1. How might a cell phone manufacturer, an elementary school and the local post office each benefit from Toyota’s concept of kaizen?

2. Do you believe that a U.S. automaker would keep auto assembly employees on the payroll when the line is stopped? Use Hofstede's five dimensions of value differences to explain your answer.

3. Does Toyota appear to value its human resources more than its U.S. rivals? Is this a result of Toyota’s business philosophy or its cultural values?

4. Further research—Toyota isn’t alone as a major Asian competitor to the U.S. automakers. Do some investigation; who else is in the picture and what countries are they from? Are the other Asian automakers using operations techniques and values similar to those found at Toyota, or are they bringing new ones into play?

By borrowing the best ideas from American brands and innovating the rest itself, Toyota has become a paragon of auto manufacturing effi ciency. Its vehicles are widely known for their quality and longevity—and Toyota’s sales numbers are the envy of the American Big Th ree. Here is how Toyota became so effi cient at producing highquality automobiles.  

Buy “American”? “Buy American” used to be a well-known slogan encouraging U.S. car buyers to purchase domestic models assembled in America. Th ose who still tout the motto have likely done a good bit of head-scratching over how to classify Toyota—a Japanese company sited in rural America that employs American workers to use American-made parts to produce vehicles sold in the United States. What to think when this Japanese brand achieves a product quality far superior to long-known American brands? And Toyota has surged ahead of General Motors to rank number one in global auto sales for three years in a row.

Quality by Design Toyota’s success and growth in the American auto market is no accident. Th e company has used strategies honed since the 1950s to earn and retain customer satisfaction by producing superior vehicles within a highly effi cient production environment. From the home offi ce to factories to showrooms, two core philosophies guide Toyota’s business: (1) creating fair, balanced, mutually benefi cial relationships with both suppliers and employees, and (2) strictly adhering to a just-in-time (JIT) manufacturing principle.

Collaboration over Competition Over the decades, American auto manufacturers developed relationships with their suppliers that emphasized tense competition, price-cutting, and the modifi cation of suppliers’ production capacities with the changing needs of the domestic market. Year after year, parts suppliers had to bid to renew contracts in a process that valued year-to-year price savings over long-term relationships.

Domestic manufacturers, notorious for changing production demands mid-season to comply with late-breaking market dynamics or customer feedback, forced suppliers to turn to double or triple shifts to keep up with capacity and thus can’t avoid the problems— quality slips, recalls, line shutdowns, layoff s—that ultimately slow the fi nal assembly of vehicles. When a carmaker doesn’t know what it wants, suppliers have little chance of keeping up. Th is system of industry dynamics proved susceptible to new approaches from Japanese competitors.

Toyota’s model of supply-chain management displays an exclusive commitment to parts suppliers, well-forecast parts orders that are not subject to sways in the market, and genuine concern for the success of suppliers. In the Financial Times, M. Reza Vaghefi noted that supply-chain relationships among Asian manufacturers are based on a complex system of cooperation and equity interests. “Asian values, more so than in [W]estern cultures, traditionally emphasize the collective good over the goals of the individual,” he said. “Th is attitude clearly supports the synergistic approach of supply chain management and has encouraged concern for quality and productivity.”

Visiting American auto plants and seeing months’ worth of excess parts waiting to be installed taught Toyota the benefi t of having only enough supplies on hand to fulfi ll a given production batch. Toyota plans its production schedules months in advance, dictating regularly scheduled parts shipments from its suppliers. Suppliers benefi t by being able to predict long-range demand for products, scheduling production accordingly. Th is builds mutual loyalty between suppliers and the carmaker—almost as if suppliers are a part of Toyota. Th e fi t and fi nish in Toyota vehicles is precise because its suppliers can aff ord to focus on the quality of their parts. And consumers notice: Toyota vehicles consistently earn high marks for customer satisfaction and retain their resale value better than almost any others. …………..