toyota toyota

vinay kamat

9.06 million cars. That’s Toyota’s production goal for 2006, which will make it the world’s largest car-maker. It would be a big moment for a company that has always relied on lean manufacture to shift its paradigms. In doing so, Toyota has given operational excellence a new meaning: strategy-on-the-fly.

In their paean to Toyota, in The Machine That Changed The World, James Womack, Daniel Jones and Daniel Roos define the strategic dimension of lean production: “[It] combines the best features of both craft production and mass production—the ability to reduce costs per unit and dramatically improve quality while at the same time providing an ever wider range of products and ever more challenging work.”

Now, kaizen, or the force that drives lean manufacture, is a culture of relentless improvement. The beauty of the Toyota Production System (TPS) is to blur the boundaries between improvement and innovation. In an insightful piece in the Harvard Business Review, Learning To Lead At Toyota, Steven Spear describes the induction process of a top manager in its plants in the US and Japan. He details how lean manufacture is not only a bottom-up communication process, but a change agenda as well.

Change, after all, comes from total knowledge of what you are doing. In essence, kaizen is art of leveraging knowledge flows from every nook and corner of the organization to create tomorrow’s products.

Eli Goldratt, author of Goal, underlines the importance of creating two simultaneous paradigm shifts to forge ahead of competition. Microsoft is banking on two: web-based products and gaming. Toyota appears to have created two paradigm shifts through quality (kaizen) and technology (Prius). Yet both are spin-offs of its lean culture.

A blog on soultek.com provides the answer: “Toyota does acknowledge that cars require vast amounts of energy to function, i.e., trillions of dollars of gasoline, refined from environmentally destructive oil. To ignore this would be to ignore kaizen; therefore, Toyota didn’t give up when the first Prius hybrid car was laughed at by automotive ‘experts’.”

The original brief for Project G21, or Prius, came in kaizen language. As Jeffrey Liker points out in The Toyota Way: “The only real guidance was to develop a fuel-efficient, small-sized car. In addition to the small size, a distinguishing feature of the original vision was a large, spacious cabin.”

In a recent column, Financial Times’ Simon London describes the three strategic steps that Toyota took to stay ahead: lean manufacture, design and marketing, and hybrid-power technology. Only a multifocal strategy, focusing on craft, cost, and change, can help an automotive brand to position itself at both ends of the product spectrum: from Qualis to Lexus to Prius.

If there’s anything to learn from Toyota, it’s the art of challenging oneself to do infinitely better. Once Toyota becomes the car king, perhaps kaizen will enter the pages of management as continuous innovation—a tool that has continuously reinvented an industry.