Mechanization of auto production has also been transformed over the past
century, led by the need for faster and lower-cost production on the supply
side of the industry. Ford’s
mass-production system relied on standardized designs to enable the
construction of assembly plants that were fully automated and utilized
interchangeable auto parts. In its heyday, between 1908 and 1920, Ford
streamlined the assembly process to the point where it took just over an hour
and a half to produce one car. Setting the industry standard for production
enabled Ford to take the lead in market share, but it also led to a complacent
mindset that hindered innovation. In the 1920s General Motors improved on Ford’s assembly line
process by introducing flexibility into the production system, enabling faster
changeovers from one model to the next. However, it took half a century after
Ford stopped mass producing Model T’s
in 1927 for another production paradigm to emerge as the standard in the global
automotive industry. Toyota’s
lean production system—which
had its beginnings in 1953—drove
productivity to new heights by replacing the “push” system with a “pull” system. Instead
of producing mass quantities of vehicles and pushing them through to
dealerships to sell to customers or hold as inventories, the lean system pulled
vehicles through the production process based on immediate demand, minimizing
inventories at suppliers, assemblers, and dealerships. Just-in-time production
also gave a larger responsibility for product design, quality, and delivery to
assembly workers and suppliers than did the mass-production system. Suppliers
were not vertically integrated into auto assembler operations, but rather
networked to the assemblers via long-term contracts. This total system of
cost-minimization and responsiveness to customer demands revolutionized auto
manufacturing on a global scale, although the model has been adapted to
regional conditions.
Product innovation in the automotive industry has mainly been a response to
customer demands, although product positioning is a critical strategic variable
for automakers. Ever since General Motors began producing different types of
vehicles for different product segments, thereby ending the reign of Ford’s low-price,
monochromatic Model T, the ability to vary products on several dimensions has
been the main strategic variable of auto producers. U.S. automakers have mainly
been responsive to customers’
desires for comfort, speed, and safety, and have developed rugged drive trains,
plush suspensions and interiors, and stylish chassis and bodies. In contrast,
European auto producers have focused their attentions on performance and
agility features of vehicles, such as steel-belted radial tires, disc brakes,
fuel injection, and turbo diesel engines. For Japanese producers, the
miniaturization culture and the scarcity of fuel, materials, and space largely
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