Chapter 20. Motor-Vehicle Industry: Earliest but Lagging

The long-term leanness rankings in Chapter 18 include four sectors in which motor vehicles has apresence. Of the 33 industries, motors/engines is 27th, autos/light and trucks/bikes is 29th, and heavy industrial vehicles is 31st. Vehicle components do much better, ranking 12th, which puts it comfortably into the top half of the 33 sectors. Overall, as judged by 10-or-more-year inventory trends, the automotive industry is not a high performer. Two quick reactions might be: (1) The OEMs have had success in getting their suppliers to adopt lean, but have lacked the incentives or capabilities to do much of it in their own business units. (2) Contrary to what is sometimes presumed, the OEMs are not simply pushing inventory and all its problems back onto suppliers. This chapter bores down into these propositions and related issues. To set the stage, we look at data for 55 automakers and then 91 suppliers.


Of the land-based motor-vehicle assemblers (cars, trucks, RVs, off-road, motorcycles; not boats or planes) included in the database, Harley-Davidson tops the leanness list with 3.9 percent per year improvement, and for 20 years. Toyota Motor, fount of lore in the lean core, ranks 52nd out of 55 companies. Its inventory turnover has not improved in 16 years and in the past 13 has been more than halved, from 22.9 to a still-respectable 10.1 turns. Toyota's decline averages 4.0 percent per year, ...

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