Why the Toyota Way Works

Toyota, as you all know, just became the largest car manufacturer in the world, surpassing GM. For many years now, their incredible efficiency and production line methods have been studied, analyzed, and have been publicized. GM, itself, tried to learn from Toyota by owning and operating a joint manufacturing plant in California--the deal was that GM would learn how Toyota makes incredible quality-cars and Toyota would gain a sales channel in the US. Well, although that plant was successful (like all of Toyota's other plants) GM did not figure out how to turn their other factories into money-making machines.

Yet, the Toyota-way is not a mystery. In theory, it's all very simple and intuitive. If there is a mistake on the production line, a worker pulls a cord, and the entire line is stopped. A manager will rush over to the source of the error, and if the problem is not fixed immediately, the worker will pull the component/part off the line and will resume the rest of the production line. The worker is in charge of reporting the problem and working with people to develop a solution. Once a solution has been created, both the problem and solution are announced to the company, so that the issue does not occur again. With this incredible process, Toyota continues to learn from their own mistakes about quality and improvement.

However, no other car manufacturer in the world and most other factories, in general, have not been able to use this same method. This is a mystery, as Toyota is very open about their processes and the Toyota case is touted by b-school professors everywhere. So why does it work in Toyota and not elsewhere? Is it their corporate culture? Is it because American unions disincentivize workers from doing quality-work?

My classmate Yas, who is an up-and-coming manager at Toyota, gave a lecture today in class and presented a perspective that I've never heard before. He thinks their success has to do with respect. At Toyota, the line worker, though he may not have had a college education, is expected to problem-solve at the level of an ivory-tower-trained engineer. Furthermore, he said that the line workers are willing to do this because they are given incredible respect. Hierarchy is minimal at Toyota. People don't think line workers are idiots or are unsophisticated--they realize that the line workers are the ones who make the company successful. If a line worker has a design-idea, there are processes in play that allow immediate implementation of the idea, further supporting the notion of acknowledgement across all levels of employees.

But how do you teach people this kind of respect? Yas, himself, who is an Ivy-league trained engineer, fluent in English and Japanese, has worked on the line. Apparently every new employee regardless of the position he/she was hired for, must work on the production line for a few months, side-by-side with all the line workers who will not be assuming other positions in his/her career. Yas said that it taught him respect for what line workers do, because not only did he have to do it himself, but he ended up becoming friends with everyone on his line. With those kinds of friendships, it's hard to disrespect people on the line, even when he moved on to higher positions and they stayed. In addition, all new hires must also sell cars for a few months, so Yas learned to appreciate sales and became friends with car salespeople as well. I think this is an amazing way to build camraderie.