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Matthias Holweg

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

by Matthias Holweg (Author), Frits K. Pil (Author)

4.2 7 ratings

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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.

ISBN-10

0262083329
ISBN-13

978-0262083324
Publisher

The MIT Press
Publication date

May 14, 2004
Language

English
Dimensions

6.25 x 1 x 9 inches
Print length

252 pages
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Editorial Reviews

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." Gary S. Vasilash Autofieldguide.com

"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 CambridgePlease note: The last sentence may be omitted, and probably should be when used in conjunction with the endorsement from Daniel T. Jones. Thanks!

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

Product details

Publisher ‏ : ‎ The MIT Press (May 14, 2004)
Language ‏ : ‎ English
Hardcover ‏ : ‎ 252 pages
ISBN-10 ‏ : ‎ 0262083329
ISBN-13 ‏ : ‎ 978-0262083324
Item Weight ‏ : ‎ 1.06 pounds
Dimensions ‏ : ‎ 6.25 x 1 x 9 inches

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Matthias Holweg
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Matthias Holweg
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Matthias is the American Standard Companies Professor of Operations Management at Saïd Business School at the University of Oxford. His areas of expertise include process improvement, digital operations, and leading digital transformations within organisations.
His recent work focuses on leading digital transformations within organisations, with a particular focus on machine learning and additive manufacturing. He is particularly interested in identifying the role that digital technologies will play in supporting process improvement, and how processes can be reengineered in the light of these novel digital capabilities. In his latest work, he has co-developed an ethics-based audit protocol of artificial intelligence systems to meet the upcoming regulatory mandates for conformity assessment of such systems.
Prior to joining Oxford he was on the faculty of the University of Cambridge and a Sloan Industry Center Fellow at MIT's Engineering Systems Division.
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Unus, sed leo

A thoughtful book, but needs editing and polishing

Reviewed in the United States 🇺🇸 on February 18, 2007

Verified Purchase

The Second Century provides a valuable, and rare, look at how the huge auto industry can be made profitable again. Very thoughtful book. And the authors did their homework.

Both authors are part of the MIT International Motor Vehicle Project. Their work updates and expands on The Machine That Changed the World, which is a great book but now dated. Given that the topic of The Machine That Changed the World -- lean production -- has become fairly widespread in the industry, this new look at "building to order" may be a pathway to profitability for carmakers.

But I expected The MIT Press to do a better job of editing. Parts of the book have a convoluted organization that makes it hard, sometimes even impossible, to figure out what the authors are saying. Typographical errors abound. Some lines, sentences, and even paragraphs appear to be missing. And some references to the figures were wrong, rarely but still often enough to be noticed. Perhaps authors and publishers do not bother with much editing and proofreading anymore.

Still, I have been looking for insightful books on the auto industry to match those of the 1990s. Few books do. The Second Century does. Highly recommended.

One person found this helpful

Helpful

Serguei Netessine

A fascinating read about a fascinating industry

Reviewed in the United States 🇺🇸 on August 3, 2005

Verified Purchase

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.

4 people found this helpful

Helpful

Unus, sed leo

A thoughtful book, but needs some editing and polishing

Reviewed in the United States 🇺🇸 on February 18, 2007

The Second Century provides a valuable, and rare, look at how the huge auto industry can be made profitable again. Very thoughtful book. And the authors did their homework.

Both authors are part of the MIT International Motor Vehicle Project. Their work updates and expands on The Machine That Changed the World, which is a great book but now dated. Given that the topic of The Machine That Changed the World -- lean production -- has become fairly widespread in the industry, this new look at "building to order" may be a pathway to profitability for carmakers.

But I expected The MIT Press to do a better job of editing. Parts of the book have a convoluted organization that makes it hard, sometimes even impossible, to figure out what the authors are saying. Typographical errors abound. Some lines, sentences, and even paragraphs appear to be missing. And some references to the figures were wrong, rarely but still often enough to be noticed. Perhaps authors and publishers do not bother with much editing and proofreading anymore.

Still, I have been looking for insightful books on the auto industry to match those of the 1990s. Few books do. The Second Century does. Highly recommended.

Helpful

Gerardo A. Moya Prado

Focused on Build to Customer Order

Reviewed in the United States 🇺🇸 on March 13, 2009

This book is pretty intresting, it explains how many industries manufacture their products based in a poor accuracy based in their forecasts and not in their real demand. This generate wrong information for the next year or month forecast, and the chain remains with this wrong information.
It's difficult to manufacture a product in a short time, but having the right information in the right time it's always useful.

Helpful

Stephen Parry

You need to not only think outside the box but work outside the box

Reviewed in the United States 🇺🇸 on January 11, 2009

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.

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