In the 1990s and throughout the first part of this century, the Big Three American car companies based their businesses on the SUV and big truck boom — a decision based on the fact that gas was cheap and plentiful at the time.
Humvees, full-sized pickups, and Chevy Suburbans — with their single digit MPGs — were hot vehicles for people who didn’t worry about future gas shortages.
Sales soared. Ford Motor Company even based its turnaround to profitability plan on SUVs and trucks.
Toyota, however, chose a different path. Instead of building low-mileage vehicles and coasting to “victory” on short-term sales, the company quietly invested over $1 billion dollars in developing a high-mileage, fuel efficient vehicle based on the fact that fuel shortages would happen again.
The result: Toyota’s hybrid technology, which has made the Prius and Hybrid Camry two of the top selling automobiles today.
Although gas prices have certainly helped hybrid sales in the short term, Toyota has overtaken Ford and is closing in on GM due to how it runs its business in the long term and its storied TPS — Toyota Production System.
David Magee covers the rise of Toyota in his book, How Toyota Became #1. Not a “corporate hagiography . . . nor a corporate biography,” the book outlines the “principles, lessons, and strategies that helped make one company one of the most successful and inspirational in the world.”
If you’re a student of lean manufacturing, the auto industry, and exceptionally told stories about exceptionally great companies, then these are reasons enough to read How Toyota Became #1. Magee’s writing is crisp, clean and very easy to read. The book reads like a novel — the story so well told I raced through it in a matter of days.
If you’re a small service business, a freelancer, or a consultant, however, then this book becomes a must read.
Lean manufacturing precepts seemingly have no place in an office where “work” is based on ideas and providing services, such as accounting, graphic design, and even copywriting.
However, Toyota’s rise to greatness isn’t based on instilling mind-numbing production systems and order on employees. Instead, the company constantly seeks to find “waste” in its systems and processes — from the manufacturing floor to the managerial suite.
All employees are encouraged to seek out mistakes, question systems, and continually make improvements, no matter how small, to their jobs and the company’s systems.
It’s common knowledge that plant workers can “pull the cord” at any time during the production process if someone finds a problem.
The production line comes to a complete standstill — sometimes for up to a full half hour — until the problem is resolved.
What astounded me is that the cord is pulled over 5,000 times a year at the Kentucky plant alone.
Imagine how much your business could change — and profit — if you actively sought out and rectified problems in your systems this way every single day.
Reading this book made me see that any business, including my own, can improve quality and reduce “waste.” At Toyota, for example, problems are not simply “fixed,” they are analyzed and solved through the “five question” method:
Why did the machine suddenly stop? Because it blew a fuse.
Why did a fuse blow? Because the fuse wasn’t the right size.
Why was the wrong sized fuse in the box? Because one of the engineers put it there.
Why did the engineer do that? Because somebody in the supply room issued the wrong size fuse.
Why? Because the stock bin for fuses was mislabeled.
How Toyota Became #1 isn’t a how-to on developing business systems and processes.
Instead, it’s an insightful and thoughtful account about how a small Japanese company started off building looms in the 1930s and slowly built itself into a multinational manufacturing juggernaut – all the while maintaining the culture, values, and ideals upon which it was founded.
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