Toyota: Better or Different?
Seth Godin asks if we should try to make processes better or “different.”
It makes me think back to this morning’s WSJ article comparing the upcoming Toyota San Antonio plant with the existing (and old) GM Arlington plant. Sure it’s unfair, in a way, to compare old and new plants, but look at the innovation in the Toyota plant. This sounds more “different” than “better.” (A free version of the full WSJ article is here).
On the other hand, even though Arlington is the country’s most efficient large-SUV plant, GM can’t maximize its success by adopting its newest, best methods there. “Arlington is doing a great job for GM, but they can’t have an optimal layout, and their footprint is landlocked because a world with subdivisions and expressways has grown up around it, whereas Toyota was able to take out a clean sheet of paper,” Mr. Robinet says.
Right, not a fair comparison. But still, here is what Toyota is doing:
Being new means Toyota can use its most-efficient manufacturing technology, which the company has developed as part of a recent push to slash its production costs.
The San Antonio plant is installing smaller, lighter machinery with a simpler design that takes up less space than previous generations of equipment, an effort Toyota calls “simple and slim.” Smaller machines mean Toyota can spend less on the building that houses them, while simpler design means those machines are cheaper to install, easier to maintain, much less likely to break down and simpler to fix if they do. The plant covers about 2.2 million square feet, including some metal-stamping operations, which are not done in Arlington. Still, the Toyota plant is roughly a third smaller than the 3.75 million-square-foot GM plant.
If Toyota had built the plant with the conventional technology, the plant would have been “30% to 40%” larger, says the plant’s manager, Hidehiko “T.J.” Tajima.
As his engineers haul in and test new stamping presses and other heavy equipment in San Antonio, what’s equally important to Mr. Tajima is what’s missing. Toyota’s newest U.S. factory doesn’t have shoulder-high shelves lining the assembly line to hold parts for workers. Instead, the parts for each vehicle are delivered in a small container inside each car, freeing workers from having to pick out the right parts from the shelves. The missing shelves coupled with the smaller machines turn what would ordinarily be a dark and noisy place into one that is airy and well lighted.
Robots on the assembly line at GM’s Arlington facility.
“We try to come up with break-through innovation in every major equipment and process,” Mr. Tajima says, pointing to an example where engineers replaced heavy parts conveyer systems with lighter and more flexible robots.
Further, Toyota has arranged for 21 key Tundra suppliers to set up factories right on the same site, sandwiching the plant on the north and south sides. Engines still come from a Toyota plant in Alabama and axles from a supplier in Arkansas, but most other major parts, from instrument panels to seats to exhaust systems, are assembled at those on-site suppliers. That cuts the cost of transporting parts and storing large inventories on site as insurance against missed shipments. It also eliminates risks of having too many components en route to San Antonio — a potential logistical nightmare that could cost Toyota dearly if a defect suddenly appears.
There are risks for the on-site suppliers, though. They cannot spread their costs over different products from multiple auto makers, which makes them vulnerable to a downshift in demand for Toyota’s big trucks.
So to those who say Toyota’s kaizen system can’t innovate, look at the comment above:
“We try to come up with break-through innovation in every major equipment and process.”
If I was a Toyota supplier, I wouldn’t worry about the “risk” of marrying my production to Toyota. They have an amazing track record of consistent growth. It would be a “risk” to do the same thing as a supplier to GM. GM could try to copy Toyota’s supplier strategy, but does GM have the trust and relationships built up to get suppliers to go along with it? Would GM “strongarm” suppliers into cooperating? What a silly notion that is.
The notion of “spreading your costs” across multiple programs…. isn’t that more of a mass production mindset coming out in the writing of the WSJ reporter?