Lean Production and Industrial Engineering Practice in the Context of China's Dual Economy
I. The underlying logic of China's dual economy: The "parallel path" that does not follow linear development
The economic evolution of developed countries follows a linear path of agriculture → industry → knowledge economy. However, China's national conditions have determined a unique dual - economic structure. Traditional agriculture and modern industry and service industries are not in a "substitution relationship", but rather "co - exist and develop in parallel". Agriculture is not only the foundation of food security, but also directly drives the upgrading of industry and service industries through industrial chains such as agricultural product processing and rural e - commerce (for example, the vegetable industry in Shouguang, Shandong has formed a collaborative system of "agriculture + industry + Internet" from planting to cold - chain logistics and then to e - commerce platforms). This structure means that China's management engineering cannot simply copy the "single model" of developed countries. It is necessary to take into account both the "solidity" of agriculture and the "iterative nature" of industry to find a production mode suitable for itself.
II. Lean Production: The "Efficiency Revolution" Born from the Competition between Japan and the United States
1. The origin of lean production: The "crisis-driven" situation in the U.S. automotive industry
In the 1980s, the U.S. automobile industry suffered a "Waterloo". The market share of Toyota's Corolla and Honda's Accord in the North American market soared from 10% to 30%, while the profits of the three major U.S. automakers (General Motors, Ford, and Chrysler) dropped by 60%. The core reason is that Japanese companies' products are "good and cheap". For the same sedans, the failure rate of Japanese cars is 30% lower than that of American cars, while the cost is 20% lower.
To break through the deadlock, the Massachusetts Institute of Technology (MIT) in the United States organized 17 experts to launch the "International Motor Vehicle Program (IMVP)", conducted in-depth research in Japanese enterprises such as Toyota, and finally refined the concept of Lean Production: centering on "eliminating all waste", through "just-in-time manufacturing, zero defects, and zero inventory", integrating "the low cost of mass production" and "the flexibility of single-piece production" to achieve the low-cost production of high-quality products with multiple varieties.
Simply put, mass production (such as the Ford production line) reduces costs through "standardization" but cannot quickly switch products; single-piece production (such as handmade customization) meets personalized needs through "flexibility" but has high costs. The breakthrough of lean production lies in: replacing "large-scale mass production" with "small-batch and high-frequency production" and replacing the "push-type supply chain" with the "pull-type supply chain" - producing exactly how much is needed, when it is needed, and in what quantity. This approach not only retains the efficiency of mass production but also has the flexibility of single-piece production.
2. The essence of lean production: TPS = IE + corporate culture + management concept
The foundation of lean production is the Toyota Production System (TPS), and its essence is a combination of "American Industrial Engineering (IE) + Japanese corporate culture + Toyota's management philosophy".
IE is a tool: In the 1950s, Japanese enterprises extensively learned from American IE (Industrial Engineering). For example, the "motion study" in IE enabled Toyota to optimize every motion on the assembly line, and the "time study" made the time for each process accurate to 0.1 second. Zhao Keqiang, a Toyota expert, clearly stated in the book *The Toyota Production System*: "The essence of TPS is 'Toyota-style Industrial Engineering', and IE is the'skeleton' of TPS."
Corporate culture is the soil: Japan's "collectivism" and "long-term employment" culture makes employees willing to participate in "continuous improvement" - Toyota's "suggestion system for improvement" receives 2 million suggestions from employees every year, and more than 90% of them are adopted, which is unimaginable in American companies (American employees attach more importance to "individual performance").
Management philosophy serves as the guide: Toyota's core philosophy is "cost reduction" - because profit = revenue - cost. Revenue is determined by the market, and the only factor that enterprises can control is cost. The concepts of "zero inventory" and "zero defect" in lean production are all aimed at "eliminating waste" and ultimately achieving "high profits with low costs".
Later, TPS evolved from Toyota's Method to Comprehensive TPS (covering the entire R & D, production, and supply chain processes), and then was upgraded to Japanese Management Standard. In essence, it is a deep integration of tools + culture + concepts.
III. Management Mode and Industrial Engineering: Understanding the "Underlying Language" of Lean
1. Management mode: An unreplicable product of the environment
A management model is a management system with clear goals, concepts, and structures (such as the Ford production line, the Toyota model, and the Haier model). It has two core characteristics:
Non - replicability: The management model is an outcome of the environment — the Ford production line was suitable for the mass - consumption market in the United States in the early 20th century (at that time, the per - capita car ownership in the United States was less than 10%, and affordable cars were needed); the Toyota model was suitable for the environment of resource scarcity and teamwork in Japan (Japan lacked oil and steel, so it was necessary to make the most of every penny). Directly applying Japan's TPS to American enterprises or directly using the American ERP system in Chinese enterprises will fail due to cultural conflicts.
Accumulation: The management model is the result of long - term precipitation. It took Toyota 30 years to develop TPS (from 1950 to 1980), and it took Haier 20 years to form the "Rendanheyi" model (from 1998 to 2018). The depth of management directly determines the competitiveness of an enterprise. Toyota's TPS enables its production cost to be 15% lower than that of its peers, and Haier's "Rendanheyi" has reduced its inventory turnover days from 90 days to 30 days.
2. Industrial Engineering: The Bridge Connecting Technology and Management
The essence of Industrial Engineering (IE) is to use engineering technology to solve management problems. It differentiates between two types of "engineering":
Professional engineering (inherent technology): For example, mechanical engineering designs equipment, and chemical engineering designs processes. These are the "necessary conditions" for production - only with the equipment and processes can products be manufactured.
Industrial engineering (management technology): For example, optimizing processes, reducing waste, and improving efficiency are the "sufficient conditions" for production. Only with IE can equipment, processes, and people be combined into a "high - efficiency system".
The most classic example is the shovel experiment conducted by Taylor, the "father of scientific management": By studying "the action of shoveling coal", he found that different materials (coal, charcoal, soil) require shovels of different shapes - a wide shovel (weighing 25 pounds) for shoveling coal, a narrow shovel (weighing 20 pounds) for shoveling charcoal, and a pointed shovel (weighing 15 pounds) for shoveling soil, which tripled the workers' efficiency. Taylor's contribution was not "inventing the shovel", but "transforming technical problems into management problems" - using engineering methods to solve the problem of "how to make workers more efficient".
3. Core awareness of IE: The "underlying thinking" of lean
The essence of IE lies in the "five types of awareness", which also represent the "underlying logic" of lean production.
Problem awareness: Actively seek problems instead of reporting achievements. Leaders of Japanese enterprises will ask, "What wasn't done well today?" because problems are the starting point for improvement. Many Chinese enterprises only talk about "how many indicators have been completed" during their reporting meetings, which actually covers up potential waste such as "inventory backlog" and "poor workflow".
Improvement awareness: Continuous improvement rather than one-time optimization. Toyota's "Kaizen" culture requires employees to make "1% small improvements" every day. For example, adjusting the position of tools or reducing one movement during handling. Over the course of a year, it amounts to "365% significant progress".
Efficiency, cost, and quality awareness: Efficiency means "doing the right things" (such as optimizing processes to reduce waiting time), cost means "doing things right" (such as reducing the defective product rate to minimize losses), and quality means "doing things right the first time" (such as using automated equipment to detect defective products). The goal of IE is to balance these three aspects rather than sacrificing one for another.
IV. Toyota Production System: The Underlying Logic of the "Toyota House"
The core framework of the Toyota Production System is the "Toyota House", which consists of "one major goal, two major pillars, and one major foundation":
I. One Major Goal: Reduce Costs and Create Profits — Toyota's logic is very simple: Revenue is determined by the market (for example, the selling price of cars is determined by consumers and competing products), and the only thing a company can control is costs. To create profits, it is necessary to "eliminate all unnecessary waste" (such as inventory, waiting, and defective products).
Two major pillars:
Just-in-Time (JIT): "What is needed, when to deliver, and how much to deliver" - For example, in Toyota's assembly line, the previous process only delivers parts when the next process needs them. There is no inventory and no waiting. This requires a high degree of synergy in the supply chain: Suppliers must deliver the "exact quantity" to the "exact location" at the "exact time".
Automation (Jidoka): "Automation with artificial intelligence" – for example, when the equipment detects defective products, it will automatically stop, and workers can also stop the machine at any time when they find problems to avoid "batch scrapping". This kind of automation is not about "replacing people" but "assisting people": allowing people to focus on "solving problems" rather than "repetitive labor".
I. One major foundation: Continuous improvement (Kaizen) – JIT requires the cooperation of the supply chain, automation requires the cooperation of equipment, while continuous improvement requires the cooperation of people. Toyota's employees put forward about 2 million improvement suggestions each year, and over 90% of them are adopted. This is the cultural foundation of TPS – without the participation of employees, neither JIT nor automation can be implemented.
V. Strategies for China to Introduce Lean Production: "Hierarchical Adaptation" Based on the Dual Economy
China's dual economic structure (the coexistence of agriculture and industry) determines the "differences in development levels" among enterprises. Introducing lean production requires "implementing measures according to different levels":
First level (high-tech enterprises): For example, Huawei and DJI, which require "modern IE + information technology" - using integrated manufacturing (integrating R & D, production, and supply chain into a single system), agile manufacturing (quickly responding to market demands), and supply chain management (optimizing the global supplier network) to meet the market demands of "multiple varieties and small batches".
Level II (Regular manufacturing enterprises): For example, automobile and machine tool factories need "traditional IE + lean tools" - use work study (to optimize assembly line actions), logistics engineering (to reduce handling waste), and 5S management (sorting, straightening, sweeping, standardizing, and sustaining) to standardize the workplace, and first address the "visible waste" (such as inventory overstock and high defect rates).
Third level (Small and medium-sized enterprises/ Township enterprises): For example, agricultural product processing and garment factories, which require "Classical IE + Basic management" - use Taylor's "motion study" to improve efficiency (such as adjusting the height of sewing workers' workbenches), use visual management (color labels to distinguish materials) to reduce errors, and use the "improvement suggestion system" to encourage employees to put forward suggestions to solve "basic waste" first (such as forgetting to turn off equipment and redundant staff).
Conclusion: China needs "its own lean production method"
Lean production is not a "Japanese patent", but a "universal logic for solving efficiency problems". China's advantage lies in the flexibility of its dual economy - the solid foundation of agriculture can provide a "stable foundation", and the rapid development of industry can provide a "driving force for progress". In the future, China's production mode will inevitably be a combination of "IE tools + Chinese culture + local concepts":
- Solve "efficiency problems" (such as optimizing processes and reducing waste) with IE;
- Build "team collaboration" with China's "harmony and unity culture" (for example, Haier's "Rendanheyi" model that connects employees with customers);
- Be guided by the concept of "customer-centric" (for example, Xiaomi's "user participation in design" allows customers to become part of the product).
Ultimately, China will develop its own "lean production mode" – not a copy of Japan's TPS, nor a direct adoption of the US's IE, but an "efficient system" that is suitable for China's dual economy.
Early practices of lean production in China: FAW being "the first to eat the crab"
In 1980, China's manufacturing industry was still struggling in the extensive stage of "scale first" - with long waiting times on production lines, huge inventories piling up, and a high defective product rate. As the "eldest son" of New China's automobile industry, FAW had acutely realized that the traditional "large and all - inclusive" production model could not cope with future competition. So, FAW took a crucial step towards benchmarking against the world's advanced level: it sent a core team to study at Toyota Motor Corporation for a year.
This is not an inspection for a mere "check-in with photos". Team members immersed themselves in Toyota's assembly lines, warehouses, and supplier workshops, and squatted on-site to observe "why Toyota's on-site inventory is only one-fifth of ours" and "why employees can proactively stop the line to solve problems". They found that Toyota's core competitiveness is not "advanced equipment", but industrial engineering (IE) - the underlying logic of optimizing processes and eliminating waste with scientific methods.
After returning to China, FAW did something "unprecedented": it established industrial engineering departments in core sectors such as FAW Jiefang Group and FAW-Volkswagen. This is the first functional department specifically responsible for "process optimization and efficiency improvement" among large and medium-sized state-owned enterprises in China. For example, FAW Jiefang Group used the "time study" in IE to streamline the assembly line, changing "batch assembly" to "assembly line operation", and increasing the single-shift output by 20%. FAW-Volkswagen used the "workstation layout" method in IE to reduce the changeover time of the engine assembly line from 4 hours to 1 hour.
More importantly, FAW's attempt has set an example for state-owned enterprises: Lean is not the exclusive patent of foreign-funded enterprises, and state-owned enterprises can also implement Lean through IE tools. After that, enterprises such as Dongfeng and SAIC have followed suit one after another, and the industrial engineering department has gradually become the "efficiency engine" of manufacturing enterprises.
Five key paths to promote lean production
I. Concept: From Copying TPS to Lean with Chinese Characteristics —— Management innovation is the core
The first misunderstanding of lean management among many enterprises is "blind copying": when they see Toyota using "kanban management", they buy a batch of paper kanbans and hang them on the production line; when they see Honda using "andon cords", they install cords at each workstation. As a result, it often turns out to be "similar in form but different in essence" - the kanbans become useless ornaments and the cords turn into mere decorations.
The root cause of the problem lies in the environmental differences: TPS (Toyota Production System) was developed based on Japan's "lifelong employment system", "supply chain of small and medium-sized enterprise clusters", and "employee participation culture", while Chinese enterprises are facing the realities of "high labor mobility", "multiple levels of supply chain", and "fickle customer demands". Copying TPS blindly is like "planting Japanese seeds in Chinese soil", and it is impossible for them to grow into towering trees.
The correct concept is "localized innovation" – from TPS/LP (Lean Production) to CPS/CLP (Lean Production with Chinese Characteristics). For example:
- The core of Toyota's "Kanban management" is "pull production". Chinese enterprises can replace paper Kanbans with "digital Kanbans" (real-time data from the MES system), but the core is to "pull according to customer needs" rather than blindly copying the form.
- The core of Toyota's "jidoka" (employees taking the initiative to stop the production line) is the "sense of responsibility". Chinese enterprises can replace it with the "employee suggestion system". For example, a home appliance enterprise has set up the "Lean Award", giving cash rewards to employees after the improvement plans they put forward are implemented. In essence, it is to "stimulate participation" rather than blindly copy the "right to stop the production line".
The core of the concept is just one: Lean is not "being lean for the sake of being lean", but "solving practical problems and enhancing overall competitiveness through management innovation". What enterprises should ask is not "What does Toyota do?", but "What are our pain points? What can Lean help us solve?" — If the inventory is high, use "Value Stream Mapping" to find the waste of "overproduction"; if the delivery is slow, use "Pull Production" to shorten the lead time; if the defective rate is high, use "Poka - Yoke" to reduce human errors.
II. Training: Integration of Chinese and US-Japanese Experiences —— Leadership Initiative + Long-term On-site Oriented Planning
The second major obstacle to the implementation of lean manufacturing is "biased training": either "only train employees but not leaders", which results in the failure to promote cross - departmental collaboration; or "only talk about theories but not on - site situations", which leads to employees not applying what they have learned.
To solve this problem, we need to first clarify the core differences between the training in the United States and Japan:
American model: Top-down, emphasizing execution. For example, Jack Welch of General Electric promoted Six Sigma. Led by the CEO, all employees from senior executives to ordinary staff had to obtain the "Black Belt" certification. The core is "using data to speak" (DMAIC process), emphasizing "top-down implementation."
Japanese model: Prioritize the on - site and emphasize practice. For example, Toyota's "Go and See" principle requires employees to observe beside the production line for 30 minutes before raising questions. The core is "do it with your hands". New employees first work on the production line for 3 months when they join the company, and learn to organize their workstations using the "5S" method and identify abnormalities through "visual management".
The training of Chinese enterprises should combine the advantages of both.
1. Leaders must participate: Lean requires cross - departmental collaboration (production, procurement, and sales work together on the value stream). Without leadership support, it is impossible to break down the "departmental walls". The CEO of a machinery enterprise participates in the "Lean Weekly Meeting" every week, listens to the improvement progress reports from various departments, and solves cross - departmental problems on the spot. For example, when the procurement department reports that "suppliers fail to deliver on time", the CEO immediately takes the lead in holding a supplier conference to encourage suppliers to optimize the delivery process using lean methods.
2. Training should be on-site: Don't stay in the meeting room to teach the theory of Value Stream Mapping. Instead, take the employees to the production line and draw the value stream map with actual products. Don't just explain the definition of 5S. Let the employees organize their own workstations personally and feel the change of finding tools 10 minutes faster after the organization.
3. Training should be "long - term": Lean means "continuous improvement", and training cannot be a "one - shot deal". An electronics enterprise conducts "full - staff IE certification" every year. Front - line employees take exams on "5S and time study", middle - level managers take exams on "value stream analysis and rapid changeover", and senior managers take exams on "strategic deployment and culture building", turning training into "essential skills for the job".
III. Informatization: IE is the body and IT is the wing —— The collaborative logic of lean and digitalization
Many enterprises have misunderstandings about "lean + informatization": either they think that "informatization is lean", and implementing ERP or MES is equivalent to implementing lean; or they think that "lean does not require informatization", and manual tools can solve the problems.
In fact, the relationship between lean management and informatization is like that between the "body" and the "wings":
- IE (Industrial Engineering) is the foundation – it solves the problem of whether the process is reasonable (for example, changing batch production to assembly line operation).
- IT is the wing —— it solves the problem of whether the process is efficient (for example, using the MES system to solidify the process and avoid man-to-man supervision).
Without a foundation in Industrial Engineering (IE), Information Technology (IT) is just an "empty shell". For example, directly implementing an Enterprise Resource Planning (ERP) system will only "push" out more inventory. Without the empowerment of IT, the effects of IE cannot be magnified. For example, when drawing a value stream map manually, the updates are slow and inaccurate. Using digital tools (such as a Manufacturing Execution System, MES) allows real - time viewing of the process status, and the efficiency is increased several times.
Let's take a specific case: A certain automotive parts enterprise
1. IE optimization: Use "value stream mapping" to identify that "batch production" is the biggest waste. Change "push production" to "pull production", and reduce the on - line inventory from 500 to 50.
2. IT enablement: Launch the MES system to monitor the status of the processing line and assembly line in real time. When there is a shortage of parts on the assembly line, the MES automatically issues a "pull instruction"; when the defective product rate exceeds the threshold, the MES automatically gives an alarm.
In the end, the efficiency is improved by 30% and the inventory is reduced by 40%. This is the core logic of "IE + IT = (LP + IT)": only by first making the process "reasonable" and then "solidifying" it with the system can "continuous high efficiency" be achieved.
IV. Industry-University-Research Collaboration: Benefit-driven Approach is Fundamental - From "Academic Research" to "Solving Practical Problems"
The misunderstanding of many enterprises in the "industry-university-research" cooperation is "to obtain projects and publish papers". They cooperate with universities to conduct a "theoretical research on lean production" and publish several papers, and then consider the task completed. However, the industry-university-research cooperation in lean management must be centered around "benefit-driven" - solving the actual problems of enterprises, obtaining real monetary benefits, and then feeding back into research.
Specifically, it can be implemented in three directions:
1. Pilot project for introducing intelligence: Select industry benchmarks or consulting firms to set up a "pilot line". A home appliance enterprise collaborated with a retired Toyota expert. First, they chose a refrigerator assembly line as a pilot. By using lean tools, the defective product rate was reduced by 15%. Then, the successful experience was replicated across the entire factory, saving 20 million RMB in costs in one year. The advantage of the pilot project is that it "has a low risk and quick results", enabling the enterprise to see the "real benefits" of lean management.
2. Combination of internal and external resources: The internal team works in collaboration with external consultants. The internal team understands the "pain points" of the enterprise (such as bottlenecks in the production line), while external consultants are well - versed in lean "tools" (for example, using "SMED" to solve the problem of slow mold change). The internal IE team of a machinery enterprise discovered that "the die - change time of the punching machine was long", and invited an external consultant to conduct a "Single Minute Exchange of Die" training. Together, they reduced the die - change time from 2 hours to 30 minutes, and the output of a single device increased by 25%.
3. Benefit sharing: Share the proceeds from industry - academia - research cooperation with the partners. A certain automotive parts enterprise cooperated with the IE team of a university. Through lean management, they reduced inventory by 20% and saved 10 million yuan in funds. The enterprise allocated 10% (1 million yuan) to the university as research funds. The university used this money to develop a "digital value - stream tool" and provided it to the enterprise for free, thus forming a virtuous circle of "the enterprise benefits, the university obtains data, and the tools are iterated."
V. Corporate culture: Lean is not a "tool", but a "value" - cultural shaping that integrates the genes of the enterprise
Many enterprises' understanding of "corporate culture" remains at "wall slogans", such as slogans like "integrity, innovation, and high efficiency", which have nothing to do with lean. The core of lean culture is "commonly recognized values" - from top to bottom, everyone believes that "eliminating waste and continuous improvement" is right and is willing to take the initiative to do so.
The cultural structures of different enterprises vary:
Manufacturing enterprises: mostly feature "80% industrial culture + 20% corporate culture", and place more emphasis on process standardization and stable quality.
Service-oriented enterprises: mostly feature "80% corporate culture + 20% industrial culture", and place more emphasis on customer experience and service efficiency.
However, regardless of the structure, the implementation of lean culture must be integrated with the genes of the enterprise.
- The original value of a manufacturing enterprise was "Quality first". After integrating lean management, it became "Quality first + Eliminate waste". As a result, employees would actively pick up parts on the ground (inventory is waste), adjust the layout of workstations (transportation is waste), and put forward improvement suggestions (continuous improvement is a responsibility).
- The original value of a service enterprise was "Customer First". After integrating lean management, it became "Customer First + Value Creation". Employees will proactively optimize the service process (reducing the customer waiting time from 30 minutes to 10 minutes) and reduce ineffective services (no longer recommending unnecessary products) because "what customers need is 'value', not'redundant services'".
The ultimate form of lean culture is to transform lean from a "tool" into the "corporate DNA" - employees will proactively make improvements without being supervised by the leadership; they will actively look for waste without the constraint of regulations.
Conclusion
Lean production is not "an exclusive right of foreign-funded enterprises" nor "an unattainable theory" - it is the inevitable path for Chinese enterprises to enhance their competitiveness through "management innovation". From FAW's early practices to the implementation of the five major paths, there is only one core: Lean production should solve the actual problems of enterprises and create real benefits.
Whether it is the concept, training, informatization, industry-university-research cooperation, or corporate culture, ultimately it all has to return to "value" itself - eliminating waste and creating value to make the enterprise more efficient and competitive. This is the essence of lean production.