No survey of modern automotive manufacturing can possibly overlook the “lean” techniques and cultural values developed in Toyota’s Production System, so it was inevitable that The Magical Mystery Plant Tour would visit a Toyota facility to learn about the latest developments in the endless process of kaizen (continuous improvement). In fact, the tour itself embodies one of the key principles of TPS: genchi genbutsu, or “go and see,” an admonishment that keeps managers and designers in touch with the realities of the shop floor.
Before we could see we had to go, and so we boarded a flight for Tokyo’s Narita Airport and settled in for more than 12 hours in the air. We were greeted in Tokyo by grey skies, a light drizzle and my co-organizer for the tour Bertel Schmitt. We boarded a train to Tokyo’s Shinagawa Station where we changed to a Shinkasen bullet train and sped off south to Nagoya.
Our first stop in Toyota City, the company’s headquarters and manufacturing complex on the outskirts of Nagoya, was the Takaoka plant. Built in 1966 for the first-ever Corolla, Takaoka is now equipped with two main assembly lines: #1, a traditional “volume” line building 903 RAV-4 and Harrier (Lexus RX) crossovers per day and #2, a newer reconfigurable “flex” line building 617 RAV-4s, Prius, Prius C and Prius V vehicles per day.
One of the key goals for the tour was to showcase the diversity of auto manufacturing factories and cultures as well as the fundamental values that all share, and as soon as the first tour at Toyota City began we knew were accomplishing that goal. Dearborn is hardly an inefficient plant, but its cash-printing F-150 puts more emphasis on maintaining uptime than lean efficiency. By contrast, Toyota showcased its utter commitment to the lean manufacturing principles that it innovated and has been evolving for decades.
Densely-packed in all three dimensions, Takaoka #1 was as different from Deaborn Truck as Tokyo is from Detroit. Though its 60 second takt time is slightly slower than Dearborn’s 54 seconds, workers move much faster to perform multiple processes before walking back up the line to the next vehicle. Almost every workstation featured some form of karakuri kaizen, simple unpowered mechanical contraptions that use the weight of tools, parts, springs and magnets to automate non-value-added functions like staging parts and returning tools to the ready position [stay tuned for an in-depth look at karakuri kaizen, which tour attendees agreed was one of the highlights of the entire trip -Ed].
But even this dense, ultra-efficient line was just the beginning: moving to Takaoka’s #2 flex line showcased the latest developments in Toyota’s production philosophy. Developed in the wake of the Global Financial Crisis, the flex line does away with overhead-mounted tool systems and even entire stretches of fixed conveyors and introduces forklift-mobile workstations so capacity can be increased or decreased by as much as 30% in just one weekend. By stripping the line to its barest and most mobile essentials, the flex line allows Takaoka to respond quickly to shifting market conditions and avoid the punishing overcapacity that plagued every automaker in the last downturn.
Compared to the built-up clutter and massive tooling at so many of the assembly lines we saw during the tour, the ruthless minimalism of the Takaoka #2 flex line holds an important lesson: surviving the lean years of an economic downturn, rather than "hypergrowth" during the fat years, is the ultimate test of an automotive manufacturer. It's obvious that the bankruptcies and bailouts of 2008 taught Toyota hard lessons that gave birth to this new, ultraflexible line, whose true value would only be realized the next time demand either crashed or changed suddenly. Efficiency, Toyota's manufacturing experts explained, isn't simply about the sheer number of vehicles you can build with a given amount of money and time; it's about constantly optimizing production to match the actual "pull" of demand in the market.
Takaoka’s lean efficiency and unprecedented flexibility reinvigorated the ongoing discussion among the tour’s attendees over sashimi at the end of the first day, with the more experienced sharing their knowledge and insights with curious newcomers. The contrast with Dearborn led to conversations about the ways in which the unit economics of each product and market drives changes in the manufacturing system, with lower-margin mass market cars requiring lower capital expenditures and more dedication to lean efficiency than high-margin trucks. The reconfigurable flex line inspired discussions about the cyclical nature of the industry, the perennial challenge of sudden overcapacity and the Darwinian selection for strategies that prioritize survival in downturns over any other consideration.
One of the core values that came up again and again in these discussions was the fact that Toyota’s lean principles kept leading back to an emphasis on human workers. This surprised many of the tour’s attendees, many of whom had been under the impression that labor is a more significant contributor to the cost of each new car than it really is. A human worker’s innate quality-assessment capabilities, supreme flexibility ability to suggest kaizen improvements and even develop their own karakuri kaizen automation makes them the core of Toyota’s lean manufacturing regime. At a time when technology and automation have been elevated to mythical status in the imaginations of nonexperts, it shocked many of our tourists to learn that automation is often seen as overly expensive and inflexible.
These lessons were hammered home the next day when we visited Toyota’s Global Production Center, where workers learn and develop skills ranging from fundamentals like bolt torqueing to advanced kaizen analyses and techniques. The attention to detail, emphasis on fundamentals, and belief in the human capacity for improvement that was evident throughout Toyota's production facilities all comes together in Toyota's training programs, which treat even the simplest task as an art form to be mastered. If, as Elon Musk says, companies are a "cybernetic collective," it's just as important that each human component be "up to spec" as it is that every part of a car conforms to its proper specifications.
But rather than simply imposing top-down standards on workers, Toyota sees its people a source of insight into how the broader system can function more efficiently and create higher quality. As Executive Vice President and former line worker Mitsuru Kawai explained, automation had actually led to a loss of basic skills among Toyota’s workers especially as it globalized its production outside of Japan, demanding a reinvigorated advanced training regimen for an elite vanguard of line workers who would then pass their monozukuri (craftsmanship) skills on to their colleagues. But, Kawai said, this wasn’t simply a rejection of automation: in order to live up to the TPS principle of jidoka or “intelligent automation,” Toyota needed workers with advanced skills in order to identify the best opportunities and techniques for automation.
The best of the best of Toyota's deeply-trained workers can be found in a small assembly area on the edges of Toyota's Motomachi plant, where the Lexus LF-A supercar was once built. Here, without a single robot in sight, elite practitioners of monozukuri hand-build a car that is so important Toyota calls it "the future": the hydrogen fuel-cell Mirai. Even tasks that are automated in almost every factory around the world, like the process of applying adhesive to a windshield before installation, is done completely with human hands. Eventually, Toyota says, these cars will move into a larger production area, automation will be brought in, and volumes will ramp up as the cost of fuel cell stacks comes down. But until that day, the expert human labor in this workshop are doing more than building Mirais: they are developing a deep understanding of how the car is made in order to inform the processes and automation that will someday make the Mirai a mass-market vehicle.
Toyota's human-centric philosophy resonated deeply with many of the tour’s attendees, who contrasted it with the values of the high-tech sector. Plant managers at Ford had told them that automaking would always be a “human business,” but the training and techniques at Toyota illustrated this reality in a deeply profound manner. For the investors in the group this lesson was especially eye-opening: accustomed to being dazzled by visions of the vast untapped potential in technology, they were amazed to find that Toyota seemed to see the same untapped potential in their human workers. It’s a lot harder to put a valuation on skills and culture than software and robots, but having seen Toyota’s “cultural technology” in action they reported a fresh appreciation for the potential of human labor in manufacturing.
At a time when many automakers are perceived by investors as being behind the technological curve and struggle to attract strong market valuations, this development suggests that there may be a way through the industry’s stock market doldrums. Rather than just trying to adopt the tech sector’s techno-futurist playbook, our Toyota City visit suggests that there’s an opportunity for automakers to develop a greater appreciation for human abilities they all rely on. Anyone who takes the time to genchi genbutsu can see that making the future better isn't just a question of developing new technologies and hoping they solve our problems; it's about making ourselves better.