Isegoria

The story of China’s productivity revolution starts with the improbable tale of Gavriel Salvendy, a Hungarian-Israeli-American high-school drop-out:

Growing up in a Jewish family during the Nazi occupation, Mr. Salvendy hid in haystacks to escape deportation. Later, after his family abandoned Europe, he became the Israeli weight-lifting champion. Now 72, at well over 6 feet tall and 265 pounds, he still has the presence of a strongman.

For the past nine years, Mr. Salvendy has run the department of industrial engineering at Tsinghua University in Beijing, China’s equivalent of MIT. He is an incongruous presence there — a booming maverick in a hierarchical and generally conformist culture — but he and his team of professors have helped to boost productivity at some Chinese factories by as much as 20% a year.

Mr. Salvendy’s road from weight-lifting to academia involved a series of strange twists. In his youth, he took a job in a factory in London and discovered a natural flair for reorganizing manufacturing systems. A British engineering professor heard of this untutored genius and, despite his lack of formal schooling, recruited him into his graduate program at the University of Birmingham. There Mr. Salvendy earned a master’s degree and a doctorate. Then in 1968 he landed an academic appointment in the U.S.

By 2001, Mr. Salvendy was a grandee of industrial engineering, known for more than 200 publications in journals, and, among friends, for his eccentricities, including an inability to remember the alphabet and a habit of losing his way on short walks. Already past his 60th birthday at that point, his big head framed by a comb-over of orangey brown hair, the professor seemed comfortably established. But then an offer came from Tsinghua, and Mr. Salvendy could not resist.

Mr. Salvendy accepted the offer — at 20 times the standard pay package for a Chinese professor — and the revolution began:

Chinese professors were accustomed to hierarchy; Mr. Salvendy insisted on open-collared informality. He wanted professors to publish in the top peer-reviewed American journals, so they started to write and teach in English. Dividing his time between Beijing and Purdue University in Indiana, Mr. Salvendy quickly built up a department of some 25 professors, most of whom had Ph.D.s from the U.S.

Salvendy’s team from Tsinghua found plenty of low-hanging fruit at the Hua Jian shoe factory:

The factory kept months’ worth of raw materials in its warehouse, wastefully tying up capital. Its tools were designed with obvious inefficiencies.

Within a few months, the Tsinghua delegation boosted Hua Jian’s productivity by 20%. In the West, gains on this scale are almost unthinkable. Productivity in a fast-improving U.S. factory might rise by 5% a year. And as they returned repeatedly to Hua Jian, the engineers conceived a new ambition: to rethink the standard ideas about production-line balancing that were hatched in U.S. factories in the 1950s and 1960s.

At Hua Jian, most workers arrived fresh from the countryside and then quit after a year or so; the level of training was both low and uneven. Because skills were minimal, the tasks had to be split up more, so that each worker was required to master a single simple function. But because skills were uneven, workers at some stations might complete their task in 30 seconds while others took a full minute. The least productive workers would determine the speed of the conveyor belt, while the most productive ones would spend half the shift idle.

This past summer, the Tsinghua team devised a way to balance out the tasks on the production lines to minimize wastage. Hua Jian’s productivity registered a further 20% gain.

Traditionally, economists have fingered poor infrastructure, low levels of education and excessive regulation as the chief impediments to continued growth in productivity. But the technical literature on the subject increasingly points to poor management as a serious obstacle.

Mr. Salvendy’s achievements at Tsinghua suggest that China will increasingly realize its productivity potential. His department has cycled more than 1,500 Chinese managers through its executive training programs, and thousands more are being minted by the 200 industrial engineering programs that have sprung up around China in imitation of Tsinghua. Every year, more of Mr. Salvendy’s disciples fan out across the country, spreading the lessons of lean manufacturing, quality circles and supply-chain management — techniques that have powered industrial success since the time of Henry Ford.

(Hat tip to David Foster.)

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