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.

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This phenomenon has many parallels to other industry sectors such as fast moving consumer goods and especially electronics products. "The Second Centrury" is a continuum to "Machine that Changed the World". This is a great book for MBA or MSc courses in industrial management and it gives a critical perspective on many current practices.

3 of 3 found the following review helpful:

A fascinating read about a fascinating industryAug 03, 2005
By Serguei Netessine
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 of 5 found the following review helpful:

A vital follow-up to the "Machine that Changed the World"!Jun 26, 2004

Holweg and Pil provide a comprehensive analysis of the drivers - and inhibitors - of the performance of entire value chains. They show that in increasingly demanding and dynamic markets, the forecast-driven systems currently in place cannot cope, and the current incentive crisis in the auto sector marks just a case in point. Drawing on over a decade of research with the MIT International Motor Vehicle Program, they demonstrate that well-intentioned lean manufacturing programs, 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 great follow-up to 'The Machine that Changed the World' that demonsrates the need of, and road towards, a responsive build-to-order system that reconnects lean factories to the customer!

1 of 1 found the following review helpful:

A thoughtful book, but needs editing and polishingFeb 18, 2007
By Edward Durney
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.

Focused on Build to Customer OrderMar 13, 2009
By Gerardo A. Moya Prado
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.

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