By September 1, 2008 10 Comments Read More →

Toyota’s Commitment to People

Toyota’s plunge into big pickups veers into a Texas-size ravine – USATODAY.com

I’ve already written about this before, but there was a new article in USA Today about Toyota’s commitment to its workers in San Antonio, even during a slow down in the truck market (and in truck production).

Now, about 2,000 permanent employees draw a paycheck from a plant that doesn’t produce anything. They perform maintenance, talk about ways to improve quality, and relearn tasks as basic as the best way to drive a bolt.

Toyota has the financial strength to do this. I’m sure it has nothing to do with P.R. or being philanthropic. I’m sure keeping the workers on and training them (with real work, not just letting them sit in the cafeteria) is all about the long-term good of the company. Many of Toyota’s suppliers (certainly part of the TPS sphere of influence) are not keeping their workers on — probably because they don’t have the balance sheet to allow that?

They’re luckier than the plant’s 200 temporary workers who work as needed and an army of employees at its parts suppliers, who have been furloughed.

I wonder if Toyota would consider sponsoring similar quality training and TPS training for the suppliers’ employees, expecting that to also help improve Toyota quality in the long run? Or does that just get to be too much of an expense?

There were some comments from Jeff Liker in the article, he said:

“If they laid off San Antonio workers for three months, that would be the shot heard ’round the world,” says Jeffrey Liker, a University of Michigan professor whose The Toyota Way and other books on Toyota’s production system have become business best sellers.

If the training program for the San Antonio plant stoppage works, the result could be workers with higher skills and more loyalty, lowering the plant’s costs in the future.

It also is building a reservoir of local good will.

“If I were in Texas, I think any sane person would say, ‘The market is awful, and this crazy company is actually keeping people employed,’ ” Liker says.

So what are the workers doing during this production stoppage? There’s a bit more detail in the article:

There’s plenty for workers to do while not making trucks, Toyota officials insist. In the press to get production started, many new hires never were fully steeped in Toyota methods. Trainers now can make sure workers are knowledgeable about best practices, says Toyota spokesman Mike Goss.

Those can be as simple as the best way to drive bolts with an impact wrench, a process some workers may repeat thousands of times a day.

They might practice picking up five at a time in the exact configuration for each to be driven most efficiently.

That’s an amazing level of detail for their “standardized work,” the exact way to pick up and hold the bolts. I’m impressed that Toyota can have both such attention to detail AND a long-term view. Are they perfect? No! They really misjudged the market for trucks (and they’ve had quality problems that have popped up along the way) — as Jim Womack pointed out in the article, they’re far from perfect. But they’re still an interesting company to watch and to learn from.


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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.

10 Comments on "Toyota’s Commitment to People"

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  1. Ralf Lippold says:

    Hi Mark,

    That is really great news. I wish similar events would be used in this manner at other OEMs instead of sending people home where they are sitting iddling around.

    So the collective intelligence can really get to work and I think the Toyota officials are quite right:

    There is always enough to improve (even without running the assembly line!)

    Best from Leipzig

    Ralf

    PS.: Diversity while looking at current issues can lead to really exceptional results:-))

  2. Bob Graban says:

    Wow, what a great, original idea from Toyota!

    Oh, wait … hmm … I’ve come across a UAW Local 1853 newsletter from Sept. 5, 1997 at the Saturn plant talking about their training during a sales shutdown (I doubt this link works outside of GM, but you can try).

    Quoting:

    Beginning this week and starting today, Saturn will reduce its manufacturing output through a series of steps, including eliminating production two shifts per week through the end of the year.
    Current market conditions in the small car market and declining demand for small cars industrywide are attributed to this strategy of reducing inventory in the field.

    To face this challenge, Saturn is standing by its policy of no layoffs and showing its commitment to job security. Rather than laying off members because of the underbuild, the organization is grabbing this opportunity to conduct other meaningful activities during the downtime.

    […] During the non-production time, training will shift into high gear, teams are expected to conduct team building activities, maintenance will perform projects to relieve manufacturing bottlenecks across the site, future model preparations will get underway and a host of other important and value-added activities will take place.

    This production adjustment plan was rolled out to members on the floor a week ago today.

    “At any General Motors facility we would have a layoff right now under these market conditions. But not here; at Saturn we’re different, we are committed to job security,” says Local 1853 President Joe Rypkowski. “Once again,” Joe observes, “our unique labor agreement is serving Local 1853 members very well.”

    “I ask everyone in the Saturn organization to do their part during this challenging period by working harder than ever to continue to protect our jobs -our livelihood. Let’s all pull together,” says Rypkowski.

    Wow, GM even thought about building small cars (the industry-wide small car market was down), reducing bottlenecks, etc. While the plant no longer builds Saturns and operates under the standard GM-UAW agreement (standard work?), it is now producing high-quality Chevrolet Traverse crossovers. Perhaps they wish they were building small cars again.

    In the interest of disclosure, I am a GM employee.

  3. nick says:

    Toyota must be improve their technical skill to produce a perfect vehicle for the future.

  4. Anonymous says:

    I wouldn’t call that “standard work”, having a consistent union contract.

    Saturn was certainly ahead of its time… But 11 yrs later, they’re no longer a unique animal. As with the hopes of EDS making GM modern and agile, the larger body exerted its force on the smaller. Saturn didn’t save GM, you could argue GM (and the UAW) ruined Saturn.

    Are any GM plants following Toyota’s lead today, or just keeping workers home?

  5. Anonymous says:

    I think an interesting comparison is to look at the practices of a typical hospital. When patient census (volume) is down, they’ll send staff home. They can be ruthless about managing to a single labor cost metric instead of using that free time to improve quality and processes. I think society wouyld benefit from us “beating up” on our local hospitals (in a friendly, helpful way) instead of “beating up on” GM.

    We should share this Toyota examples with hospital CEOs. Who has “respect for people” in mind?

  6. Anonymous says:

    Did you see Matt May’s blog post about this? OUCH!

    Elegant Solutions Blog

    Man, tell us what you really think about Womack and Liker… check it out.

  7. Mahendiran says:

    Great article and thanks for presenting it. It is a great decision by Toyota and definitely shows their long term focus and looking at the big picture of the business.Paying 2000 people for few months does not really cost any money considering the benefits that are going to come out when the business ramps up again. Toyota proves it again……

  8. Maurice W. says:

    Wow. That’s great commitment by Toyota. I’m sure it will lead to great employee loyalty in Texas. It draws a stark contrast with many other companies here (in America). They seem too worried about a dip in stock price to see the great worth of their trained, experienced employees.

  9. Mark Graban says:

    Toyota has, of course, resumed production at this plant and has been increasing production to replace inventories that were depleted by the cash for clunkers program.

    LINK

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