Page 82 - Toyota Under Fire

THE OIL CRISIS AND THE GREA T RECESSION

with them at the other Toyota plants. The shutdown presented
the opportunity to deploy quality circles throughout the plant.
The long-term objective was to have quality circles led by hourly
employees, but first their immediate supervisors, called group lead-
ers, had to be experts so that they could mentor their team mem-
bers. Every group leader was asked to go through facilitator training
and then lead a quality circle. As a result, the plant launched 94
quality circles. They worked on safety, quality, and productivity
in all areas of the plant. As at TMMI, with the power of all these
groups put into problem solving rather than being laid off, the
plant was able to achieve its scheduled targets for improvements in
cost reduction, quality, and safety a full year ahead of schedule—
making major gains in the long-term profitability of the plant.

Learning to Manage Complexity

Another major initiative for improving the long-term profitabil-
ity of plants was to end the practice of buffering North American
plants with Japanese plants. North American plants had never pro-
duced all the vehicles sold in North America. Output from Amer-
ican plants was held relatively constant, below actual demand, while
Japanese plants dynamically adjusted their production to provide
the remaining vehicles to fill demand, buffering the American
plants from the complexity of changing vehicle mixes or line speed.
Having the Japanese plants operate as a buffer and shipping
vehicles to North America was expensive (in addition to ship-
ping costs, the plants had to duplicate all the tooling in the Amer-
ican plants that they were buffering) and exposed the company
to excessive foreign-exchange risk. During the recession, the deci-
sion was made to cut costs by ending this duplication of tooling
and effort and having the American plants handle the full volume

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