Michael Schwartz and Andrew Fish, "Just-in-Time Inventories in Old Detroit," Business History 40 (#3, July 1998), 48-71. (original) (raw)

Just-in-Time Inventories in Old Detroit

1998

Just-in-time inventories have been portrayed as the centerpiece of the flexible production system developed by Toyota, and the key element in outperforming the mass production systems utilized in the United States. We demonstrate that just-in-time inventories--and other elements of flexible production--were pioneered by the US auto industry in the first part of the 20th century; were the key elements in making Detroit the global capital of auto production, and were abandoned by Detroit just as Toyota was copying the system in Japan.

Drivers of Finished-Goods Inventory in the U.S. Automobile Industry

Management Science, 2010

Automobile manufacturers in the U.S. supply chain exhibit significant differences in their days of supply of finished vehicles (average inventory divided by average daily sales rate). For example, from 1995 to 2004, Toyota consistently carried approximately 30 fewer days of supply than General Motors. This suggests that Toyota's well-documented advantage in manufacturing efficiency, product design, and upstream supply chain management extends to their finished-goods inventory in their downstream supply chain from their assembly plants to their dealerships. Our objective in this research is to measure for this industry the effect of several factors on inventory holdings. We find that two factors, the number of dealerships in a manufacturer's distribution network and a manufacturer's production flexibility, explain essentially all of the difference in finished-goods inventory between Toyota and three other manufacturers: Chrysler, Ford, and General Motors.

The Effect of Toyota Production System (TPS) in US Manufacturing During 1981-1998: Inventory Increased or Decreased as a Function of Plant Performance

International Journal of Production Research

More than 14 000 firm years of data (average number of firms per year times 18 years) were processed to investigate the effect of Toyota Production System (TPS) in high and low performing firms. This is a longitudinal study of the records of US manufacturing firms operating for the entire duration of 18 years from 1981 to 1998. Using industry data from COMPUSTAT files, manufacturing firms covered by SIC 3400-3900 were ranked on performance. Evidence from the ranked companies shows that the ratio TI/S ((total inventory)/(sales)) declined significantly in the top and middle performers (top 10% and middle 10% in performance). In contrast, the study discovered that firms making the bottom 10% showed an unhealthy “inventory growth” trend in TI/S during 1981-1998; the better performers got better, and the weak performers got weaker with time. This discovery of the unwanted and unexpected growth in TI/S in bottom performers opens many new avenues for research stemming from questions such a...

Review: \u27Storied Independent Automakers: Nash, Hudson, and American Motors\u27

2010

Nash, Hudson, and now even American Motors are automobile brands that have largely disappeared from the American memory. Yet, despite riding the twentieth-century economic roller coaster and operating in the shadow of the Big Three, these firms made sustained, significant technological and economic contributions. Charles K. Hyde’s Storied Independent Automakers is the author’s latest foray into the area of automotive business history, following work on the Chrysler Corporation and the Dodge brothers. A professor of History at Wayne State University, Hyde has written a needed critical business history on an important topic that complements the vast amount of “buff” and coffee-table literature produced on this subject. Indeed, the author has resurrected the rich history feebly represented by once-a-year orphan car shows that take place on a summer Saturday afternoon, reminding us of a once-textured automotive past. Key individuals are at the heart of Hyde’s story—Thomas B. Jeffrey, Ch...