Second Century

by Holweg, Matthias; Pil, Frits K.

• ISBN13: 9780262582629
• ISBN10: 0262582627
• Format: Paperback
• Copyright: 2005-09-01
• Publisher: Mit Pr

Summary

Winner, 2006-07 Sloan Industry Studies Best Book Award competition. 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.

Author Biography

Matthias Holweg is Lecturer at the Judge Institute of Management, University of Cambridge 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

Table of Contents

Acknowledgments	ix
At the Dawn of the Second Automotive Century	1	(10)
I Disassembling the ``Order-to-Delivery'' Process
Old Habits Die Hard	11	(12)
Thirty Days to Production and Counting	23	(16)
Production, Distribution, and the Best We Can Expect	39	(12)
II Band-Aid Solutions to Stem Red Ink
Islands of Excellence	51	(16)
Volume---the Holy Grail	67	(6)
Shifting the Metal	73	(10)
III The Case for Build-to-Order
Ripping the Lid off the Revenue Box	83	(12)
Closing Arguments	95	(10)
IV Three Dimensions of Responsiveness: Process, Product, and Volume
Process Flexibility and Customer Demand	105	(8)
Process Flexibility and Demand Visibility	113	(14)
Process Flexibility and Production	127	(10)
Process Flexibility and Suppliers	137	(16)
Process Flexibility and Logistics	153	(8)
Product Flexibility	161	(30)
Volume Flexibility	191	(24)
Breaking the Cycle	209	(6)
Notes	215	(18)
Index	233