John Davirose Rockefeller and his philanthropy

After reading JDR's autobiography, I am surprised to find how big an entrepreneur and how great a philanthropist he is. At age of 25 he had set up Standard Oil and by age 54 he was a great philanthropist.

The directed philanthropy that he started was instrumental in removing poverty from some parts of Africa and smallpox from the face of earth.

Toyota 14 Principles ..

The Toyota Way (Toyota Production System) is a comprehensive expression of the company's management philosophy, which is based on the two foundational principles of Continuous Improvement (kaizen) and Respect for People.

The Toyota Way defines the fundamental values and business methods all Toyota people should apply in every aspect of their day-to-day work, at every level of the company, worldwide. 

Click here to read an interesting blog

The Toyota Way is supported by two main pillars: 'Continuous Improvement' and 'Respect for People'. Toyota is never satisfied with where they are and always work to improve their business by putting forward new ideas and working to the best of their abilities.

We are living in a world of great competition. Even though the Japanese or Toyota were not the first to invent the automobile, the brain came from Europe, the Japanese have shown the world how good they are at execution, discipline, standardised orderly, neat approach, continuously striving to improve the product or process through  continuous improvement or Kaizen. 

They have been able to show the world how excess of inventory in any organisation or industry can be dangerous, costly or even fatal and why manufacturing just in time when the customer needs the item is the best and cheapest high quality way to get reliable good products out of the system for the customer.

The implementation of Toyota Way saw to it that any employee could work to improve the company . TPS reduces waste, increasing efficiency and reducing costs

Ford and lean manufacturing, Open Forum ..

I had the good opportunity to present a session in the Open Forum from Alliance School of Business, on 7 October, organised by the Operations stream on the topic Henry Ford, Mass Manufacturing and Lean Manufacturing. It was attended by 5 faculty from the Operations stream. 

Presenting before a faculty group is always beneficial as the presenter has to go to a higher professional level than what is delivered to the students. Also the preparation time for the talk was almost the whole holidays of Dussehra. I was also simultaneously reading Homer's Iliad, as that was the topic originally planned for a future week.

Without doubt we can say that Ford was in a major part one of the greatest industrialists the world has ever had. 

• Industry 1.0 focused on Mechanisation, cotton loom, printing press, steam engine etc.
  
• Industry 2.0 focused on  invention of electricity and mass manufacturing. 
• Industry 3.0 focused on the Digital Revolution sparked by the invention of the microprocessors and digital computer starting with the cutting edge work from Claude Shannon of MIT. 

We are now at the threshold of Industry 4.0 which is going to be the one of Artificial Intelligence, Machine Learning, Internet of Things, Blockchains, 3D Printing etc.

Yesterday's talk was specifically on the contribution of Henry Ford to Industry 2.0 or Mass Manufacturing.

Ford introduced Model T car for the world in 1908. It was initially offered at $850 and by 1925, it was offered at $260. Henry Ford's three pronged focus was on 

1. cost reduction (affordability), 
2. simple to operate (simplicity) and 
3. working for a long time (durability).

Ford is said to have been asked repeatedly why Model T came only in black colour, it was because black colour was cheap, dried faster and it was possible to make a car in just 90 minutes with the black paint.
Ford hated waste. He wanted lot of value addition and focused all his efforts on it. He created the concept of mass mobility, revolutionised mass production, helped create the American middle class and helped Americans to move from the cities to the towns, started the suburban sprawl. 

On first December 1913 was the day Henry Ford installed the first moving assembly line for the mass production of an entire automobile. His innovation reduced the time it took to build a car from more than 12 hours to one hour and 33 minutes

It kick started the MASS PRODUCTION REVOLUTION WORLD OVER.

The use of the moving assembly line allowed for the work to be taken to workers rather than the worker moving to and around the vehicle.

Ford also shocked the world by doubling workers pay to $5 per day. He wanted to give respect to the working class, and was sure this act would help him retain the best skilled workers in Ford.

Going through his autobiography, we understand he was more happy giving dividends to the working shareholder than the non-working shareholder.

Doubling the average wage helped

• ensure a stable workforce (no quitting) and
• boosted sales (the workers could now afford to buy the cars they were making)
• laid the foundation for an economy driven by consumer demand.

Ford for the first time brought these LEAN concepts to the world.

• Flow: started with raw materials and ended when the customer left with his car.
• Standardisation: standardization of product models, associated parts and also production tasks
• Reduction of wastes: in particular operator movements by minimizing the number of tasks to be performed
• Just in time: Ford worked on its Supply Chain to get the right amount of materials and parts according to demand

(all these lean concepts were developed 12 years before Sakichi Toyoda proposed looms stopping when fibre got cut (autonomation) for looms)

Why then did Ford fail ?

Ford did not focus on organisational improvement, solely on product quality. Product was more important than the organisation. Family run organisations after two generations need to be transferred to professionals to manage, as complacency sets in the family and it is difficult after two generations to find grandchildren with the same fire in the belly as their grandfather. 

Of 100 businesses that are started, it is found from a Harvard study that only 40 enter the second generation and of the first 100, only three enter the third generation. Click here to read my blog on this phenomenon. It was the reason why the 160 year old Tata Sons from India had to slowly move to professionals to run the organisation as smart leaders were not coming from the family.

Though Model T started at $850 around 1912, through mass manufacturing he brought it down to $260 in 1925, making it the car of the masses by reducing waste, ie. inventory pileup . Ford ruled the world of automobiles the first 40 years till 1940 when we find General Motors under a great leader Alfred P Sloan overtook Ford. MIT named its business school after this doyen of the manufacturing world. Japanese entered the market with low quality products, but kept continuously improving their products, conquering global markets.

The discipline, practical application dedication saw the company Toyota, born in 1939, 36 years after Ford in 1903, take over the world automobile scene presently.

The 2021 automobile sales global is given below. (statista.com)

1. Toyota            9.56 m
2. VW                 8.88 m
3. Hyundai-Kia` 6.67 m
4. GM                 6.29 m
5. Stellantis       6.14 m
6. Honda            4.46 m
7. Nissan           4.06 m
8. Ford              3.94 m
9. Renault         2.69 m
10. BMW             2.52 m

Top 10 sales 55.21 million vehicles and global sales are 66.7 million vehicles.

For a company that ruled the automobile world for the first fifty years of the last century, in the face of increased competition and better manufacturing methods, can it or will it revive and survive in global market ?

George.

Homer's Iliad - story of war, heroism, valour and deceit ..

During this time of Dussehra holidays, I thought of making good use of the time. I am reading Iliad by Homer (lived in the 8th century BC) written and published around 750 BC on the Trojan war fought between Greeks and Trojans from Troy (modern day Northwest Turkey). Encyclopaedia Britannica claims Homer to be one of the all time greatest of the world's literary artists and Iliad, his first work to be one of the earliest literary works.

 

Throughout the book we see mention of the names of different Greek Gods, mainly Apollo as Gods did rule the lives of the people. King David of the Bible Old Testament would be born only 200 years after the Trojan war was over, around 1000 BC. Appeasement of the native ancient Gods through offerings and sacrifices was very much prevalent then, as we now also see. The full compilation of the Old Testament in the Bible was not ready, it had to wait till 600 BC.

 

Believers of the Old Testament Gods of Jehovah in Jewish belief have moved to the more convincing Triune God for Christians as a matter of conviction and convenience. One should remember that this shift happened as the old Gods were getting ineffective and their teachings were inadequate, feeble and weak.

 

Who knows whether in the coming years we too will not switch over to more powerful Gods, created from our imagination, more suited to the modern times, digital avatars in the digital and artificial intelligence domains ?

 

The main story line is the conflict between the Greeks – led by Agamemnon, King of Mycenae – and the Trojans – whose king was Priam – which took place in the Bronze Age around 1200 BC, and lasted 10 years.  The epic Iliad is about the tenth year of this ten-year war between Greece and Troy. It is a description of the events that took place during the tenth year of the war and told by the protagonist of the poem, Achilles, one of the most celebrated Greek warriors in the war. The other book by Homer, Ulysses is about the tale of the victor Odysseus making his way to his home country, Greece.

 

This singular book forms the basis and one of the most influential books of western literature. Written in poetic style in ancient Greek language and recited over the ages, the English translation has withstood the test of time and is as absorbing as the original one.

Gods, Kings and warriors united the people then while the people fought others who were following their own different Gods (as do the present day people). Wars described how nations (and people) were born, survived and went down under.

I am thoroughly and slowly enjoying each step of my trip to Troy, in the north west corner of Turkey, going back in time by 3200 years, to understand the minds, thoughts, beliefs and actions of people, their conversations, emotions and stories of heroism and valor during the time of the war. This helps us to gauge where the present day men are faltering in their steps, helping understand the weaknesses and limitations of the present day Gods. 

Achilles

Ancient Gods keep changing and increasing over time, man has not changed. Old Gods are forgotten, new Gods are invented and put in place. These Gods will be forgotten and new ones again invented in the future, in another five hundred to thousand years. The book is the defining one that paved the way to the birth of English literature. More reading will expose more facts to me in the coming days.

One of the events in the book mentions about the Trojan leader Chryses asking the Achean (Greek) leader Agamemnon to release his daughter Chrysues. The request is refused. The Trojan leader now requests God Apollo who brings in a plague to inflict the Acheans (Greeks). When Agamemnon realises the plague was due to the interference of God Apollo, he releases Chryseus.

Though I have not reached the end of the book, I understand, towards the end of the war the Greeks through an act of deception under the King of Ithaca, Odysseus, build a huge white wooden horse and leave it at the gate of Troy as an offering to the Gods. They pretend to give up the battle and sail away back to Greece. Sensing victory, the Trojans took the white horse inside the city of Troy, when the soldiers or warriors who were hiding inside the big wooden white horse came out and ransacked Troy, bringing the great ten year battle to an end.

Some comments need to be made about the age of this composition to know how important it is to world culture and specifically Western literature. The oldest Hindu epics (the oldest world religion) of Bhagavath Gita, Ramayana and Mahabharatha, as per Encyclopaedia Britannica were written around 500 - 300 BC, which qualifies Homer's work to be among the oldest in the western and eastern world. As per Columbia University sources, the Confucian Analects, the Confucian holy book, is believed to have been written after the death of Confucius in 479 BC and  between 476 and 221 BC. 

The Angams of Jainism were composed around the sixth century and written around the fourth and third century BC. The Tripitakas of Budhism were composed around 550 BC and written during first century BC. The other older religion Jewism, it's holy book Torah, which is the first five books of the Hebrew Bible, Genesis, Exodus, Leviticus, Numbers and Deuteronomy, as per Britannica was composed in sixth century BC and revisions done in the fifth century BC. Christianity and Islam are too nascent and young to find mention in this writing.

The distance between Greece and Troy is just about 380 km, which in modern day driving one can do in 6-8 hours driving or an hour of flying. It took 10 years for the victorious Greek forces under Ullyses to reach Greece from Troy after the war ..

Though the story line for the events in the book is almost 3200 years old and told about 2800 years ago, the narration is very real and lively. It is great to see that people three thousand years back also had the same feelings and emotions of fear, confidence, anxiety,  valour etc.. as any one of us. Homer's writings will continue to dominate and influence global thoughts and actions for a long time to come.

George