(source: Nassef Mohsen Ali)
You might be surprised to learn that Christian Bale’s preferred mode of transportation is a 2003 Toyota Tacoma. If a Toyota is cool enough for Batman, it’s cool enough for me. Admittedly, I was slow to hop on the Toyota bandwagon. No, I never gravitated to Toyota Hot Wheels as a kid or thought, “That’s easy, a Toyota Camry,” when asked about my dream car, yet despite my foolish oversight, Toyota has managed to dominate the competition.
Toyota has led global sales over the last ten years and built a brand known for reliability. Its success can be rooted in one of its core Japanese business philosophies: kaizen, which roughly translates to “good change” or improvement. To compete with foreign competitors that were better resourced and positioned to thrive post-World War II, Toyota understood it needed to maximize its limited resources by adopting the kaizen approach to enhance efficiency. In the context of a car manufacturing juggernaut, everyone from the assembly line to the executive suite is responsible for making incremental improvements. Over time, these small changes add up to form more significant advances. This philosophy empowers every worker by encouraging everyone to take ownership of their roles and responsibilities and promotes the elimination of waste.
(Speaking of waste, if only the city of New York had utilized kaizen principles. They could’ve avoided paying a consulting firm 4 million dollars to determine if using trash bins was better than throwing trash bags directly on the streets. If you’re on the edge of your sets, the anti-climactic verdict was that trash bins are, in fact, better—but I digress.)
Toyota’s reliance on kaizen allows it to avoid waste and reduce costs by utilizing internal resources (looking inwards) to increase operational efficiency rather than looking outwards (recent college grads). For example, anyone on the assembly line can stop production if they notice an abnormality. This policy might slow output but drastically decreases defects from ending on the road. Kaizen reaffirms that the experts do the work on the ground. And though this makes a lot of sense, why isn’t it so common?
Many American auto manufacturers struggle against Japanese competition in the 21st century because they are missing one key element: quality control.
We can attribute the growing love of Toyotas to their legendary reliability. But, the Japanese auto manufacturer we have come to adore today wasn’t an overnight global success. In the 1960s, Toyota had less than 1% of the US market share compared to 8% in the 1990s. Last year alone, Toyota sold 11 million vehicles in the US and captured 14% of the market share. There’s a reason why Toyotas and other Japanese cars retain their value in the used market decades later compared to American brands. The primary key to Toyota’s success is leveraging its continuous improvement methodology and internal workforce to bolster efficiency without sacrificing quality control.
So, what happens when a line operator spots an error on the assembly line?
After pausing production, workers participate in a kaizen event or a kaizen blitz. The word blitz does indeed come from the German word blitzkrieg—which means “lightning war,” often referring to a quick, violent attack in warfare. In the business world, the kaizen blitz allows workers to collaborate to identify the error, take small, actionable steps to provide a short-term remedy, and quickly get production back on track. As far as Japanese and German collaborations go, this one is a winner. The same cannot be said for all of their historical collaborations.
Today, Toyota continues to beat the competition, but can it keep up with the proliferation of electric vehicles (EVs)?
The reality is that Toyota’s success will not dissipate overnight. Still, there is a looming EV threat. Newer technology has made it easier for manufacturers to emerge with feature-rich EVs. Toyota’s reliance on tried-and-true tech is a definite contributing factor to its reliability. But there’s a catch: in practice, the seemingly cautious embrace of new tech allows the competition to pack more features at similar price points. Toyota has one fully electric model across its mostly hybrid EV line-up but has already shared plans to expand its offerings within the next few years.
Toyota, a company whose identity is forged with kaizen—a philosophy rooted in incremental change—is at a crossroads. Should it continue to hedge on its traditional approach or adapt to the rapidly evolving times? The answer lies in the surging EV sales.