Mother Factory vs. Model Factory

Abstract

The production systems of Japanese companies are considered to be firm-specific advantages, which lead to superior productivity. The mother factory system, exemplified by Toyota Motor Corporation, has been used as a primary method for transferring Japanese production systems overseas. However in recent years, some companies, such as Hyundai Motor Company of Korea, have begun using a different way to transfer production methods overseas. This paper terms this method the "model factory system" and compares it with the mother factory system within the framework of knowledge transfer theory. In this framework, production systems are regarded as knowledge held by the home country. In this analytical framework, members, tools, and manuals represent knowledge that is directly moved; skills, organizations, and layouts represent knowledge that can be reproduced by the recipient. This framework was used to analyze cases of production system transfer overseas by Toyota Motor a) Manufacturing Management Research Center, Graduate School of Economics, the University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo, Japan, ruiberd@gmail.com A version of this paper was presented at the ABAS Conference 2016 Summer (Suh, 2016). © 2016 Youngkyo Suh. This is an Open Access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited. 252Corporation and Hyundai Motor Company. It was shown that the mother factory system primarily transfers knowledge from the home country's factories, whereas the model factory system transfers knowledge from the corporate headquarters.

Organizations for Global Simultaneous New Model Launching

“…The Toyota Production System is characteristic of a mixed production system (MPS), and its production floor (gemba) is very flexible with respect to the change (Fujimoto, 1997(Fujimoto, , 2012Monden, 2006;Suh, 2015). In contrast, although the Hyundai Motor Company's production system uses MPS methods, it is not seen as being very responsive to changes on the production floor (gemba) (Jo, 2005(Jo, , 2016Suh, 2012aSuh, , 2016. In particular, Hyundai Motor Company's domestic labor structure is rigid.…”

“…According to Suh (2016) In fact, both the mother factory system and the model factory system can be seen as having been created due to the differences in the competencies of the domestic production floors (gemba) and production systems and the impact that these differences had on the organizations for launching new models. The Toyota Production System is characteristic of a mixed production system (MPS), and its production floor (gemba) is very flexible with respect to the change (Fujimoto, 1997(Fujimoto, , 2012Monden, 2006;Suh, 2015).…”

“…Toyota and Hyundai have been noted as having very different production systems (Jo, 2005(Jo, , 2016Suh, 2012aSuh, , 2016. Although their production systems are different, Both organizations have pilot production lines that are separate from the mass production lines, and these pilot lines both create prototypes and engage in process development.…”

Factory strategy

“…In addition, the study set three factors as strategic reasons for location: access to low-cost production (locations with cheap labor and material costs), market access, and access to skills and knowledge. 2 There have been many studies on the role of mother plants with discussions on global plant networks in international management theory, and even studies of Japanese firms (Amano, 2005;Hamamatsu, 2017;Oki, 2012Oki, , 2014Oki, , 2015Oki, , 2016Suh, 2016Suh, , 2017aSuh, , 2017b. and a measurement scale for choosing the top three "reasons for locating and using a plant" from among supplier proximity, labor availability, usability of skills and know-how, market proximity, sociopolitical reasons, competition, energy, and other factors.…”

Knowledge Network of Toyota

“…This can be seen as a case of domestic knowledge network expanding overseas. Moreover, studies on Toyota's global knowledge network (Suh, 2012(Suh, , 2015(Suh, , 2016 have clarified that the role of domestic plants, the OMCD, and the GPC in knowledge transfer to overseas is essential.…”