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After this overview of Uddevalla’s achievements and the reasons for the
closure, let us now analyse its capacity for learning in more detail. Paul
Adler and Robert Cole have argued that Uddevalla was not in ‘striking difference’ of the productivity of Toyota’s Californian joint-venture with General Motors, NUMMI (New United Motor Manufacturing Inc.). This alleged performance gap is attributed to the Swedish plant’s emphasis on
individual, as opposed to organizational, learning. Workers at Uddevalla,
Adler/Cole contend, lacked both the motives and the mechanisms for focus-
ing and capturing ‘the kinds of microscopic kaizen opportunities that drive NUMMI performance’ (Adler and Cole 1993: 89). Now, if we want to ana- lyse organizational learning, it is essential to distinguish between absolute
performance and rate of improvement. Adler and Cole are quite correct when they report that the NUMMI plant consumes much less assembly hours to
build a car than Uddevalla, or any other Volvo plant. The problem is the next step, their attempt to establish a direct link between this performance
gap and the capabilities of organizational learning at the two plants. As
emphasized by Williams et. al. (1992), it is very difficult to compare pro- ductivity data between plants belonging to different companies, producing different products, using different component suppliers, etc.. The problem is not to establish the number of assembly hours required, the difficult task
is to interpret the differences. In the case of NUMMI and Uddevalla, the
performance gap is influenced by a number of factors outside the control of the final assembly process.
First, there is an important difference in product characteristics and prod-
uct manufacturability. NUMMI workers would certainly appear much less
productive if they had to assemble Volvo cars.
Second, the quality of the components supplied are by no means the same. This is not only true for external deliveries, but also for components supplied by previous processes within the company. For example, according to inter-
nal Volvo studies carried out in 1990, the precision of Volvo’s and Toyota’s
body components differed in a highly significant way (Karlsson, 1991). This, of course, affected productivity in final assembly in a substantial way.
Third, as Williams et. al. have demonstrated, capacity utilization must be included in any serious comparison of plant productivity. This factor is
consistently overlooked by Womack et.al., and the same holds true for Adler
and Cole. Since Uddevalla only utilized 50 per cent of its one-shift capacity
in 1991–92, whereas NUMMI operated much closer to optimal efficiency, Volvo’s plant is again at a disadvantage.
Fourth, the two plants are differently positioned on their respective
learning curves. NUMMI adopted a mature, fine-tuned concept, developed
for decades in Japan. Uddevalla on the other hand, had just established its learning curve for a qualitatively novel concept, and needed much more experience for synchronizing assembly design, materials control, worker training, management organization, information systems and so forth.
For all these reasons, I will concentrate my discussion on Uddevalla’s rate
of improvement, rather than its absolute productivity. Figure 1 illustrates
productivity development at the plant from January to November 1992, as measured by worker hours per car. A look at this graph makes it difficult to
maintain that Uddevalla did not have a significant capacity for systematic, organizational learning. Moreover, the accelerated productivity progress in the autumn of 1992, was combined with a 20 per cent improvement in quality and with an almost complete conversion to custom-order assembly. In fact, the plant had never made as broad progress as it did during this period. The reason for this acceleration is very important and highlights a
serious flaw in Adler &Cole’s analysis. They emphasis the importance of
organizational learning, but analyse the organization of the two plants in a
very simplistic way. Thus, under the heading ‘organizational design’ there
is only a description of the assembly teams at Uddevalla. For students of management and administration, it should be obvious that plant manage- ment and administrative hierarchies have some impact on productivity, and cannot be identified with shop-floor structures.
<Figure 1, Page 122, Part II, Berggren>
Figure 1
By focusing squarely on the shop floor level, Adler and Cole miss an im-
portant and paradoxical aspect of the Uddevalla story. The plant’s advanced
structure of assembly teams co-existed for a long time with a basically traditional management apparatus, located in an office building, the de- tached and secluded character of which was underscored by its architectural design. During the first years, the plant developed in spite of this anomaly, but in early 1992 there were clear signs of stagnation. The plant could not develop only on the strength of its team systems, a congenial plant organi- zation and managerial structure was urgently needed. In mid-1992, after a difficult period of soul-searching, a different and very process-oriented organization was put into place, headed by a new plant manager. He had
previously been extremely successful in reorganizing the pilot plants be-
longing to Volvo’s development and product engineering departments. In Uddevalla’s new structure there was only two hierarchical levels, shop and
plant management.
As before, the assembly and materials shops (on average comprising 70
workers) were organized in teams with rotating, hourly team leaders. They communicated directly with the shop managers, who in turn made up the bulk
of the plant’s new management committee. This participation of first-line managers in Uddevalla’s central governing body reflected the very strong
emphasis on process and process development (including organizational learning!) in the new organizational design. For the new plant manager, the
flattening of the hierarchy was only the first step. Next, he planned to empty
the office building completely, and relocate all managers and administrative officers to facilities directly adjacent to the production process.
‘Some of the functional heads did not believe me’, he admitted when interviewed about this plans, ‘but I intended to move first, and then the others would have no choice but to follow suit.’
A third aspect of this focus on the process was a series of initiatives to
involve salaried employees in direct production activities in order to build an intimate knowledge of manufacturing problem across the plant. To gain first hand experience, the new managers of the assembly shops started to learn how to assemble, not complete cars (that was in most cases too daunting a task), but at least fairly complex sub-assemblies. The remaining industrial engineers, who had been relocated from the office to the assembly and materials shops, were expected to spend half of their time building cars in the assembly teams. To bridge the still existing gap between white and blue collar workers, the head of manufacturing assigned other managerial staff, such as accountants and systems analysts, to assist the teams for a shorter period (normally one week). Initially, this program encountered vehement opposition, but in the end the reactions were very positive.
These initiatives were no cultural exercises but served well-defined pur- poses, one of the most important being to develop, adopt and diffuse best
practice methods plant-wide. Aggressive performance demands provided
the impetus, the presence and participation of the support staff (engineers, etc.), the opportunity to elaborate and spread best-practice procedures
swiftly. As a part of this drive there was a very successful introduction of a
plant-wide Kaizen programme in the autumn of 1992. The advanced team structure turned out to be ideally suited for sustaining continuous improve-
ment activities. ‘Previously’, team members recalled during interviews in 1993,‘we had only felt the pressure from management to reach our targets. Now, we really got the support, and did a lot of things, often small improve- ments, we had never bothered to do before.’
Adler and Cole quite correctly emphasize that both concepts, both NUM-
MI and Uddevalla, are capable of learning and evolution. Nonetheless, they
tend to interpret their impressions from the 1991 visit to Sweden in a very static way, as the essence of the Uddevalla concept.
‘At Uddevalla’, they write, ‘work teams were left to their own devices.
In the very early days of Uddevalla, managers gave workers the procedure documents from the Torslanda plant. But these procedures were not very well designed … as a result, the Uddevalla workers quickly discarded them, and, along with them, the very idea of detailed methods and standards … this management philosophy sounds more like abandonment than empow-
erment.’ (Adler and Cole 1993:90). It is true that there was an interregnum
at Uddevalla, when the traditional standards did not work and the new methods had not yet been developed. This interregnum was not an inherent
feature of the Uddevalla concept, however. In fact, at the time when Adler
and Cole visited the plant (mid-1991), this period was coming to a close, new pro-cedure documents had almost been completed and introduction in the assembly teams started.
The problem of finding effective means for diffusing methods and prac- tices from high-performance teams to lesser performing units, that is, organizational learning, had been a management preoccupation since the
start of the plant. Thus, Adler and Cole are wrong when they argue that a ‘a third assumption built into the Uddevalla approach… is that an increase
in individual learning automatically leads to an increase in organizational
learning. This is a fundamental fallacy’ (1993:92). Uddevalla had no
problem in acknowledging the need for organizational learning, that was self-evident. The challenge was to organize it in effective and congenial ways. In 1991 and early 1992, the managerial answer was to strengthen the hierarchy and expand the role of the technical expertise. The new proc- ess-driven organization represented a very different solution, combining radical decentralization, participative management and strong performance orientation. The Kaizen programme was one approach to develop and diffuse best-practices. To further increase the process of knowledge transfer, the plant manager envisioned a comprehensive system of personnel exchange, within and between assembly shops, and eventually between the assembly
department and the materials handling. According to managers interviewed
as part of my evaluation study, it was only in 1992, three years after its inauguration, that Uddevalla had acquired an overall organizational form
that fitted the team structure and production design. As the plant’s former
personnel head, a shop manager in the new organization, pointed out in an
interview in April, 1993:
We had to learn so many things from scratch, starting with a process of un-learning, getting rid of previous conceptions and behavior. Only in
September 1992 we found an organization suited to our production con- cept. We also introduced a new programme for leadership development, which was essential for all shop managers, and the new management
board. The first session of the programme took place in November, on
the same day as the close-down decision was announced.
For all those interested in the development of competitive humanistic manu- facturing, the shut-down of Uddevalla is a sad and disheartening event, but
the evaluation of the plant’s performance is a consolation. This ‘experiment’
was not only a bold step in creating humane work, but a potential success in a wide range of performance measures. Rapidly improving productivity and quality was combined with superior flexibility, low cost tooling, unparal- leled customer orientation and a unique responsiveness to market demands. Volvo has abdicated from its pioneering position, but the invaluable experi- ence is there for anyone interested in making use of it.
Note
1. Some of the arguments have been presented elsewhere (see Berggren, 1993 a; Berggren and Rehder, 1993). These contributions were based on a preliminary evaluation, whereas this chapter draws on the comprehensive assessment of Uddevalla and Kalmar presented in September 1993 (Berggren, 1993b).
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