Toyota Secrets

The Economist writes:

Toyota’s success starts with its brilliant production engineering, which puts quality control in the hands of the line workers who have the power to stop the line or summon help the moment something goes wrong. Walk into a Toyota factory in Japan or America, Derby in Britain or Valenciennes in France and you will see the same visual displays telling you everything that is going on. You will also hear the same jingles at the various work stations telling you a model is being changed, an operation has been completed or a brief halt called.

Everything is minutely synchronised; the work goes at the same steady cadence of one car a minute rolling off the final assembly line. Each operation along the way takes that time. No one rushes and there are cute slings and swivelling loaders to take the heavy lifting out of the work. But there is much more to the soul of the Toyota machine than a dour, relentless pursuit of perfection in its car factories.

Another triumph is the slick product-development process that can roll out new models in barely two years. As rival Carlos Ghosn, chief executive of Nissan, notes in his book Shift (about how he turned around the weakest of Japan’s big three), as soon as Toyota bosses spot a gap in the market or a smart new product from a rival, they swiftly move in with their own version. The result is a bewildering array of over 60 models in Japan and loads of different versions in big overseas markets such as Europe and America. Of course, under the skin, these share many common parts. Toyota has long been the champion of putting old wine in new bottles: over two-thirds of a new vehicle will contain the unseen parts of a previous model.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.