The Innovator's Folly 4 - Imitation Is The Sincerest Form of Profitability

Bob Lutz and Mark Fields have talked loud and often about the urgent need to create exciting, innovative products.  GM will be saved when Lutz comes up with something that duplicates the effect the minivan had at Chrysler; and the boys at Ford are feverishly trying to dream up the next Mustang or Taurus.  They are going to invent and create and conjure up something so wonderful, the whole world will be ready to drop their Toyotas and Hondas off at the junkyard to get in on the product of their innovation.  At its heart, the product innovation theory is based on the idea that, if you can invent something fantastic enough, the demand will be so great that mass production can come back from the grave and make us all rich again.

On the other hand, there is Chrysler in Belvidere, Illinois.  Their assembly plant makes three different models and is "flexible enough to vary the production mix between three products anywhere from 0 to 100 percent of each model"     The third shift at the plant is being staffed entirely with 'temporary workers', although the temps will have a job for at least two years, and receive health benefits after eight months.  Starting pay is $18 an hour.  "The new workplace model lets employees design their own work stations."  Who knows if this model will work for Chrysler, but the objective is part of Chrysler's move to "flood the market with a record 10 new products in a single year."  Put ten new products out there, build factories that can make any or all of them in any mix, and be able to turn on a dime in whatever direction the customers want to go.

There is not a single 'innovation' in the Chrysler scheme (although, like the body shop guy, they may think they invented it).  Mixed models on one line; not quite zero minute exchange of tooling, but faster than the line cycles; using temporary employees to supplement the workforce; employee designed work stations - it has all been done before.  The power of Belvidere is not in any invention.  It is recognizing the change in the auto business and adapting.  Ten models in one year and not relying on any one of them to be a superstar in order to make money is the essence of the Toyota business model.