Toyota’s Tenacity

Why do people buy Toyotas? Especially in the US, where we are still wed to big muscle cars and SUVs that make a statement? Ask a Toyota owner and the answers will likely be quality, innovation and price.
In Fortune’s March 7 issue, Toyota was listed fifth among the world’s most admired companies and is the only non-US company in the top ten. In an article the previous month, Fortune noted that Toyota has also nearly doubled its market share in the US in the past 15 years—only GM stands in its way of being the world’s number one automaker.
So why is Toyota so successful? How did a company that didn’t even get into carmaking until the 1940s manage to outpace other car manufacturers so quickly?
When Toyota decided to jump into automotive manufacturing the company was far behind its US counterparts. Toyota plant manager Taiichi Ohno was charged with playing productivity catch-up.
Ohno took Western ideas like Henry Ford’s production lines and supermarkets where shoppers could choose from a large variety of products on shelves that were replenished often and incorporated them with Toyota’s own manufacturing practices, which included an emphasis on quality carried over from the company’s loom business. Ohno read Ford’s books and visited Ford plants. Then he took what he learned and applied it to Toyota’s unique situation as a small manufacturer with little capital in a small country whose consumers required a variety of automotive products rather than mass production of one type of product, in one color. He combined the Toyota concept of jidoka, first developed in the Toyoda family’s loom business, with Ford’s continuous-flow assembly line and the pull system being used in supermarkets and developed the Toyota Production System (TPS). TPS soon became known as lean manufacturing: Toyota’s dramatic successes were achieved with fewer people, less space, less inventory, and less money while maintaining a high quality standard and competitive pricing.
One theme that flows through all of the literature about the Toyoda family and the development of lean manufacturing is the willingness family members and company managers had to get their hands dirty, trying ideas and reworking those ideas if the first attempt didn’t achieve the desired result.
Lean manufacturers have benefited greatly from the groundwork laid by Toyota, which has steadily gained market share and made money even during downturns. Many would look at similar success and say, “I have done enough. Now it’s time to rest.” Not Toyota. Today the company still looks for ways to cut costs, eliminate waste, improve processes, and ensure quality.
In his recent book The Toyota Way, Jeffrey Liker describes TPS, how it has revolutionized manufacturing, and how companies can fully embrace the Toyota manufacturing culture. Especially relevant is Principle 14: “Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen). Once you have established a stable process, use continuous improvement tools to determine the root cause of inefficiencies and apply effective countermeasures. Design processes that require almost no inventory. This makes wasted time and resources visible for all to see. Once waste is exposed, have employees use a continuous improvement process (kaizen) to eliminate it.”
For anyone who has experienced the magic of lean, these current lessons from Toyota are certainly worth your attention.
Anand Sharma is a founder and CEO of TBM Consulting Group, Inc. and author of The Perfect Engine (Free Press, 2001). Named a Hero of U.S. Manufacturing by Fortune magazine, and a recipient of SME’s Donald Burnham Manufacturing Management award, he can be reached at [email protected].