A Tale of Two Cities (Profound)
In the IT world, they sometimes refer to the Red Queen’s Race from when Alice went back to Wonderland. The Red Queen and Alice ran like the wind. When they stopped, to the little girl’s astonishment they were exactly where they’d started. She remarked,
"Well, in our country," said Alice, still panting a little, "you'd generally get to somewhere else—if you run very fast for a long time, as we've been doing."
"A slow sort of country!" said the Queen. "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!"
By 1965, Toyota City was running twice as fast; Detroit didn’t even know there was a race.
“The moral of the [US automobile plant supervisor]’s experience is, never buy a car made on a Monday or a Friday. On those days, the work force stays out in droves. Anybody who can hold a tool is pressed into service to keep assembly lines moving.” That’s from the New York Times in 1971. Autoworkers at the Big Three wanted to skip Fridays to get the party started early. Mondays, they were so hungover they couldn’t come to work. Dealers and those “in the know” would specify that only cars built on Tuesdays, Wednesdays, or Thursdays be sent to their dealership—all the lemons and shoddy workmanship got dumped on the unsuspecting. And this was normal. Expected. Planned for. (Shewhart would’ve said this was a system in control. Its “normal” might be normally bad, but it’s a system that was reliably bad.)
In 1955 while Toyota was still recovering from the war, it averaged four vehicles produced per employee. Ford and GM, on the other hand, were producing ten per employee. The problem is that the two American automakers stayed there over the next thirty-five years; Toyota did not.
Someone once asked Deming, “How long do you think it will take the United States to catch up with Japan?”
His counter question: “Do you think Japan is standing still?”
Japan was not.
The Japanese Automobile Industry: Technology and Management at Nissan and Toyota - Cusumano, Michael; numbers have been rounded for ease of comparison.
Detroit wasn’t improving; it was standing stockstill.
Picture it. One Ford employee making ten cars a year for thirty-five years while his Toyota counterpart goes from four to sixty. Toyota’s supplier network? A typical GM car factory used 800 suppliers. Toyota? Just 125...with half the in-house work. This dispels the Western myth of needing more to do more: Toyota was doing more with less. Less outsourcing meant greater control and greatly reduced variation.
Toyota’s suppliers loved working with the company. As late as the early 2000s, Toyota’s network rated the carmaker 350 points out of 500, putting it in the “good to very good” category. GM’s suppliers rated their relationship with the US carmaker at 125—”poor.”
Toyota didn’t just dominate US markets—it decimated them.
