The status and influence of Toyota in the global automotive industry
In a certain issue of *Business Week*'s review of the global automotive industry, the opening paragraph pointed out that the automotive industry was being dominated by Japan. In the Japanese automotive field, Toyota is like a rapidly developing giant, continuously expanding its scale at an astonishing speed. It is aggressive in financial mergers and acquisitions. Relying on its strong financial strength and strategic vision, it acquires relevant enterprises to improve its own industrial chain and enhance its market competitiveness. At the same time, the outstanding models produced by Toyota are sufficient to dominate the global automotive industry.
However, although Toyota Motor has sales of up to $146 billion, it cannot be a leader in every field. Currently, General Motors remains the veritable king in the automotive industry, with a profound foundation in many aspects such as market share and technological R & D. Nissan and Honda also have very impressive sales records in North America and even globally, each with its own unique technological advantages and market positioning. However, no automobile manufacturer can be a leader in as many fields as Toyota, especially in production management. The "Toyota Production System" (also known as the "Lean Production System") has become a benchmark for many internationally renowned enterprises to learn from. Enterprises like Sony, NEC, Canon, and Fujitsu have all borrowed this production system.
The key to Toyota's success: Kaizen business philosophy
Mr. Masaaki Imai, the author of *Kaizen: The Key to Japan's Competitive Success*, believes that the key to Toyota's success lies in the implementation of the business philosophy of Kaizen (continuous improvement). Kaizen is a Japanese term meaning small, continuous, and incremental improvements. This approach requires enterprises to improve efficiency and quality by enhancing a series of detailed activities in the production and business process. For example, continuously reduce non - value - added activities such as handling, because the handling process does not add actual value to the product but consumes human resources, materials, and time; eliminate the waste of raw materials to control costs at the source; improve operating procedures to make the production process more scientific and reasonable; improve product quality to enhance market competitiveness; shorten the product production time to speed up the capital recovery; and continuously motivate employees to improve their work enthusiasm and creativity.
In the product design process, the determined target costs for each function of the product and each department of the enterprise serve as the basis for cost control during the product manufacturing and sales process. The enterprise uses Kaizen to gradually reduce costs to reach or exceed this target and achieve the profit level in stages and in a planned manner. Masaaki Imai once described the Toyota Production System admiringly: In Toyota's assembly plants, workers follow four work principles: cleaning, sorting, screening, and tidying. There is an active atmosphere throughout the factory. Every action has a clear purpose, and there is no idleness. In general factories, one often sees piles of unfinished parts, and when the assembly line stops for maintenance, workers have nothing to do. However, in Toyota, the production process is like a well - designed dance. Workers are like dancers, and a series of actions such as picking up parts, installing them, and checking the quality are all carried out in a perfect environment.
Comparison between Kaizen and other corporate philosophies
Compared with corporate philosophies in the West such as process reengineering, TPM, and 6SIGMA, which often involve comprehensive changes, Kaizen seems less "radical" and more like a silent and gradual improvement. However, compared with the one - shot innovation ideas, even the seemingly insignificant effects brought about by the Kaizen concept may ultimately have a subversive and revolutionary impact. It requires every manager and operator to continuously improve work at relatively low costs. In the long run, this step - by - step continuous progress can yield huge returns. At the same time, Kaizen is also a low - risk approach. During the improvement process, if any inappropriate aspects are found, managers can revert to the original work methods at any time without incurring high costs.As a lean production system that avoids useless work, the Toyota Kaizen production method mainly has two core ideas:I. "Eliminate waste", that is, carry out effective cost control;II. "Continuous improvement". This idea comes from Deming's concept of "continuous quality improvement", regarding the improvement of products and processes as an endless process of continuous small improvements.
The two pillars of the Toyota Production System
Taiichi Ohno explained his understanding of Kaizen in *The Toyota Production System*. "Thoroughly eliminating waste" is the basic concept of the Toyota Production System, and the two pillars running through it are "just-in-time" and "jidoka". In the middle of the last century, the ratio of industrial productivity between Japan and the United States was I:IX. The gap was even greater when compared with the most developed automobile industry in the United States. Taiichi Ohno and Kiichiro Toyoda, the then president of Toyota, realized that there was huge waste in the production process among the Japanese. As long as waste was eliminated, productivity might increase tenfold. This is the starting point of the Toyota Production System.
"Just-in-time" refers to the process of assembling cars on an assembly line, where the required parts are delivered to the side of the production line at the right time and in the right quantity, neither more nor less. In this way, the problem of "inventory", which places a burden on business management in terms of materials and finances, can be almost solved. "Automation" refers to "machines with automatic stop devices". This concept originated from the automatic loom invented by Sakichi Toyoda, the founder of Toyota. His automatic loom can immediately stop running when a warp thread breaks or the weft thread runs out, because it is equipped with a "device that enables the machine to judge the state", so no defective products will be produced. Endowing machines with human wisdom means that the meaning of management will be greatly changed. When the machines are running normally, no human is needed. People only need to handle the situation when the machines malfunction and stop running. One person can manage several machines. As the number of personnel gradually decreases, the production efficiency will be greatly improved.
Toyota-style Kaizen is customer-oriented
Toyota's Kaizen has made great efforts in "customer orientation" and "demand supremacy". Taiichi Ohno mentioned in the book, "Only when ineffective labor (waste) is reduced to zero and the proportion of work approaches 100% can we truly improve efficiency. The Toyota Production System pursues production on demand. Therefore, the number of employees should be reduced to match the excess production capacity with the required production volume." To make Kaizen achieve the maximum effect, the primary task is to thoroughly expose ineffective labor and waste phenomena and eliminate them in a timely manner. These phenomena include ineffective labor in over - production, wasted time in waiting, ineffective labor in transportation, ineffective labor and waste in the processing itself, waste in inventory, ineffective labor in movements, ineffective labor and waste in manufacturing defective products, etc. The inspiration that Toyota's Kaizen gives us is that it only makes sense for an enterprise to improve efficiency when it is combined with cost reduction. It must strive in the direction of producing only the required quantity of products with the minimum number of employees. Regarding efficiency, we should focus on each operator, the production line organized by them, and then the entire factory centered around the production line. Every link needs to be improved to achieve an overall effect.
The shadows of other business ideas in Toyota-style Kaizen
From Toyota's Kaizen management, one can faintly see the shadows of other business ideas. For example, Taiichi Ohno advocated breaking through the traditional idea of "having inventory" and insisted on pursuing the concept of "zero inventory", which is extremely similar to the strategic approach of Michael Dell (Dell Computers). Dell uses the direct - sales method. On the one hand, it can bypass distributors to reduce prices and improve product competitiveness; on the other hand, it can directly face customers and understand their needs. Another example is the "kanban" management adopted within Toyota. That is, a standard operation sheet is attached to the side of the parts box being transported to the production line. On the one hand, it indicates that necessary items should be obtained in the necessary quantity at the necessary time to provide instructions for the actual processing of work - pieces; on the other hand, it functions as an operation instruction. This is taken from the operating model of American self - service supermarkets. After customers buy goods, the supermarket replenishes the same kind of goods in a timely manner according to the quantity purchased, avoiding the unnecessary movement of items whose selling time is unknown.
Future outlook of Toyota-style Kaizen
Kaizen, which integrates management ideas such as Total Quality Management (TQM), Just-in-Time (JIT) production system, and Total Productive Maintenance (TPM), has already become the corporate philosophy of Toyota and will continue to guide Toyota to move forward steadily. When Toyota's brand continues to expand and make continuous progress, providing a reference for the global automobile manufacturing industry, and when Kaizen is regarded as the clearest, simplest, and fastest path to maximizing output and optimizing quality, will the Toyota Production System, like the famous saying about Toyota cars "Even when all seems lost, there's always a Toyota on the road", become the mainstream choice widely praised and adopted by people? The determination of Taiichi Ohno gives us confidence. He said, "If Henry Ford, the king of the American automobile industry, had seen it during his lifetime, he would definitely have adopted the Toyota Production System."