Construction as a manufacturing process? Similarities and differences between industrialized housing and car production in Japan

TLDR

Japanese industrialized housing and automobile production share similar management practices in product development, design, supply‑chain coordination, marketing, and sales, yet the application of car‑industry techniques is constrained by the need to balance economies of scale with the flexibility required for highly customized products. The study argues that housing firms can adopt advanced manufacturing methods from car production while automobile manufacturers can learn from housing firms’ customization management, proposing that broader consumer choice is achieved by integrating standard components with flexible assembly across the entire production system. Applying car‑industry manufacturing principles has enabled the creation of attractive, customized, and affordable homes.

Abstract

In Japan, similar management practices in product development, design, supply-chain coordination, marketing and sales have been used to produce very different products: industrialized housing and automobiles. Manufacturing principles derived from the car industry have been successfully used to produce attractive, customized and affordable homes. But there are limits to which such techniques can be applied to manage the assembly of wide varieties of component parts needed to produce complex customized products. Managers must trade off the need to achieve economies of scale in the production of standardized factory parts with economies of scope in various stages of assembly in order to provide flexibility to satisfy consumer choices. The housing industries can benefit by learning more about the use of advanced manufacturing techniques developed in car production. At the same time, automobile makers may learn more about the management of customization from the way in which housing firms organize sales, design and final assembly. The paper suggests that wider ranges of choice can be delivered through managing the whole production system, balancing the use of standard components with flexibility in assembly, rather than by solely attempting to optimize control in discrete parts of the system.