The Answer Is Transaction Costs Little's Law: The Transaction Costs of (Re)Drawing Lines
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Oct 14, 2025 Andrew Wagner, a veteran manufacturing engineer with 25 years in aerospace and automotive industries, dives into the fascinating world of production design. He explains how transaction costs influence productivity, touching on Adam Smith’s classic examples. Wagner explores Little's Law, the importance of line balancing in food service, and Toyota's SMED technique for reducing changeover times. He emphasizes the significance of worker empowerment and quality economics, illustrating how modern automation and ergonomic design can transform production efficiency.
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Intro
00:00 • 2min
Why Division of Labor Depends on Market Size
02:06 • 3min
How Line Balancing Works in Food Service
05:31 • 3min
Little's Law and Production Line Design
08:11 • 3min
Expanding or Shortening Automotive Lines
11:39 • 3min
Machine Tools and Meta-Tools in Modern Factories
14:24 • 2min
Stamping Dies, SMED and Toyota's Flexibility Advantage
16:22 • 6min
Just-In-Time Inventory and Quality Benefits
22:31 • 3min
U.S. Automakers' Responses: Robotics, Platforms, Deming
25:08 • 2min
Deming's Plan-Do-Check-Act and Quality Economics
27:19 • 4min
Worker Empowerment and Stopping the Line
31:34 • 5min
Why Rethinking Tools Improved WWII Assembly
36:36 • 2min
How Automation Enables Small Production Runs
38:34 • 2min
CAD, Parametrics and Modular Vehicle Design
40:55 • 2min
Clay Mockups, CNC Milling and Design Tradeoffs
42:40 • 3min
Specialization, Ergonomics and the $5 Day
45:43 • 5min
Outro
51:08 • 4min
