Management Demand and Production system

Management must demand that those responsible for production know what system of production is appropriate, and apply the principles of that system consistently and to the limit. These are the first and decisive steps in pushing back the limitations of production on business performance.

Only when these steps have been taken can the next one be made: the organization of parts of production on the basis of a more advanced system.

The result of doing this without first analyzing the production process and organizing it properly is shown by the failure of the prefabricated house. It would seem the most obvious thing in the world to build a house from prefabricated, standardized parts. Yet the attempt, when made after World war II, proved abortive.

The reason was that uniform, standardized parts mass production, in other words were superimposed on a badly disorganized unique product system. Instead of homogeneous stages, the organizing principles were craft organization. The use of pre-fabricated parts in a craft system proved more expensive and slower than the old methods. When, however, the Levitts in Long Island organized home building by homogeneous stages, they could immediately use uniform standardized prefabricated parts with conspicuous savings in time and money.

Similarly, standardized parts brought no savings in a locomotive repair shop as long as it was craft organized. When the work was organized in teams, each containing all the skills needed in a particular stage of the work, when, in other words, craft organization was replaced by stage organization, standardized parts brought tremendous savings.

This is of particular importance in a mass production industry, which produces diversified products. For there the great opportunity lies in the application of Automation; and this can only be achieved if production is properly understood and organized as the manufacture of uniform parts and their assembly into diversified products.

The electrical instrument maker mentioned above could fairly easily put his production of parts on an automatic basis, approaching closely the continuous flow and automatic self control of an oil refinery or a plate glass plant. There are other illustrations.

The US Bureau of Standards has recently worked out for the US Navy a method of automatic production circuits. This process does away with the soldering of individual circuits; it eliminates, in other words, the traditional “production by assembly” of the electronics industry. At the same time it makes possible the use of large number of different circuits and their combinations without redesign of the process and without change in production. It does this by replacing the wiring in a radio or television set with a fairly small number of pre-designed parts that can be plugged together in assembly to give many circuits or combination of circuits.

A good example is a shirt manufacturer who faced the problem of an almost infinite variety of sizes, styles and colors, seemingly making impossible any production planning. He found, however that three quarters of his production were in white shirts; and that there were only three basic qualities of fabric used in making white shirts and in fairly predictable proportions. He then found that all shirts were made of seven parts: front, back, shoulder yoke, collars, right sleeve, left sleeve, cuffs. Size adjustments could be made in assembly where the finished shirt is sewn together by cutting off excess length or width; for it is cheaper to sacrifice a few inches of material than to turn out parts of different size. Style adjustments could be made by using different collars and cuffs and different buttons. As a result all parts except collars and cuffs could be produced in the three grades of cloth without variation; cuffs required three variations; collars six. Only collars, which are simple to produce, are therefore made according to customers’ orders today. And a job that, twenty years ago, was still almost entirely run by hand on individual sewing machines, is now done as a continuous automatic process, controlled by inventory standards. The result has been a sharp cut in cost, a tremendous increase in the variety of final products sizes and styles and greater customer satisfaction.