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Column
How a company treats its workers will determine whether it can compete in the world of producing high-quality, reasonably priced products. By Fujio Cho Ed. Note: This article is reprinted from the Fall 1991 issue of Directors & Boards, in which Mr. Cho, then a senior U.S.-based executive for the auto maker, was a keynote author for a special 15th anniversary issue of the journal, themed “Being a Global Leader.” Our 30th anniversary issue will be published in October of this year. At Toyota, we have four principles that guide us in our actions and decisions: • To produce America’s No. 1 quality car based on “customer first” philosophy. • To contribute to the quality of life, as well as to the economic growth, in the communities we serve. • To promote stable employment and improved well-being of employees through steady growth of the company. • To develop unique, innovative production and management systems by combining the best ideas of two countries. The three main factors for plant operation in a manufacturing company are often expressed with three M’s — man, machinery, and material. Let us consider the relative importance of these three factors in the success of present-day manufacturing industries. (In order to succeed, of course, all three must be working well.) As technology advances, and communication and distribution systems become well developed on an international scale, all plants can have the same level of technology. In other words, in any manufacturing industry, a new technology becomes common knowledge in a very short time, and all companies will certainly incorporate the new technology in their operation. The same is true with newly developed material. As the saying goes, good news travels fast. The same goes for technological advances. The same is true for machinery. As long as the money is available, anyone can buy state-of-the-art automated machines. Mass media are still paying a great deal of attention to robotics and to automation in a plant, but I suspect that the extent of automation and the use of robots in any automobile plant in North America is more or less the same. I do not think automation and robots are the deciding factors in the difference in quality or productivity among various auto plants. Machines and material, then, are no longer decisive factors in determining success of the present-day manufacturing operation. I would like to rephrase the question of why a certain plant succeeds as follows: “Why are there differences in quality and productivity when everyone uses similar machinery and material?” The difference is man—i.e., the difference is employee motivation. Our emphasis on respect for the individual worker and the success of good team management is exemplified through the Toyota production system. This system is not a Japanese system but, rather, one that is unique to Toyota. It is not just a production system but is a method for motivating our team members. I have spent most of my time at Toyota on the production floor trying to make it a more efficient and better place to work. Through this experience, I came to believe strongly that the key factor that makes the difference among various plants is the workers. I have kept this thought in mind for the last five years, even during our preparation stage of the Kentucky project. I am now more firmly convinced of the validity of this philosophy. I cannot stress enough that, in order to compete and to produce high-quality, reasonably priced products, it is essential that we motivate our work force. But how can we provide constant motivation for our people in the work place? We must answer this with another question: Why do people lose their motivation in the work place? People tend to lose their motivation when: — They are not involved; — They cannot participate in decision making; — They are not allowed to think for themselves; — They are not informed of relevant information; — They do not have any responsibility or authority; — Their work or contribution is not recognized. I have had the opportunity to visit many plants in Japan, and I have seen many workers who are not motivated to achieve their very best. Simply put, these individuals are seldom given the opportunity to think, to share responsibilities, or to participate in the decision-making process. Through the lack of personal involvement, people have somehow lost out to machines. Although one of our goals is to make high-quality products at a reasonable cost, I believe that the most important philosophy behind the Toyota production system is respect for every team member. This is accomplished by motivating each individual to reach personal goals as well as goals that benefit their fellow team members. The Toyota production system is successful in motivating team members by following these overall guidelines: • Do not make people perform work they don’t find meaningful. • Constantly strive to eliminate work that does not add value to the product. • Make sure that people control machines rather than having machines controlling people. • Take measures so that problems are apparent to everyone, and encourage team members to correct them. • Always leave room for people to make decisions in their work. Perhaps one good way to measure the success of our operating philosophy is to evaluate the existing morale at Toyota Motor Manufacturing U.S.A. Inc. Our current annual turnover rate is approximately 2.5%, and our absentee rate is also very low. The company’s production volume is 10% greater than anticipated, and internal surveys show that 94% of our team members feel that their work contributes to TMM’s success. And 90% believe that TMM is a good place to work. So, while we’re not perfect, it seems that most of our team members like to work at TMM. It’s because of this satisfaction that we have become a successful and competitive company. The same is true for other successful American companies. People are the key, no matter what your business is. We have learned to benefit from the basic American traits of resourcefulness, individuality, and helpfulness, and put them to work manufacturing one of the best cars in the world. In fact, we are so confident in the ability of Americans to compete that we are investing more than $800 million to double the size of the Georgetown plant. With an understanding of the need to involve people in the entire manufacturing process, America will continue to grow and prosper as a globally competitive nation. |
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graduate of the Faculty of Law at the University of Tokyo, Fujio Cho
joined Toyota Motor Corp. upon earning his degree in 1960. After
spending his early career in general affairs, in 1974 he became a
manager in the production control division, where he was assigned to
the operations management consulting department to learn the principles
of the Toyota production system. In 1987, he was dispatched to the United States as executive vice president of Toyota’s operations in Kentucky, site of its first U.S. auto plant, and was named president of the unit the following year. Also in 1988 he was named a Toyota director. (It was during this period that he authored the above article for Directors & Boards.) He returned to Japan in 1994 where he was named a managing director, a senior managing director in 1996, and, in 1998, an executive vice president, where he oversaw Toyota's corporate planning, information systems, and industrial equipment. He was appointed president of Toyota in 1999. As the company's head, he not only shaped corporate policy for Toyota but also served as a spokesman for the automobile industry and for manufacturing in general. In June 2005 he was appointed a vice chairman, and in June 2006 was named chairman. Copyright © 2006 Directors & Boards, P.O. Box 41966 Philadelphia, PA 19101-1966. All rights reserved. Contact the webmaster. < Privacy Notice > |
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