Toyota Has Most Efficient Plant in N.A., Harbour Report Says
Toyota Has Most Efficient Plant in N.A., Harbour Report Says:
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“”‘Toyota's labor productivity lead equates to a $350 to $500 per vehicle cost advantage relative to domestic manufacturers,' said Harbour President Ron Harbour. He noted that Toyota has placed more emphasis on the Toyota Production System and the automaker is aggressively spreading standardized manufacturing processes throughout its plants.” According to the News, “Toyota Motor Corp. cut its total labor hours per vehicle 5.5 percent from last year's study to 27.90 hours.””
More detailed article from the Chicago Tribune is here.
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Traditionally, Nissan (Smyrna, TN) has been the most “efficient”, not Toyota. But, “efficient” is a loaded term with many meanings. Toyota is more profitable, which is what really counts. While “hours per vehicle” probably corollates to profit, I’d rather have higher profit with slightly less “efficiency” (as measured by the Harbours) than the other way around.
It’s a bit eyebrowing raising to see that Toyota is going to place more emphasis on TPS and standardization. I can see a progression where you first work to standardize the way things are done in one plant (which is often a huge challenge, anyway!), then you move to standardize across plants. That’s the Intel “copy exactly” philosophy — to make sure the same method and technology is used at each Intel fab around the world.
GM complains about the $1200 per vehicle cost disadvantage they have because of health care and retirement costs. If Toyota has a $300-$500 cost advantage (due just to the lower labor content of their production?), then you can see that GM has a huge opportunity to use efficiency improvements to offset medical costs.
The problem for GM, though, is that their market share is shrinking…. if they get more efficient, they’re still paying the benefits. GM needs to grow their way out of that problem as well as getting more “lean.”