Page 72 - Toyota Under Fire

THE OIL CRISIS AND THE GREA T RECESSION

These quality-circle efforts, led by hourly team members and
team leaders, saved $2 million on just one (of two) assembly line
at TMMK in 2009.
For example, one team of hourly team members invented a de-
vice to aid in recycling the flow racks (roller conveyors on frames
that move parts to the assembly worker), which have to be rebuilt
whenever there is a change on the assembly line. The roller convey-
ors in these racks are highly specific and tended to be discarded when
changes were necessary. This team built a machine that could disas-
semble the rollers and separate them into bins of steel, plastic, and
aluminum parts so that each could be recycled rather than thrown
away. The invention has been finding its way to other Toyota plants,
and the team has submitted the paperwork to get it patented.
All of the cost cutting, though, was done through the lens of
future profitability. The idea was to ruthlessly cut any expenses that
did not have an impact on customers or on the company’s future
growth prospects—that’s why layoffs and large R&D cuts were off
limits. What TEMA and other parts of Toyota found was that even
a company that was devoted to constantly finding and eliminating
waste can be blinded by rapid growth and profitability. The vari-
ous teams’ success in finding areas where costs could be cut with-
out long-term impact was a powerful reminder of Taiichi Ohno’s
precept that every process was full of waste and could be improved.
Toyota does attempt to create a scarcity mentality in all em-
ployees even in the best of times. In fact, its extreme fiscal con-
servativism in good times is what gave it the cash to get through
the recession and the recall crisis without involuntary layoffs and
major reductions in R&D spending (see Saving in Good Times
for a Rainy Day, page 42). Still, one of the positive outcomes
of the recession was that the firm now has a new generation of
team members and leaders who have lived this precept firsthand.

41