Sunday, August 17, 2008

The Development of a New Car at Toyota

Inside the Mind of Toyota: Management Principles for Enduring GrowthKenji Hiranabe gave a presentation at Agile 2008 about Lean at Toyota. He talks about Nobuaki Katayama, former Chief Engineer at Toyota, and how they build new cars. There are 3 phases to car building:

1. Planning and concept development: concept, style, market research, pre-development, cost and profit target. Spend a lot of time in this phase. Start out with a good concept, then visit dealers and users and get feedback to see if this concept work and then redo. The next 2 phases are management of milestones.

2. Real car development: Design prototyping, evaluation

3. Production and sales:

Managing big projects:

1. Planning and concept management: project backbone, clear appealing points are needed, 1st concept and plan has to be refined until satisfaction, discuss multiple opinions from wide views, rules to avoid immature “go”, calm evaluation with 3rd person

2. Development process management: needs to be a strong dedicated leader with org that supports him, with clear milestones, and supporting people to achieve them, rules to avoid proceeding before achieving them, mechanics to avoid “too late”, trigger of 3rd person, honest communication (face to face), bad news 1st rule, early and reliable backup plan.

3. Resource management: people and money, work hard does not work, visualization estimate based on actual record, make projects slim. Cost: Visualize the target cost, leader owns buffer, assign target cost based on actual record, value sense of completion, avoid sense of being “forced to do”, plan in detail and follow up and adjust seeing the whole

4. Cost management: Reduce cost means save profit so that the company can grow, everyone and every division think about global competition and cost reduction. Culture of do not complain but cooperate. Analyze past and present cost. Use it as base cost data. Reduction of cost is accumulated step by step by everybody. Value engineering is the technical competence. Each team is responsible for reducing cost.

5. Benchmarking: it’s about knowing competitors strategy. Not copy others techniques, but focus of parts that are better than ours. Set performance targets including ahead and behind time difference. Study designs of 2 to 3 years ago and develop product 1 to 2 years away. Use it for continuous competiveness.

6. Leader attitude: Leadership, teamwork, macroview, passion are good. Dictator, one man shop, leave all to subordinates, charismatic are bad for leadership.

Kenji then contrasts “do it until it’s done” vs. “do it until the time”. Mr. Katayama explained that for phase 1 use do it until it is done and for phases 2 and 3, do it until time.

Kenji wraps up by mentioning the Nobuaki Katayama values consistency and integrity over passion and strong leadership, values engineering thinking, and tries to understand new ideas.

This presentation is available on InfoQ at