Shortening Lead Time through Early Problem Solving A New Round of Capability-Building Competition in the Auto Industry

This paper presents both quantitative and clinical data from comparative studies of automobile product development, which I have participated in during the 1980s, early 1990s, and mid 1990s mainly at Harvard University. It focuses on the Japanese advantages in the 1980s, the western "reverse catch-up" in the 1990s ( American in particular), as well as recent efforts by some Japanese auto-makers to further reduce lead times. The analysis generally indicates that the effective organizational routines capabilities) that our previous studies identified ( Clark and Fujimoto, 1991) have in fact been a primary focus of the capability-building efforts by the western auto-makers during the early 1990s. It also suggests that a framework that describes product development as a management of interconnected problem-solving cycles, which our past studies have adopted in analyzing effective product development ( Clark and Fujimoto, 1989a, 1989b, 1991, Fujimoto, 1989, 1993), can also be applied to the analysis of more recent phenomena further reduction of engineering lead times from about 30 months to around 20 months (or less) by some Japanese auto-makers in the mid 1990s. An analytical framework and some clinical evidence are presented in the second half of the paper. Early problem solving through what we call "front-loading" is emphasized as a key method for the lead time reduction at this phase of capability-building competition.