The growing complexity of the car and relations between car manufacturers and their suppliers

Type de publication:

Seminar Presentation


Dankbaar, Ben


Gerpisa colloquium, Paris (2011)


codevelopment, complexity, supplier relations


Recalls have been a familiar phenomenon in the car industry for many decades. In spite of all the attention paid to design and engineering of a modern car, it happens time and again that some parts or components have been installed that do not meet the standards and cause more or less serious malfunctioning of the car. How is that possible? The highly publicized problems encountered by Toyota over the past two years have reignited debate about this question. How is it possible that even a quality champion like Toyota has to recall large numbers of cars? Or more generally: how is it possible that large, experienced and sophisticated car manufacturers repeatedly find out that their products do not meet the standards they have set themselves?
In a first approximation, the answer is often that the mistake was made by a supplier. It is an understandable reflex to blame problems on someone else and for car manufacturers it is all the more understandable, because a large and over the years increasing part of the value of a car is being manufactured by suppliers. Nevertheless, as car manufacturers know all too well, the final responsibility lies with the manufacturer whose name is on the car. Even if it is sometimes possible to claim damages from the supplier, the general public usually does not know and does not care about the name of the supplier. From the perspective of the customer, it doesn’t matter if a part, component or subassembly has been manufactured by the car manufacturer or by a supplier.
In a second approximation, then, the answer is that the automobile has become an increasingly complex product, so complex indeed that problems are almost inevitable. In a comment on the recalls, Fujimoto and MacDuffie wrote in Harvard Business Review that “Toyota’s highly publicized recalls earlier this year were not outliers but, rather, emblematic of an industry challenge that will only intensify as vehicles integrate ever-more-elaborate hardware, software, safety equipment, and creature comforts.” Interestingly, the increasing complexity of the automobile is also a reason behind the increasing reliance of car manufacturers on suppliers. In that sense, the two answers given above are connected. In this paper I explore these connections between the complexity of the car and the relations between car manufacturers (OEMs) and suppliers.
First, I discuss complexity: what is it and how are organizations dealing with it? Outsourcing is an important part of dealing with complexity and I subsequently discuss the role of the systems integrator before moving to the central issue in this setting: the issue of control. I discuss the question if suppliers are gaining more control in the industry.

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