What we can learn from the lean car plant, NUMMI

“In remembrance of NUMMI” by Hugo90 on flickr 1

The car in the photo above is a a Chevy Nova that was produced in Fremont, California, at a factory that was known as the New United Motor Manufacturing Inc., or NUMMI. If you think it looks a bit like a Toyota Corolla, you would be right, for reasons that will become clear.

The story of NUMMI is a fascinating one, and I first came across it when the NPR radio series, This American Life, broadcast an episode about it. You can listen to the whole one hour episode in the embedded player, below. You can also go to the This American Life website to listen to the episode in 2 halves, or read the transcript. I come back to listen to it every few months, because it can tell us a lot about the nature of change, quality, empowerment, motivation, and culture in organisations.

Culture change

NUMMI was formed in 1984, from the ashes of a plant that GM had closed in 1982. General Motors reopened the plant, employing many of the same workers who had staffed, according to the United Auto Workers union, the former worst performing plant in the US. Employees of the defunct factory regularly drank on the job, had very high rates of absenteeism, and performed deliberate acts of ‘anti-QA’ sabotage, such as putting empty bottles inside car doors to annoy customers.

GM and Toyota had formed NUMMI as a joint venture to satisfy imperatives for both companies; GM needed to learn how to manufacture small cars cost effectively, with high quality standards, and Toyota to learn about producing cars in the US in the face of changing import laws.

Some of the American workers were sent to Japan to learn the Toyota Production System, and the results were remarkable. In a massive turnaround, NUMMI almost immediately began producing vehicles to quality standards that rivalled the Toyota factories in Japan that they had learnt from. The emphasis on quality inherent in the TPS, meant that employees became empowered to do things such as stopping the production line when they saw a problem, rather than allowing defects to build up and have to be fixed at a later stage.

“I believed that the system was bad, not the people” – Bruce Lee, union representative

Initially, the reemployed workers hated the idea of change, until they started going to Japan to view Toyota’s system at work. They were amazed at how empowered workers were in the Toyota Production System, and that people were expected to continuously improve, as a team.

“They had such a powerful and emotional experience, of learning a new way of working, a way that people could actually work together collaboratively, as a team” – John Shook, Toyota trainer.

The changed way of working and management, handed the NUMMI workers the opportunity to build in quality and to be engaged in problem solving and making improvements.

As Shook noted in a piece for MIT Sloan Management Review:

What changed the culture at NUMMI wasn’t an abstract notion of “employee involvement” or “a learning organization” or even “culture” at all. What changed the culture was giving employees the means by which they could successfully do their jobs.

‘No Problem’ is Problem!

The ability to highlight problems and fix the cause without placing blame on individuals, is a key learning. If fingers are pointed, people will have a tendency to pass the problem “down the (production) line” to make sure that there aren’t personal repercussions; asking “why” and not “who”. The American culture was, when asked how things were going, to respond “No Problem!”. However, the Toyota view was that saying “No problem”, was a problem itself. There are always “problems”, that if solved can spark improvement.

As Shook said when concluding his article:

The famous tools of the Toyota Production System are all designed around making it easy to see problems, easy to solve problems, and easy to learn from mistakes. Making it easy to learn from mistakes means changing our attitude toward them. That is the lean cultural shift.

What happens at NUMMI, stays at NUMMI

When GM tried to take the successes experienced at NUMMI to its other factories in the USA, it was generally a failure; at least for the first 10-15 years! Initially, GM sent 16 managers to California to start NUMMI, the ‘Commandos’, with the idea that they could go back to other parts of the company. However, there was no ‘master plan’ beyond that to extend this to other parts of such a large and complex organisation.

People at other plants didn’t have the same motivation to take on different ideas as the NUMMI workers had. “It’s a lot easier to get people to change if they have lost their jobs and then you offer them back”

To make real change, GM managers had to leave the US, and overhaul operations in Germany and Brazil, in the mid-90s. It took a decade and a half, a generational transformation, until there was a critical mass of people sufficient to change the whole of GM. To the point that by the early 2000’s, GM had what they called the “Global Manufacturing System”.

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