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Four Lessons We Can Learn from Toyota’s Car Production Method

The
Toyota Production System (TPS) maintains a legendary reputation in
the auto industry. For the past 70 years, this socio-technical
practice has set a high standard for other car manufacturers.

The
TPS continues to offer lessons that can propel other domestic and
global companies to new heights.

The Toyota Production System Overview

TPS
is an integrated production system that represents the philosophy and
practices of the company’s managers and owners. The goal is to reach
the best productivity and decrease waste.

In
the late 1940s, the company founder Sakichi Toyoda and his son
Kiichiro developed the Toyota Production System, together with the
executive Taiichi Ohno. At first, they referred to it as just-in-time
manufacturing.

As TPS evolved over the years, it became known as The Toyota Way and lean manufacturing. The Toyota Way addresses the common theory that car making involves 50 percent science and 50 percent trial-and-error.

It
seeks to cut the trial-and-error part by making sure every car that
comes off its production line is an ideal creation that will exceed
the consumer’s needs.

The
system is renowned for its ability to organize manufacturing and
logistics and make them highly efficient.

Its
history, design, and method offer critical advice from which other
company executives around the world can benefit.

Lesson #1: Drive to Always Improve

One
of the first lessons to pick up from TPS is the concept of Kaizen
or continuous improvement. This philosophy translates to business
operations.

The
market and the competition is changing and keeping up with others
calls for improvement of one’s work processes.

Kaizen
doesn’t function without employee engagement. Employees are both
encouraged to suggest improvements in their divisions and given tasks
to improve their own skills.

After
reaching a series of set goals, Toyota’s employees receive another
round of milestones to work toward and meet in the next few weeks and
months. It compels them to always strive for improvement and guard
against complacency and permanent satisfaction.

Kaizen also encompasses respect for employees, especially workers on the production lines in the factory. It helps them feel vital to the company’s success and not just paid labor. This appreciation and care make sure they are happier at work and stay loyal to the company.

Finally,
Kaizen
compels company executives and employees to always be on the lookout
for ways to improve their performance and rate their satisfaction and
efforts in different categories.

For
example, employees can rank themselves in categories like:

  • Safety
  • Quality
  • Cost
  • Human
    Development

When
you set up such practice and your team gets in the habit of
self-evaluation, they become proactive. We love to be good at our
jobs. Let’s say the work safety benefits the product quality, then it
should be on the improvement to-do list.

An
honest, self-reflective analysis helps employees discover what it
takes to close the gaps and drives the company to a higher
operational level.

Lesson #2: Cut Waste Across All Functions

Toyota
shows that their system (TPS) is a versatile business strategy,
applicable to other divisions.

In
the Toyota Corporation, we find the same philosophy applied through:

  • Finance
    and financial services
  • Dealer
    networks
  • Production
    control
  • Logistics
  • Purchasing

In
applying the concepts behind TPS to other parts of the company,
Toyota makes it a priority to perfect its operations at every level
before it grows any of them.

This
ensures the division expands on solid foundations and growth doesn’t
cause future breakdowns. The rule applies to many businesses and
industries.

We
can see the TPS at work in Toyota’s manufacturing operations
including any serious design changes. Every four to eight years when
the company undergoes major model transformations, it makes it a
priority to change all the stamping dies, welding points, locations,
and painting and assembly processes.

By
implementing TPS into its manufacturing procedures, Toyota has cut in
half the time to do a complete model change.

Regardless of where you apply it, TPS always aims to eliminate seven wastes to achieve higher productivity.

These
wastes include:

  • Overproduction
    (this includes exceeding the quality)
  • Waiting
    (wasting time)
  • Transporting
    (wasting time)
  • Inappropriate
    processing
  • Unnecessary
    inventory
  • Excess
    motion (another time-based waste)
  • Defects

One
example of how they reduced waste (in shipping costs or wasted time
and money) in their European factories is to produce cars in the
country that buys that model the most.

Implementing TPS across the board at Toyota also has allowed the company to enter an era of being able to anticipate the customer’s needs.

Lesson #3: Embrace Rapid Innovation

While
TPS favors slow, continuous improvement, it doesn’t shy away from
radical innovation either. Rather, it embraces rapid innovations as
soon as they are available.

To
stay competitive, Toyota relies on the concept of Kakushin
or
rapid innovation.

They
showed their commitment to rapid innovation using the latest
technology when they applied for a patent for the world’s first
flying car.

Toyota’s
flying car that will use the same drive mechanism for both road and
air travel. Its rotor hubs will fold into the wheels when the car is
on the ground, allowing it to roll freely. The driver will steer and
brake by applying differential power among the individual wheel
rotors. The company hopes to reveal its first flying car at the 2020
Olympics in Tokyo.

Because
of that balance of always improving and innovating, Toyota remains
one of the fiercest competitors in the auto industry by establishing
itself in every major auto market around the world.

They
have manufacturing plants not only in Japan and the U.S. but also
across Europe in countries like Poland, France, Portugal, and the
U.K. Eight out of 10 Toyota cars sold in Europe are made at one of
their European factories.

Lesson #4: Strive for Market Domination

TPS
teaches automakers and other industries on how to dominate the
market. Toyota remains one of the world’s most popular and successful
car brands thanks to several factors.

It
garners high marks from consumers and auto industry insiders for its
cars’:

  • Durability
  • Reliability
  • Safety
  • High
    resale value

Good
product quality is Toyota’s competitive advantage. Eighty percent of
Toyota cars are still on the road 20 years after production. And they
only get better with time. You might like to buy a seasoned model
that has gone through several production cycles.

Knowing the ideology behind the manufacture and the fact that the first Yaris and the one-millionth Yaris are not the same, we see the improvement system in action.

This
doctrine gained them some of the highest reviews from the Insurance
Institute for Highway Safety and auto reviewers like J.D. Power. Used
Toyotas also have the best resale values quoted by Kelley Blue Book.

Toyota
production system offers important lessons that other companies can
use to reach new levels of success.

If
your company, no matter how big, strives to continually improve the
processes, tries to cut unnecessary waste and innovates when
possible, it will come closer to market domination. These principles
underly the popularity Toyota continues to experience today.

Author’s Bio

Heather Redding is a content manager for rent, hailing from Aurora. She loves to geek out writing about wearables, IoT and other hot tech trends. When she finds the time to detach from her keyboard, she enjoys her Kindle library and a hot coffee. Reach out to her on Twitter.


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