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As the auto industry moves into its second century, it suffers from low margins and a sclerotic value chain that cannot evolve with customer desires. Inventories of many weeks pile up on dealer lots and at distribution centers around the world while executives applaud marginal improvements in factory efficiency.
Value streams based on Henry Ford's mass-production model from the early 1900s do not deliver the strategic flexibility that is needed in today's increasingly competitive and demanding market. With billions of potential product variations, customers still compromise by selecting from a limited number of products sitting at dealerships or at distribution centers. Those customers who dare insist on a specific variation not only wait weeks but also pay extra for the privilege of telling vehicle manufacturers what they actually want.
In The Second Century, Matthias Holweg and Frits Pil provide a comprehensive look at today's dysfunctional value-chain strategies, then systematically discuss the changes in products and in processes that are needed to bring about responsiveness to customer needs through build-to-order. They look beyond the dealer, the factory and the design studio to examine the web of relationships and dynamics that have brought the auto industry to its current low point.
Holweg and Pil argue that in this century the winners will not be those firms that search for larger and larger scale or those who run efficient factories, or those that squeeze the last drop of profitability from their suppliers. The winners, they say, will be those who build products as if customers mattered.
- Sales Rank: #4041022 in Books
- Published on: 2005-08-12
- Original language: English
- Number of items: 1
- Dimensions: 9.00" h x .50" w x 6.00" l, .73 pounds
- Binding: Paperback
- 252 pages
Review
Becoming more responsive to customer wishes is a major challenge for an industry as complex as the auto industry. This is the most comprehensive analysis of the case for build-to-order to date.
(Daniel T. Jones, Founder and Chairman, Lean Enterprise Academy UK, coauthor of The Machine that Changed the World and Lean Thinking)A comprehensive analysis of the drivers -- and inhibitors -- of the performance of entire value chains. Holweg and Pil draw on over a decade of research and a unique data set. They demonstrate that well-intentioned programs of manufacturing reform, implemented in isolation, can create 'islands of excellence' -- but may do so at the expense of the responsiveness and profitability of the whole value chain. A vital follow-up to The Machine that Changed the World.
(Nick Oliver, Professor, Judge Institute of Management, University of Cambridge)The Second Century provides a comprehensive look at the dysfunctional nature of current value-chain strategies.
(Impact)This book is more important to the industry than The Machine That Changed the World.
(Autofieldguide.com) From the Inside Flap
"The second automotive century is driven by the customer. An inspiring book that illustrates how firms need to be both lean and smart."
--Yoshio Ishizaka, Executive Vice President, Toyota Motor Corporation
"Becoming more responsive to customer wishes is a major challenge for an industry as complex as the auto industry. This is the most comprehensive analysis of the case for build-to-order to date."
--Daniel T. Jones, Founder and Chairman, Lean Enterprise Academy UK, coauthor of *The Machine that Changed the World* and *Lean Thinking*
"A comprehensive analysis of the drivers - and inhibitors - of the performance of entire value chains. Holweg and Pil draw on over a decade of research and a unique data set. They demonstrate that well-intentioned programs of manufacturing reform, implemented in isolation, can create 'islands of excellence' - but may do so at the expense of the responsiveness and profitability of the whole value chain. A vital follow-up to *The Machine that Changed the World*."
--Nick Oliver, Professor, Judge Institute of Management, University of Cambridge
About the Author
Frits K. Pil is Assistant Professor at the Katz Graduate School of Business and a Research Scientist at the Learning Research and Development Center, University of Pittsburgh.
Matthias Holweg is Lecturer at the Judge Institute of Management, University of Cambridge.
Most helpful customer reviews
4 of 4 people found the following review helpful.
A fascinating read about a fascinating industry
By Serguei Netessine
As a person who does research in the automotive industry I found the book to be an invaluable companion to "The machine that changed the world". The authors provide compelling analysis of the automotive supply chain and manufacturing process and its evolution in the recent years. The book is full of specific numbers, evidence and case studies which differentiate it from a number of other more anecdotal accounts of the automotive industry. This is a must read for researchers and anyone interested in knowing what is wrong with the current state of Big 3 US automotive companies.
0 of 0 people found the following review helpful.
You need to not only think outside the box but work outside the box
By Stephen Parry
This is a timely reminder for those companies who consider themselves to be Lean to take another long hard look at themselves.
The authors demonstrate that within the four walls of the production plant many manufacturers have put into practice Lean principles, but they go on to demonstrate that all the company has succeeded in doing is optimise a small part of the real value chain. The Authors criticise short-sighted approaches to Lean which provide little or no benefit for the customer and loses the opportunity for companies to differentiate their business.
The next competitive advantage will be gained by those companies who are brave and confident enough to really start connecting their value chains to the customer (end-user) and their suppliers.
Often companies say things like, 'we have enough to worry about getting our own part of the business sorted out without worrying about what our suppliers or distributors are doing' this thinking illustrates the problem the authors are discussing and provide direction for companies who simply cannot think outside the box let alone work outside their box.
This is well written, researched and provides a clear direction for lean Manufacturers, lets hope it does not take another century for them to learn.
9 of 9 people found the following review helpful.
Excellent analysis of the automotive industry
By A Customer
Highly recommendable book for anyone interested in production management or current trends in automotive industry. Holweg and Pil describe the challenges of car manufacturers and the challenges they are facing. Although, "Built-to-last and made-to-stock" seems the way many companies are still heading, something new is required. The key points seem to be demand for build-to-order type of process and increasing product variety. Responding to this requires different types of flexibility.
This phenomenon has many parallels to other industry sectors such as fast moving consumer goods and especially electronics products. "The Second Centrury" is a continuum to "Machine that Changed the World". This is a great book for MBA or MSc courses in industrial management and it gives a critical perspective on many current practices.
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