved in the metal
production, some engineers were for decades responsible for preparing just one or
two lathes, while others had been responsible for preparing a few milling machines.
According to Womack
6
, who gave an example of an engineer in a mass-production
automobile company, who had spent his whole career designing automobile door-
locks. This engineer was not the expert on how to make door-locks, however that
was the door lock manufacturing engineer. The door-lock design engineer simply
knew how the door-lock should look and work, if it was made correctly.
In comparison to the points above, it seems as though lean production and a JIT-
system help workers on the shop floor to develop their skills on the job. When this
happens, they may feel under more stress at work since their degree of responsibility
has increased. This is quite right, because lean production makes special demands
on the work-force.
In this system it is rational to have a versatile and flexible workforce. The employees
must also be capable of relating to customers requirements and to the production
flows. Furthermore the employees must be prepared to accept change and responsi-
bility, they have to be motivated, beside that they have the ability to solve problems
independently, contribute to developing and improving production.
6
Womack / Jones, Lean Thinking
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So to derivate maximum benefit from the people's skills and knowledge, the work is
often carried out by teams with a rotating team leader. Duties are integrated into the
teams horizontally and vertically. As well as a new pay system a "qualifications-
related scales of remuneration" has taken place. With its focus on the increase of the
pressure for change, encouraging the skill enhancement employees need to become
able to do their jobs and to achieve a high degree of flexibility.
A variable performance related element of remuneration is normally linked to these
pay scales with a team bonus measured on results.
In most of the progressive companies teams of operators have a large number of
duties in addition to their actual work with the machines. For example, the following
tasks in a company with a lean production system are often delegated from a former
supervisor level: a detailed planning of work and the division of work. Parts of
personnel matters and the ordering of material, tools, as well as measuring
equipment and repairs; furthermore tasks in following-up of production targets in
quality and quantity and as mentioned out before, problem solving and correcting
defects are given into the teams responsibility. But there are often also duties
delegated to the teams, which were classical duties only for production engineers,
planners and other white-collar categories such as programming, getting in touch
with customers and subcontractors. Also working on improvements, for instance in
project groups together with technicians, are the main changes in a lean production
orientated production company.
A flexible allocation of workers can be reached through job rotation. Rotation
between work places allows the job content to be enhanced, on other words it results
into job enlargement. For employees it has the advantage of giving more variety,
thereby reducing the routine and blunt character of the machine paced work.
However, teamwork goes far beyond the simple job rotation. More important is the
gradual and the ever continuing evolution of incorporating additional responsibilities
within the production teams. The philosophy is to make better use of the available
capacities, in order to achieve a more autonomous and efficient functioning of the
teams.
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Thinks like first line maintenance, quality assurance, material supply etc. have been
integrated into the teams, combined with a restructuring of the formal organization in
order to achieve closer support from a reduced staff department to the production
teams. Usually additional responsibilities for the teams are assigned to a specific
function within the teams or to their team leaders, while the job content of the other
remains unaltered.
Additional responsibilities for the teams must be interpreted as allocated to all team
members, when everybody rotates over a number of jobs within the teams. Rotation
means more then just "doing more of the same" or just simply job enlargement.
Involvement in off-line activities supporting the teams functioning also implies job
enrichment.
In the line with this, another phase can start the evolution towards semi-autonomous
teams, for instance phase of self management. Here everybody of the team
members has been given the ownership of a specialized topic in correspondence
with his own field of interests, capacities and competencies. The topics can vary
according to specific team needs, prevention of break downs, damages or follow up
of product quality, for example. Every team has to be given a day or two to engage
on these team-activities. Also here a rotation scheme can be applied, every day
someone else gets the opportunity to be revealed from the conveyor belt and do
some work on the topic, he was chosen for. This allows the companies to make
better use of the available human capacity by addressing and stirring up sometimes
hidden qualifications. In general the self-management could increase the self-
supporting character of the teams, as well as the general quality level of the teams
and organization tout court.
Teamwork was characterized by its gradual and stepwise implementation. Evolving
from a former Taylorism job to a richer job, characterized by a self-management in
autonomous teams, implies a long learning process that cannot be pushed from top
down.
Team members have to receive off-the-job trainings to enlarge them, to jump to a
subsequent stage and take on additional responsibilities. As a rule it can be pointed
out, that the target-orientated and partly autonomous teams will have to receive
Details
- Seiten
- Erscheinungsform
- Originalausgabe
- Jahr
- 2003
- ISBN (eBook)
- 9783832481919
- ISBN (Paperback)
- 9783838681917
- DOI
- 10.3239/9783832481919
- Dateigröße
- 472 KB
- Sprache
- Englisch
- Institution / Hochschule
- Hogeschool Zeeland – Economics
- Erscheinungsdatum
- 2004 (August)
- Note
- 1,9
- Schlagworte
- group mini
