By January 8, 2007 1 Comments Read More →

Toyota Goes Big…

Toyota bulks up Tundra, hoping to draw a crowd of buyers

They go big, but stay lean (or they’re getting “leaner”).

It’s been hard to avoid the Toyota ads while watching football, with their new full-sized trucks. Rather than patriotic music (Chevy) or country singers (Ford), Toyota’s ads are definitely focusing on the product… and on details such as the size of the trailer hitch assemblies, etc. I’m guessing they got some solid “voice of the customer” data about components and capabilities that were critical.

This press release has some details about the San Antonio plant:

A NEW STANDARD FOR QUALITY
————————–
The new Tundra is designed in North America, and a number of Tundra models are manufactured at a brand new, purpose-built assembly plant in San Antonio, Texas. This plant represents a major evolutionary step in the Toyota Production System, one of the most highly-regarded manufacturing systems in the world.

The new Tundra plant in Texas is at the heart of a manufacturing complex that includes a network of 21 major suppliers of components and parts, located on the same site. This is the first time for Toyota that suppliers’ parts production operations have been co-located with an auto assembly plant. The move has significantly reduced the landfill waste and the fuel emissions and costs associated with the transport of components from off-site manufacturing locations. It has also greatly increased production efficiencies by eliminating inventories. Many components are now built to order and delivered directly to the assembly line to be installed in the Tundra for which they were made. Finally, working with on-site suppliers has given Toyota previously unheard of control over quality and the ability to quickly address production issues.

Funny how Toyota isn’t trying to source tons of parts from Mexico or China, huh? Toyota’s not stupid. If they thought their total costs and effectiveness would be better by sourcing from China, they would. But, they have their suppliers in a high-labor country (albeit a non-union area) with the suppliers right near by. Why don’t more companies copy that?

I’ll post more later on Boeing (or keep tuned to Evolving Excellence), but Ford’s new lean wonder-CEO didn’t push a similar approach with Boeing’s supply chain.

Here is the WSJ article that Dan references in his comment.

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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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1 Comment on "Toyota Goes Big…"

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  1. Dan Markovitz says:

    I believe that one reason Toyota wants to emphasize the home-grown component aspect of their vehicles is to forestall political/PR backlash against a foreign company. Yes, Toyota employs American workers, and yes, they contribute to the economies in which their plants are located. But that may not be enough when the Big Three are going down the tubes.

    Today’s Wall Street Journal reports that “Toyota Motor Corp. faces pressure to further ramp up North American production from its own internal targets as it looks for ways to counteract potential political backlash stemming from the U.S. Big Three’s woes.”

    The article further comments that “Toyota has been mounting a multimillion-dollar ad campaign stressing how “American” it has become here. In magazine ads and on its Web pages featuring American employees in production, sales and product development, the company touts “commitment to investing in the communities where we do business” and the number of jobs it has created: It directly employs more than 32,000 Americans, and its dealer and parts suppliers have helped create an additional 386,000 jobs in the U.S.”

    I suspect that Toyota move to co-location of supplier parts is driven by cost considerations, logistics challenges, and PR needs. But the key point for me is that Toyota is doing something about the status quo, rather than complaining about it.

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