Comparative Analysis

Comparative Analysis

A production system can be defined as the concept used for viewing the way in which the economic activities in firms are arranged and organized over space. It is a collection of various operating systems. The historical way of most of the auto enterprises was the consolidation of the so called local companies and these include the U.S. Big 3 where there local subsidiaries were able to differentiate the local products on their own and also bought the local parts through their own means. The Japanese car manufacturers have in the past tended to transfer their part and production procurement systems and also their products with very local modifications. However, in the recent past they have been confronted by the widely known Yen’ appreciation and also rationalization of their own production (Koichi 120).

Both of these companies have been altered from being local oriented to become global oriented due to globalization. They needed to build the local production network that would be connected to the global division of labor. The network of local production was known to produce global products that could be exported into the entire world and then move to the international network. In Japan, these strategies were taken up by the car assemblers as well as the part supplies. The United States have cut down the modular of the platform types and the Big 3 have greatly reduced their part suppliers. GM aims at 600 from a possible several thousand, Ford aims at 1000 from a possible 2500 and Chrysler aims at 150 from a possible 1500. Ford plans to buy the chief components exclusively and wholly from only 180 firms. The narrowing of this field to only module and system suppliers leads to the purchase from the suppliers with very high technical ability and who are able to operate on an international scale (Cynthia 200).

The reduction of the number of suppliers promotes restructuring and integration of the sub-system makers, thereby promoting the tendency where the middle-size and small suppliers who are unable to change themselves into international players although they have original techniques, join in international networks. Although different companies have different goals regarding globalization where some opt to be more centralized and others prefer being localized, there are similarities in the product development system. These include platform integration by every car segment, removal of the dual research and development efforts, reduction of the development lead time, efficient and effective co-ordination in the research and development activities, minimization of the research and development cost and also the reinforcing of the higher concurrent product development engineering with the design-in suppliers (Takahiro 98).

The U.S. Big Three are currently are advancing to streamline the various types of the platforms that they utilize and also cut supplies while still reforming the product improvement processes. The advancement of the three-dimensional CAD (computer-aided-design) techniques has led to the designing of various car bodies using only one platform. This development has helped in the elimination of overlap in the new car development and this greatly cuts on cost. Ford for example is developing a developed “world car” strategy in which the international product teams will use only one platform in designing the international sale. The Big Three are currently employing the strategies of global unification and much focus on purchases and development whereas the Japanese especially the Toyota Company are involved in the active shift of their production internationally and have highly increased the purchases of the overseas parts (David & Andrew 87).

These Japanese auto-makers have really tried to remove duplication through cutting back on the different varieties of platforms and developing the local development systems overseas by way of restructuring, and yet strengthening the global purchasing network. Both the United States and the Japanese auto-makers are decreasing or cutting back the number of platforms and is also communizing the usage platforms to similar platform. The Japan’s production base and biggest market, Toyota, Honda and Nissan have enhanced their local contents ratio nearly similar to the U.S. Big Three with their production capacities and engine local production expanding to almost 700 thousands. The research and development system has been developed greatly in both the Japanese and the U.S. automakers (Japan 56).

These developments in the research and development systems especially in the Toyota Production Systems have been able to produce and launch original car models which are station wagon and medium size car which totally differ in body design, axle, interia and many more but are still commonized with the Japanese model.  The U.S. R&D center of the Japanese automakers have led to development of Toyota Camri wagon, Honda Abaron wagon, Toyota Abaron, Nissan Altima and Honda Accord which are then produced locally and then exported to Europe or Latin America, Japanese market, and other Asian markets (Cynthia 300).

This level of localization and also international networking were driven by Yen’ much continuous appreciation and there was the Japan-U.S. auto negotiation where they decided on their international vision. This tendency of international networking for the local production has spread among the Big Three and also among the Japanese car makers and they both have “World Car strategy” where they have new strategies and grand designs of producing new and expensive cars (Koichi 56).

There is massive team concept, outsourcing, increased flexibility of the workers deployment, contingent compensation, collapsed job categories, labor-management cooperation, decentralization of quality responsibilities, participatory mechanisms, and also the removal of work rules that were won in the previous years. The Big Three also have now become lean-production versus mass production hybrids. These strategies are really helpful because they make the two companies to increase the profit margins (James 2). The encouragement of the lean production from mass production is really good and encourages the companies to work well and maximize output and improve their production through the development of more new products. The Japanese Toyota production systems and the Big Three in the U.S. have been seen as the leanest and the delivery through JIT (just-in-time) has caused fragility of the lean system which has worked efficiently and effectively.