Comparison of American and Japanese Car manufacturing Strategies: Push and Pull. Ford and Honda

Comparison of American and Japanese Car manufacturing Strategies: Push and Pull. Ford and Honda

American and Japanese have different production strategies to tackle product variety.

American car manufacturers believed in the philosophy of mass production producing high volumes and achieving economy of scale. They always chose to offer minimum fundamental variety to keep the production costs low and offered very high peripheral variety.

Japanese auto manufacturers offered more distinct models to choose from and less option combinations thus increasing the fundamental variety. One of the reasons for this fundamental difference in product variety offered was because of the production strategies followed by them.

American manufacturers followed the push production system and the Japanese manufacturers followed the pull production system.

In push systems batches of materials are forced through different stages of production. The flow of materials are planned and controlled be a series of production schedules. The push system is also called as the make to stock system. The ability to handle product variety in push system is governed by the setup time. In most cases due to high setup times the resulting batch sizes are large rendering the push system to be least flexible to handle product variety.

In pull production there is emphasis on reducing inventory at every stage of production. The successive station triggers production at the preceding station. In effect there would not be production if there is no downstream demand. Pull system is commonly known as just-in-time manufacturing because the product and the corresponding sub-assemblies are produced as and when required. The JIT philosophy (often coupled with low setup times) facilitates lower work in process. Pull systems in general offer higher flexibility in manufacturing to accommodate product variety.

Hence one can say that Push System are inherently made to order and Pull system are inherently make to stock.