"Lessons from Toyota's Long Drive"
Harvard Business Review
July-August 2007, pp. 74-83
This interview with Toyota CEO Katsuaki Watanabe is quite an eye-opening look at Toyota's plans to continue improving both its products and its organization.
In 1995, Toyota had 26 factories. In 2007, that number will rise to 63 factories. There are new factories in the United States and China, and there are more being built in Thailand, Canada, Russia, and China. Toyota's philosophy is to produce vehicles where the customers are. In order to deal with market risks that vary form country to country, Toyota will use its factories in Japan to deal with short-term demand fluctuations. The plants in Japan are very flexible and can handle this type of challenge. They consider this a form of "heijunka", or line balance, that is part of the Toyota Production System.
Toyota is entering emerging markets in Brazil, Russia, India, and China. Toyota has decided not to be a "cheap" brand in those countries, with the corresponding quality issues of being "cheap". Toyota wants to be their second car purchase, when they decide they want "something better".
With its rapid growth, Toyota feels it needs three times the "coordinators" it has available to pass on the Toyota Way to newer facilities. To provide the quantity of guidance needed, they have:
- Published a document with the principles of the Toyota Way
- Kept older workers so that younger ones are freed to serve abroad
- Created several new training facilities
- Begun sending coordinators from Toyota Canada and Toyota Kentucky (both of which have close to 20 years experience now)
While maintaining its focus on kaizen (continuous improvement), Toyota is also instituting "kakushin" or revolutionary changes. Toyota is building a revolutionary new facility in Takaoka, Japan. The first line that opens this summer is expected to quickly become Toyota's fastest production line. Lead times, logistics, assembly time, and number of problems are expected to be cut in half. The length of the line has been cut in half. The line moves 1.7 times faster than before. Painting time will be shortened by 40 percent. Line flexibility will allow the plant to produce 16 models on 2 lines, compared to the previous four or five models on three lines. High-precision testing devices will ensure quality.
Watanabe also wants Toyota to come up with a "Dream Car"—a vehicle that "can make the air cleaner than it is, a vehicle that cannot injure people, a vehicle that prevents accidents from happening, a vehicle that can make people healthier the longer they drive it, a vehicle that can excite, entertain, and evoke the emotions of its occupants, a vehicle that can drive around the world on just one tank of gas."
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