Saturday, June 15, 2013

Two great HBR papers on Toyota ..


The past few days, happened to go through two HBR papers published in 2007 and 2008 respectively in Harvard Business Review on the Toyota system, in my research of the Toyota system. Going through and taking notes from papers are a part of my profession , but this one was really different. What I was looking for the past many months comes to me directly as two high value papers..

The papers are  
1. "The contradictions that drive Toyota's success" by Hirotaka Takeuchi, Emi Osono and Norihiko Shimizu in June 2008, HBR, and 

2. " Managing for the Long term - Lessons from Toyota's long drive", an interview by HBR editors Thomas A Stewart and Anand P Raman with Toyota's former President, Katsuaki Watanabe, July - August 2007, HBR.

Watanabe, earlier Toyota President ..
I am amazed by the vision of Toyota. I do not own a Toyota nor do I have any plans to own one in the near future. But the simple thoughts and dedication behind the system baffles me.

The first paper talks of the Toyota culture : the obsessive respect for people (employees) and their welfare, how getting around contradictions is a way of life in Toyota, constantly challenged by nearly impossible tasks, a very understanding management which takes "constructive criticism" in its stride, making Toyota a learning
and thinking organisation for its employees, constantly evolving from one level to another ..
Akio Toyoda, present Chairman ..

Toyota does not keep their culture secret, in fact it is so open, they are sure no one on planet Earth can ape it !!.  They are very public about it, but no other country or company has been able to replicate it anywhere else, except for Toyota. The great example of Toyota and GM holding hands together to form NUMMI and reopening the Fremont Calif. plant in 1984 as a joint venture between GM and Toyota is studies as case in Business schools around the world. The present situation of the plant is difficult partly due to problems with GM and its bankruptcy measures.

To  train the "Toyota culture" to the new employees in different geographies, Toyota sends in mentors from Japanese plants to these new sites. For this they retain Toyota employees in Japan who are aged more than sixty years too. The Toyoda family which still retains the top positions and takes major decisions in the company holds just 2% of stock. No one dare topple the apple cart ..

Naturally out of curiosity, I have this simple question to the authors,
Is not the Toyota culture - a system of extreme humility and obeisance to authority, practiced in the plant and outside in their dealings with all other stakeholders, very much a  part of the Toyota DNA or way of doing things. Is this not part of the Japanese culture of respect for others and exacting discipline which is evident in all these practices ? Will it not take thousands of years to imbibe this "country-specific" culture ?

The second paper is more insightful into the Toyota system of manufacturing and operations management, which is opposite to what is taught in Business schools around the world. 

Radical innovation - kakushin and drastic reform - kaikaku implemented at the new plant at Takaoka in Toyota city incorporating the simple, slim and speedy production system was a great insight. The paper highlights the fact that Toyota is not a complacent organisation, not resting on its laurels as the greatest manufacturer of the twentieth and twenty first centuries, it is constantly innovating and changing itself, constantly being challenged by nearly impossible tasks.

One of the innovative programmes they have is - by joining several components into one integrated component, Toyota intends through design and development  to reduce costs and add value - the program is Value Innovation.

A very radical vision of Toyota is to make a dream car that will make the air more cleaner, that cannot injure people, prevents accidents, that can make people healthier the longer they drive it, one that can excite, entertain and evoke the emotions of the occupants and one that can drive around the world in just one tank of fuel - in other words making environment, energy, safety and comfort the themes of Toyota's future development.

Toyota is presently obsessed with and trying to be very narrowly focused on improving the value of the product and giving the world the supposedly best product for transporting people from one point to another. In future as how Science evolves, we hear of teleportation and other new concepts picking up.  If humanity over the next few decades comes up with a technology that can do away with the need for physical transportation, and thus vehicles to carry humans, how will Toyota survive and what will be the production plans or production lines of Toyota then ?

Having visited the Bidadi, Bangalore, India plant of Toyota Kirlosakar on at least four different occasions with a purely academic mind to grasp and understand Toyota Production systems and the Toyota culture, the two papers were an eye opener for me. A great learning of six years of the authors with the company will be a great experience for me and my students too ..

My research into the Toyota Production system continues ..

ge..

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