James P. Womack explains Why Toyota Won:
Toyota is leading the charge against Detroit — largely from inside the U.S. — with a fundamentally different approach to business that my MIT research team in the 1990s labeled ‘lean’ enterprise. Compared with these Toyota practices, GM and Ford’s approach has five fatal weaknesses:
- GM and Ford can’t design vehicles that Americans want to pay “Toyota money” for.
- GM and Ford are clueless as to how to work with their suppliers.
- GM and Ford have miasmic management cultures.
- GM and Ford cling to their wide range of brands.
- GM and Ford still treat customers as strangers engaged in one-time transactions.
Womack points out that he doesn’t blame “creaky factories, vast pension obligations, and cranky unions.”