Lean manufacturing
Based on Wikipedia: Lean manufacturing
In the ruins of postwar Japan, with bombed-out factories and a collapsed economy, Toyota had almost nothing. No cash to buy materials in bulk. No space to store inventory. No natural resources on the islands. No domestic market to sell into. What they did have was desperation—and an American statistician named William Edwards Deming who couldn't get anyone in his own country to listen to his ideas.
That combination of scarcity and fresh thinking would birth a manufacturing philosophy that transformed global industry. We call it lean manufacturing today, but its origins are a strange tale of rejected ideas finding fertile ground halfway around the world.
The Prophet Without Honor
Before World War Two, Deming was working for the United States Bureau of Statistics, where he began developing ideas about how to make manufacturing more efficient. He wasn't thinking about widgets on assembly lines—he was thinking about variation, about quality, about systems. His approach, which he called Total Quality Management, asked a simple but radical question: what if instead of inspecting products at the end to catch defects, you designed the process so defects never happened in the first place?
During the war, Deming and a colleague named Walter Shewhart applied their statistical methods to help America's military manufacturers. It worked brilliantly. But after the war ended, American industry didn't want to hear it.
Why would they? America in 1945 was the only major industrial power left standing. Europe was rubble. Japan was rubble. American factories could sell everything they made. Efficiency? Quality control? Statistical process management? Thanks, but we're doing fine.
Deming's ideas were dismissed as radical. Too theoretical. Unnecessary.
An Ocean Away, A Different Reception
General Douglas MacArthur was overseeing the reconstruction of Japan, and he assigned Deming to help advise struggling Japanese industries. The contrast with his American experience couldn't have been starker.
Japanese manufacturers were desperate. They had none of the advantages American companies enjoyed—no abundance of raw materials, no vast domestic market, no capital for big factories stuffed with inventory. They couldn't afford to make things the way everyone else did.
So when Deming arrived with his unconventional ideas, they listened.
Toyota, which had started as a textile company before moving into automobiles in 1934, became one of Deming's most enthusiastic students. The company's founder, Kiichiro Toyoda, had already noticed a problem: they were wasting enormous resources fixing defective engine castings. Deming's philosophy offered a way out. Instead of accepting waste as inevitable and building in time and money to fix mistakes, you could redesign the process to eliminate mistakes entirely.
Two Toyota engineers, Shigeo Shingo and Taiichi Ohno, took Deming's teachings and ran with them. Shingo had read Frederick Taylor's Principles of Scientific Management back in 1931 and been so impressed that he made efficiency his life's work. Now he had a systematic framework to build on.
The Seven Deadly Wastes
Shingo formalized what became the philosophical core of lean manufacturing: the identification and elimination of muda—the Japanese word for waste. Not just physical waste like scrap metal, but any activity that consumes resources without creating value for the customer.
He identified seven types:
- Superfluous inventory—raw materials and finished goods sitting around taking up space and tying up money
- Overproduction—making more than you need right now, which sounds efficient but actually creates all the other wastes
- Over-processing—doing more work than the customer actually requires or will pay for
- Transportation—unnecessary movement of materials and people within the system
- Excess motion—automating or mechanizing a process before you've figured out the best way to do it
- Waiting—any time when work isn't happening because something is stuck in a queue
- Defects—having to redo work because you didn't get it right the first time
That last one connects directly back to Deming. If you build quality into the process, you eliminate the waste of fixing mistakes.
But notice something else on that list: overproduction is there for a reason. The traditional approach to manufacturing said you should make things in large batches to spread fixed costs across more units. Economies of scale. Build it and they will come.
Toyota turned this thinking upside down.
Pull, Don't Push
Ohno had visited American supermarkets and noticed something interesting. The shelves weren't stocked according to some master production schedule. They were restocked when customers pulled products off them. Demand drove supply, not the other way around.
What if manufacturing worked the same way?
Traditional manufacturing pushed products through the system. You made what the sales forecast said you'd sell, and if the forecast was wrong, you ended up with warehouses full of stuff nobody wanted—or shortages of stuff everybody did.
Just-in-time manufacturing pulled products through the system. You only made what customers had actually ordered. Raw materials arrived just as they were needed, not weeks in advance to sit in a warehouse. Each station in the production line only made what the next station needed, right when it needed it.
This is terrifying if you're used to traditional manufacturing. No safety stock? No buffer inventory? What if a supplier is late? What if a machine breaks down?
That's exactly the point.
Making Problems Visible
When you have six months of inventory sitting in a warehouse, you can absorb all kinds of problems without noticing them. A supplier delivers late? Fine, you've got buffer stock. A machine breaks down? No rush, you're ahead of schedule anyway. A defective batch gets through? You'll catch it eventually during final inspection.
The inventory hides the problems. You might not even know they exist.
Toyota's approach was to deliberately reduce inventory to the point where problems couldn't hide anymore. If a supplier is late, production stops. If a machine breaks, production stops. If there's a quality issue, production stops.
That sounds like a terrible idea until you realize what it forces you to do: fix the problems. Not work around them, not buffer against them, but actually solve them permanently. The pain of stopping production creates powerful incentive to prevent the issues from recurring.
Toyota even gave workers the authority to stop the entire production line if they spotted a defect. This was heresy in traditional manufacturing, where the line stopping was the worst possible outcome and workers existed to keep it moving no matter what. But Toyota understood that the cost of stopping to fix a problem now was far less than the cost of discovering the problem later—or shipping defective products to customers.
Kaizen: The Never-Ending Journey
There's a word that keeps appearing in discussions of lean manufacturing: kaizen. It means continuous improvement—not a one-time overhaul but an ongoing, never-ending effort to make things a little better every day.
Toyota formed kaizen improvement teams to examine every stage of every process, looking for waste to eliminate. Not big dramatic changes, necessarily, but small incremental improvements that compound over time. Move a tool rack closer to where it's used, saving workers a few steps. Redesign a part so it can only be installed one way, eliminating the possibility of installing it wrong. Rearrange the sequence of operations to reduce waiting time.
Each improvement might be tiny. But thousands of tiny improvements add up to transformational change.
The opposite of kaizen is accepting things as they are because that's how we've always done them. Lean manufacturing considers that attitude a form of waste in itself.
The Term Finally Gets a Name
By the 1980s, Toyota's methods had attracted worldwide attention. Japanese automakers were eating into American market share with cars that were cheaper, more reliable, and more fuel-efficient. Detroit wanted to know how they did it.
In 1988, an American businessman named John Krafcik wrote an article called "Triumph of the Lean Production System." He needed a name for this approach that contrasted with traditional "buffered" manufacturing—where you buffer against problems with extra inventory, extra time, extra resources. Toyota's approach had stripped away those buffers. It was lean.
The name stuck.
In 1990, a book called The Machine That Changed the World brought lean manufacturing to a mass audience. Authors James Womack, Daniel Jones, and Daniel Roos had conducted a massive study of automotive manufacturing worldwide and concluded that Toyota's methods weren't just incrementally better—they were fundamentally different and dramatically more effective.
Womack and Jones followed up in 1996 with Lean Thinking, which distilled the philosophy into five principles:
- Precisely specify value from the customer's perspective
- Identify the entire value stream for each product
- Make value flow without interruptions
- Let the customer pull value from the producer
- Pursue perfection relentlessly
Notice how different this is from traditional manufacturing thinking. You start with the customer and work backward. Value is defined by what the customer actually wants, not by what's convenient for you to produce. Everything else is waste.
America's Earlier Brush With These Ideas
Here's an irony: the efficiency principles underlying lean manufacturing weren't new to American industry. Frederick Taylor had documented observations about manufacturing efficiency in the early 1900s. Henry Ford had implemented many similar ideas at his plants—he wrote in his 1922 autobiography that raw materials should ideally arrive directly into production without stockpiling.
But there was a crucial difference. Taylor and Ford focused on physical organizational efficiency. What Deming added—and what Japanese manufacturers embraced—was the systematic, philosophical, statistical dimension. Not just organizing the shop floor better, but fundamentally rethinking how you manage quality, variation, and continuous improvement.
American manufacturers in the 1910s were aware of competition from "cheap offshore labor"—the phrase shows up in Frederick Taylor's writings. Henry Towne, a past president of the American Society of Mechanical Engineers, wrote that improving manufacturing efficiency was essential "to strengthen our control of home markets, and, above all, to broaden our opportunities in foreign markets where we must compete with the products of other industrial nations."
They had the motivation. They just didn't have the complete toolkit yet. And when Deming offered it to them after the war, they weren't interested.
The American Awakening
By the late 1970s, American manufacturers couldn't ignore Japanese competition anymore. Articles about Toyota's methods started appearing in Western publications in 1977, referring to the "Ohno system" after Taiichi Ohno.
The real turning point came in 1980, at a conference in Detroit—Ford's hometown, in Ford's own world headquarters. A group called the Repetitive Manufacturing Group had formed within the American Production and Inventory Control Society to look for advances in manufacturing. They invited Fujio Cho, who would later become president of Toyota Motor Corporation, to explain the Toyota system.
The audience was stirred. Some of that stirring was enthusiasm. Some was defensiveness.
See, American manufacturers had spent the 1960s and 1970s investing heavily in a computer-based approach called Manufacturing Resource Planning, known as MRP II (pronounced "M-R-P two"). This was a system for scheduling and managing production through sophisticated software. It was modern. It was high-tech. It was expensive.
And now these Japanese companies were achieving better results with paper cards called kanbans?
Kanban—the word means "signboard" in Japanese—is a visual scheduling system at the heart of just-in-time production. When a workstation uses up materials, they send a kanban card upstream to signal that more materials are needed. Simple, low-tech, and remarkably effective.
Debates erupted in professional meetings and publications. Just-in-time versus MRP II—which was better? One article was titled "The Rise and Fall of Just-in-Time." Another asked, "Kanban Versus MRP II—Which Is Best for You?"
Over time, the controversy faded. Even prominent MRP II advocates eventually acknowledged that just-in-time's time had come. The approaches turned out to be more complementary than competitive—you could use computer planning systems while still applying lean principles.
Lean Goes Mainstream
Throughout the 1980s, American companies began implementing lean manufacturing in earnest. The case studies multiplied.
A company called Omark Industries—which made chainsaws, ammunition, and logging equipment—became an extensive just-in-time implementer under their homegrown name ZIPS: Zero Inventory Production System. At their main plant in Portland, Oregon, workers received forty hours of training and then were "turned loose."
Things began to happen quickly. They arbitrarily eliminated a week's lead time from their processes—and things ran smoother. Workers asked to try removing another week. The approach spread through the plant "like an amoeba." At one of Omark's smaller plants in Minnesota, large-size drill inventory was cut by ninety-two percent. Productivity increased by thirty percent. Scrap and rework dropped twenty percent. Lead time from order to finished product fell from three weeks to three days.
Similar stories emerged at Hewlett-Packard, Harley-Davidson, John Deere, IBM, Apple, and others. General Motors and Toyota even formed a joint venture called NUMMI—New United Motor Manufacturing—to apply Toyota methods at a GM plant in California. A factory that had been one of GM's worst performers became one of its best.
The Tradeoffs
Lean manufacturing is not magic. It involves real tradeoffs.
The just-in-time approach requires extraordinarily accurate demand forecasting. If you're wrong about what customers will order, you can't just reach into buffer inventory—you don't have any. Minor delays in the supply chain can cascade into major disruptions. A strike at a single supplier, a ship stuck in a canal, a factory fire—any of these can halt production entirely when there's no inventory cushion.
Workers sometimes bear the cost of lean systems. The elimination of slack means there's no hiding from problems, which can be stressful. The pressure for continuous improvement can feel relentless. Conditions can become inflexible when every minute of every process is optimized.
And lean manufacturing depends on reliable suppliers. If your parts don't arrive exactly when needed, exactly as specified, in exactly the right quantity, the whole system breaks down. This requires deep, trusting relationships between manufacturers and suppliers—a very different dynamic from the adversarial, lowest-bidder approach traditional in American industry.
Beyond the Factory Floor
What started as a manufacturing philosophy has spread far beyond factories. Hospitals use lean principles to reduce patient wait times and medical errors. Software developers adopted lean thinking into "agile" development methodologies. Service industries apply value stream mapping to improve customer experiences.
The core insight transfers: identify what creates value for your customer, eliminate everything that doesn't, and continuously improve the process. Whether you're making cars or treating patients or writing code, waste is waste.
Deming's Revenge
Perhaps the strangest part of this story is its ending—or rather, its continuation.
Japanese manufacturers still honor William Edwards Deming. The most prestigious quality award a company can receive is called the Deming Prize. It's been awarded annually since 1951, recognizing companies that demonstrate excellence in Total Quality Management.
The American whose ideas were rejected by American industry became a hero in Japan. And the methods Japanese companies developed from his teachings eventually forced American industry to adopt them anyway, decades later, under competitive pressure.
Deming lived until 1993, long enough to see his ideas finally embraced in his home country. Ford invited him to consult in the 1980s. Other American companies followed. Better late than never.
But one wonders: what if American manufacturers had listened in 1945? What if Toyota's lean revolution had been an American lean revolution? How different might the industrial history of the late twentieth century have been?
We'll never know. What we do know is that necessity proved to be the mother of invention. Japan's constraints—no cash, no space, no resources, no market—forced innovation that abundance would never have demanded. Toyota built smaller factories because they couldn't afford bigger ones, held minimal inventory because they couldn't afford to tie up capital, and focused relentlessly on quality because they couldn't afford to waste materials on defects.
The methods born from scarcity turned out to be superior to the methods born from abundance. That's the lean manufacturing story—and it's a reminder that constraints aren't always obstacles. Sometimes they're exactly what you need.