Page 246 - Toyota Under Fire

LESSONS

find a problem that is outside of your control. There will always
be factors outside of your control. When you reach a cause that
is outside of your control, the next why is to ask why you didn’t
take into account forces outside of your control—either by find-
ing an alternative approach or by building in flexibility to adjust
to those forces.
In the case of the Great Recession, taking responsibility
doesn’t mean looking for ways in which Toyota could have pre-
vented the Great Recession. Rather, as Art Niimi did in our in-
terview, it asks, why didn’t Toyota sense the evidence that it was
in a bubble and a downturn of some kind was coming? And if
anticipating the crisis was impossible, why didn’t the company
have much greater flexibility built in? Why did it allow fixed costs
to get so high?
Niimi’s observation that “our truck inventory was building
up from the end of May through the beginning of June” was
more than lamenting. As someone who had been personally
trained in the Toyota Production System (TPS) by Taiichi Ohno,
he knew that the company had violated a fundamental principle:
avoid overproduction, the most fundamental waste. Ironically,
one of the events that solidified the Toyota Production System
as the system to emulate in Japan was an oil crisis, the 1973 oil
embargo, which led to skyrocketing fuel prices and in the United
States even fuel rationing. At that time, Toyota recovered faster
than any other large Japanese company because it had not over-
produced, had very little inventory of parts or finished cars that
would not sell, and had the flexibility to quickly ramp up produc-
tion of the small, fuel-efficient cars that Americans now craved.
While almost all other companies were helpless to adapt to the
crisis, Toyota navigated through it relatively smoothly. Now, 35
years later, in a similar crisis beginning with rising fuel prices,

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