Adding Value Vs. Removing Cost

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Yesterday an article titled “Learning from Toyota – Again” by John Teresko was published on IndustryWeek.com. The focus of Teresko’s article is centered around 2 key questions:

How does Toyota keep getting better?

What keeps competitors from emulating their performance?

To answer these questions, Teresko draws on the experience of Jeffery Liker and the 14 Management Principles of TPS outlined in “The Toyota Way”. The article also includes comments from Michael Paris of Illinois based Paris Consulting. In general this is a good article that deals with the important issue of treating Lean as a holistic, long term approach rather than as disjointed systems and tools haphazardly applied. Nothing new for all the true lean thinkers out there.

What really got my attention were some of the quotes in the article from Stanford professor Jim Matheson. He states that Toyota is, “driven by the need to continuously deliver more value to the customer. In contrast many of the new users of TPS tools tend to ignore that issue. The short-sighted tendency is to focus on little more than a cost-based strategy.” Matheson adds, “by itself, cost reduction is not a strategy unless you want to commoditize or go out of business.”

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Luke Van Dongen

Luke, an auto industry engineering veteran, blogged here from 2005 to 2006.

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2 Comments on "Adding Value Vs. Removing Cost"

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  1. Mark Graban says:

    Thanks for posting that. Yeah, about value, I’ve read how some Toyota people say that TPS isn’t about “cutting costs”, but it’s really about “maximizing profit.”

  2. Chet Frame says:

    Isn’t that another aspect of mind set? The positive view exhibited in delivering more value versus the negative of cost cutting shows, in a very simple way, how we approach TPS.

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