How does this square with for example the Japanese car market, which I thought led the world in labour practices and efficiency? They've invented many labour practices that are considered the best we have today. And their cars are so cheap - how are they doing this if they aren't being efficient?
For example are Toyota's engineering and factories running on wasted meeting time, fax machines, and hand-written letters? Doesn't seem likely. If they are it seems to produce great results!
An assembly-line is a machine designed to avoid the need for synchronous human decision-making. Instead, there are only synchronous machine decisions, and asynchronous human decisions based on e.g. sampling, or spotting.
There are synchronous human tasks in some assembly-lines, but as long as they're rote tasks, inefficiency usually isn't introduced. Humans working as if they were machines, are rarely inefficient; and if they are, this inefficiency is "legible" for blue-collar work in a way that it isn't for white-collar work, so an inefficient human "part" can be, er, swapped out.
The whole "thing" that Toyota did to revolutionize car manufacturing, was essentially to make quality-assurance part of the same ground-level machine (i.e. make it a computed outcome of a series of "dumb" machine and worker steps), rather than making it a separate auditing process. As such, they essentially squeezed the ability to be inefficiency/incompetent out of the QA process.
> The whole "thing" that Toyota did to revolutionize car manufacturing, was essentially to make quality-assurance part of the same ground-level machine
Where can I read more about it? I find it hard to imagine, how QA could possibly be a function of manufacturing process, since pretty much the sole purpose of it is to spot when "dumb" manufacturing process failed you a couple of steps ago. I mean, a lot of QA is pretty dumb too (like testing a party of 1000 details by breaking 10 of them), but there is nothing new about that specifically.
> since pretty much the sole purpose of it is to spot when "dumb" manufacturing process failed you a couple of steps ago
This is really not correct, a quality based approach to design and engineering will likely change your entire process (for good or for ill ... probably both).
> For example are Toyota's engineering and factories running on wasted meeting time, fax machines, and hand-written letters? Doesn't seem likely. If they are it seems to produce great results!
I used to work at Toyota, although it might have changed since I was there (I doubt it changed significantly, though).
The factories and supply chain seemed well optimized. This is a huge cost in producing cars, so it makes sense to focus on this even over engineering productivity, to some extent.
But engineering certainly did involve lots of meetings, paper documents with hanko seals, and antiquated IT systems.
So manufacturing is generally quite efficient. Toyota would be one of the powerhouse I had in mind, as would be most car companies. Note that Toyota is very much a global company and under the pressure of competition worldwide. But many large Japanese companies aren't.
>For example is Toyota also thriving on wasted meeting time, fax machines, and hand-written letters? Doesn't seem likely.
I don't want to go too much in specifics, but the examples I gave are actually coming from a company whose sole client is a large car company.
The inefficiency is generally limited to white collar workers. Japanese blue collar workers are very efficient. Also, internationally competitive companies like Toyota often (but not always) have better business practices.
I believe that's an issue of manufacturing efficiency vs. corporate efficiency. Toyota invented "lean manufacturing", but that doesn't mean that their biz dev, marketing department, etc isn't massively inefficient. I'm not saying they are, just that the two are orthogonal.
how are they doing this if they aren't being efficient?
As somebody driving a Toyota they simply don't add too many gimmicks and options are usually limited to just trim levels and maybe a few bundles you can buy separately. Overall it's a far cry from e.g. German manufacturers where the configuration form can have tens of items from which you can pick and choose.
Also apparently creative work such as software engineering lends itself to inefficiencies, because the outcome isn't easily measurable. You have to have a culture that accepts irreducible uncertainty to navigate in such an environment.
Japanese companies have a baffling knack for internal innovation that kind of transcends the overwhelming management style.
All the overtime and useless meetings produce a lot of decisions by consensus that balance out the random “maverick” ideas a VP might come up with. This creates a bizarre balancing act that sometimes produces decently market-synced products.
Also the just crazy amount of seasonality in Japan makes even the slowest moving company make large pivots at least four times a year. New season? New product, even if it’s weird and nobody wanted it, they figure out how to sell it and get 1500 workers to all shift left at the same time.
Many products in the Japanese market are well designed, durable, functional and cost-efficient, this is not something specific to cars.
When it comes to computer products, I am a fan of REALFORCE keyboards, which are manufactured in Japan. They have really made a difference in my day to day work.
Have you cross shopped vehicles lately? Your statement is arguably true about Nissan and Nissan only.
Japanese light vehicles typically carry an initial price premium that self perpetuates for a whole host of reasons beyond the scope of this discussion.
>Can you cite a self perpetuating instance of the price premium ownership?
The marginal difference between buyers of various vehicles and their intended use affects how those vehicles age and how they are perceived and valued by consumers over time. I'm gonna make a whole bunch of generalizations that are true at the margins (but obviously exceptions abound), please don't take them personally and hold your outrage until the end.
I think it's easier to explain in the opposite direction (i.e negative loop where customers reduce the premium-ness of the product) so I'll do that one first. For that case I present Jeep SUVs (other than the Wrangler). These vehicles are cheap up front and Chrysler financing will write a loan to anyone with a pulse. That means that proportionately a lot more of these vehicles get sold to people who are in an economic position where loading the back seat full of bags of concrete makes more sense than renting a truck if you catch my drift. These people tend to decline maintenance that isn't absolutely necessary, they will let a wheel bearing grind and let things wobble until payday, tow a trailer a little too big, etc, etc. The vehicles they own just get treated a lot harder all around than the vehicles of people with more wiggle room in their budget. And as you'd expect that means there's a lot more examples of these vehicles on the used market in rough shape with lots of little issues. That drives down the value, makes them more accessible to the same kind of people on the used market and the cycle feeds itself and Jeep SUVs are perceived as cheap and low class.
An example in the positive direction (premium customers giving a vehicle a good reputation) would be Toyota pickups and SUVs. When new they're moderately more expensive than the competition so the people for who are already stretching things to afford that class of vehicle (e.g. midsize SUV) never get their hands on them. As a result they get more often bought by people who are in a position to justify treating them well and keeping them nice so at any given age they'll have less hard use on them and be relatively nicer and better maintained than the competition. Because the examples around are in nice shape (and priced accordingly) people think they're inherently nice cars. That makes them hold their value even further. That means even when they're old the price premium helps keep them out of the hands of the people who have no better option but to use them hard and run them into the ground. It's a positive feedback loop that's keeping them "premium"
An even more scientific (less variables) example (albeit dated) of the same thing on the domestic side of the isle with the Mercury Grand Marquis. Old people bought them and mostly treated them nicely and they held their value very well compared to comparable sedans of other makes and the identical Crown Vics that were the staple of fleets. If you take an equivalently optioned 'Vic and Grand Marquis in equivalent condition/mileage the Grand Marquis will be worth more for no reason other than the badge on the grill implies nicer condition on the used market. Same engine, same trans, same cloth seats but the difference in buyer demographics had an effect on how well the vehicles aged and the Grand Marquis will be worth more because of it.
Basically Japanese vehicles traditionally target and get sold to a slightly more premium customer and they carry that premium their whole way down the economic ladder as they age.
Source: Extensive personal experience in the bottom price bracket of the used car industry.
For example are Toyota's engineering and factories running on wasted meeting time, fax machines, and hand-written letters? Doesn't seem likely. If they are it seems to produce great results!