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People Matter

Surprisingly, many organizations emulate Toyota’s technical systems rather than their people systems.
#Toyota #Chrysler


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Several years ago, I frequently wrote about the Chrysler Operating System, which was devised by then-Chrysler manufacturing head Dennis Pawley and his then-number two Frank Ewasyshyn. Yes, there was more than a smidgen of the Toyota Production System found in COS. But those two did a fine job of tailoring their approach to North America from the get-go: realize that there are not only cultural differences between the ground from which TPS grew and that in another hemisphere, but Chrysler had to deal with a whole lot of existing systems, not only organizational, but those made of bricks-mortar-conveyors-transfer lines-assembly systems-and-whatnot.

One thing that Frank Ewasyshyn told me long ago has stuck with me: “Any company can buy the same machines and robots that any other company can. But it’s the people that make the difference.”

Two points about that: Ewasyshyn was instrumental in setting up Chrysler plants with the latest manufacturing technology—where appropriate. He was instrumental in making the connection between the workstations in the design studio and the workstations on the factory floor, pioneering much of the CAD/CAM/CAE integration that we now take for granted.

Second: while the “it’s the people that make the difference” sounds like sugar and spice and everything nice, Ewasyshyn was a serious, hard-working man not given to sappy sayings. He meant that.

While every manufacturing company on the planet seems to have their version of the Toyota Production System, it strikes me that in many cases this is pretty much like having a framed set of guiding principles in the lobby. Everyone has them. No one pays (much) attention to them. Familiarity breeds inertia. Continuous improvement gives way to going through the motions.

Arguably, since the Great Recession, the auto industry has been in a somewhat bizarre situation in that there were thousands of people let go, multiple facilities shut down, and now a rising demand for product—better product, product with new technology, product that must be changed more frequently. Anyone who doesn’t have more to do today in their job than they did five years ago is someone who has managed to do a good job staying hidden.

To make up for the closed plants and the retirement of equipment and systems well beyond their sell-by date, the auto industry has been investing heavily in capital equipment, dwarfing the spend of several other industries combined. But people in the industry have also discovered that one thing that is lacking is an abundance of skilled people. There is a lot of posturing and consternation about the high levels of unemployment, but there are a whole lot of jobs that are going unfilled because there aren’t the people with the capabilities required to fulfill the demands of those jobs. “Unskilled labor” has now become “unemployed people.” The whole re-shoring phenomenon is real, but it is hobbled by the fact that there aren’t more women and men to have the capabilities to thrive in the environment of the aforementioned CAD/CAM/CAE.

Ewasyshyn’s observation came to mind while reading a fascinating new book, The Modern Theory of the Toyota Production System: A Systems Inquiry of the World’s Most Emulated and Profitable Management System by Phillip Marksberry (CRC Press; crcpress.com). Note the word management in that lengthy subtitle. It is a production system but it is not a technology system. It is a system predicated on people. Indeed, Marksberry writes, “The one aspect that is completely the same in all organizations today and at Toyota is people. Organizations have people doing work. Toyota has people doing work. The common denominator is people doing work. Surprisingly, many organizations emulate Toyota’s technical systems rather than their people systems.”

In other words, they buy the machines and the robots and the material handling equipment and all the rest, but they overlook the people part of the on-going execution of the system. It doesn’t work. Well, that’s a slight exaggeration. It does work. But not well. Or maybe it does work—right now. But it isn’t sustainable because given the demands that are being placed on individuals and a lack of credible, concomitant support, people will simply burn out. And on their way to that, they’re output is going to be less than top-notch, which means that quality will suffer, which will lead to things like declining sales and recalls, which will lead to—well, we’ve all seen that movie before.

At the end of the day, it is about learning. Yes, companies must ship. But that shipped product, be it a fastener or an F-150, must be a result of the efforts of skilled, educated, committed people. 

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