John Krafcik Succeeds in the the Biggest Test to His “Lean Production” Strategy With Waymo

This article discusses the background of current Waymo CEO John Krafcik. He is the leader with the most experience in the auto industry that I discuss in my book, The Future is Autonomous. His experience allowed him to create, develop, and ultimately perfect the notion of “lean production” which he patented. This technique allowed him to only focus on developing the technology for the “Waymo Driver” instead of alo developing a vehicle after the “Firefly” debacle.

John Krafcik’s Leadership Background Ushers in a New Direction for Waymo

John Krafcik was born on September 18, 1961 in Southington, Connecticut. He lived in this small town in Connecticut for the duration of his adolescent and teenage years before he decided to move across the country for his undergraduate degree. Attending Stanford University for his undergraduate degree, he studied mechanical engineering and received his bachelor’s degree in 1983.

Krafcik’s first job after finishing his degree at Stanford was working at New United Motor Manufacturing, Inc, which was the first step in a lifetime of work in the automotive industry. He worked as a quality and manufacturing engineer from 1984 to 1986. In order to move into a more managerial role, Krafcik moved back to the East Coast where he studied for his master’s degree in management at MIT.

At MIT, one of the top technological universities in the world, Krafcik was exposed to many new technological developments. This had a profound impact on his later decision to focus on technology in the auto industry at Waymo. This included research work for the Center for Technology, Policy, and Industrial Development.

During and immediately following his studies at MIT, where he graduated in 1988 with a master’s degree in management, Krafcik worked under Professor James P. Womach. Under Womach’s guidance, Krafcik worked at the International Motor Vehicles Program as a lean production researcher and consultant from 1986 to 1990.This job was a formative experience for Krafcik.

It was in this role that he was able to gain a clear understanding of the challenges of mass-producing high-quality vehicles. In this job, he travelled to and studied ninety manufacturing plants in twenty countries. In his research notes, he compared their productivity and quality. He also compared the different work styles and manufacturing processes that made the factories operate successfully, as well as the practices that could be improved.

Krafcik’s notes from this work were used by Womach in his book The Machine That Changed the World. This was a study on “lean production.” This is a term Krafcik patented to refer to a production style he used throughout his career. Lean production is an approach focused on cutting waste while ensuring quality. This approach can be applied to all aspects of vehicle manufacturing from design, to production, to distribution. The aim is to make the business more efficient and responsive to market needs.

Krafcik used “lean production” for his work in the automotive industry, but it can be applied to many different industries to optimize a company’s products and allow for companies to pivot toward new markets. For example, few people remember Amazon was once just an online book buying and downloading website for its Kindle device. Now, it is a massive internet conglomerate, after pivoting to fill the demands for customers wishing to shop online. Amazon could meet the demand of a growing customer base while keeping its costs down by partnering with the USPS to deliver goods from its website to customer’s homes. Amazon also built distribution centers all over the US to decrease shipping costs.

After gaining recognition for his work for Dr. Womach, Krafcik worked for Ford Motor Company. At Ford, Krafcik held numerous positions. These positions included chief engineer for the Ford Expedition and Lincoln Navigator until 2004. This experience taught Krafcik how to put his concept of lean production to action. As the chief engineer, he was responsible for directing his subordinates at Ford in everything from the design of the vehicles to the manufacturing and production processes. He could lower waste by reducing production costs, identifying cheaper technologies, and relying on automation for more of the vehicle manufacturing process. Krafcik was successful in building vehicles for one of the largest car manufacturing companies in the world for over a decade.

Building on his success at Ford, Krafcik left Ford to become the president and CEO of Hyundai Motor America in 2013. During Krafcik’s time as CEO of Hyundai, they posted record sales and increased their market share in the US. Krafcik, a trained engineer, spent a lifetime working for a premier US automaker in Ford.

Krafcik further refined his managerial tactics working for a relatively new company, at least in the US, with Hyundai. He had a relatively short stint at popular online car dealership website TrueCar from April 2014 to September 2015. It was with his next venture as CEO of Google’s self-driving car project, later Waymo, that Krafcik would best be able to put his “lean production” model to the test. He was tasked to deliver the best product while reducing the cost for the more expensive autonomous vehicles.

John Krafcik lacks the eccentricities and boisterous predictions of people like Elon Musk, CEO of Tesla. Instead, he presents himself as a stately, respectable man. His extensive knowledge and experience in the automotive industry surpasses every other CEO in the autonomous vehicle industry. That knowledge and experience also fuels his desire to make the “Waymo driver,” the “brain” of the autonomous vehicle, the most experienced and safe driver in the world.

I had a conversation with author David Kerrigan who wrote a book on the benefits of autonomous vehicles called Life as a Passenger. He described his first ride in a ten to twelve passenger autonomous shuttle in Brussels, Belgium. He remembered, “As far as the experience itself, I was like a little child on Christmas morning. I was so excited to be given the opportunity to actually go in a driverless car.”

However, he then admitted even though he has been obsessed with autonomous vehicles for the past five years, he got a little bit bored after about a minute. This boredom was actually a sign everything was working well. While I was initially confused by this, he explained, “John Krafcik from Waymo has always said in his interviews that we are doing the hard work so that you guys should be bored.”

While Elon Musk likes to make bold predictions about when autonomous vehicles will be ready for the market, Krafcik and Waymo will not be rushed. In the end, he will let the results of what he hopes will be a dramatically safer driving experience in a Waymo vehicle do the talking.

Google, and later Waymo, have been reaching impressive milestones for driving their vehicles on public roads. After Krafcik took over as CEO, however, they began testing their vehicles in areas with different weather conditions and climates. This exposure to different weather patterns would allow the automated driving system to become a better driver. After all, not everywhere is sunny and clear like it is in southern California.

For example, Google added Kirkland, Washington as a test site in February 2016 due to the region’s wet weather. As discussed in the chapter on cameras and LiDAR sensors, rain and fog can impact object recognition, which affects the vehicle’s deep learning system. Therefore, the Waymo vehicles need to be able to cope with rainy conditions to be as safe as possible.

Two months later, Google announced it would be testing its vehicles in Arizona. The stated reason for this test pilot in Arizona was to allow Google to understand “how our sensors and cars handle extreme temperatures and dust in the air.”

To complete the inclement weather test sites, Google (now Waymo) launched a test site in Novi, Michigan in October 2017. This site was chosen to test Chrysler Pacifica SUVs equipped with the company’s autonomous driving system, cameras, and sensors. This site was chosen to determine how the vehicles react to cold conditions as well as snowy and icy conditions on the road.

While Google announced it would begin to test its vehicles in Arizona in April 2016, it had already sent four vehicles to Phoenix to begin mapping the area. Brian Jee discussed the problems mapping causes by explaining, “That’s the killer, which is why for Waymo they started for the rider-less pilot (in Arizona) only like a year ago. Only in Chandler, and they’re only now slowly expanding it to certain parts of Phoenix.”

The expansion of autonomous vehicles will be a slower and more deliberate process than deploying a new conventional vehicle. While Krafcik was right to say Waymo is not Google, it certainly benefitted from the work Google had done previously. The work Google had already done on what would later become the “Waymo driver” gave the autonomous system the needed experience. Krafcik has continued testing the system in all possible conditions to make Waymo the most advanced and safest autonomous vehicle so far, in both the US and China.

John Krafcik’s “Lean Production” Model Makes Waymo the Leader in the US

Recognizing the technological side of the autonomous vehicle is the most important, Krafcik was able to use his “lean production” strategy to focus exclusively on that. Because of his decades of experience in the automotive industry, he established close ties with many people at top automakers. This allowed him to more easily form partnerships with companies like Chrysler Pacifica, and now Jaguar, for the vehicles themselves. Focusing on only developing the technology allows Waymo to cut costs by not dealing with developing the vehicle itself and all of the added staff that would entail.

As described in my chapter on the short-term benefits of autonomous vehicles for the US, Krafcik focused on autonomous trucking during the COVID-19 pandemic to raise significant funds. He recognized both the technological limitations of being confined to mapped areas for autonomous passenger transport in “robotaxis.” He also recognized the political reality in the US that there are far fewer restrictions for transporting goods than people, even in long-haul freight trucks.

Finally, Krafcik and Waymo have begun to sell their custom-made LiDAR sensors they use on their Waymo vehicles. They will sell the LiDAR sensors to companies outside the autonomous vehicle industry for companies in industries such as security, robotics, and agricultural technologies. These sales will also help Waymo reduce the price of its LiDAR sensors for its vehicles by scaling up production for economies of scale.

The key challenge for Waymo will be safety. According to a poll conducted by AAA in March 2020, American consumers still do not trust self-driving cars to be safer than human drivers. There are reasons to be skeptical about the credibility of a poll. It is conducted by an organization designed to assist human drivers.

Autonomous vehicles represent a dramatically new and different driving experience for American consumers. Therefore, it would make sense there would be some apprehensions. This is particularly true because people fear their lack of direct control over the transportation experience. For example, some people are afraid to fly even though travelling by plane is the safest method of travel. While autonomous vehicles have not yet reached this level of safety, the experience of the passenger with no direct control of the vehicle is analogous to the person sitting in a plane seat.

Accidents involving autonomous vehicles have a disproportionately large impact on people’s trust of autonomous vehicles than accidents involving conventional vehicles. While Waymo has not been involved in a fatal collision, these accidents will happen. Particularly in the US, where accidents involving autonomous vehicles garner significant media attention, industry leaders need to have a strategy for the best way to provide the public with adequate information to understand a particular accident. This is essential to reassuring the public of the overall safety of autonomous vehicles and to protecting the industry as a whole.

Waymo’s goal is to create the most experienced driver in its “Waymo driver.” They do this by driving their vehicles for more miles on public roads than every other autonomous vehicle company in the world. Waymo has also driven autonomously on public roads for significantly more total miles than all of the different Chinese companies combined. Waymo, represents the best chance for a US company to beat China in deploying autonomous vehicles on a large scale.

Because of the close public-private partnership which has emerged in China in recent years, it is unrealistic to think a company in the US will beat a Chinese company to commercialize their vehicles on a large scale. The goal needs to be to create the most advanced, experienced, and safest vehicles to set the standard for quality throughout the world. According to Krafcik, “You need to have a lot of real-world experience. There’s no way to avoid that. You must have it.” He hopes because of the Waymo vehicle’s experience, a passenger can have a “boring” ride when the vehicles are ready.

For my next article, I will discuss Uber’s entry into the autonomous vehicle industry. The article includes an analysis of the steps that Uber took to first rehabilitate its image after the controversy of sexual misconduct by the executive team. I then discuss its efforts to establish a “safety culture” after a test autonomous vehicle struck and killed a pedestrian. The article also discusses Uber’s efforts to attempt to create industry-wide standards for testig of autonomous vehicles and an innovative financial model called “Fleits” that could be used by companies attempting to establish a fleet of autonomous “robotaxis.”

Even though Uber has since sold its Advanced Technology Group (ATG) responsible for its autonomous vehicle testing and deployment program for a $400 million investment in Aurora Technologies Inc., these moves are still relevant and important.

If you are interested in learning more about different financial models, political choices for how to govern autonomous vehicles, or more information about the major companies in the industry in both the US and China, read my book The Future is Autonomous!

Here is the amazon link to buy my book: https://www.amazon.com/Future-Autonomous-China-Develop-Driverless-ebook/dp/B08PVRL38J