ANALYSIS OF THE PRODUCTION SYSTEM
History of Porsche
The earliest Porsches were built by hand in Austria, exemplifying the notion of “craft production”. The cars were produced largely by hand by highly skilled workers, one unit at a time. The resulting products varied subtly and were made to high standards, but were expensive and time-consuming to produce. In theaftermath of the war, Porsche’s Zuffenhausen factory in Stuttgart was commandeered by American forces, and thus the car-building efforts took place in Gmünd, Austria. This was a rural mill town rather than being an industrial centre, and the Porsche family took to calling this stage of the company’s history “United Shed Corporation”. Workers had to produce the entire car by hand, including the body,which was the most time-consuming part of the process. In conjunction with financial and personal factors, Porsche was anxious to return to producing cars in Germany.
Money was pouring in for the Porsche family from the royalties of the Volkswagen Beetle, whose sales had taken off by that point, and to offset this income, the family needed to embark on industrial endeavours within Germany touse as write-offs. They were informed that they would have the Stuttgart factory back by the first of September 1950 and thus began making preparations to begin larger scale production in Germany. Thanks to the industrial activity in Stuttgart, Porsche could now contract a separate body builder to make the bodies of the cars, and chose Reutter, which was in business nearby making and repairingbodies for the city’s street trolleys. Reutter’s work had the necessary quality to satisfy Porsche, and thus, they entered a contract with the firm, which also allowed Porsche to assemble cars in a 5380 square foot corner of Reutter’s factory until Porsche’s factory was released by American authorities.
In June of 1950, however the Korean War broke out, and the Americans suspended all militaryasset dispersal, including Porsche’s factory. It would be two years before Porsche got its factory back, and during that time, they continued to build the cars in the corner of the Reutter factory. In the great crafts production tradition, each engine was assembled over a twenty-five hour period by a single workman and then stamped with his initials to help trace quality problems. Production wasabout two cars per day during this period. Also typical during this period was the loose definition of jobs. There were few enough employees that workers simply did what was needed to be done, especially among administrators. For example racing director Fritz Sittig Huschke Baron von Hanstein joined Porsche as a field representative in the sales department before becoming head of racing, and notedthat he “was never really told what sort of work [to] do…nor what [he] was hired for, because in those days everybody did a little bit of everything.”
Production continued to grow during the fifties and sixties, but remained fundamentally unchanged into the early 1990’s. A new larger factory was completed nearby in 1969, and the number of tasks completed in house generally increased. Havingconsumed the majority of Reutter’s production, Porsche bought the company out, and engine parts manufacturing was also transferred in-house. Production of engines and many other components switched from individual to teamwork as well during this period. Production capacity reached about eighty-six cars daily, but was still completed in large part by hand, including convertible tops, each of whichrequired fourteen hours of work by a seamstress, even into the 1990’s.
In addition to production technique differences, Porsche differed from conventional mass production as championed by American companies on an organizational and philosophical level. Ferry Porsche visited General Motors during the 1950’s and found the differences to be remarkable. He noted the tremendous power of the costing...
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