3 stories fromLean Enterprise

@hoangngoctu

NUMMINew United Motor Manufacturing, Inc.

1

What is NUMMI?

◉ 1962-1982: one the worst GM plants.◉ 1982: closed.◉ 1984: reopened as NUMMI, a joint venture

between GM and Toyota.

GM vs. Toyota

◉ Toyota must avoid import restriction.◉ GM wants to study Toyota’s production

system (TPS).

After NUMMI started

◉ Toyota rehired workers and sent them to Japan to learn TPS.

◉ Within 3 months, NUMMI produced near-perfect cars (as good as Japanese) with much lower cost than GM plants.

“

it was the system that made it bad, not the people.

- A union leader

How?The primary idea of TPS is everyone should be

involved in deciding how to improve the system

Western traditional management

F. W. Taylor’s scientific management:

◉ Manager analyzes the work and break it down into discrete tasks.

◉ Tasks are performed by specialized workers.

Organization = A machine which can be broken down into component parts.

Taylorism vs. TPS

Taylorism:

◉ Workers = Cogs in a machine◉ Paid = perform pre-planned actions as fast as

possible

Taylorism vs. TPS

TPS:

◉ Require workers to pursue mastery through continuous improvement.

◉ Autonomy to experiment with improvement ideas.

◉ Giving people pride in their work (intrinsic motivators) rather than trying to motivate them with carrots and sticks

Did GM replicate NUMMI success?

◉ No, they didn’t.◉ Toyota even opened public tours to its plants,

even to competitors.◉ Let GM photographed every inches of NUMMI

to copy it precisely.◉ TPS work is not so much any particular

practices but the culture of continuous improvement.

The end of NUMMI

◉ 2009: GM went bankrupt and pulled out of NUMMI.

◉ 2010: Toyota shut down NUMMI.

Moral of the story?Let’s discuss!

Napoleon vs. Prussian1806

2

Command and Control

Classic

◉ People in charge make the plans◉ People on the ground execute

Prussian Army

◉ Larger army (250,000 vs 160,000)◉ Better trained◉ Classic plan-driven organization

Napoleon Army

◉ Maneuver warfare◉ Situation changed so fast that communication

couldn’t keep up◉ Able to learn, make decisions, and act faster

than enemy - the same capability that allows startups to disrupt enterprises.

◉ And he won!

Aftermath: Mission Command Doctrine

◉ Officer’s autonomy.◉ Mission Command = maneuver + scale.◉ It is key to understanding how enterprises can

compete with startups.

Moral of the story?Let’s discuss!

NUMMI part 2New United Motor Manufacturing, Inc.

3

NUMMI became Tesla Factory

◉ 2010: NUMMI was purchased by Tesla and become Tesla Factory.

◉ Tesla uses continuous methods to innovate faster than Toyota.

Tesla announced it will not enforce its patents.

◉ Origin is still Toyota’s spirit.◉ Long-term value of an organization = ability to

innovate continuously improvement.

Moral of the story?Let’s discuss!

Any questions ?

You can find me at

◉ @hoangngoctu◉ Skype: tu.hoangngoc

Thanks!

Credits

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◉ Presentation template by SlidesCarnival◉ Photographs by Unsplash