Flexibility versus efficiency? A case study of model changeovers in the Toyota production system

Abstract

T his is a careful and insightful case study of how the Toyota Production System manages the paradox of efficiency and flexibility, which arises periodically in connection with model changeovers. The authors detail the functioning of four organizational mechanisms-metaroutines, partitioning, switching, and ambidexterity. However, of particular interest is the contextual reinforcing role of training and trust in administrative structures, procedures, and rules. AbstractThis 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 flexibility/efficiency combination. First, metaroutines (routines for changing other routines) facilitated the efficient performance of nonroutine tasks. Second, both workers and suppliers contributed to nonroutine tasks while they worked in routine production. Third, routine and nonroutine tasks were separated temporally, and workers switched sequentially between them. Finally, novel forms of organizational partitioning enabled differentiated subunits to work in parallel on routine and nonroutine tasks. NUMMI's success with these four mechanisms depended on several fea-tures of the broader organizational context, most notably training, trust, and leadership.

A stage-dependent model of resource utilization, strategic flexibility, and implications for performance over time: Empirical evidence from a transitional environment

“…Much organization theory argues that exploitation requires efficiency, that efficiency requires bureaucracy, that bureaucracy impedes flexibility, which is a prerequisite for exploration, and that organizations therefore confront a tradeoff between efficiency and flexibility (Adler & Borys, 1996;Adler, Goldoftas, & Levine, 1999). Such a relationship suggests that efficiency and flexibility may be viewed as two ends of a continuum, as illustrated in Figure 1.…”

“…From an organizational point of view, efficiency requires a bureaucratic form of organization with high levels of standardization, formalization, and specialization. However, such bureaucratic features impede the fluid process of mutual adjustment required for the flexibility that is essential for strategic adaptability to environmental changes (Adler et al, 1999). Focusing on the other end of the efficiency-flexibility continuum, such a perspective emphasizes a firm's capability to respond to rapid changes and to quickly re-align with the environment (Sanchez, 1995).…”

Manufacturing flexibility and performance: bridging the gap between theory and practice

“…The Olhager and West approach is interesting because it clearly demonstrates the tremendous amount of analysis and effort required to perform this translation of market demand into flexibility competences. Adler et al (1999) suggested that companies could reduce the trade-off through what they called ''ambidexterity'': investing in the ability of employees to be both flexible and efficient. Ambidexterity included tactics such as (a) metaroutines, or routinizing innovative tasks; (b) job enrichment through adding nonroutine tasks to the operator's work; (c) switching, or dividing employee time between tasks requiring efficiency and tasks requiring flexibility; and (d) partitioning, or creating subunits in the organization specialized in either routine or nonroutine tasks.…”

Organizing dualities and strategizing for change

“…Through ambidexterity, organizations avoid what Christensen (1997) described as 'the innovator's dilemma', where companies with the advantage of a new technology or approach fail as a consequence of pursuing it along with the forms of organizing that it demands. Strategic change subsequently becomes a constant process of shifting the trade-off between organizing forms that encourage either flexibility or efficiency (Adler et al, 1999). Discrete activities such as knowledge acquisition have to be combined with common activities providing effective organizational controls (Ilinitch et al, 1996).…”