car manufacturer history

Welcome to our presentation about the evolution

of management theories

This cartoon made in 1948 was sponsored by the A. P. Sloan Foundation

• Few workmen • Very Skilled and qualified • Customized cars • Workman :– Director– Manufacturer – Salesman

Disadvantages

• Manufacturing costs extremely high

• Maintenance and repair costs very high

• No Research and Development

Henri Fayol (1841-1925)

• One of the most influential contributors to modern concepts of management

• Father of modern operational management theory

• General and Industrial Management (1916)

Biography

• Educated at “Ecole des Mines” in St. Etienne• Almost 60 years of experience as an engineer

and Director at “Houilleres de Commentry”• 1916: Publication of “General and Industrial

Management”

Theory

• Fayol’s theory holds that there are five primary functions of management:

(1) Planning:

(2) Organizing:

(3) Commanding:

(4) Coordinating:

(5) Controlling:

Theory

• Modern management theories (e.g. Richard Daft) have reduced the five functions to four:

(1) Planning

(2) Organizing

(3) Leading

(4) Controlling

The Classical School of Management

Taylorism

Taylor : a Quaker!• Principles 1:

Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.

• « the natural instinct and tendency of men is to take it easy » F.W.TAYLOR

• Principle 2• Scientifically select, train, and develop each employee rather than

passively leaving them to train themselves. • « they sould...do what they are told to do promptly and without

asking questions or making suggestions » F.W. TAYLOR

Taylorism

• Principle 3• Provide "Detailed instruction and supervision of each worker in

the performance of that worker's discrete task".

• Principle 4• Divide work nearly equally between managers and workers, so

that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.

• « The Work of every workman is fully planned out by the management , each man receive complete written instructions ,... This task specifies not only what is to be done but also how it is to be done and the exact time allowed for doing it » F.W. TAYLOR

Henry Ford (1863-1947)

• Father of modern assembly lines

• Mass production

• Model T automobile

• Prolific inventor (161 U.S. patents)

Philosophy of Fordism• Widespread prosperity and rise corporate profits

How ?• High wages allow the workers to purchase the output they

produce. The idea : Convert workers into customers

Division of labor • Distinctive division of labor allows complex tasks to be

divided into several simple and repetitive one.

• Skilled labor is no more needed in the production.

Standardisation -Major issue of custom made cars : Each producers have their own parts and components. (even not the same metric system)

-Ford invented a process to directly shape parts out of a quenched steel block.

-Hand-made steel parts have to be recalibrate after beeing quenched.

Optimize the working space• Typically similar machinery

are installed one next to another.

• Ford rearrange them into the correct sequence to follow the production patern.

• Various parts of the production process are linked together by a moving conveyor belt : "Bring the work to the workers."

DisadvantagesAdvantages

• A pure product of the MIT…

– Graduated in electrical engineering in 1895, at 20

– Member of ΔΥ fraternity

– Founded in 1950 the School of Industrial Management

Alfred P. Sloan (1875-1966)

… & A selfmade man,1937-1956

1923-1946

1918

1916

1899

1895

Sloan’s Management approach

• Establishing annual styling changes

• Impeding alternative transports to car

• Pricing discrimination

• Market segmentation

Sloan’s Marketing approach

planned obsolescence

monopolysing

Sloan’s pricing discrimination

Quantity

Pric

e /

Qua

lity

Supplyer

Consumer

Mkt $!

15 Brands#1 Manufacturer for 76 Years 1930-2006The 25 Millionth car in 1945The 50 Millionth car in 1955The 75 Millionth car in 1962The 100 Millionth car in 1967#2 Manufacturer in 2007 after

Toyota Production System• A production system was developed between

1948 and 1975 for Toyota Motor company by:

– Taiichi Ohno,

– Shigeo Shingo

– Eiji Toyoda

• Difficulties for the company : – Small market with high competition– Poor consumers

Aim• Eliminate all muni, mura, muda (overburden,

inconsistency, waste) from the operation to stay competitive.

Toyota Production System House

Just in time production• Created by the founder of Toyota : Sakichi

Toyoda, his son Kiichiro Toyoda and the engineer Taiichi Ohno.

• Based on the 7 wastes:– over-production– motion (of operator or machine)– waiting (of operator or machine)– conveyance– processing itself– inventory (raw material)– correction (rework and scrap)

Jidoka• TPS emphasizes the participation of all

employees.• Toyota organized their workers by forming

teams • Each team has a leader who also works on the

line• Teams are responsible for :– Training to do many specialized tasks. – Housekeeping and minor equipment repair.

• Product defects must be discovered as soon as possible.

• Workers are responsible for the discover of defects.

• Workers are able to stop the entire line by pulling a cord (Jidoka).

• Workers are controlling machine’s work.

Jidoka

• Global Warming• Financial crisis• Energy crisis• Unemployment• …