Toyota Way Chapter 1

1. Group. 1
Using Operational Excellence
as a strategic weapon

2. Nissan
Honda
Isuzu
Toyota
Mitsubishi
1980s
Quality Efficiency

3. Nissa
n Honda
Isuz
u
Mitsubi
shi
1990s
Operational
Excellence
Designed Faster More Reliability Competitive Cost

4. $8.1 billion and 8.3 times higher
than industrial average
Toyota Big 3
 Annual Profit At The End of March 2003
Chrysler
Ford
GM

5.  Toyota’ s shares increase 24% over 2002.
 Total value of company’s stock was 105 billion
more than combined of Big 3.
 ROA is 8 times higher than industrial average.
 Made profit every year last 25 years.
 Stock Price in 2003

6.  Success story in North America
 Became Big 3 by selling more than Chrysler.
 Sold more than Ford and Chevrolet in U.S.
 Camry was the top-selling U.S. passenger car.
 Corolla was the top selling small car in the world.
1.8 million Toyota/Lexus was sold, 1.2
million were made in North America
1. GM
4.Chrysler
2. Ford
3. Toyota

7.  Luxury Car
 Lexus was introduced in 1989 and in
2002 outsold BMW, Cadillac and
Mercedes-Benz in U.S.

8. Toyota
Fastest
Product
Development
Process
Best in
class
Quality
Reputation
Lean
Production
(TPS)
High Productivity
High Quality
Manufacturing speed
Flexibility

9.  Toyota Statistic From Consumer Reports’ 2003
 Small car category, won each last 3 years.
 Family Sedans, Camry won each last 3 years.
 Toyota Used car, more than half was recommended for purchase.
 Has dominated the J.D. Powers “ initial quality” and “long-term
durability ranking for years.
 Lexus was the #1 reliable car.

10. Eliminate waste and time

13. 0
50
100
150
200
Before
After
93%
83%
50
%
91%
83%
9 to 1.5
hrs
30,500 to
2,890 units
10 to 5 hrs
per person-
week
2.4 to 4.5
pieces /labor-hr
10 days to
6.5 hrs

15. Blue-collar White-collar Manufacturing
Service
industry
1. Time and Resources
2. Quality
3. Low-Cost and Expensive new technology
4. Business processes
5. Culture
Inspiration Organization

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