You Can Lead a Horse... Even Horses...

Greg Gardner's article in the Detroit Free Press the other day had some hidden insight into why the NUMMI experiment did nothing for GM... and why Toyota opens its doors to tours by competitors. 

Toyota's decision to close its 25-year-old California factory where UAW workers build Corolla cars and Tacoma pickups has delivered a seismic, Detroit-like jolt to the once-invincible Silicon Valley economy.  The Japanese automaker's first plant closing in North America will add to California's swelling unemployment rolls, and perhaps, help the Golden State better empathize with the industry that it has persistently challenged with regulatory requirements.

I can personally attest to the "persistently challenged with regulatory requirements"... it's just plum crazy out here.  Byzantine overtime requirements, tax structures, red tape... you name it.  And they scratch their heads wondering why capital and knowledge and jobs are leaving.  But that's a different topic.

Here's the meat:

Mark Hogan embodies what hundreds of General Motors Co. executives learned from the company's 25-year joint venture with Toyota: New United Motor Manufacturing Inc., known throughout the industry as NUMMI.  "I went out as a finance guy. I came back much more conversant in manufacturing and what made Toyota successful," Hogan said. "We all were involved in hands-on decisions and spent part of every day on the floor. I even worked in the stamping shop. I came out a much better executive."

Those of us steeped in the culture of lean understand completely.  Finance is just one support function to the core value-creation of the manufacturing process... not the other way around.  And to truly understand the core you have to be out on the gemba every day.  What a great opportunity for GM.  So what went wrong?

GM's early NUMMI grads often encountered frustration as they tried to apply what they learned from Toyota back in the mothership, but most of them persisted. When Jack Smith, one of the joint venture's founders, became GM's chief executive in November 1992, the NUMMI prophets had a shepherd who supported them.

"A great deal of the learning from NUMMI ended up at Saturn," said David Cole, chairman of the Center for Automotive Research in Ann Arbor. "Ironically, the core of Saturn has gone away."

What a wasted opportunity.  You can lead a horse to water, even many horses, and they may learn very well... but those horses still have to battle the herd.  Ok enough of the completely busted metaphor.

Create great manufacturing and the rewards will come.  Focus on finance and marketing identical cars as different while considering manufacturing and factory knowledge workers as a cost and... well we all know what happened.

Finally, just for kicks, take a quick skim though some of the 300+ comments on the article.  One of my favorites:

We showed Toyota and drove them out of US-based plant.

Yeah, keep on thinking that.  Detroit still has a long, long ways to go.

Comments

[david foster]

The correct thing for GM to do, IMNSHO, would have been to keep Saturn as a true business unit--its own engineering, its own manufacturing, and its own dealer network--and increase its model range over time.

Yeah, there are economies of scale in centralization of functions, but there are also huge costs, particularly in the lengthening of what fighter pilots called the OODA loop.

[Steve Murphy]

I worked for a supplier to Toyota. We made parts for dealer distribution, not directly to the factor. That was a whole different level we weren't ready for.

Toyota held Kaizen Challenge events with their suppliers. These sessions covered TPS and kaizen at and were held at a Toyota facility. During the event, the host said they provide Toyota training to anyone who asked, including their "competative partners". Someone in the training session asked the obvious question, "How can you do that? How can you give away you're core knowledge?"

The host replied, "Because we know our competative partners won't do anything with it. And even if they could, we are years ahead of them."

I learned a lot in these training sessions, but that was probably the most important lesson on competitive advantage.

I'm at a different company now, but there is a lot of talk about product lifecycle - kill off the old products that made you successful, innovate and penetrate new markets. How many times can you make lightning strike? My goal is to improve the things that made us successful, improve our processes and avoid the fear that our products become a commodity.

Do you just dodge the wolves or stay ahead of them?

[Bill Waddell]

Horses have the sense to do the basic things needed to survive and thrive as a species, and have done so for thousands of years. To compare them with GM is an insult to horses.

[Rick Bohan]

I read the comments on the original article. I think the "We drove Toyota out" comment was meant as sarcasm.

I owned a GEO Prizm made at the NUUMI plant. It got 260,000 miles before the transmission went bad. Best car I ever had, other than it didn't have cruise control.

[Mark Welch]

LOL on Bill's comment... Bill, have you ever thought about doing a Lean standup routine? You'd be a big hit at an LEI (or other) conference.

[My two cents]

Just a couple of comments... first it is important for your readers to note that TMS and Lean do have many similar goals but both systems are very different in practice and philosophy.

Secondly, as a former NUMMI employee having spoken with former GM coordinators whom had returned to GM after their NUMMI tours, TPS was not embraced it seems in my opinion because the same fundamental differences between TPS and Lean, found there way back to GM, even when the philosophy was delivered correctly by NUMMI/TMC trained GM personnel. That is to say the powers that be were more interested in tools and quick culture change than strategic change with a purpose. TPS is not about the tools but how and when to deploy them. It’s also important to note that culture change in a TPS environment comes through the implementation of standards and systems to help reduce cost through waist elimination, this is driven in most cases from, as the stories author notes form the guy at the process... which is different than the focus of Lean.