Chapter 9 Video Case: Understanding Toyota’s Success
It may be surprising to learn that Toyota Motor Corporation started as an offshoot of a company that made automatic looms. Inventor Sakichi Toyoda built a special feature into his machines; if even a single thread broke, a machine would automatically shut down until it was fixed. That intolerance for defects was woven into Toyota’s culture and helped it become one of the world’s leading auto manufacturers.
At Toyota’s nearly 30 auto plants throughout the world, every worker is empowered to shut down the production line if there’s a problem, no matter how small. Toyota team members also are told it is part of their job to figure out if there’s a way to improve processes or products. Any Toyota employee can explain in simple terms the practice of kaizen, continuous improvement of all functions of the business. “Kaizen is plant-wide, companywide,” says one worker on the line at Toyota’s Indiana plant. “No matter where you are, you have an opportunity to improve whatever’s going on.”
The belief that good enough is never enough permeates all levels. One Toyota executive attributes that mindset to paranoia about what the competition is doing. It is a healthy paranoia that is valuable to an organization, even when it has reached the top, as Toyota did when it passed GM to become the world’s largest car manufacturer.
Refusing to be complacent means Toyota constantly tries to find and fix problems and to improve even proven products. The Camry, for example, had been the number one selling sedan in the United States for six years when Toyota introduced a dramatically new model. While working with new casting molds for the Camry, Toyota engineers ended up developing a new process to make engines for half the cost.
A big part of the Toyota system is being a learning organization. Management seeks input, listens, and spreads knowledge quickly throughout the organization to make improvements. When its plant in Vietnam found a less costly way to keep the parts of a car together as it is being welded, Toyota installed the new assembly process in all of its factories around the world within six months.
Questions
- How do the Toyota employees interviewed in the video illustrate the company’s practice of TQM?
- How has kaizen driven innovation at Toyota? Give examples from the video.
- Why is Toyota able to spread knowledge so fast throughout the company?