1. Toyota developed the Prius using a new product development process led by an unlikely chief engineer to create a hybrid vehicle that achieved significantly higher fuel economy. 2. The chief engineer utilized an "obeya" system where the cross-functional team made decisions together in the same room to consider all options through consensus-building. 3. Toyota launched the Prius ahead of schedule in 1997 utilizing this new development process, with the goal of developing technologies for the 21st century that focused on environmental friendliness and conserving natural resources.

1. Chapter 6 : The Toyota way in action
New Century, New Fuel,
New Design Process Prius

2. Flex 27 Sec2 Group 6
• Nutcha Suphachaimongkol 5710224116
• sirinart saneha 5710224083
• Chardchai Jansirijaroen 5710224086
• Chutima Thiammuang 5710224085
• Thongtong Mahawongwiriya 5710224110
• Wadsadeegorn Intakunjinda 5710224104

3. Toyota way in action
• Toyota was too successful.
• Toyota had a very strong product development system –
No change for Decades.
Eiji Toyoda
Toyota Chairman
Principle 1: Base management decision on a Long-term
philosophy, even at the expense of short-term financial goal.

4. The Prius Blueprint
• Project Global 21 (G21) – Team 10 young managers support by Management.
Principle 9. Grow leaders
Principle 10. Exceptional people and teams
Principle 12. Genchi genbutsu
Goal:
Develop a new method for manufacturing cars for the 21st century.
Develop a new method of developing cars for the 21st century.
Requirement
Room cabin space High seat position
Aerodynamic exterior 47.5 mpg. (20 km/L)
Small + Automatic transmission

5. An Unlikely Chief Engineer Invents a New
Approach to Car Development: Uchiyamada
• Obeya system – Gather people in one time to make key decision.
– Cross-function
– Team of experts
Uchiyamada: No designing background - Fresh
From research
Technical engineering
Principle 13: Make decisions slowly by consensus, thoroughly considering
all options; implement rapidly. (Nemawashi).

6. Environmentally Friendly,
Conserving Natural Resources
The 21st – Century Car

7. Set – Based Concurrent
Discuss multiple alternatives
before narrowing in a decision

8. HARDWARE
SOFT
ASPECT
Let’s stop focus on
HARDWARE
Let’s focus on
SOFT ASPECT
National resource
Environment

9. FUEL ECONOMY
LOW EMISSION
HYBRID
TECHNOLOGY

10. HYBRID
TECHNOLOGY
Current
50% Fuel economy
DOUBLE (Next Target)
Conflict
Principal 8: Use only reliable, thoroughly tested
technology that serve your people and process.
reject
the notion of a
Hybrid engine
Challenge
Set Higher Target from 50% fuel
economy to DOUBLE the current
fuel economy
1994 1995
Lead time 1 year to develop the showcase product

11. Phase III : Accelerating the Development Project
used a “Set-based” approach
Nov
1994
Dec
1994
Jan
1995
Feb
1995
Mar
1995
Apr
1995
May
1995
Jul
1995
Aug
1995
Oct
1995
Jun
1995
Sep
1995
Develop a Hybrid
concept vehicle
Propose one alternative
to the G21 team
an official development
project
Auto show
a three-year plan
80 hybrid types
10 types The best 4 types
1st year 2nd year 3rd year
Developing
a complete
prototype
Working out
details
through research
Finalizing the
production version
and preparation
6 months
not requirement
one alternative to
the G21 team
1998
19981995

12. A New President with a New Mission Prius Leads the Way
• Hiroshi Okuda, new president, stay the same Toyota
plan but pursued it faster and more aggressively.
o Ask for launching Prius a year faster
• The prototype Prius launch publicly in Oct. 1995
o Energize the team to develop the true production
hybrid vehicle.
• Uchiyamada refuse to cut corners. (In the high timing pressure)
o Refuse to apply hybrid engine on existing model of Camry.
“This car may change the course of Toyota’s future and even that of the auto industry.”

13. The Clay Model Freeze
15 Months to Go
- An unusual degree of
thoroughness in decision making
decision making. (Nemawashi)
- July 1996 : A clay model freeze
process

14. - Joint venture company with Matsushita
Electric called “Panasonic EV Energy”
- Need battery as small as possible.
Principle 11 :
“Respect your extended
network of partners and
suppliers by challenging
them and helping them
improve.”

15. In October 1997, Prius was launched
in mass production.
-The price was subsidized by Toyota :
“ volumes increased and cost reduction
opportunities were identified” .
“ The importance of the Prius was
the learning. Toyota employees
knocked themselves out to do it their way
, in house, and develop knowledge and
new capabilities along the way” .

16. Toyota’s New Product Development Process
1 .The cross-functional team and chief engineer work together almost daily in the same room.
2. Simultaneous engineering.
Other Toyota Way Principles from the Prius Story
Production 1997-2001 Production 2003-2009