Ford must copy TMC, which copied Ford
Today, as the once-vaunted DaimlerChrysler merger frays, as Chrysler Group
casts away 13,000 workers, as Ford Motor Co. fails to meet even the modest
targets of its second Way Forward revival plan, as General Motors Corp.
struggles to produce a coherent 2006 financial report after weeks of delays,
it seems fitting that "The Machine That Changed the World," the seminal 1990
book on lean manufacturing as practiced by Toyota Motor Corp., is now being
In the next few weeks, Simon & Schuster will publish a paperback edition of
the book, with a new foreword and afterword reflecting on Toyota's
ascendance to the top of the world automotive heap during these past 17
The foreword, titled "Why Toyota Won: A Tale of Two Business Systems," notes
that when authors Jim Womack, Dan Jones and Dan Roos wrote their book in
1990, Toyota was only half the size of GM and two-thirds the size of Ford.
"Today," they write, "Toyota has easily passed Ford and is surging past GM
to become the largest and most consistently successful industrial enterprise
in the world."
The sad part -- for Detroit anyway -- is that Toyota managers unabashedly
based their business model and production theories on those practiced by
Henry Ford in the original Model T plant in Highland Park, circa 1914.
GM and Ford butchered the lean-production system in subsequent decades and
lost their zeal for rooting out waste. When Toyota and Honda and other
carmakers set up shop on American shores in the 1980s, Detroit responded
with denial and excuses for its loss of market share to foreign-owned
rivals. But even after conceding the merits of Toyota's system, the Detroit
Three have found it difficult to duplicate.
Jim Womack, chairman and founder of the Lean Enterprise Institute in
Cambridge, Mass., relates this unsettling tale on his Web site www.lean.org
"In 1997, I got a call from Jac Nasser, who had just taken over Ford's North
American Automotive Operations on his way to becoming CEO of Ford. He
matter-of-factly told me that Ford's Explorer and F-series pickup trucks
were the only Ford products that made serious money and that he calculated
that he had four years to become as efficient as Toyota. Otherwise, the
large pickups and SUVs would be copied by foreign firms at lower cost with
higher quality and Ford would be in terminal decline.
" 'So,' he asked, 'how can Ford become Toyota in four years?' We sat down to
talk over just what this would mean -- dramatically changing the supplier
management system, dramatically changing the product development system,
dramatically changing the production management system, dramatically
changing what managers do -- and he quickly concluded that it was just too
hard. So he changed the management metrics, purged the poorest managers
according to the metrics, and experimented with selling cars on the Web. I
was not asked back and had no desire to go back."
In short, Nasser saw the future correctly -- Toyota and others would
challenge Detroit dominance in trucks and SUVs -- but didn't have the
stomach to do what was needed.
Womack's prescription for new Ford CEO Alan Mulally is the same: "Ford needs
to remake itself once more, this time in the image of the company that
copied Ford's original system: Toyota."
GM and Chrysler should pay heed, too. Time is growing short.
"The king of Israel answered, "Tell him: 'One who puts on his armor should
not boast like one who takes it off."