Toyota's Secret

TOYOTA'S SECRET

If you enter the lobby of Toyota's headquarters in Japan, you will see two small portraits and one big one hanging there. The two small ones show the founder and the current chairman of the company. The large portrait shows an American. It is Dr. Edward Deming. Who is Edward Deming you might ask? And indeed who is he? But it's a long story and one cannot explain who Edward Demings is without involving characters like the Japanese, the Americans and the Toyota Company. So here goesÐ'...

Long Ago and Far AwayÐ'...

World War II had barely ended, the Japanese were left with a devastated country, ruins that were previously houses and a battered economy. But there was something left that helped them overcome all this destruction. They did not sit and lament their fates but began thinkingÐ'...where do we go from here and to get there what do we need to do? Factories began production again firstly to supply all the basic necessities and after around 15 years when everyone had the basic goods they needed, they turned their energies towards overcoming the surplus of imports. Japan needed to offer something more in their goods if they had to succeed on foreign shores....

The Japanese car manufacturers namely Toyota wanted to start operations in America. That was all very well. But how could they make the Americans buy their cars rather than local ones. Enter Dr. Edward Demings and hey presto! They had the secret recipe! The man who according to his biographer Rafeel Agumayo(1) is the American who taught Japan what quality management is. Dr. Edwards Deming was a physicist specialized in the field of statistics and worked in United States Bureau of Census. His greatest contribution on the evaluation of statistical methods for ensuring the quality of census assessment established him as a leader in the field of Total Quality Management. In fact he is considered as the "Guru" of Total Quality Management. Deming also enunciated 14 principles for quality management which include innovation, the philosophy of quality to be inculcated in all individuals, appropriate and complete supervision, absence of fear and openness, ensuring quality from design through to maintenance, work standards in production, training of every worker in statistical methods, retraining people to new skills and so on.

The world saw Toyota take over America by storm, they offered better, faster, more comfortable and more efficient cars and Americans came to buy cars from them in droves. But America was not the only stop, in fact Toyota quickly became the largest car Manufacturer in the world. And there has been no looking back since.

(1). Rafeel Agumayo, Dr. Deming, the American Who Taught the Japanese About Quality, Carol Publishing Group, New York.

How Toyota Does ItÐ'--Everyday

Fewer man-hours. Less inventory. The highest quality cars with the fewest defects of any competing manufacturer. In factories around the globe, Toyota consistently raises the bar for manufacturing, product development, and process excellence. The result is an amazing business success story: steadily taking market share from price-cutting competitors, earning far more profit than any other automaker, and winning the praise of business leaders worldwide. How do they do it?

One of their secrets that gives them an edge over other car Manufacturers is the Ð''Toyota production System'. Toyota had discovered earlier on that the key to their success was Total Quality Management (TQM) . To make sure that they incorporated TQM in every stage from designing to car manufacturing to after sales service they developed the Toyota Production System (TPS). Initially developed in Japan, TPS or the Toyota Production System, was transplanted to the United States nearly two decades ago, when Toyota launched a joint venture with General Motors Corp., called New United Motor Manufacturing, Inc., or NUMMI, based in Fremont, Calif.

One of the aspects of the Toyota Production System (TPS) that tends to be overlooked--or is at least not mentioned as frequently as subjects such as kanban or kaizen--is the fact that there are people involved. Instead, TPS is discussed almost as though the practices are what's essential.

But when you talk to a key practitioner of TPS, such as Mike DaPrile, vice president-Manufacturing, Toyota Motor Manufacturing-Kentucky, people come first. As in, "One of the things that we do for efficiency and lean manufacturing is putting responsibility in worker's hands. I know that sounds naive, but it is not."

He adds, "I really believe in giving people responsibility. Efficiency comes from improving processes--from people kaizening their own processes." Of course, there is something else that must be taken into account: "There is little concern here about being laid off." Should a person improve him- or herself out of a position, they stay on their team for six months, then transition over to a kaizen team.

According to DaPrile, there are several keys to lean manufacturing, all of which relate to the people who are actually doing the work. For example, there is never a situation where a machine is in control of a person; a person always controls the machine. The andon system--the cord that the worker can pull to stop the line--is an example of a person being in charge of an assembly line. (Contrast this to places where the speed of the line paces the worker, where it is up to the worker to keep up with the machine, where the machine keeps going regardless of the quality being produced. "The andon system allows the person to stop the line to incorporate good quality in the product.")

Safe & Engaged. Further, DaPrile states with emphasis, "We feel strongly that safety is a top priority." And by creating a safe workplace, there is improvement in

morale. And as morale rises, there are gains in both quality and productivity. This is not the proverbial double win (management and workers), but actually a triple win, in that the customer receives a better product (which explains, in large part, why the Camry is continuing a run on the top of the best-selling car in America list).

To keep the people engaged in their work, they do a number of things at the Toyota plant in Georgetown, KY. For example, they level the production. This is a means by which there is assurance that people can get their jobs done in the amount of time available without having them waiting around. "People don't like to wait," DaPrile says. "It's

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