Toyota: From 0-60 To World Domination
02-18-07, 09:25 AM
#1
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Toyota: From 0-60 To World Domination
From 0 to 60 to World Domination
By Jon Gertner
February 18, 2007
1. Here Comes the Tundra
"For most of the January morning, the reporters at the Detroit auto show crisscrossed the COBO convention center like a herd of livestock, moving at least once every hour to feed — sometimes literally, since Lexus offered fresh fruit. All the world’s car companies were unveiling this year’s models. Often, the back-to-back corporate announcements required everyone to scurry clear across the exhibit floor to get a seat at the next press conference. It was hard not to lose yourself in the scenery, however, as you passed by a dazzling showroom exhibit of Maseratis, for instance, or encountered some gleaming Infinitis. The event was a place untroubled by thoughts of traffic jams, long commutes or gas prices. It was also a place where C.E.O.’s like Rick Wagoner of General Motors showed off electric cars like the Chevy Volt that cannot yet be produced — at least until battery technology improves — but that can nonetheless be driven slowly across a stage toward a cluster of photographers. In this context, it seemed, G.M. was not a company that posted a $10.6 billion loss in 2005, nor was Ford a manufacturer that announced plans last year to shed more than 30,000 employees. There were no overwhelming pension and health-care burdens.
Shortly after noon that day, in a ballroom just off the convention center’s main floor, the crowd was waiting for Toyota to unveil the latest (and largest) version of its new full-size truck, the Tundra. From where I stood, pinned against a back wall in the darkened room, it was getting hard to breathe. At this point I had been following Toyota and the Tundra for months; I visited the company’s new Tundra plant in San Antonio, its sales headquarters near Los Angeles, its executive offices in Manhattan and its Camry plant near Lexington, Ky. Apart from some recalls of faulty parts (an unusual and humiliating occurrence for the carmaker), Toyota had seemed as close to a juggernaut as any corporation in existence.
By any measure, Toyota’s performance last year, in a tepid market for car sales, was so striking, so outsize, that there seem to be few analogs, at least in the manufacturing world. A baseball team that wins 150 out of 162 games? Maybe. By late December, Toyota’s global projections for 2007 — the production of 9.34 million cars and trucks — indicated that it would soon pass G.M. as the world’s largest car company. For auto analysts, one of the more useful measures of consumer appeal is the “retail turn rate” — that is, the number of days a car sits on a dealer’s lot before it is turned over to a customer. As of November 2006, according to the Power Information Network, a division of J.D. Power & Associates that tracks such sales data, Toyota’s cars in the U.S. (including its Lexus and Scion brands) had an average turn rate of 27 days. BMW was second at 31; Honda was third at 32. Ford was at 82 and G.M. at 83. And Daimler-Chrysler was at 107. The financial markets reflected these contrasts. By year’s end, Toyota would record an annual net profit of $11.6 billion, and its market capitalization (the value of all its shares) would reach nearly $240 billion — greater than that of G.M., Ford, Daimler-Chrysler, Honda and Nissan combined.
When the Tundra finally arrived onstage in Detroit, Jim Lentz, one of the company’s North American executives, told the packed ballroom that this vehicle “changed everything” for Toyota. It was researched, designed, engineered and built in America, Lentz pointed out; and it seemed, from his presentation, to be the toughest, brawniest and most iconically masculine pickup truck anywhere, ever. Such boasts were in keeping with the spirit of car-dealership hucksterism at the show. Still, 50 years after coming to the U.S., Toyota views the Tundra, which arrived in American showrooms earlier this month, not only as another big truck but also as the culmination of a half-century of experimentation, failure, resurgence and domination. And as anyone with even a passing familiarity with Toyota’s strategic history knows, the company never makes rash moves or false promises."
This New York Times magazine cover story continues here:
http://www.nytimes.com/2007/02...login
By Jon Gertner
February 18, 2007
1. Here Comes the Tundra
"For most of the January morning, the reporters at the Detroit auto show crisscrossed the COBO convention center like a herd of livestock, moving at least once every hour to feed — sometimes literally, since Lexus offered fresh fruit. All the world’s car companies were unveiling this year’s models. Often, the back-to-back corporate announcements required everyone to scurry clear across the exhibit floor to get a seat at the next press conference. It was hard not to lose yourself in the scenery, however, as you passed by a dazzling showroom exhibit of Maseratis, for instance, or encountered some gleaming Infinitis. The event was a place untroubled by thoughts of traffic jams, long commutes or gas prices. It was also a place where C.E.O.’s like Rick Wagoner of General Motors showed off electric cars like the Chevy Volt that cannot yet be produced — at least until battery technology improves — but that can nonetheless be driven slowly across a stage toward a cluster of photographers. In this context, it seemed, G.M. was not a company that posted a $10.6 billion loss in 2005, nor was Ford a manufacturer that announced plans last year to shed more than 30,000 employees. There were no overwhelming pension and health-care burdens.
Shortly after noon that day, in a ballroom just off the convention center’s main floor, the crowd was waiting for Toyota to unveil the latest (and largest) version of its new full-size truck, the Tundra. From where I stood, pinned against a back wall in the darkened room, it was getting hard to breathe. At this point I had been following Toyota and the Tundra for months; I visited the company’s new Tundra plant in San Antonio, its sales headquarters near Los Angeles, its executive offices in Manhattan and its Camry plant near Lexington, Ky. Apart from some recalls of faulty parts (an unusual and humiliating occurrence for the carmaker), Toyota had seemed as close to a juggernaut as any corporation in existence.
By any measure, Toyota’s performance last year, in a tepid market for car sales, was so striking, so outsize, that there seem to be few analogs, at least in the manufacturing world. A baseball team that wins 150 out of 162 games? Maybe. By late December, Toyota’s global projections for 2007 — the production of 9.34 million cars and trucks — indicated that it would soon pass G.M. as the world’s largest car company. For auto analysts, one of the more useful measures of consumer appeal is the “retail turn rate” — that is, the number of days a car sits on a dealer’s lot before it is turned over to a customer. As of November 2006, according to the Power Information Network, a division of J.D. Power & Associates that tracks such sales data, Toyota’s cars in the U.S. (including its Lexus and Scion brands) had an average turn rate of 27 days. BMW was second at 31; Honda was third at 32. Ford was at 82 and G.M. at 83. And Daimler-Chrysler was at 107. The financial markets reflected these contrasts. By year’s end, Toyota would record an annual net profit of $11.6 billion, and its market capitalization (the value of all its shares) would reach nearly $240 billion — greater than that of G.M., Ford, Daimler-Chrysler, Honda and Nissan combined.
When the Tundra finally arrived onstage in Detroit, Jim Lentz, one of the company’s North American executives, told the packed ballroom that this vehicle “changed everything” for Toyota. It was researched, designed, engineered and built in America, Lentz pointed out; and it seemed, from his presentation, to be the toughest, brawniest and most iconically masculine pickup truck anywhere, ever. Such boasts were in keeping with the spirit of car-dealership hucksterism at the show. Still, 50 years after coming to the U.S., Toyota views the Tundra, which arrived in American showrooms earlier this month, not only as another big truck but also as the culmination of a half-century of experimentation, failure, resurgence and domination. And as anyone with even a passing familiarity with Toyota’s strategic history knows, the company never makes rash moves or false promises."
This New York Times magazine cover story continues here:
http://www.nytimes.com/2007/02...login
02-20-07, 10:03 PM
#4
Super Moderator
Toyota's Lean Business System is the Machine That Changed the World
The Lean Enterprise Institute (LEI) is a nonprofit training, publishing, and research company.
CAMBRIDGE, Mass., Feb. 20 /PRNewswire-USNewswire/ -- The key to
Toyota's rise from a Japanese maker of textile looms to possibly the
world's best corporation, as described in a recent cover story in The New
York Times Magazine, is its ground-breaking lean business system, said
James Womack, founder and chairman of the Lean Enterprise Institute (LEI).
Womack, who was featured in the Feb. 18 story "From 0 to 60 to World
Domination," co-authored the book that brought Toyota's revolutionary lean
business system to widespread public attention in 1990. Simon & Schuster
will re-issue The Machine That Changed the World in paperback next month
with a new Foreword, "Why Toyota Won: A Tale of Two Business Systems" and a
new Afterword, "What We Have Learned about Lean Production Since 1990."
"The book remains relevant today because it clearly describes two
fundamentally different business systems, two ways of thinking about how
humans work together to create value for customers," Womack said. General
Motors pioneered the mass production business system in the 1920s as it
became the world's largest industrial enterprise. Toyota pioneered the lean
production system after World War II and is within reach of overtaking GM
as the world's largest automaker.
Machine describes how Toyota operates the five elements of its lean
business system: product design, supply chain coordination, customer
relations, production, and enterprise management. The "machine" that is
changing the world is this complete lean business system.
After nearly two decades in the market, Machine has become a management
classic, taking its place as the third book in a historical sequence
beginning with Peter Drucker's Concept of the Corporation (1946), which
first summarized the mass production business model, and continuing with
Alfred Sloan's My Years with General Motors (1965) in which the chief
architect of this system explained it in very precise detail.
About LEI
Based in Cambridge, MA, the Lean Enterprise Institute is a 501(c)(3)
nonprofit education, publishing, conferencing, and research center founded
by James P. Womack PhD, in August 1997 to give people simple but powerful
tools that enable them to apply a set of ideas known as lean production and
lean thinking, based initially on the Toyota business system. For more
information visit LEI at http://www.lean.org .
SOURCE Lean Enterprise Institute
CAMBRIDGE, Mass., Feb. 20 /PRNewswire-USNewswire/ -- The key to
Toyota's rise from a Japanese maker of textile looms to possibly the
world's best corporation, as described in a recent cover story in The New
York Times Magazine, is its ground-breaking lean business system, said
James Womack, founder and chairman of the Lean Enterprise Institute (LEI).
Womack, who was featured in the Feb. 18 story "From 0 to 60 to World
Domination," co-authored the book that brought Toyota's revolutionary lean
business system to widespread public attention in 1990. Simon & Schuster
will re-issue The Machine That Changed the World in paperback next month
with a new Foreword, "Why Toyota Won: A Tale of Two Business Systems" and a
new Afterword, "What We Have Learned about Lean Production Since 1990."
"The book remains relevant today because it clearly describes two
fundamentally different business systems, two ways of thinking about how
humans work together to create value for customers," Womack said. General
Motors pioneered the mass production business system in the 1920s as it
became the world's largest industrial enterprise. Toyota pioneered the lean
production system after World War II and is within reach of overtaking GM
as the world's largest automaker.
Machine describes how Toyota operates the five elements of its lean
business system: product design, supply chain coordination, customer
relations, production, and enterprise management. The "machine" that is
changing the world is this complete lean business system.
After nearly two decades in the market, Machine has become a management
classic, taking its place as the third book in a historical sequence
beginning with Peter Drucker's Concept of the Corporation (1946), which
first summarized the mass production business model, and continuing with
Alfred Sloan's My Years with General Motors (1965) in which the chief
architect of this system explained it in very precise detail.
About LEI
Based in Cambridge, MA, the Lean Enterprise Institute is a 501(c)(3)
nonprofit education, publishing, conferencing, and research center founded
by James P. Womack PhD, in August 1997 to give people simple but powerful
tools that enable them to apply a set of ideas known as lean production and
lean thinking, based initially on the Toyota business system. For more
information visit LEI at http://www.lean.org .
SOURCE Lean Enterprise Institute
02-21-07, 10:55 AM
#5
Lexus Fanatic
Toyota has made a long series of mistakes, sometimes serious, dating back to 1994, of offering mid-sized trucks, even with V8's, and falsely marketing them as "full-sizers". ( I have written at length about this, in detail, in other CAR CHAT threads and won't re-hash it again here).
Then Toyota really got caught with its pants down when Nissan did it right and pre-empted them with the true full-size Titan a few years ago. Only the Titan's reputation for poor quality, shared by other Nissan-Infiniti products built in the Canton, MS plant, kept it from handily outselling the last Tundra. (The Tundra, though, was popular with those who didn't need a full-size truck).
Now, that's not to say that the Titan, even with good quality, would have been serious competition, at least at first, for the domestic full-size trucks either. F-150, Silverado, and Ram owners are some of the most loyal in the industry, and the F-150 and Silverado sell each year in tremendous numbers, with the Ram no longer that far behind either.
Fortunately, Toyota ( finally ) now has a true full-sizer....at least something that will compete with roughly the half-ton pickup class....the F-150, Chevy and Dodge 1500's. But neither Toyota or Nissan have a heavy-duty three/quarter or one-ton diesel full-sizer with dual rear wheels like the F-250/350 or Chevy/Dodge 2500/3500....so no matter how well the new Titan and Tundra sell, the domestics will still rule the roost with the heavy-duty trucks, which are popular in industries like construction, logging, etc...
Then Toyota really got caught with its pants down when Nissan did it right and pre-empted them with the true full-size Titan a few years ago. Only the Titan's reputation for poor quality, shared by other Nissan-Infiniti products built in the Canton, MS plant, kept it from handily outselling the last Tundra. (The Tundra, though, was popular with those who didn't need a full-size truck).
Now, that's not to say that the Titan, even with good quality, would have been serious competition, at least at first, for the domestic full-size trucks either. F-150, Silverado, and Ram owners are some of the most loyal in the industry, and the F-150 and Silverado sell each year in tremendous numbers, with the Ram no longer that far behind either.
Fortunately, Toyota ( finally ) now has a true full-sizer....at least something that will compete with roughly the half-ton pickup class....the F-150, Chevy and Dodge 1500's. But neither Toyota or Nissan have a heavy-duty three/quarter or one-ton diesel full-sizer with dual rear wheels like the F-250/350 or Chevy/Dodge 2500/3500....so no matter how well the new Titan and Tundra sell, the domestics will still rule the roost with the heavy-duty trucks, which are popular in industries like construction, logging, etc...
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