Case Study about Model Changeovers in the Toyota Production System
Abstract: This article seeks to reconceptualize the relationship between flexibility and efficiency. Much organization theory argues that efficiency requires bureaucracy, that bureaucracy impedes flexibility, and that organizations therefore confront a tradeoff between efficiency and flexibility. Some researchers have challenged this line of reasoning, arguing that organizations can shift the efficiency/flexibility tradeoff to attain both superior efficiency and superior flexibility.
Others have pointed out numerous obstacles to successfully shifting the tradeoff. Seeking to advance our understanding of these obstacles and how they might be overcome, we analyze an auto assembly plant that appears to be far above average industry performance in both efficiency and flexibility. NUMMI, a Toyota subsidiary located in Fremont, California, relied on a highly bureaucratic organization to achieve its high efficiency. Analyzing two recent major model changes, we find that NUMMI used four mechanisms to support its exceptional flexib ility.
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