
The open secret of (Toyota's) success - chaostheory
http://www.msnbc.msn.com/id/24457074/
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sgoraya
There was a wonderful article in the July/Aug 07 Harvard Business Review
magazine with Watanabe, president of Toyota. (I've actually got that edition
here on my desk ;)

Their ability and commitment to measure nearly every aspect of production and
processes is pretty amazing. This is very relevant in the space of tech
companies and startups: Measure! Measure! Measure! (anything and everything
from site analytics and bug reports to closing a sales cycle with clients)

The term 'Corporate Culture' gets thrown around a lot, but I think Toyota has
done a great job of preserving & innovating their culture. Being as big as
they are, that is a huge achievement.

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misterbwong
Every time I read about the failing American automakers, I wonder how much of
their downfall can be attributed to the cost of their unionized workers'
benefits and salaries. I heard somewhere (probably a hyperbole) that 60%+ of
the cost of manufacturing a GM car can be attributed to the company's payment
of pensions/retirement money. Does anyone happen to know where I can get data
about this?

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gibsonf1
Toyota can use their expensive workers to do the same work in 50% of the time
with 80% higher quality. That is where the real savings are.

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kingkongrevenge
The whole point here is that Toyota's workers are much cheaper. That's a fact.

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Xichekolas
Each worker isn't much cheaper. My dad retired from GM in 2005, and the Toyota
plants here in the US pay $1/hr less than he made. There is a decent
discrepancy in health insurance, but not enough to totally justify the
difference.

The key is what gibsonf1 pointed out. Each worker at Toyota is much more
productive than each worker at GM (and most likely other companies).

They also benefit from a halo around them of 'superior quality'. I'm not
entirely sure if a big quality difference actually still exists (it definitely
did once), but in the minds of many, Toyota will always be the 'reliable
choice' which allows them to charge more for their vehicles than GM can for
it's equivalent.

It also didn't help that GM made ugly cars for years, and even today is only
marginally improving. I sincerely hope the Volt actually happens as planned,
both for nerdy reasons, and because it'd be nice if GM didn't blow a golden
opportunity to save itself (and my dad's retirement).

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kingkongrevenge
You are overlooking retiree benefits. GM workers are much more expensive. The
per car cost of current retiree medical benefits is staggering.

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xirium
Details of Toyota processes applied to chip fabrication was recently posted on
this forum ( <http://news.ycombinator.com/item?id=180671> ).

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tjweir
I have always liked this ChangeThis document about Toyota:
<http://changethis.com/29.01.ElegantSolutions>

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gibsonf1
The idea that a very large company can constantly improve their quality and
productivity while maintaining focus on customer value is a compelling one.
I'm guessing that a company managed in this Lean way is also a good one to
work for, and may serve as a counter example to PG's assessment that working
in a traditionally structured top-down corporation is mind-numbing, which is
true. In a Lean company the best ideas win, while in the top-down company
politics wins. The Lean company manages the _system_ , not the people.

Toyota has demonstrated the efficacy of a new paradigm in management - they
use Lean for all functions including engineering, design, finance, production.
The big news for us small companies is that the same techniques can be used at
any scale with the same positive results, as has been happening at my
architecture firm and startup.

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redorb
I like the similarities between this story and "deliberate practice" ... makes
a lot of sense to - move slow but move everyday in the right direction... I'm
sure this relates to their quality also.

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joshwa
For anyone interested in the operations side of business, Jeffrey Liker's "The
Toyota Way" is a fascinating read. ERP/Supply Chain software seems pretty
expensive and useless compared to simple mechanical or paper kanban systems,
coupled with regular time spent together talking about how to improve the
process (kaizen), so the improvements come from the people with the most
knowledge of the system: the ones actually doing the work.

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boredguy8
I wish change management at my workplace followed a similar practice. We have
dozens upon dozens of "good, revolutionary" ideas. Time, effort, and energy
spent investigating these options and implementing them then goes to the next,
leaving past solutions to rot.

Slow, steady change makes the stable foundation from which strong ideas arise.

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edw519
Nice read, but please, let's give credit where credit is due:

<http://en.wikipedia.org/wiki/W._Edwards_Deming>

"Deming is widely credited with improving production in the United States
during World War II, although he is perhaps best known for his work in Japan.
There, from 1950 onward he taught top management how to improve design (and
thus service), product quality, testing and sales (the last through global
markets)[1] through various methods, including the application of statistical
methods. Deming made a significant contribution to Japan's later renown for
innovative high-quality products and its economic power.

It was the U.S. that spearheaded the rebuilding of Japan's heavy industries
after WWII.

Kinda makes me wonder if 50 years from now, we'll be reading a similar article
about the Middle East.

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gibsonf1
Actually, Toyota's innovation goes far beyond the necessary foundation that
Deming laid out and many US companies ignored.

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edw519
Of course.

"many US companies ignored"

Kinda mind boggling, isn't it? Maybe that's another reason why startups have
gained so much traction these days.

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gibsonf1
Even more mind-boggling, if logic were the standard for judging these things,
is how US auto makers have ignored Toyota's management innovations and
continue on their merry way into decay. Porsche adopted lean fully, and the
results for them have been also quite compelling. Audi is also going lean. On
the service side, Rockwell Collins has had enormous success with adopting lean
for their engineering.

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jontekinkaw
good but reasonably priced cars, period.

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hugh
Well yes, but the real question is: how do you make a good car for a
reasonable price?

And the answer is in all those details of the manufacturing process as
described in the article.

