The European auto components industry: manufacturing performance and practice.

Studies of international competitiveness have always excited widespread interest, and recent years have seen several such studies. The motor industry has been a popular subject for these studies[1-5], although more general investigations do exist[6-7]. In the case of the European auto industry, the news has not generally been good. In 1993, two reports showed the European industry to be trailing its international counterparts. One of these branded the whole industry as uncompetitive and predicted up to 400,000 job losses[2]. The other focused specifically on comparisons between Japan and the UK, and concluded that Japan was out-performing the UK by a factor of 2:1 on productivity and a much greater margin on quality[4].

This latter finding was a matter of particular concern to the European industry, as some commentators argue that the UK automotive industry has certain advantages over its continental European counterparts, principally in terms of the presence of Honda, Nissan and Toyota on British soil, whose transplant factories are boosting volumes for UK suppliers, and allegedly diffusing best practice throughout the local supply bases. If the UK was performing so poorly, relative to Japan, how would the rest of Europe fare?

Such performance gaps notwithstanding, there is certainly no paucity of models of best practice present in the literature, many based on the "Japanese" model of manufacturing. In the UK, awareness of Japanese manufacturing practices has been high throughout the 1980s, assisted by the publication of several books on the subject[8,9]. Recently, interest in Japanese practice has been fuelled by the publication of The Machine that Changed the World[1] which revealed a 2:1 difference in productivity between car assembly plants located in Europe and those located in Japan, with the Japanese plants showing a 50 per cent superiority on defects per car. These performance differences were ascribed to lean production practices, the principles of which include:

* integrated single-piece production flow, with low inventories, small batches made just-in-time;

* defect prevention rather than rectification; production which is pulled by the customer and not pushed to suit machine loading;

* team-based work organization with flexible, multi-skilled operators and few indirect staff;

* active involvement in problem solving to eliminate all non-value adding steps, interruptions and variability from the process; and

* close integration of the whole supply chain from raw materials to the finished customer through partnerships with suppliers and retailers.

The size of the gap between the Japanese and Western car makers, and the use of lean production concepts to explain such a gap, has not gone unchallenged[10] but interest in the lean production concepts has remained high among academics and practitioners in the UK and some other European countries, although in the USA there are signs that agile manufacturing may be replacing lean manufacturing as the latest fashion in best practice.

The purpose of this article is to analyse the performance levels of automotive plants in the European motor industry in terms of the productivity and quality, and also to investigate the link between manufacturing performance and the use of lean production practices. In doing this, the spread of lean production practices across Europe will also be discussed.

Research methods

The study covered 71 automotive component plants in eight countries -- France, Germany, Italy, Japan, Mexico, Spain, the UK and the USA. By region, this represented 44 plants in Europe, nine plants in Japan and 18 plants in North America. The project covered three product areas:

(1) complete seat sets;

(2) exhaust systems; and

(3) brake …