In the Pull Economy, you respond to customer ‘pull’ forces, rather than rely on old-fashioned Supplier Push. The market isn’t made and shaped by a supplier driving demand through advertising (the old post-war model), but by customers and suppliers together shaping the market.
I was reminded of this by the death last week of Joseph Juran, aged 103 who, along with W. Edwards Deming, was credited with inspiring the Japanese manufacturing quality ‘miracle’ of the late 1970s and 1980s.
Pushing control down onto the shopfloor and putting it into the hands of workers is something all customer-centered manufacturers do, now, as it contributes to a manufacturing system that is more responsive to customer pull.
Harley-Davidson routinely train their production line workers in Statistical Process Control (SPC) now, having learnt from Japanese bike makers what they, ironically, learnt from an American (Deming).
When working out how you can adapt your processes to ‘Customer Pull’ forces, it’s useful to take a quick look at how Toyota pioneered the Pull approach, building it into its production techniques decades ago. Then work out how you can apply some of their thinking to whatever it is that your organization does. Here’s a slideshare that does that (click on ‘view’ if you want to see it).
Phil
I share your enthusiasm for all things Toyota. And that is not just out of loyalty after having consulted and worked for Toyota for the last four years. Toyota has a lot to teach western companies about how to improve their business. It’s no surprise that Alan Mulally, the new Ford CEO is looking to the Toyota Way to help pull Ford out of its huge troubles.
The slideshow is an introduction to the fundamentals of the Toyota Production System. The various books on the Toyota Way by Jeffrey Liker go into the background to Toyota’s entire business system in much more detail. And Womack & Jones book “Lean Solutions: How Companies And Customers Can Create Value And Wealth Together” is the definitive description of how to successfully apply lean thinking to service and experience businesses. Interestingly, Toyota uses all of these books for staff education itself.
Perhaps the best single thinker on push-pull business is John Hagel. He has written extensively on this at his Edge Perspectives blog, and with John Seely Brown at the McKinsey Quarterly and in their own whitepapers.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
Phil – Juran actually started in Japan in the 1950s and much of his high impact work occured in the 1960s. I wouldn’t have known that except I’m writing a new book on Office Process, which has a section explaining how process got to where it was in the mid-80s, when the process world turned upside down, and why we still can’t separate “manufacturing’ from “process.”
Dick Lee
Thanks, Dick. Yes, it was 1954 he was invited to go to Japan and lecture on his methods. Though it’s not polite to quote yourself, there’s more information on that, below, from my website. The Deming stuff might be useful for you, too, as you are looking into this at the moment.
I’m sure you are right about the inability to separate ‘manufacturing’ from ‘process’. The ‘old’ manufacturing system was used as the model for most of our office processes. In banking, they still have ‘new product development’ people who develop a product then pass it over to be put together, then have it passed to sales and marketing and to the front office to sell the ‘product’.
They even use the words ‘financial services products’, which is completely divorced from the language their customers use. (Nobody thinks “I must go out and buy a financial services product today), which is largely why banks are so out of synch with what consumers actually want.
This manufacturing/process problem and the way office processes are distorted by their origins in manufacturing applies to ‘manufacturing’ in the Fordian/scientific management/Frederick Winslow Taylor version of manufacturing, that is. Here’s a little about Juran and Deming from my website, in case it’s helpful (you’ve probably got this already from your research):
Who was Joseph Juran?
“Juran, along with W Edwards Deming, was invited to Japan in 1954 and 1950 respectively to teach Japanese managers about quality and statistical process control respectively. Juran in particular is widely-seen as the father of the Japanese domination of global manufacturing in the late 1970s and throughout the 1980s.
A prophet is never recognised in their own land, as they say. Juran and Deming were widely ignored in the West until western manufacturers started looking for the causes of the Japanese manufacturing miracle that led western customers to prefer Japanese products, and traced JIT, TQM, kanban and other ‘customer pull’ manufacturing techniques back to their roots in Deming and Juran’s post-war lectures in Japan. Their ideas were enthusiastically, if belatedly, taken up in the West, leading to the growth of the Quality movement.”
Phil Dourado
http://www.PhilDourado.com
Hi Graham
Thanks for that. I didn’t know the Edge Perspectives blog, so that’s a great share: thanks.
I read somewhere (but can’t remember where) that Ford first got a clue that Japanese manufacturing was doing something right when they noticed that they had two versions of a transmission – one made in Japan and one in the US – for a particular car model. Customers kept asking for the Japanese-made one when the transmission needed replacing. They examined them to find out why. Though the overall tolerances both factories were asked to work within were the same, the Japanese-made pieces were more accurate down to far smaller tolerances than the ‘official’ Ford acceptability rate for measurement. As a result, they fitted better and gave less wear and so lasted longer and were more efficient.
It took Toyota maybe 50 years to develop the Toyota Way, and it’s still developing. Ford apparently first really absorbed what was going on in Japanese manufacturing from a TV programme (!) broadcast by NBC in 1980. The following year, Ford brought in W. Edwards Deming to consult with them to help improve their manufacturing. That was thirty years after the Japanese had done the same. That’s quite a lot of catching up they have got to do.
Phil Dourado
http://www.PhilDourado.com
Toyota has always seemed a step ahead in their manufacturing of cars and competent in adapting their manufacturing process of Toyota auto parts to suit the customer climate each year. I believe other companies reluctance to pay full attention to the methods used by Japan in the past is what has lead to Toyota having the upper hand. As far as I know Joseph Juran isn’t really cited as being the important figure he was by some people which is a real disappointment.