A hallmark is the conviction that every process must contribute to satisfying the customer by constantly and incrementally achieving higher quality. In continuous-improvement systems, tightly linked teams bridge disparate functions that typically interact with each other in a predictable, sequential manner. Continuous improvement and mass customization require very different organizational structures, values, management roles and systems, learning methods, and ways of relating to customers. While executives are correct in thinking that continuous improvement is a prerequisite for mass customization, one thing is becoming clear from the experiences of companies such as Toyota, Amdahl, and Dow Jones. And, as a work force gets better and better, expanding its range of skills, it can handle an increasingly complex set of tasks, such as assembling a variety of products or delivering tailored services. The frequent process enhancements generated by continuous improvement can increase the inherent flexibility of those processes. They acknowledged that they had learned the hard way that mass customization is not simply continuous improvement plus.Īll too often, executives at manufacturing as well as service companies that have been pursuing continuous improvement do not realize that mass customization is a distinct and, generally, a very unfamiliar way of doing business. But, according to Toyota top managers, these weren’t the only reasons for the company’s retrenchment. These factors had undermined the company’s competitive position and were causing its profits to slide. What happened? Was Toyota’s new goal off-base in the first place, or was the mass-customization program a victim of troublesome economic times? Many analysts believe that Japan’s recession and the devaluation of the dollar against the yen were the culprits that forced Toyota’s pullback. After Toyota’s investigations revealed that 20 % of the product varieties accounted for 80 % of the sales, it reduced its range of offerings by one-fifth. As production costs soared, top managers widened product-development and model life cycles and asked dealers to carry more inventory. In the last 18 months, however, Toyota has run into trouble and has had to retreat, at least temporarily, from its goal of becoming a mass customizer. They saw this approach as a more advanced stage of continuous improvement.Īs recently as early 1992, Toyota seemed to be well on its way to achieving its goals of lowering its new-product-development time to 18 months, offering customers a wide range of options for each model, and manufacturing and delivering a made-to-order car within three days. companies finally catching up, Toyota’s top managers set out in the late 1980s to use their highly skilled, flexible work force to make varied and often individually customized products at the low cost of standardized, mass-produced goods. The same, however, cannot be said for mass customization, Toyota’s latest pioneering effort. Toyota became the benchmark in the automobile industry for quality and low cost. For three decades, Toyota enlisted its employees in a relentless drive to find faster, more efficient methods to develop and make low-cost, defect-free cars. Continuous improvement at Toyota Motor Company is now a business legend.
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