From Fixed to Flexible: Automation and Work Organization Trends from the International Assembly Plant Survey

The paper is organized into seven sections. First, we define how we measure automation in the assembly plant study. Second, we describe the overall regional trends in the use of automation from 1989 to 1993/94. Third, we explore the patterns of usage for robotic equipment across regions, emphasizing in particular the significant move by many companies towards the replacement of fixed or "hard" automation with flexible, programmable automation. Fourth, we explore departmental differences in the use of automation, emphasizing the evolution in thinking about the most effective way to automate various tasks in the body, paint, and assembly shops. While automation levels continue to rise in the body and paint shops, a different approach is being taken in the assembly department, the most labor-intensive area of the plant and yet the place where total automation solutions have been most elusive. Fifth, we describe how trends in the adoption of flexible automation are linked to the adoption of flexible work practices that seek to boost worker involvement in production-related problem-solving. Sixth, we summarize what we have learned about the performance implications (in terms of productivity and quality) of the automation trends described here. The seventh section presents our conclusions from these analyses and our speculation about future trends in automotive manufacturing automation.The International Motor Vehicle Program and the Sloan Foundation

Performance Findings of the International Assembly Plant Study

We recently undertook the largest in-depth evaluation ever of automobile assembly plants around the world. In the Second Round of the International Assembly Plant Study, we surveyed 88 automobile assembly plants representing 20 companies and as many nations (see figure 1 for a distribution of plants by region of the world). We collected data on a host of different issues ranging from production processes and design choices to labor relations and organization of work. Here we report on our performance findings. In addition to reporting on our most recent findings, reflecting performance in 1993/4, we will compare those with the performance findings of the First Round of the International Assembly Plant Study which took place in 19892. European plants have shown the greatest percentage improvement in productivity of any region, but Korean plants, and plants in North America have also shown considerable gain. Given the minimal improvement in the average performance of Japanese-owned assembly plants in Japan, the performance gap between US and Japanese plants has closed significantly, although a differential still remains. In the area of quality, the European and US producers have shown tremendous improvement, and are approaching Japanese quality levels. However, our quality data only reflects vehicles sold in the United States, and as such, may overstate the average quality level of the European producers. The quality level of new entrant plants (particularly Korea) has not followed the world-wide trend in improvement in quality. One of our most important observations from this round is that there are tremendous performance differentials within each region of the world. This reflects different capabilities of companies operating in those regions. We are currently undertaking extensive analyses to understand the drivers of these intra-regional performance differences.MIT's International Motor Vehicle Program and the Sloan Foundatio

International Assembly Plant Study: " Management of the Extended Enterprise" Research Team

During the past fiscal year, we have worked closely with a number of researchers from around the world to develop a questionnaire that will provide us with a fuller understanding of the value-chain issues that surround current automobile manufacturing. While centered on the assembly plant, we are also looking at the interface between the plants and their suppliers, as well as the plants and their distributors. We will summarize these efforts, as well as our timetable for data collection. In this writeup we are focusing only on the work undertaken in relation to assembly plants. We have also done extensive work in the Modularization/Outsourcing project that is helping to pave the way for some of the assembly plant work; please refer to the separate report on that project

Project Report to International Motor Vehicle Program (IMVP), M.I.T.International Assembly Plant Study

INTRODUCTION: During the past fiscal year, we have worked closely with a number of researchers from around the world to develop a questionnaire that will provide us with a fuller understanding of the value-chain issues that surround current automobile manufacturing. While centered on the assembly plant, we are also looking at the interface between the plants and their suppliers, as well as the plants and their distributors. We will summarize these efforts, as well as our timetable for data collection. In this writeup we are focusing only on the work undertaken in relation to assembly plants. We have also done extensive work in the Modularization/Outsourcing project that is helping to pave the way for some of the assembly plant work; please refer to the separate report on that project

Energy Systems Scenario Modelling and Long Term Forecasting of Hourly Electricity Demand

The Danish energy system is undergoing a transition from a system based on storable fossil fuels to a system based on fluctuating renewable energy sources. At the same time, more of and more of the energy system is becoming electrified; transportation, heating and fuel usage in industry and elsewhere. This article investigates the development of the Danish energy system in a medium year 2030 situation as well as in a long-term year 2050 situation. The analyses are based on scenario development by the Danish Climate Commission. In the short term, it is investigated what the effects will be of having flexible or inflexible electric vehicles and individual heat pumps, and in the long term it is investigated what the effects of changes in the load profiles due to changing weights of demand sectors are. The analyses are based on energy systems simulations using EnergyPLAN and demand forecasting using the Helena model. The results show that even with a limited short-term electric car fleet, these will have a significant effect on the energy system; the energy system’s ability to integrated wind power and the demand for condensing power generation capacity in the system. Charging patterns and flexibility have significant effects on this. Likewise, individual heat pumps may affect the system operation if they are equipped with heat storages. The analyses also show that the long-term changes in electricity demand curve profiles have little impact on the energy system performance. The flexibility given by heat pumps and electric vehicles in the long-term future overshadows any effects of changes in hourly demand curve profiles

Dynamic Nature of Production Models

Toyota and Volvo have traditionally been viewed as anchoring two extremes of production models that companies in the automotive and other manufacturing sectors draw upon. The ‘Toyota (Lean) Production System’ drove superior organizational learning, innovation, and control with positive implications for customer-oriented outcomes. Volvo's ‘Reflective Production’ model aimed to leverage and develop workers’ unique abilities, leading to adaptability, motivation, satisfaction, and innovation at the individual and group levels, with positive benefits for employees. Through a longitudinal case study, we show that environmental pressures, in the form of increased international product market competition and labor market constraints, drove convergence across the two production systems as enacted at Volvo and Toyota, in organizational structure, work design, and to a lesser extent, technology. The result is an integration of the adaptability, motivation, and development of workers at the individual and group levels, with enhanced organizational capacity for responsiveness, variability reduction, and innovation at the organizational level. Understanding how production models evolve provides insight into their operation, their limitations, and the challenges that are associated with their study, imitation, implementation, and use

Modularization and Outsourcing: Implications for the Future of Automotive Assembly "Management of the Extended Enterprise" Research Team

Overview Twice in this century, automotive assembly has been the setting for dramatic innovations in production organization that have transformed the basis of competition in the auto industry. Henry Ford's mass production and Taiichi Ohno's lean production are both systems of interrelated practices held together by a core "logic" - powerful ideas shaping how we think about "making things". As we approach the second century of the car, there are important debates about whether, once again, auto manufacturing will strike off in a new direction -- commonly described as "modular assembly." Our IMVP research team aims to contribute to this debate through the research project described below. Deverticalization through the outsourcing of production from the large automakers to their suppliers has been a dominant trend during the 1990s, including the transfer of component design responsibility as well as manufacturing. A related trend is the effort to develop more modular designs, i.e. self-contained functional units with standardized interfaces that can serve as building blocks for a variety of different products. These trends have been visible in other industries for some time, but they are relatively recent in the auto industry; as a result, the implications are still not clear. In industries such as consumer electronics and personal computers, the ultimate consequence of extensive outsourcing is often that the final customer, i.e. the Original Equipment Manufacturer (OEM), manufactures very little in-house. When extensive outsourcing is combined with more modular designs, the outcome can be a dramatic reshaping of the value chain. We want to investigate the extent of these trends in the auto industry and evaluate the implications for the role of automotive assembly and the structure of the entire industry, by doing case studies of specific modules.

Institutional Labor Economics, the New Personnel Economics, and Internal Labor Markets: A Reconsideration

The author illustrates the utility of institutional labor economics and makes a case for a reconsideration of it. Two recent developments motivate this effort: the rise of New Personnel Economics (NPE) as a significant subfield of labor economics and the substantial shifts in work organization that have taken place since the 1990s. Understanding how and why firms have reorganized work opens the door for a renewed interest in institutional approaches. The author explains that the rules of institutional labor markets (ILMs) emerge from the competition between organizational interest groups—unions, personnel professionals, and the government—and competing views of firms’ objectives—resulting in the rise of ILMs, the slow diffusion of High Performance Work Systems, strategies used to obtain a high level of commitment from workers, the use of contingent employees, and the spread of new promotion rules in response to equal employment opportunity pressures. As such, the role of power and influence in establishing work rules is of central concern, though more conventional NPE considerations also remain important

The international and temporal diffusion of high-involvement work practices

This dissertation provides a comprehensive analysis of the factors driving the adoption and use of high-involvement/high-performance work practices. Using a unique longitudinal data set of automobile assembly plants from around the world I address three key questions: (1) Given the extensive literature linking high-involvement work practices and superior organizational performance, how do we explain the slow adoption of such practices? (2) What factors determine the distribution of high-involvement work practices within a global industry? and (3) What modifications are made to work practices when they are brought into a different cultural and institutional environment? The adoption of high-involvement work practices is driven by a complex set of factors. Each factor shifts the perceived costs and benefits of altering existing work practices. I show that the presence of complementary human resource practices, experience with earlier practices, and disruptions that unfreeze existing practices are important in explaining who adopts high-involvement work practices. The presence of complementary practices also plays an important role in explaining international differences in the use of high-performance work. Using dyadic analysis, I further demonstrate that location effects are extremely important. In particular, company effects are mitigated by host and home country effects. Lastly, I show that while Japanese transplants in North America use the same work practices as their counterparts in Japan, they have made various modifications to accommodate the North American environment. Coupled with careful socialization and selection programs aimed at developing a work force amenable to high-involvement work, these changes help the transplants to manage the cultural and institutional differences between North America and Japan. The modifications show that, while high-involvement work practices can be implemented in very different cultural and institutional environments, some adaptation is needed. The findings in this dissertation dramatically expand our understanding, both theoretically and empirically, of the determinants of adoption of high-involvement work practices, and the drivers of differences in how organizations operate in a multinational context. They accentuate the benefits of considering high-involvement work systems from the dual vantage points of a dynamic and a multinational perspective