Toyota has become the world’s largest automobile manufacturing company this year, overtaking General Motors which reigned supreme since the 1930s. Before then, Ford was the global leader. Toyota’s market capitalization is more than five times that of Ford and General Motors combined. Toyota must have been doing something right these past 20 years since it has become the most productive manufacturer in the world. The company owns the newly created market in hybrids. Toyota’s example offers an excellent insights and a guide toward improving personal productivity.
The two main pillars of Toyota’s approach boil down to: 1) respect for people and 2) continuous improvement; constant and never-ending improvement in all areas. Toyota made a major innovation over the American automobile manufacturers in the process of how the company viewed its people. General Motors and Ford viewed factory workers as a replaceable variable cost component – labor as a commodity. Toyota viewed its workers as the main place to turn for productivity and quality improvements. Toyota further innovated by challenging the planned obsolescence approach. The company started producing cars with fewer defects that were more durable and would hold their value longer. American car companies were forced to respond in kind by producing longer lasting, better quality cars with greatly extended warranty packages. This is not all Toyota has done in terms of process innovations. American accounting methods valued inventory the same as cash, without any incentives for reducing inventory.
Toyota pioneered “lean manufacturing” based in large part on creating value in the eyes of the customer and having products being “pull” or demand-based that would be responsive to the customer rather than “push” or supply-based from the production end. Lean manufacturing also includes identifying and minimizing waste (including inventory), empowering employees and aiming for perfection in the processes. This is an evolutionary change in the way cars are made that is currently sweeping through the other modern manufacturing sectors of the global economy. The ‘Toyota Way’ can also be applied toward improving personal productivity. The Toyota Production System (TPS) works as a complete philosophy. It is a consistent set of processes and principles applied over a long period of time. The following principles form core parts of the highly effective TPS that can be used to enhance personal productivity.
Toyota has pioneered its process and one of the great outcomes was becoming the world’s first mass producer of hybrid automobiles, with over half the world market for hybrids. The Toyota process itself is a hybrid of best practices that have evolved over time that can be used to enhance personal productivity.
Peter Paul Roosen and Tatsuya Nakagawa are co-founders of Atomica Creative Group, a specialized strategic product marketing firm. Through leading edge insight and research, sound strategic planning and effective project management, Atomica helps companies achieve greater success in bringing new products to market and in improving their existing businesses. They have co-authored Overcoming Inventoritis now available.
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