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NUMMI, we knew ye well (but GM didn’t)

April 1, 2010

Today marks the last day of a bold experiment in lean manufacturing.  New United Motor Manufacturing, Inc. (NUMMI), the joint venture between Toyota and General Motors closed for good on April 1, 2010.

When I visited in October 1989 as part of my academic research in lean manufacturing, NUMMI was indeed an experiment.  Large numbers of academics and industrial engineers studied NUMMI and their findings, shared with the world, aided the spread of lean manufacturing in the English-speaking world.

(Personal note: Shortly after my visit, I bought one of NUMMI’s products, a 1990 Geo Prizm, and drove it for 17 years.  The car was still running well on the day I donated it to my local public radio station.)

Credit: CanadaGood via Flickr

For General Motors, NUMMI was a giant missed opportunity.  They had a front-row seat from which to observe the Toyota production system for 26 years and, frankly, they squandered it, much to their detriment.  Ford didn’t have the same luxury and yet they are now well on their way to transforming their operations to compete with the best in the world.

Overall, NUMMI will be remembered as a success.  It demonstrated, for anyone who still doubted, that lean manufacturing wasn’t a Japanese cultural trait but rather an integrated set of production methods that could be implemented anywhere by anyone.

It established Toyota as a North American manufacturer.  It’s possible some will regard this as a net negative, an invasion of sorts.  Indeed, when Toyota and others began exporting increasing numbers of vehicles from Japan to the North American market, it was regarded by many as an invasion; and the resulting political pressure led to voluntary import quotas.

However, a business model where vehicles are built on one continent and shipped to another is not sustainable in the long-term.  The nature of automobile manufacturing is such that it can only succeed when makers develop engineering, marketing, manufacturing and a full supply chain on the continent where vehicles are consumed.

So, rather than providing a foothold for an invading power, NUMMI was the first step in developing a renewed auto manufacturing sector in the United States.

Ironically, NUMMI’s closure could be considered the second step in this renewal — the rationalization of production.  As is clear from this excellent, if slightly dated, information graphic by the New York Times, auto manufacturing in the United States is clustered in a relatively tight corridor between the eastern Great Plains and the Appalachian Mountains.

Due to its remote location, NUMMI never implemented true just-in-time delivery throughout its supply chain.  It depended on deliveries of components and assemblies from Japan and elsewhere.  The other outlier on the New York Times graphic is the General Motors plant in Wilmington, Delaware.  Located on the eastern side of the Appalachians, it closed on July 28, 2009.

NUMMI will be remembered alongside Ford’s Rouge plant and Toyota’s Takaoka plant as one of the most influential manufacturing facilities of the industrial age.

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