BRIEFING: Recent developments in the automotive production chain

The production systems of the automotive OEMs face numerous challenges, but two stand out in importance. One is the traditional challenge of matching capacity to demand, something that is applicable at individual company and total industry level. As an increasing share of the world's population become single or multiple car owners, the challenge facing the automotive manufacturing industry is how to construct the optimal level of capacity in just the right global locations. To complicate matters, this is, of course, a moving target. At the end of the 20th Century, the OEMs were probably missing the target by some margin. Regional and global overcapacity was a problem, and despite some individual plant closures, this continues to be a dominant concern in the industry.

bcusack June 1, 2003

June 2003 management briefing

The production systems of the automotive OEMs face numerous challenges, but two stand out in importance. One is the traditional challenge of matching capacity to demand, something that is applicable at individual company and total industry level. As an increasing share of the world’s population become single or multiple car owners, the challenge facing the automotive manufacturing industry is how to construct the optimal level of capacity in just the right global locations. To complicate matters, this is, of course, a moving target. At the end of the 20th Century, the OEMs were probably missing the target by some margin. Regional and global overcapacity was a problem, and despite some individual plant closures, this continues to be a dominant concern in the industry.

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