By August 20, 2006 0 Comments Read More →

AutoWeek article on Toyota

The Roots of Toyota’s Strength – AutoWeek

Why is Toyota so successful? AutoWeek answers:

“Toyota’s strength does not lie in a single core competency. It rises from a complex, interlocking set of extraordinary skills. These include working closely with suppliers, continually finding ways to innovate and improve, and constantly challenging itself to cut costs.”

I think that’s a good way of putting it. It’s not just any one tool or approach, it’s an interlocking set of skills, methods, attitudes, and approaches. That’s why TPS can be so hard to copy.

Many interesting tidbits in this article. The first is about having suppliers delivering parts through underground tunnels to their new China assembly line:

To see the roots of Toyota Motor Corp.’s excellence, go beneath its new assembly plant in Guangzhou, China. Toyota group suppliers zip parts through a series of underground tunnels to the line building Camrys.

Some parts never go outside before being installed on a car. They therefore require less packaging than similar parts delivered to assembly plants in Toyota City, reducing their cost.”

Thanks to their financial success, Toyota has paid CASH for their new factories.

“Over the past five years, Toyota has opened three assembly plants in China, one in Mexico and a joint-venture plant with PSA-Peugeot/Citroen in the Czech Republic. It also opened powertrain factories in China, India, Poland and Alabama. It currently is building assembly plants in San Antonio; Woodstock, Ontario; and St. Petersburg, Russia.

Toyota paid cash for all of them. It has not borrowed any money to pay for the new plants.”

There are more details in the article, but they break out the keys for success as:

  1. Elimnation of Waste (including the energy lost by braking — applied to hybrids)
  2. A Culture Rooted in Manufacturing (“there are ‘manufacturing guys’… and everybody else”)
  3. Fast, Disciplined Product Development Cycles
  4. Consistent and Relentless

The article also gives a pretty balanced view of the problems that face Toyota in the future.

Here is a classic story related to #2 and the problem solving ethic:

In a classic encounter, Toyota and GM managers met in the mid-1980s to review that week’s production at their new joint venture, New United Motor Manufacturing Inc. in Fremont, Calif. A lifetime GM manager, trained not to bother his boss with problems, brightly reported “no problems” in his department. His new Japanese boss looked him in the eye and said, “No problem is a problem.”

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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