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Toyota Building Second Plant in India

Posted on April 11, 2008  Comments (1)

Toyota is investing $350 million in a second Indian manufacturing plant. The plant is focused on producing vehicles for the local market – as the Toyota Production System suggests that production be close to the market.

Toyota to invest Rs1,400 crore for “strategic” small car in India

The new plant will have a production capacity of 100,000 units and will become operational by 2010, he added. The company’s current plant has a capacity of 63,000 units a year.

The plant will make the Corolla sedans along with the small cars The company plans to have high level of localisation for the small car by procuring several components and sub-systems from Indian vendors. Primarily the car maker plans to sell the small car in the fast growing domestic market, though some will be exported as well, the company stated.
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The Japan-based automaker said last year that it plans to capture 10 per cent of India’s market. In 2007 Toyota sales accounted for a mere 0.6 per cent of the Indian car market

Related: Manufacturing Takes off in India – Toyota Chairman Comments on India and Thailand – Top 10 Manufacturing Countries 2006 – Indian companies have received as many awards as companies from all other countries combined since 2000 – Toyota to Build New Plant in India to Make Small Cars – TVS Group Director on India – Manufacturing, Economy

Toyota’s Commitment

Posted on March 8, 2008  Comments (4)

From Toyota’s blog, Living Up to Our Commitment

We’ve received reports that on a small number of model-year 1995 to 2000 Tacomas, excessive corrosion of the frame has caused perforation of the metal. The reason for this, it appears, is that the frames of some of the 813,000 vehicles built during this time-frame may not have adequate corrosion protection.
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Because of our oft-stated commitment to standing behind our products, we’re extending the rust-perforation warranty covering these trucks for a period of 15 years from each vehicle’s original date of purchase, with no mileage limitation, for corrosion damage that results in perforation of the vehicle’s frame material. Owners of these Tacomas need not be the original owners. Even if you bought your Tacoma second- or third-hand, it’s covered by this extended warranty.

Once again Toyota shows what it means to go beyond the traditional way of thinking (where often MBA bean-counters and lawyers decide what should be done) instead of someone interested in having the company actually live up to a higher mission. From a previous post on their blog:

The Toyota Way is a management philosophy involving 14 principles that is the essence of the DNA of our organization and really all those who make up the company. In its basic form, the Toyota Way boils down to two fundamental practices: Respect for People and Continuous Improvement.

Related: Toyota IT Overview – Deming Companies – Reacting to Product Problems – Toyota Management Develops the New Camry – Corporate Blogging – Dell Innovation

Management Improvement Carnival #30

Posted on February 29, 2008  Comments (0)

Please submit your favorite management posts to the carnival. Read the previous management carnivals.

Car Powered Using Compressed Air

Posted on February 25, 2008  Comments (11)

car powered using compressed air

Jules Verne predicted cars would run on air. The Air Car is making that a reality. The car would be powered by compressed air. Certainly seem like an interesting idea. Air car ready for production:

Refueling is simple and will only take a few minutes. That is, if you live nearby a gas station with custom air compressor units. The cost of a fill up is approximately $2.00. If a driver doesn’t have access to a compressor station, they will be able to plug into the electrical grid and use the car’s built-in compressor to refill the tank in about 4 hours.

The car is said to have a driving range of 125 miles so by my calculation it would cost about 1.6 cents per mile. A car that gets 31 mpg would use 4 gallons to go 124 miles. At $3 a gallon for gas, the cost is $12 for fuel or about 9.7 cents per mile. I didn’t notice anything about maintenance costs. I don’t see any reason why the Air Car would cost more to maintain than a normal car. Five-seat concept car runs on air

An engineer has promised that within a year he will start selling a car that runs on compressed air, producing no emissions at all in town.
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Tata is the only big firm he’ll license to sell the car – and they are limited to India. For the rest of the world he hopes to persuade hundreds of investors to set up their own factories, making the car from 80% locally-sourced materials.
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“Imagine we will be able to save all those components traveling the world and all those transporters.” He wants each local factory to sell its own cars to cut out the middle man and he aims for 1% of global sales – about 680,000 per year. Terry Spall from the Institution of Mechanical Engineers says: “I really hope he succeeds. It is a really brave experiment in producing a sustainable car.”

Now does that sound like the Toyota Production System to you? It should. If I were an executive at Toyota I would sure examine this to see if it really is as promising as it looks. And if it is Toyota sure has plenty of cash and the management practice to make a very compelling case for allowing Toyota to produce this globally. The engineers desires closely match what Toyota has learned. Both seek to eliminate the waste of transportation (friction).

Related: Click Fraud = Friction for Google – Manufacturing Takes off in India – Electric Automobiles

Toyota Presses On

Posted on February 24, 2008  Comments (0)

At Toyota, a Global Giant Reaches for Agility

With plants in 27 countries, more new factories under construction and workers speaking languages that include Russian and Turkish, Toyota’s top executives are trying a difficult balancing act – replicating the company’s success and operating principles in other countries while ceding more control to these new outposts at the same time.
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Next year, it expects to sell more than 10.4 million cars worldwide, double what it sold in 2000.
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At Motomachi, more than 3,000 tasks on the assembly line have been translated into video manuals that are displayed on laptop computers above 30 simulated workstations, situated where their functions would be carried out inside the factory.

The videos show everything from the correct way to hold a screw to the best way to hold an air gun so that a worker’s hand will not tire in a few hours. This month, workers from Toyota’s plant in Thailand took part in training required for jobs in their plant’s paint shop. Listening as an interpreter translated from Japanese into Thai, the workers were shown how to bend their knees and spray a water gun across a clear panel of Plexiglas.

Yet another article on the management of Toyota. And here is another: Toyota heir slowly following in family footsteps. And another: Toyota explores more efficient methods to build cars.

Related: 12 Stocks for 10 Years Feb 2008 Update – No Excessive Senior Executive Pay at Toyota – New Articles on Toyota Management – Toyota’s Effort to Stay Toyota – More Positive Press for Toyota Management – Toyota in the US Economy

Deming Companies

Posted on December 17, 2007  Comments (4)

I get asked for examples of Deming managed companies fairly often. And recently I have had a number of such requests. So I figured I would provide an answer as a blog post. First, Dr. Deming would respond to such questions by referring to the theory of knowledge and the fallacy of trying to learn via examples. So remember to read up on why learning from examples is dangerous before taking to much from this.

I see Toyota as the best example of a Deming company. Dr. Deming did not propose a cookbook to follow. Instead he proposed a theory that requires learning and application within the specific institution. Toyota has created a management system that is based on Dr. Deming’s ideas and then they have evolved that over 60 years into something that is consistent with Deming’s management philosophy and has new ideas Deming did not mention. As odd as it may sound that very act of developing new concepts that were not mentioned by Dr. Deming is exactly what makes them the company that most exemplifies Deming’s management system.

Other companies that have also done a great job applying his ideas. Peaker Services has done great things. Ian Bradbury is the President and a friend. He spoke at a seminar I co-presented and I included links to a couple documents of his in a blog post. He worked at GM Power System when Dr. Deming was working with GM. Richard R. Steele founder and also serves on the Deming Institute board of trustees.

Hillerich & Bradsby Company has been following Dr. Deming’s ideas since 1984. John A. Hillerich is President and Chairman of the Board of Hillerich & Bradsby Company and serves on the Deming Institute board of trustees. The companies brands include: Louisville Slugger and Powerbuilt.

A couple of good books explore companies adopting Dr. Deming’s ideas: Free, Perfect and Now by Robert Rodin (a great book by the CEO of Marshall Industries), highly recommended). Unfortunately the company was bought by a larger company and I do not believe the Deming philosophy is alive and well (but I could be wrong). Always Think Big by Jim McIngvale is by the CEO. Mattress Mack: One man, one store, one of a kind.

Omnilingua has had amazing success applying Dr. Deming’s idea and I am proud to call Eric Christiansen their president a friend. Lean Blog Podcast with Eric Christiansen “A Deming Company”. In a previous post I recapped another example: Dr. Deming’s Ideas at Markey’s Audio Visual.

Companies awarded the Deming prize can also provide good examples. Four subsidiaries of the Rane Group in India has received awards in the last few years. Numerous people have done great things within companies – creating pockets of Deming practice. Some great examples include Steven Prevette – see some of his articles on Deming. David Anderson has incorporated Deming ideas within Microsoft and then Corbis – see his Agile Management Blog. William Bellows has a long term effort at Boeing’s Rocketdyne Propulsion & Power business unit. They offer conference call study sessions on Deming’s ideas for those within Boeing and also allow outside participation. He is also a member of the Deming Institute board of trustees.

This is just off the top of my head so I am sure I have left off many good examples. Also, for me the company needs to have an understanding what they are doing evolved from Dr. Deming’s ideas to list them (many companies have practices which are Deming based but they do not have an appreciation for Deming’s system of management – I think that appreciation is needed to be a “Deming company”). Many companies that truly and deeply practice lean manufacturing are applying many of Deming’s ideas. However to me if they do not understand the roots of the ideas from Dr. Deming I don’t consider that a “Deming company.” But that label is not all that meaningful anyway – so this just explains my thinking.

Feel free to add your suggestions in the comments.

Related: The Purpose of an Organization – Deming management blog posts

Lean, Toyota and Deming for Software Development

Posted on December 2, 2007  Comments (5)

Mary Poppendieck on The Role of Leadership in Software Development, very nice 90 minute webcast:

In this 90-minute talk from the Agile2007 conference, Lean software thought leader Mary Poppendieck reviewed 20th century management theories, including Toyota and Deming, and went on to talk about “the matrix problem”, alignment, waste cutting, planning and standards. She closed by addressing the role of measurement: “cash flow thinking” over “balance sheet thinking”.

via, Leadership is not Obsolete for Self-Organizing Teams!

Once again Mary provides a great resource. This is a great overview. Lean Software Development by Mary Poppendieck and Tom Poppendieck is an excellent book on these topics.

Related: articles and webcasts by Mary Poppendieck – posts on software development – more management webcasts

Innovation at Toyota

Posted on February 24, 2006  Comments (3)

The Birth of the Prius by Alex Taylor III:

By the end of 1993 the development team had determined that higher oil prices and a growing middle class around the world would require the new car to be both roomy and fuel-efficient. Other than that, they were given no guidance. “I was trying to come up with the future direction of the company,” says Watanabe, who headed corporate planning at the time. “I didn’t have a very specific idea about the vehicle.”

Seems like a good job of providing a vision of what was needed without overly restrictive targets and goals (See: Targets Distorting the System).
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Toyota’s Early History

Posted on January 22, 2006  Comments (4)

via Got Boondogle:

A book that I recently finished is “Quest for the Dawn” by Shoji Kimoto. “Quest for the Dawn” is a fascinating true story set from about 1930 to the mid 1950s of a bold business quest to build an automobile from the ground up. The relentless inventors were Sakichi and Kiichiro Toyoda and, of course, the car manufacturer was the Toyota Motor Company.

Look interesting, so I went on amazon.com and Quest for the Dawn by Shoji Kimoto was available for $1, through a 3rd party, plus $3.49 shipping. I really like many of the things the internet makes easy.

And relating to the zero defects post earlier today. I never thought of it as a defect when I couldn’t order an obscure book, in a minute or two, from home and have it delivered to me. Deming was right that: “Absence of defects does not necessarily build business… Something more is required.”

Related: Shigeo Shingo’s Influence on TPS

LA Jail Saves Time Processing Crime

Posted on August 19, 2005  Comments (0)

After efficiency study, L.A. jail saves time processing crime by Dan Laidman Los Angels Daily News (pointy hired boss broke the link so I removed it)

Last week, Chief William Bratton told the Board of Police Commissioners that Toyota methods have produced dramatic changes in a jail division once beset by delays, inefficient transportation, personnel shortages and troubles with medical treatment.
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But the collaboration between Toyota and the LAPD marks the first time law enforcement has used the principles in running a jail, said Mike Morrison, the dean of the University of Toyota.

The City of Madison Police Department applied Deming’s ideas in the 1980′s. Quality Improvement and Government: Ten Hard Lessons From the Madison Experience by David C. Couper, Chief of Police, City of Madison, Wisconsin, USA.

Doing More With Less in the Public Sector: A Progress Report from Madison, Wisconsin by William G. Hunter, Jan O’Neill, and Carol Wallen, June 1986.

New Toyota CEO’s Views

Posted on July 22, 2005  Comments (6)

The Man Driving Toyota from Business Week:

Toyota has grown in the past few years, but [there's a risk] that a belief that the current status is satisfactory creeps into the minds of employees. That’s what I’m worried about.

We should never be satisfied with the current status. In each division, function, or region, we still have numerous problems to cope with. We need to identify each one of those tasks or problems and fully recognize them and pursue the causes. This needs to be done by all the people working for Toyota.

I think, this echoes my recent comment on post, Is Quality Foolproof? (unfortunately the link is broken, so I removed it. Luckily I posted my comments here so they are not gone), on the Vision Thing blog:
Continue reading →

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