For over 35 years the U.S. The auto industry has taken a beating from the Japanese manufacturers. It was only in the 1980s that we discovered what the Japanese were doing that we were not, namely using Ohno’s JIT/Lean system of production and putting top priority on continually improving processes and products. In the face of plummeting market share in the late 1970s and early 1980s, Ford closed nine factories, and GM shut down 20. Chrysler was staggering on the brink of bankruptcy. The industry was facing a full-scale invasion from Japan. Although foreign cars had been around forever, they had historically accounted for a very small share of the American market. But in the 1980s, car buyers discovered that the cars from Japan were so superior to competing for American brands that the auto industry got its first true taste of foreign competition and found it a bitter taste indeed. Suddenly the U.S. automakers found themselves in a market that demanded better quality and value for the dollar. What had been good enough to keep Detroit going was no longer good enough.
Ford realized sooner than the others that it would have to find out how the Japanese were able to produce such reliable, efficient, high-quality cars for the prices being charged. Ford managers were dispatched to Japan to study the methods of the leading Japanese automakers. Expecting to find the answer in a high degree of automation, they were surprised to find less than existed in their own plants. Nor was it that the Japanese worker was superior. Ford made a startling discovery. The difference was, it rightly concluded after long study, not automation or technology, or the Japanese workers, or lower wages, but how the workers were managed. American managers believed that once a production system achieved stability, it should be maintained at that point. Japanese managers, on the other hand, believed that production stability was just a starting point, and from that point onward, continual improvement must be applied. The Japanese also believed in a harmonious relationship between managers and workers. That too was contrary to Detroit’s historic adversarial relationship between management and labor. Japanese managers actively encouraged all workers to suggest ways to improve processes. Detroit’s managers adamantly prohibited workers from suggesting changes. In Detroit, the worker’s job was to follow instructions period. All the Japanese automakers were practicing JIT/ Lean using Taichi Ohno’s model, and quality and productivity were improved incrementally every year. It has been estimated that the cars of Japan equaled the quality of American cars by 1970. Ten more years of continual improvement in Japan, while the U.S. automakers smugly held to the status quo, created an enormous quality and productivity gap with the American industry by the 1980s.
During the 1980s, the U.S. automakers had some gut-wrenching decisions to make, but it came down to this question: “Are we going to stay in the auto business?” In other words: survival. Thirty years later the press release for the 2010 Initial Quality Study (IQS) by J. D. Power and Associates states that the U.S. auto brands, as a whole, surpassed the imports in initial quality for the first time.” In its study, J. D. Power has the U.S. brands at a quality level of 108 problems per 100 vehicles, while the imports achieved 109. Very close indeed, but during the four-year period 2007 through 2010, the IQS has had the U.S. brands on a converging trajectory to the Import brands.
– Analyse how the JIT and Lean practices support the Japanese to lead the world in the automotive industry.
– Appraise the steps were taken by the U.S. auto industry to close the gap with the Japanese.
