Dynamic Nature of Production Models

Abstract

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.