From cutting back to ramping up: the reflexes of production control (1979)

Agility, and the structure that made it possible

The core of this decision lay in a single point: under the same external conditions of recession, how to read the timing of production adjustment. Rather than piling up inventory and holding on, Toyo Bearing cut back early, caught the signs of recovery and turned to increased output, and on top of that got ahead of the next source of demand — front-wheel-drive cars — with constant-velocity ball joints. These nimble reflexes can be seen as producing a recovery in sharp contrast to Koyo Seiko, which fell into losses and entrusted its rebuilding to another company. The speed of movement in the middle of the crisis was itself what divided the competitive outcome.

What supported that speed, however, was a one-man structure in which authority was concentrated in a single manager. Strong leadership made possible both the adoption of technology for growth products and the instant decision to cut back; it also left distortions — the absence of a mechanism to bind together small, independently accountable units, and a stalling of personnel development. The ambiguity by which the very structure that led the recovery becomes the object to be corrected shows that the power to get through a crisis quickly and the power to sustain an organization in normal times are different things. The drive components that began with constant-velocity ball joints would grow into a second pillar alongside bearings. How to hold speed and endurance together — that is the question the 1979 recovery left behind.