Big Three play catch-up to Toyota plant prowess
12-28-04, 07:37 AM
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Big Three play catch-up to Toyota plant prowess
Big Three play catch-up to Toyota plant prowess
Detroit gains in efficiency, but trails in flexibility
By Christine Tierney / The Detroit News
Robin Buckson / The Detroit News
Key attributes of a good plant
* Engineering and manufacturing teams work together early to ensure vehicles are easy to build and to avoid last-minute changes that can interrupt a launch.
* Multiple models can be produced and the production mix changed to meet market demand.
* On-site stamping operations allow quick tool changes that lower equipment, labor, energy and raw material costs while maximizing quality and the number of low-cost parts produced.
* Empowered employees can fix problems on the spot.
* Work force, union or non-union, is cooperative.
Detailed car plant rankings
Detailed truck plant rankings
Comparing the six best
Robin Buckson / The Detroit News
Michelle Miksza checks the gaps between doors, fenders and other panels using an electronic system devised at GM's Oshawa plant.
Robin Buckson / The Detroit News
The screen shows whether the gaps are correct, and the system is being adopted by many GM plants.
Comment on this story
Send this story to a friend
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GEORGETOWN, Ky. — When the Toyota Camry reached his work station, Dwayne Crowder spotted a problem. A patch was blocking holes in the gearshift frame, preventing him from plugging in clips to secure the electric wiring.
Crowder immediately pulled a yellow “andon” cord, setting off a string of lights and alarms to alert the foremen at Toyota Motor Co.p.’s sprawling manufacturing complex here. A fix was made quickly and an irritating rattle avoided.
By sweating the details and nipping problems in the bud, Toyota’s factories turn out the kind of quality that translates directly to the bottom line. Compared with its Big Three rivals, Toyota commands higher prices for its vehicles and spends less on repairs because it recalls proportionately fewer of them.
In the brutal race to boost auto sales and profits, manufacturing prowess plays a key role. Because Toyota’s plants are flexible — assembling different types of vehicles on the same line — the automaker also responds faster to customer demands and can launch new models at a lower cost than Detroit’s automakers.
Thirty years after Japan’s automakers began chipping away at the American market with higher-quality cars built at lower costs, Detroit automakers still are playing catch-up.
Led by General Motors Corp., they are booking big gains in productivity and quality by liberally adopting Toyota’s manufacturing methods — and poaching its managers. But the Georgetown plant, Toyota’s mother ship in North America, illustrates how far they still have to go to become competitive.
“There isn’t anybody who does it as well as Toyota, and Georgetown is the best example in the United States,” said Ross Robson, professor of management at Utah State University and executive director of the Shingo Prize for Excellence in Manufacturing.
Manufacturing expert Ron Harbour, president of Harbour and Associates Inc. in Troy, agrees: “It’s like Tiger Woods. He may not be the best driver or the best putter, but he’s in the top five. He wouldn’t be at the top of any specific categories, but he’s near the top in every one. That’s Georgetown.”
Creative welding
It is hard from the outside to assess a plant’s overall efficiency, although some measures, such as productivity (the number of man-hours it takes to produce a vehicle) and the quality of the vehicles, can be quantified.
Labor unions have been blamed for many of Detroit’s woes, but some of the finest plants, such as GM’s state-of-the-art Cadillac factory in Lansing, employ union workers. It could vie for first place, along with nonunion plants such as Honda’s Marysville-East Liberty complex in Ohio; and Nissan Motor Co.’s ultraflexible new plant in Canton, Miss.
By some measures, some of these plants outshine Georgetown. But overall, Toyota’s Kentucky plant stands out over time among the very best.
Now 16 years old, Toyota’s first and largest U.S. plant produces 440,000 cars a year — the Avalon sedan, the Solara coupe and the Camry, America’s best-selling car. An impressive 95 percent of the models roll off the line without needing further work.
The $5.3 billion plant is nearly 30 percent more productive than the average Chrysler plant, requiring 20 hours to assemble a car.
Its stamping operations, which mold steel into body panels, are the most productive in North America, according to the 2003 Harbour Report.
A revolutionary new welding process installed two years ago turns out stiffer cars that ride more smoothly. Better yet, it costs only half as much as the previous welding system to install, and slashes the expense of adding new models to the production line by a whopping 70 percent.
Most important, however, the cars built in Georgetown run well over time and hold their value.
Moving targets
For all its virtues, however, Georgetown is not a showcase in Toyota’s production system. The company’s factories are highly standardized, and new processes are rolled out quickly to plants around the globe.
Gary Convis, Georgetown’s plant manager and one of the highest-ranking Americans in the company, said his team strives to keep up with the factory’s sister plant in Japan, the Tsutsumi factory that builds Camrys.
“It’s a moving target,” he said. “We improve, they improve, we improve, they improve. Nobody stands still.”
That underscores the strength and adaptability of the vaunted Toyota production system, which influenced its Japanese rivals and became a model for the Big Three in the late 1980s and 1990s.
“Toyota’s the force everyone fears — it’s the 500-pound gorilla that runs at sprinter speed,” said David Cole, president of the Center for Automotive Research in Ann Arbor.
Detroit’s automakers have made huge improvements at factories, such as GM’s Oshawa plant near Toronto, winner of J.D. Power and Associates’ North American quality award for 2003. But the gap between the best and worst Big Three plants is big, undermining their overall efficiency.
Compared with Japanese plants, “the (U.S.) average is lower because you have dogs and cats,” Harbour said.
If all of GM’s assembly plants operated like Oshawa, the automaker would reap billions in earnings, Cole said. “Not millions or hundreds of millions, but literally billions of added profit.”
Getting the right mix
The Big Three also lag the Japanese in flexibility, although GM is far ahead of Ford Motor Co. and the Chrysler Group. Fewer than 30 percent of Ford and Chrysler vehicles are produced on flexible lines, compared with more than 80 percent at Toyota and Nissan, according to Prudential Equity analyst Michael Bruynesteyn.
In 2003, GM built an additional 200,000 trucks on overtime because of higher demand, but laid off workers at other plants because it had 200,000 surplus cars, said Len Baxter, director of GM Vehicle Operations. With more flexible plants, GM could have saved more money, he said.
Assembly plants carry enormous fixed costs — thousands of salaries, expensive equipment and high utility bills — so down time is a waste of money. Under the United Auto Workers’ contract, U.S. automakers pay laid-off workers 90 percent of their base salary.
Yet producing cars ahead of demand also erodes profitability because automakers then have to boost incentives to move the metal.
Toyota runs its lines at the same speed its cars are selling, said Christopher Couch, the Georgetown plant’s body welding manager.
“We measure how much time we’re running versus how much time we need to run. That’s our metric,” he said. “If you build products you don’t need, maybe your production looks good, but you’re stacking inventory somewhere, and that has cost attached to it.”
When demand for a model slackens, Toyota can add a new or more popular model to the mix. Georgetown’s all-car lineup may be getting a sport utility vehicle, plant manager Convis said. “That would allow us to ride the changes in the market.”
Alternatively, the plant reassigns line workers — team members, as they’re called — to search out ways to boost quality, or cut costs by eliminating unnecessary steps, the essence of lean manufacturing.
“We’ve developed things here that they’ve taken back to Japan,” said Pat D’Eramo, general manager of Georgetown’s body operations.
Georgetown’s team members redesigned the automated carts ferrying parts in the factory so the carts would stash the components in the order needed and make them easier to reach.
Manufacturing genes
Good factories may be essential to an automaker’s success, but a great plant can be wasted in an inefficient system.
Nissan’s highly automated Smyrna plant in Tennessee and its Sunderland plant in Britain have ranked tops in productivity for years — but that did not stop the automaker from plunging into huge losses in the 1990s.
What makes Toyota a formidable opponent is the focus on manufacturing throughout the company. Even before the family-founded company began making cars in the 1930s, it had excelled in making looms and engines. Manufacturing proficiency is in its DNA.
“They think about how something is going to be built as they’re designing it,” said industry analyst Maryann Keller of Maryann Keller & Associates in Greenwich, Conn.
Today, the automaker’s vehicle lineup varies widely, yet the big Tundra pickup and the little Echo sedan can be put together in the same sequence, so both can go down the same line. Locator points on any model — where steel pins connect body panels to the floor pan — are also in the same place.
As designers conceive new models, they work early with engineers. When the current Camry was designed, engineers worried that its long, deep-set headlamps would cause difficulties for stamping machines producing front panels. So the designers tweaked the front without losing the look they wanted — before Toyota locked in a final design.
At Detroit automakers, that is the point when engineers usually come into the picture.
“(Detroit automakers) end up discovering many things at the launch,” said Jeffrey Liker, professor of engineering at the University of Michigan and author of “The Toyota Way.”
U.S. automakers carry out far more engineering changes at the launch stage than Toyota or other Japanese companies, resulting in glitches and last-minute adjustments at the factory, he said. Borrowing from Toyota’s book, GM is preaching the mantra of “process-driven product design.”
The winning formula
GM officials first saw the Toyota assembly system in action when the companies formed a venture in 1984 at a failing GM plant in Fremont, Calif. Under Toyota management, the plant’s union workers began making good cars, but GM did not immediately transfer the lessons learned to other facilities.
“It took us a long time to understand the profound message behind it (the Toyota production system),” said Gary Cowger, president of GM North America.
In the past four years, GM factories have improved enormously, with more than 80 percent fulfilling the standards and metrics laid out in GM’s Global Manufacturing System, he said.
Many Detroit executives have walked the floors of the Georgetown plant over the years, cherry-picking clever ideas and hoping to spot the trick process or secret machine that accounted for Toyota’s success.
Certainly, Toyota’s deep understanding of machinery has produced amazing breakthroughs. Its patented new welding system, called the Global Body Line, where a car or truck’s skeleton is assembled, is unlike any other.
Typically, automakers load a car’s panels and frame parts in a clamshell-like weld that holds them in position. But in the Global Body Line, a jig descends through the roof frame, expands through the rear and front window openings and suspends the vehicle. Twice as many robots can weld the exposed panels. The same robots can be reprogrammed and reused for another model.
“They were already an industry benchmark,” said Liker, the U-M professor. “Imagine how far ahead they are now.”
Toyota pillars
But the fundamental pillars of the Toyota production system are simple and low-tech: strict adherence to procedures, constant improvement, or kaizen, getting to the root of problems, and respect for line workers.
Visitors do not want to hear about those principles, Georgetown plant spokesman Rick Hesterberg said. “They’re looking for some kind of equipment or special training.”
Toyota officials say the key to their system is that it taps the knowledge and insights of their team members.
They also give them a lot of training and responsibility. At Georgetown, or any Toyota plant, any team member has the power to stop the line by pulling what is called an “andon” cord. The term “andon” is derived from the Japanese word for paper lantern.
Once a worker pulls the cord, if the problem is not resolved before the car reaches the next stage of assembly, the line stops.
“It may hurt productivity, but it improves quality,” said Brian Walters, J.D. Power research director.
Toyota encourages employees to pull the cord, despite the line stoppages, to expose problems and address them quickly. In Georgetown, workers reach for their cords 2,500 times a shift, and stoppages amount to 6-8 minutes per shift.
But, plant manager Convis said, “at Toyota, it’s a problem if you run (the line) at 100 percent. Something isn’t adding up, because life isn’t (perfect) like that.”
For the past year and a half, andon cords have hung along the assembly lines at GM’s Oshawa plant. But the concept can get muddled in translation.
“We used to get 17 andon pulls per day,” said Rod McVeigh, a supervisor in the assembly plant. “We’re now targeting six a day.”
But that might encourage workers to look out less for glitches.
Dennis Pawley, Chrysler’s former manufacturing chief and now a consultant teaching Japanese manufacturing methods, says of the Big Three: “They don’t understand that they don’t understand.”
Karaoke in Kentucky
When Toyota decided to build its first North American plant, executives settled on Kentucky’s Scott County, a dry county with a hard-working rural populace and a pastoral landscape.
“Toyota executives said the topography here is very similar to the area in (central) Japan that Toyota’s from,” said banker Tom Prather, who was then mayor of Georgetown.
Tens of thousands of candidates lined up for jobs, enduring Toyota’s rigorous testing and interview process. Critics say it weeds out nonconformists. Union recruiting drives have failed.
Toyota proved generous to the area. The plant’s second manager, Fujio Cho, now Toyota’s CEO, became a popular figure in the town. “I remember singing karaoke in his basement,” Prather said.
Between 1990 and 2000, Georgetown racked up four J.D. Power gold quality awards. Its rivals and other manufacturers picked off its managers.
“There were dozens or more trained in the Toyota method who moved on,” Liker said. “They were so good that they were in high demand, but that makes it difficult to run that operation.”
About three years ago, manufacturing experts touring the plant noticed a bit of sloppiness. First-time throughput — the percentage of cars coming off the line with no defects — was slipping. Some managers had grown overconfident, while others were inexperienced in Toyota’s methods.
New hires from the Big Three were not in the habit of speaking with line workers to take the pulse of the assembly operation. Don Jackson, then Georgetown’s vice president of manufacturing, spent hours each day on the floor, to set an example. He since has been transferred to Toyota’s new truck-making plant in San Antonio, Texas.
Meanwhile, Georgetown has snapped back. It registered an 8.6 percent productivity gain in the last Harbour Report, and a bigger increase last year.
Executives are working hard to root out complacency and reinforce kaizen. Toyota may be sitting on $28 billion in cash, but “from a cost standpoint, we approach everything as if we were broke,” Georgetown’s D’Eramo said.
With GM gearing for a comeback, and China seeking to become an automotive power, the pressures on Toyota are real.
“Everyone is trying to deliver good value to the customer, quality, dependability, reliability. The challenge in this market is to make sure we stay ahead,” said Yoshimi Inaba, senior managing director of Toyota.
“We have to do better.”
You can reach Christine Tierney at (313) 222-1463 or ctierney@detnews.com.
Detroit gains in efficiency, but trails in flexibility
By Christine Tierney / The Detroit News
Robin Buckson / The Detroit News
Key attributes of a good plant
* Engineering and manufacturing teams work together early to ensure vehicles are easy to build and to avoid last-minute changes that can interrupt a launch.
* Multiple models can be produced and the production mix changed to meet market demand.
* On-site stamping operations allow quick tool changes that lower equipment, labor, energy and raw material costs while maximizing quality and the number of low-cost parts produced.
* Empowered employees can fix problems on the spot.
* Work force, union or non-union, is cooperative.
Detailed car plant rankings
Detailed truck plant rankings
Comparing the six best
Robin Buckson / The Detroit News
Michelle Miksza checks the gaps between doors, fenders and other panels using an electronic system devised at GM's Oshawa plant.
Robin Buckson / The Detroit News
The screen shows whether the gaps are correct, and the system is being adopted by many GM plants.
Comment on this story
Send this story to a friend
Get Home Delivery
GEORGETOWN, Ky. — When the Toyota Camry reached his work station, Dwayne Crowder spotted a problem. A patch was blocking holes in the gearshift frame, preventing him from plugging in clips to secure the electric wiring.
Crowder immediately pulled a yellow “andon” cord, setting off a string of lights and alarms to alert the foremen at Toyota Motor Co.p.’s sprawling manufacturing complex here. A fix was made quickly and an irritating rattle avoided.
By sweating the details and nipping problems in the bud, Toyota’s factories turn out the kind of quality that translates directly to the bottom line. Compared with its Big Three rivals, Toyota commands higher prices for its vehicles and spends less on repairs because it recalls proportionately fewer of them.
In the brutal race to boost auto sales and profits, manufacturing prowess plays a key role. Because Toyota’s plants are flexible — assembling different types of vehicles on the same line — the automaker also responds faster to customer demands and can launch new models at a lower cost than Detroit’s automakers.
Thirty years after Japan’s automakers began chipping away at the American market with higher-quality cars built at lower costs, Detroit automakers still are playing catch-up.
Led by General Motors Corp., they are booking big gains in productivity and quality by liberally adopting Toyota’s manufacturing methods — and poaching its managers. But the Georgetown plant, Toyota’s mother ship in North America, illustrates how far they still have to go to become competitive.
“There isn’t anybody who does it as well as Toyota, and Georgetown is the best example in the United States,” said Ross Robson, professor of management at Utah State University and executive director of the Shingo Prize for Excellence in Manufacturing.
Manufacturing expert Ron Harbour, president of Harbour and Associates Inc. in Troy, agrees: “It’s like Tiger Woods. He may not be the best driver or the best putter, but he’s in the top five. He wouldn’t be at the top of any specific categories, but he’s near the top in every one. That’s Georgetown.”
Creative welding
It is hard from the outside to assess a plant’s overall efficiency, although some measures, such as productivity (the number of man-hours it takes to produce a vehicle) and the quality of the vehicles, can be quantified.
Labor unions have been blamed for many of Detroit’s woes, but some of the finest plants, such as GM’s state-of-the-art Cadillac factory in Lansing, employ union workers. It could vie for first place, along with nonunion plants such as Honda’s Marysville-East Liberty complex in Ohio; and Nissan Motor Co.’s ultraflexible new plant in Canton, Miss.
By some measures, some of these plants outshine Georgetown. But overall, Toyota’s Kentucky plant stands out over time among the very best.
Now 16 years old, Toyota’s first and largest U.S. plant produces 440,000 cars a year — the Avalon sedan, the Solara coupe and the Camry, America’s best-selling car. An impressive 95 percent of the models roll off the line without needing further work.
The $5.3 billion plant is nearly 30 percent more productive than the average Chrysler plant, requiring 20 hours to assemble a car.
Its stamping operations, which mold steel into body panels, are the most productive in North America, according to the 2003 Harbour Report.
A revolutionary new welding process installed two years ago turns out stiffer cars that ride more smoothly. Better yet, it costs only half as much as the previous welding system to install, and slashes the expense of adding new models to the production line by a whopping 70 percent.
Most important, however, the cars built in Georgetown run well over time and hold their value.
Moving targets
For all its virtues, however, Georgetown is not a showcase in Toyota’s production system. The company’s factories are highly standardized, and new processes are rolled out quickly to plants around the globe.
Gary Convis, Georgetown’s plant manager and one of the highest-ranking Americans in the company, said his team strives to keep up with the factory’s sister plant in Japan, the Tsutsumi factory that builds Camrys.
“It’s a moving target,” he said. “We improve, they improve, we improve, they improve. Nobody stands still.”
That underscores the strength and adaptability of the vaunted Toyota production system, which influenced its Japanese rivals and became a model for the Big Three in the late 1980s and 1990s.
“Toyota’s the force everyone fears — it’s the 500-pound gorilla that runs at sprinter speed,” said David Cole, president of the Center for Automotive Research in Ann Arbor.
Detroit’s automakers have made huge improvements at factories, such as GM’s Oshawa plant near Toronto, winner of J.D. Power and Associates’ North American quality award for 2003. But the gap between the best and worst Big Three plants is big, undermining their overall efficiency.
Compared with Japanese plants, “the (U.S.) average is lower because you have dogs and cats,” Harbour said.
If all of GM’s assembly plants operated like Oshawa, the automaker would reap billions in earnings, Cole said. “Not millions or hundreds of millions, but literally billions of added profit.”
Getting the right mix
The Big Three also lag the Japanese in flexibility, although GM is far ahead of Ford Motor Co. and the Chrysler Group. Fewer than 30 percent of Ford and Chrysler vehicles are produced on flexible lines, compared with more than 80 percent at Toyota and Nissan, according to Prudential Equity analyst Michael Bruynesteyn.
In 2003, GM built an additional 200,000 trucks on overtime because of higher demand, but laid off workers at other plants because it had 200,000 surplus cars, said Len Baxter, director of GM Vehicle Operations. With more flexible plants, GM could have saved more money, he said.
Assembly plants carry enormous fixed costs — thousands of salaries, expensive equipment and high utility bills — so down time is a waste of money. Under the United Auto Workers’ contract, U.S. automakers pay laid-off workers 90 percent of their base salary.
Yet producing cars ahead of demand also erodes profitability because automakers then have to boost incentives to move the metal.
Toyota runs its lines at the same speed its cars are selling, said Christopher Couch, the Georgetown plant’s body welding manager.
“We measure how much time we’re running versus how much time we need to run. That’s our metric,” he said. “If you build products you don’t need, maybe your production looks good, but you’re stacking inventory somewhere, and that has cost attached to it.”
When demand for a model slackens, Toyota can add a new or more popular model to the mix. Georgetown’s all-car lineup may be getting a sport utility vehicle, plant manager Convis said. “That would allow us to ride the changes in the market.”
Alternatively, the plant reassigns line workers — team members, as they’re called — to search out ways to boost quality, or cut costs by eliminating unnecessary steps, the essence of lean manufacturing.
“We’ve developed things here that they’ve taken back to Japan,” said Pat D’Eramo, general manager of Georgetown’s body operations.
Georgetown’s team members redesigned the automated carts ferrying parts in the factory so the carts would stash the components in the order needed and make them easier to reach.
Manufacturing genes
Good factories may be essential to an automaker’s success, but a great plant can be wasted in an inefficient system.
Nissan’s highly automated Smyrna plant in Tennessee and its Sunderland plant in Britain have ranked tops in productivity for years — but that did not stop the automaker from plunging into huge losses in the 1990s.
What makes Toyota a formidable opponent is the focus on manufacturing throughout the company. Even before the family-founded company began making cars in the 1930s, it had excelled in making looms and engines. Manufacturing proficiency is in its DNA.
“They think about how something is going to be built as they’re designing it,” said industry analyst Maryann Keller of Maryann Keller & Associates in Greenwich, Conn.
Today, the automaker’s vehicle lineup varies widely, yet the big Tundra pickup and the little Echo sedan can be put together in the same sequence, so both can go down the same line. Locator points on any model — where steel pins connect body panels to the floor pan — are also in the same place.
As designers conceive new models, they work early with engineers. When the current Camry was designed, engineers worried that its long, deep-set headlamps would cause difficulties for stamping machines producing front panels. So the designers tweaked the front without losing the look they wanted — before Toyota locked in a final design.
At Detroit automakers, that is the point when engineers usually come into the picture.
“(Detroit automakers) end up discovering many things at the launch,” said Jeffrey Liker, professor of engineering at the University of Michigan and author of “The Toyota Way.”
U.S. automakers carry out far more engineering changes at the launch stage than Toyota or other Japanese companies, resulting in glitches and last-minute adjustments at the factory, he said. Borrowing from Toyota’s book, GM is preaching the mantra of “process-driven product design.”
The winning formula
GM officials first saw the Toyota assembly system in action when the companies formed a venture in 1984 at a failing GM plant in Fremont, Calif. Under Toyota management, the plant’s union workers began making good cars, but GM did not immediately transfer the lessons learned to other facilities.
“It took us a long time to understand the profound message behind it (the Toyota production system),” said Gary Cowger, president of GM North America.
In the past four years, GM factories have improved enormously, with more than 80 percent fulfilling the standards and metrics laid out in GM’s Global Manufacturing System, he said.
Many Detroit executives have walked the floors of the Georgetown plant over the years, cherry-picking clever ideas and hoping to spot the trick process or secret machine that accounted for Toyota’s success.
Certainly, Toyota’s deep understanding of machinery has produced amazing breakthroughs. Its patented new welding system, called the Global Body Line, where a car or truck’s skeleton is assembled, is unlike any other.
Typically, automakers load a car’s panels and frame parts in a clamshell-like weld that holds them in position. But in the Global Body Line, a jig descends through the roof frame, expands through the rear and front window openings and suspends the vehicle. Twice as many robots can weld the exposed panels. The same robots can be reprogrammed and reused for another model.
“They were already an industry benchmark,” said Liker, the U-M professor. “Imagine how far ahead they are now.”
Toyota pillars
But the fundamental pillars of the Toyota production system are simple and low-tech: strict adherence to procedures, constant improvement, or kaizen, getting to the root of problems, and respect for line workers.
Visitors do not want to hear about those principles, Georgetown plant spokesman Rick Hesterberg said. “They’re looking for some kind of equipment or special training.”
Toyota officials say the key to their system is that it taps the knowledge and insights of their team members.
They also give them a lot of training and responsibility. At Georgetown, or any Toyota plant, any team member has the power to stop the line by pulling what is called an “andon” cord. The term “andon” is derived from the Japanese word for paper lantern.
Once a worker pulls the cord, if the problem is not resolved before the car reaches the next stage of assembly, the line stops.
“It may hurt productivity, but it improves quality,” said Brian Walters, J.D. Power research director.
Toyota encourages employees to pull the cord, despite the line stoppages, to expose problems and address them quickly. In Georgetown, workers reach for their cords 2,500 times a shift, and stoppages amount to 6-8 minutes per shift.
But, plant manager Convis said, “at Toyota, it’s a problem if you run (the line) at 100 percent. Something isn’t adding up, because life isn’t (perfect) like that.”
For the past year and a half, andon cords have hung along the assembly lines at GM’s Oshawa plant. But the concept can get muddled in translation.
“We used to get 17 andon pulls per day,” said Rod McVeigh, a supervisor in the assembly plant. “We’re now targeting six a day.”
But that might encourage workers to look out less for glitches.
Dennis Pawley, Chrysler’s former manufacturing chief and now a consultant teaching Japanese manufacturing methods, says of the Big Three: “They don’t understand that they don’t understand.”
Karaoke in Kentucky
When Toyota decided to build its first North American plant, executives settled on Kentucky’s Scott County, a dry county with a hard-working rural populace and a pastoral landscape.
“Toyota executives said the topography here is very similar to the area in (central) Japan that Toyota’s from,” said banker Tom Prather, who was then mayor of Georgetown.
Tens of thousands of candidates lined up for jobs, enduring Toyota’s rigorous testing and interview process. Critics say it weeds out nonconformists. Union recruiting drives have failed.
Toyota proved generous to the area. The plant’s second manager, Fujio Cho, now Toyota’s CEO, became a popular figure in the town. “I remember singing karaoke in his basement,” Prather said.
Between 1990 and 2000, Georgetown racked up four J.D. Power gold quality awards. Its rivals and other manufacturers picked off its managers.
“There were dozens or more trained in the Toyota method who moved on,” Liker said. “They were so good that they were in high demand, but that makes it difficult to run that operation.”
About three years ago, manufacturing experts touring the plant noticed a bit of sloppiness. First-time throughput — the percentage of cars coming off the line with no defects — was slipping. Some managers had grown overconfident, while others were inexperienced in Toyota’s methods.
New hires from the Big Three were not in the habit of speaking with line workers to take the pulse of the assembly operation. Don Jackson, then Georgetown’s vice president of manufacturing, spent hours each day on the floor, to set an example. He since has been transferred to Toyota’s new truck-making plant in San Antonio, Texas.
Meanwhile, Georgetown has snapped back. It registered an 8.6 percent productivity gain in the last Harbour Report, and a bigger increase last year.
Executives are working hard to root out complacency and reinforce kaizen. Toyota may be sitting on $28 billion in cash, but “from a cost standpoint, we approach everything as if we were broke,” Georgetown’s D’Eramo said.
With GM gearing for a comeback, and China seeking to become an automotive power, the pressures on Toyota are real.
“Everyone is trying to deliver good value to the customer, quality, dependability, reliability. The challenge in this market is to make sure we stay ahead,” said Yoshimi Inaba, senior managing director of Toyota.
“We have to do better.”
You can reach Christine Tierney at (313) 222-1463 or ctierney@detnews.com.
That is a great description!
12-28-04, 10:21 AM
#3
Pole Position
Excellent article.
I find it amazing that Toyota is opening it's doors and showing everyone (including competitors) their secret in the hopes to help them improve.
Now THAT's commendable. They want everyone to do better.
Too bad it's not working the way it should LOL.
I find it amazing that Toyota is opening it's doors and showing everyone (including competitors) their secret in the hopes to help them improve.
Now THAT's commendable. They want everyone to do better.
Too bad it's not working the way it should LOL.
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