Interesting Toyota Corporate History


    Toyota Motor Corp.: Information from

    Left: Banner that reads “Good Thinking, Good Products” (Toyota, circa early 1950's, source: Toyota)

    Here's a fairly complete seeming Toyota company history, including a few interesting tidbits:

    Although its profits declined substantially during the global economic downturn of the early 1990s, Toyota responded by cutting costs and moving production to overseas markets.

    So, on the surface, Toyota would be guilty of chasing cheap labor in the same way we criticize U.S. companies for moving to China? I don't think that's exactly accurate, since I believe Toyota has moved to where their markets are (including the U.S.). If Toyota just wanted cheap labor, they would build everything in Mexico and still be somewhat close to the U.S. market.

    I think we've all heard the stories about how Toyota had to eliminate waste out of necessity — lack of resources, but I hadn't heard this version of the story:

    As Japan became embroiled in World War II, the procurement of basic materials for automobile manufacturing became more and more difficult. At one point Toyoda was manufacturing trucks with no radiator grills, brakes only on the rear wheels, wooden seats, and a single headlight. Pushing toward the limits of resource conservation as the course of the war began to cripple Japan's economy, the company started piecing together usable parts from wrecked or worn-out trucks in order to build ‘recycled' vehicles.

    The history also tells the story of Toyota not being able to make payroll in 1949 and how management took responsibility by resigning.

    It also tells a story that claims the kaizen or employee involvement system came from Ford. I knew Ford got credit for flow, with the moving assembly line, and other forms of waste reduction, but I didn't know this one:

    Seeking new ideas for Toyota's anticipated growth, they toured Ford Motor Company's factories and observed the latest automobile production technology. One especially useful idea they brought home from their visit to Ford resulted in Toyota's suggestion system, in which every employee was encouraged to make suggestions for improvements of any kind.

    This story is confirmed many places, including on the Toyota website even, their version says:

    “The Spirit of Being Studious and Creative” has been deeply embedded in the Toyota Way in all areas of operations ever since the concept was very first introduced by Sakichi Toyoda, the founder of Toyoda Automatic Loom Works, Ltd. It is the fundamental concept behind “Good Thinking, Good Products,” the slogan adorning Toyota factories around the globe which was born from the Toyota Creative Ideas and Suggestions System (TCISS), and which encourages employees to suggest improvements at work.

    The system was introduced by Managing Director Eiji Toyoda when it became clear during the post Second World War economic recovery that Toyota's production facilities needed to be modernized. Toyoda took the idea from a Ford Motor Company plant which he had visited in July 1950. A suggestion system employed by Ford placed emphasis on supporting its improvement activities through opinions not only from the factory, but also from the management side.

    Based on this system, Toyota sought, not simply to copy, but to improve the system in line with the Toyota Way and established the TCISS in May 1951. Although the TCISS offered incentives to employees, the real value of the system was that it provided motivation to employees by focusing on their skills and creativity.

    That seems very Toyota-esque — to learn from someone else's system and to improve it, not just copy it.

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    Mark Graban
    Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.


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