The Second Century: Reconnecting Customer and Value Chain through Build-to-Order; Moving beyond Mass and Lean Production in the Auto Industry Book

As the auto industry moves into its second century, it suffers from low margins and a sclerotic value chain that cannot evolve with customers’ desires. Inventories of many weeks pile up in dealer lots and 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 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 dealers or 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 the dysfunctional nature of current value-chain strategies, then systematically discuss the product and process changes needed to bring about responsiveness to customer needs through build-to-order. They move beyond the dealer, the factory and the design studio to understand the web of relationships and dynamics that have brought the auto industry to its current low point. Holweg and Pil argue that the winners in this century will not be those who search for larger and larger scale or those who run efficient factories and squeeze the last drop of profitability from their suppliers. The winners, they say, will be those who build products as if customers mattered.Read More