service, and look upon its total operations as one system. It was not long ago that a manufacturer could boast about a product that invaded the market simply because it was newer or better. A manufacturer could also specialize in marketing and do reasonably well with products that were not exceptional in any way.

In today’s tough environment, new technologies have, to a large extent, changed the product. The automotive industry is the largest industry buying and applying a wide range of new technologies. We use new engineering materials such as plastics, aluminum, and alloys and depend heavily on electronics. Sensors are used extensively throughout the products, and we have taken a systems approach to product development. We see the car as a system more than a piece of hardware or an assembly of hardware. The automotive industry also has new tools for product development. Computer-aided design has led to, if not a revolution, much higher efficiency. Volvo recently has designed an engine without using the drawing board at all. So, engineers are supported in their development work by artificial intelligence, simulation, and sophisticated testing equipment.


The manufacturing industry experiences other, new demands besides competition and the pressures of recession and tough economic conditions. There are new demands from two kinds of people—the employees and the customers. The employees’ demands, of course, are for better education and more information. Employees want more meaningful jobs and a bigger say in the development of the corporation. They want to see evidence that they can experience personal development through the job.

Employees look at what might be described as the invisible contract. They give something to the corporation. They do not always feel that their contribution is reciprocated, and they want to see evidence that this invisible contract is maturing into something that is good for them. They are looking not only for monetary remuneration but also for an interesting job and the possibility of receiving training and trying new career opportunities in the company.

Customers, too, are much more sophisticated today than they were in the past. They ask not only for value for their money but also for care. They ask for service and they too want a kind of invisible contract with the supplier. Consequently, people are the key resource in industry, whether they be customers or employees.


In the automotive industry, the standard scenario in the late 1960s and the early 1970s was that large-scale production would survive and smaller-scale

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