The Toyota vision

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, Source : The Manufacturer US

Toyota is the success story of 20th century automobile manufacturing. Yoshio Ishizaka, former president of Toyota US and now a senior advisor to the board of Toyota Motor Corporation, tells The Manufacturer about his vision for the 21st century

T oyota is on the verge of overtaking General Motors as the world’s largest automaker. Having displaced Ford as No. 2 in 2003, Toyota has continued to grow while GM’s market share has been falling. Towards the end of 2005, Toyota announced its intention to produce 9.06 million cars in 2006. General Motors prefers not to publicly predict its output, but industry consultant CSM Worldwide estimates it to be 8.92 million vehicles. In 1963, when Ishizaka joined Toyota, the company sold 24,380 cars outside of Japan. “Last year,” he says, “we sold 4.95 million. I have been witness to amazing growth over the span of my over 40 years with Toyota’s overseas operations.”

Figures are fascinating, of course, but much has been said already about the Toyota Production System (not least in this magazine). So, at the end of last year, when Yoshio Ishizaka spoke at length about Toyota’s achievements and ambitions at the Cambridge-MIT Institute Distinguished Lecture Series, The Manufacturer caught up with him as he stepped down from the podium and into the future.

But first, let’s look at the framework on which the future is built. Former Toyota president Fujio Cho introduced The Toyota Way in 2001–an initiative to help employees understand and share the history and spirit surrounding the company’s most important values, or, as Ishizaka puts it, “Toyota’s fundamental DNA.” The Toyota Way is built on two pillars, continuous improvement (kaizen), and respect for all people, “concepts that are at the heart of Toyota’s operations”. From this Ishizaka developed The Toyota Way in Sales and Marketing. “TWSM is unlike other functional Toyota ways, such as the Toyota Production System,” he says. “The concept and methodology of the Toyota Production System was established mainly in Japan, and then transferred to other countries. When it comes to The Toyota Way in Sales and Marketing, however, we believe that the know-how and methodology is created and executed in each individual country and should be shared between countries.”

In TWSM, Ishizaka talks about the vision and the mission. The vision, he says, “is to become the most successful and respected car company in each market around the world by offering customers the best purchasing and ownership experience.” He then sets two missions for every employee to materialize the vision, “to create lifetime customers by adopting a customer-first strategy, and to become the sales and marketing radar for all of Toyota.”

To help implement The Toyota Way, Ishizaka established the Global Knowledge Center within the University of Toyota, a training division of Toyota Motor Sales USA, in July 2002. He chose the name carefully to avoid the connotations of academy or school, and he set it up outside of Japan, he says, because “I believe the success stories in overseas markets should not be pushed and controlled from Japan.”

Of the GKC’s various programs, he highlights work place vitality, invisible competitiveness and providing an environment (“Ba” in Japanese) for continuous improvement. Invisible com-petitiveness is an interesting one. “Visible competitiveness includes factors such as the sales price or the brand which customers consider when they make a purchase,” he says. “On the other hand, invisible competitiveness is the actual capacity of companies and employees in the area of R&D or production which customers do not see. Invisible competitiveness consists of production lead time, development speed in R&D, production quality, and the capacity of Group companies and parts suppliers.”

One of the strengths of Toyota’s invisible competitiveness is production quality, he continues. “We often say ‘quality is built-in within processes’ and ‘the next process is a customer.’ This means that the quality of a product should be insured within each employee’s process on the production line, so no defects are passed on to the next process. This is completely different than the generally accepted philosophy of having only full-time inspectors examine a product at the final stage of production. This is why we have the so-called ‘stop rope’ on our production lines. If there are any problems in quality . . . any of our employees can pull this switch to stop the production line.”

Much of what Ishizaka says about Toyota involves the visual, but when it comes to the future of mobility, we move from visual to visionary. April 2002 saw the creation of Toyota Global Vision 2010, which identifies four areas of innovation that are set to have a dramatic effect on the company and its products. The first, ‘true to the earth’, involves Toyota becoming “a leader and driving force in the reduction, reuse and recycling of resources by implementing the most advanced environmental technologies.” ‘Comfort of life’ sees Toyota “striving to create an automobile-based society in which people can live with ease, and in safety and comfort.” ‘Excitement for the world’ is how Toyota will “promote the appeal of vehicles throughout the world and strengthen Toyota’s brand image,” and ‘respect for all people’ reflects the aim “to be a truly global company that earns the respect and support of people all over the world.”

‘True to the earth’ recognizes that vehicle ownership is forecast to grow rapidly, prompting concerns about traffic accidents, global warming and air pollution. “Our responsibility as an automobile manufacturer will grow accordingly,” says Ishizaka. “The main challenge is how to achieve sustainable development.” Toyota’s approach to the challenge of what Ishizaka calls ‘sustainable mobility’ can be summed up in two words; ‘zeronize’ and ‘maximize’. The first word may be unfamiliar, even to scholars of English, but is an efficient way of describing the quest for “zero negative impacts on our environment and society.” Maximize, on the other hand, refers to the search for “maximum positive impact on personal enrichment through comfort, fun and excitement.” Opposite ends of the spectrum, you might justifiably think, and this conundrum is not lost on Ishizaka. “The main task is to build environmentally-friendly vehicles that are of high quality, deliver optimal performance and that please the customer,” he says. Aware that the increase in automobile ownership throughout the world will roughly double consumption of gasoline and diesel fuel by the year 2050, with an inevitable increase in CO2 emissions, he acknowledges that, “as the central player in the transportation industry, car manufacturers will take on a very important role.”

Hybrid vehicles may be the current flavor of the month, and many would say ‘a good thing, too’, but fuel efficient vehicles are only part of the solution. Ishizaka recognizes that the industry has focused too narrowly on “tank-to-wheel” efficiency, when the real focus should be on “well-to-tank” efficiency. The tank-to-wheel efficiency of a typical gasoline-powered car is only 16 percent, he points out, meaning that 84 percent of its energy potential is wasted in things like heat and friction, but on the other hand, “we also need to remember that carbon dioxide arises from oil refineries as well as from automobiles.”

Manufacturing the vehicles is another issue. Toyota’s research shows that the production of fuel-cell vehicles consumes more energy than conventional vehicles, so there needs to be a “structural change in the automobile industry and in the fuel and materials industries.”

But hybrid technology, Ishizaka believes, is crucial to the development of the ultimate ‘eco-car’. The Toyota Prius, of course, was the world’s first mass-produced gasoline-electric hybrid car, (launched in Japan in 1997, and then on the world market two years later), although it must be said, not the only one now. Beyond that, Ishizaka believes, “to provide an ideal car society for the future, we must consider and aim for the following; no CO2 from well to wheel; personalized mobility (one car per person, in much the same way people own mobile phones today); intelligent mobility, a car society that has eliminated accidents and traffic jams through IT and ITS (intelligent transport systems), and finally, bridging the mobility divide (a car society where the physically challenged can drive cars, and all people on every single continent can enjoy the convenience of mobility).”

Which brings us (at last, you may think) to the image of the ‘i-swing’ car on the cover of this magazine. “The i-swing is a new personal mobility vehicle that allows drivers to express their individuality,” says Ishizaka. Well, maybe so, but whether you swing or not, in Massachusetts, in January, I think I’d rather be in a 4X4.