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NUMMI Case Study
Time and Motion Regained
New United Motor Manufacturing Inc. Case Study
Paul S. Adler
Harvard Business Review
Katie Little
McDaniel College HRD 501
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NUMMI Case Study
Abstract
Workers in the Fremont plant, a once failing auto manufacturing plant, changed their
effectiveness and success by changing to a plant using Taylorist ideals. The new plant called
New United Motor Manufacturing Inc., NUMMI for short, was able to become one of the most
successful plants in the auto manufacturing industry. Workers were able to define their own
work standards and productivity, turning the atmosphere into a highly effective work
environment. The changing selection and socialization processes proved to be an important part
of the plant’s success. The emphasis of standardization and workplace environment were also
both highly valuable changes made in the NUMMI plant. Lastly, the emphasis for learning was
also helpful in creating a new organizational structure in the plant that added to the success.
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The case study done by the Harvard Business Review looks at the New United Motor
Manufacturing Inc. and looks at the ideas of standardization and Taylorist processes that they
used to turn around a once failing plant. The case study titled Time and Motion Regained by Paul
S. Adler looks at how the workers of the joint venture between GM and Toyota has created a
workplace where workers define their own job standards and productivity. The auto
manufacturing plant in Freemont, California went from being one of the worst functioning plants
on the verge of closing to one of the most successful plants in the industry.
The first change for the NUMMI plant took place after the change of power took place
between GM and Toyota. The selection and socialization process at the NUMMI were both
highly important in the plant’s success. The agreement that took place from the joint venture was
that previous employees would be rehired at the new plant. The applicants “went through three
days of production simulations, written examinations, discussions, and interviews” (Adler,
1992). The managers and union officials both evaluated the hourly jobs such as team leaders and
members. What made the process different was the union’s role in selecting managers, except
those directly from GM and Toyota. Of the 2,200 hourly workers, 85% came from the old GMFreemont plant and the old union hierarchy was rehired (Adler, 1992).
In choosing to rehire the former GM-Freemont employees and the old union hierarchy
they were able to hire employees who were already familiar with the auto industry and the
functions of the plant. The selection process would show the qualifications of the workers so that
the plant could rehire those former employees that would be beneficial. They were able to weed
out those employees that were falling behind or not qualified for the job. This was a good model
for hiring because these employees knew the work and environment so they just had to be
retrained on the specifics of the work at the under the new system.
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The principles laid out by Frederick Winslow Taylor assert, “quality, productivity, and
learning depend on management’s ability to free workers from the coercive constraints of
bureaucracy” (Adler, 1992). The Taylorist principles applied in the NUMMI plants created
“detailed standards, implemented with great discipline in a hierarchical organization” (Adler,
1992). The Taylorist procedures aim to encourage organizational learning and continued
improvement. In the NUMMI plant it was successful because it used Taylor’s time and motion
regimentation on the factory floor to increase productivity and quality while also increasing
workers motivation and satisfaction.
The Taylorist principles were effective in the NUMMI plant because by 1986 the plant
had a higher productivity than other GM facilities and twice more than the old plant (Adler,
1992). These principles would be easily transferable in workplaces and workforces in the 21st
century. If companies used the Taylorist principles they would be able to increase productivity
while also increasing the moral of the workforce. Employees not only work harder but they are
more likely to participate and give suggestions to improve the work being done. In the 21st
century people in a company take pride in being able to contribute and work hard.
The NUMMI approach was distinctive in two ways: the strong commitment to the social
content in how work is performed and the focus on standardized work. The organizational
structure at NUMMI gave workers the chance to make changes in the design and
implementations of the standardized work being done at the plant. Standardization helped reduce
variation in task performance, which helped in increasing productivity. By reducing the
variations it helped improve safety, raised the quality standards, the job rotation became more
efficient and the flexibility of workers improved (Adler, 1992). In the NUMMI plant
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“standardized work also has the overall benefit of giving control of each job to the people who
know it best” (Adler, 1992).
The case study also highlights how standardized work “gives continuous improvement a
specific base to build on” (Adler, 1992). Standardized work and workplace learning at NUMMI
gave way to a program that was designed to “encourage a growing flow of suggestions and to
help workers see and understand criteria, evaluate, process, status, and results” (Adler, 1992).
Standardization is an essential precondition for learning because it gives a platform for
improvement. Employees know the standard way of doing a specific task and create a better way
to do the job. In turn this also helps improve their job and the work environment.
The NUMMI system was highly successful in creating powerful relationships and
workplace empowerment. The social structure of NUMMI attempts to:
Build an atmosphere of trust and common purpose. NUMMI maintains exceptional
consistency in its strategies and principles, it carefully builds consensus around
important decisions, and it has programs ensuring adequate communication of results and
other essential information (Adler, 1992).
What helps create a positive work environment at NUMMI is the no-layoff policy, the
production system in place and the atmosphere of mutual respect created by those in
management.
The contrast of hierarchical power and those doing the labor also helps create a
productive workplace. With a non-flat hierarchical structure it creates a system of support and
control. The case study shows how the production system is “enormously effective is its ability
to make production problems immediately visible and to mobilize the power of teamwork”
(Adler, 1992). A thought-provoking quote from a UAW official states that:
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The key to NUMMI’s success is that management gave up some of its power, some of its
traditional prerogatives. If managers want to motivate workers to contribute and to learn,
they have to give up some of their power. If managers want workers to trust them, we
need to be 50-50 in making the decision (Adler, 1992).
This approach to the relationship of workers and managers resembles multiple popular
motivation styles such as theory x and theory y.
A strong aspect that makes the NUMMI plant work is the motivational concepts used by
the management and executive employees of the plant. The difference from the plant under GM
control to the NUMMI plant was the application of theory x and theory y. The environment at
the plant before was using theory x where “managers believe employees inherently dislike work
and must be directed or even coerced into performing it” (Robins, 2012). In the NUMMI plant
they look the approach of theory y where “managers assume employees can view work as being
as natural as rest or play, and therefore the average person can learn to accept, and even seek,
responsibility” (Robins, 2012). This theory well fits into the ideals of the NUMMI plant.
With the new production the employees were responsible for their work and were given
more opportunities to take on an active role in the workplace. A more contemporary motivation
theory that is evident in the NUMMI plant is the self-determination theory where “people prefer
to feel they have control over their actions, so anything that makes a previously enjoyed task feel
like an obligation that a freely chosen activity will undermine motivation” (Robins, 2012). By
NUMMI employees having a more active role in choices in the workplace they took more pride
in their work. Employees were allowed to make improvements in the production system and take
a role in implementing and testing them. Overall employees gave many accounts to how they felt
pride seeing care they helped produce.
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The classic reading by McGregor titled The Human Side of Enterprise compares to
conventional view of management using theory x to organize their employees. The newer theory
y style of management uses ideas of human nature and motivation. The NUMMI plant very well
uses these new assumptions on motivations to create a well-balanced work environment. Again
the “motivation, the potential for development, the capacity for assuming responsibility, the
readiness to direct behavior toward organizational goals are all present in people. Management
does not put them there. It is a responsibility of management to make it possible for people to
recognize and develop these human characteristics for themselves” (McGregor, 1957).
The NUMMI plant took these ideas and put them in place to transform a previously ill
working plant and changed it into one of the most highly functioning plants. This theory also is
visible with the NUMMI plant because “the essential task of management is to arrange
organizational conditions and methods of operation so that people can achieve their own goals
best by directing their own efforts toward organizational objectives” (McGregor, 1957). The
combination of the taylorist approach in the NUMMI plant helps to “encourage rather than
discourage organizational learning and therefore, continuous improvement” (Alder, 1992).
What is interesting to look at is the Toyota website talking about a career at their NUUMI
plant. They describe the work environment there saying “we know that the best team members
(employees) are those who work in a cooperative atmosphere -- and who are constantly
challenged to improve the quality and efficiency of the work they do. To that end, we've created
a unique workplace environment that rewards initiative and emphasizes respect and teamwork”
(Toyota, 2013). Lastly they note how they are one of the most productive and highest quality
automotive manufacturing sites.
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As enlightening and impressive the NUMMI plant may be, in today’s economy it has not
been able to function. The NUMMI plant was the last auto manufacturing plant on the West
Coast but closed in 2010. The partnership ended when GM pulled out of the agreement and lead
to the plant being shut down. What was interesting was Toyota’s approach to the closing saying
that the plant was not economically viable (Gonzales, 2010). This might have been due to the
fact that the plant was Toyota’s only unionized workforce.
Overall the motivation techniques that the NUMMI plant used were something that
during their prime time of functioning made them one of the most highly effective auto
manufacturing plants. By creating an environment where workers and management both had
active roles in decisions added to the effectives and productivity. Standardization and Taylorist
principles helped create an atmosphere for learning and development. Lastly, by having a system
that empowered workers it helped in making improvements starting with those doing the work.
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NUMMI Case Study
References
Adler, P. S. (1992). Time and motion regained . Harvard Business Review, (93101), 97-108.
Gonzales, R. (2010, April 01). Nummi plant closure ends toyota-gm venture. Retrieved from
http://www.npr.org/templates/story/story.php?storyId=125430405
McGregor, D. (1957). The human side of enterprise. In J. Ott, S. Parkes & R. Simpson (Eds.),
Classic Readings in Organizational Behavior (4th ed.). California: Thompson
Wadsworth.
Robins , S. (2012). Essentials of organizational behavior . (11th ed.). New Jersey: Prentice Hall.
Toyota. (2013). The more you know about nummi .. Retrieved from
http://www.toyota.com/about/careers/nummi/index.html