Author Description

As the auto industry moves into its second century, it suffers from lowmargins and a sclerotic value chain that cannot evolve with customer desires.Inventories of many weeks pile up on dealer lots and at distribution centers aroundthe world while executives applaud marginal improvements in factory efficiency.Valuestreams based on Henry Ford's mass-production model from the early 1900s do notdeliver the strategic flexibility that is needed in today's increasingly competitiveand demanding market. With billions of potential product variations, customers stillcompromise by selecting from a limited number of products sitting at dealerships orat distribution centers. Those customers who dare insist on a specific variation notonly wait weeks but also pay extra for the privilege of telling vehiclemanufacturers what they actually want.In The Second Century, Matthias Holweg andFrits Pil provide a comprehensive look at today's dysfunctional value-chainstrategies, then systematically discuss the changes in products and in processesthat are needed to bring about responsiveness to customer needs throughbuild-to-order. They look beyond the dealer, the factory and the design studio toexamine the web of relationships and dynamics that have brought the auto industry toits current low point.Holweg and Pil argue that in this century the winners will notbe those firms that search for larger and larger scale or those who run efficientfactories, or those that squeeze the last drop of profitability from theirsuppliers. The winners, they say, will be those who build products as if customersmattered.