Human Performance in Planning and Scheduling

By Bart MacCarthy; John Wilson | Go to book overview

CHAPTER SEVENTEEN

Engineering a Vehicle for World Class Logistics: From Paradox to Paradigm Shifts on the Rover 75 1

Joy Batchelor


17.1

INTRODUCTION

The automotive industry presents a popular image of itself as leading the way in demonstrating the efficiency gains associated with the implementation of just-intime 'customer-pull' production techniques. Other industries look towards the automotive industry in search of benchmarks against which they, too, can achieve the rewards of low cost, high quality and profitable operations. However, this picture is far from the truth. As management consultants KPMG report in Europe on the Move (1998), it is estimated that the value of unsold finished vehicle stocks within Europe are in the region of around £18 billion, with each car being stored for an average of 50 days before being sold. Furthermore, whilst a number of manufacturers aspire towards the goal of reducing customer order lead-times it is still closer to the truth to talk of industry build-to-customer order lead-times being on average 40 days or more according to research undertaken by the International Car Distribution Programme (Kiff, 1997).

Whilst theoretically, in the UK at least, automotive manufacturers have offered many millions of vehicle combinations for customers to chose from, reality has been very different. A study carried out in 1994 reported that only 64% of UK customers bought the exact specification of vehicle that they were looking for, a further 23% took an alternative specification, whilst the remaining 13% found no suitable match (Kiff, 1997). A similar picture emerges in the US where it has been reported that 11% of buyers switch to another manufacturer because their first choice vehicle is unavailable (Automotive Manufacturing and Production, 1997). The reality of vehicle production within Europe is one of a just-in-time 'push' system in contrast to a pure just-in-time environment where resources are only pulled through the value chain in response to a direct customer order. Most of the

1 This chapter was prepared prior to the sale by BMW of Rover Cars to the Phoenix Consortium and Land Rover Vehicles to Ford. Whilst the future production of the Rover 75 may deviate from the principles outlined within this chapter, a number of generic lessons can be drawn from the development of the Rover 75 in respect to overcoming the perceived trade-off between product variety and manufacturing effectiveness in a build-to-order environment.

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