Chapter 6 : The Toyota way in actionNew Century, New Fuel,

New Design Process Prius

Flex 27 Sec2 Group 6

• Nutcha Suphachaimongkol 5710224116• sirinart saneha 5710224083• Chardchai Jansirijaroen 5710224086• Chutima Thiammuang 5710224085• Thongtong Mahawongwiriya 5710224110• Wadsadeegorn Intakunjinda 5710224104

Toyota way in action• Toyota was too successful.• Toyota had a very strong product development system – No change for Decades.

Eiji ToyodaToyota Chairman

Principle 1: Base management decision on a Long-term philosophy, even at the expense of short-term financial goal.

The Prius Blueprint• Project Global 21 (G21) – Team 10 young managers support by Management.

Principle 9. Grow leadersPrinciple 10. Exceptional people and teamsPrinciple 12. Genchi genbutsu

Goal: Develop a new method for manufacturing cars for the 21st century.Develop a new method of developing cars for the 21st century.

RequirementRoom cabin space High seat positionAerodynamic exterior 47.5 mpg. (20 km/L)Small + Automatic transmission

An Unlikely Chief Engineer Invents a NewApproach to Car Development: Uchiyamada

• Obeya system – Gather people in one time to make key decision.– Cross-function– Team of experts

Uchiyamada: No designing background - FreshFrom researchTechnical engineering

Principle 13: Make decisions slowly by consensus, thoroughly considering all options; implement rapidly. (Nemawashi).

Environmentally Friendly, Conserving Natural Resources

The 21st – Century Car

Set – Based Concurrent

Discuss multiple alternatives before narrowing in a decision

HARDWARE

SOFTASPECT

Let’s stop focus on HARDWARE

Let’s focus on SOFT ASPECT

National resourceEnvironment

FUEL ECONOMY

LOW EMISSION

PRACTICALITY

HYBRIDTECHNOLOGY

HYBRID TECHNOLOGY

Current

50% Fuel economy

DOUBLE (Next Target)

Conflict Principal 8: Use only reliable, thoroughly tested technology that serve your people and process.

reject the notion of a Hybrid engine

ChallengeSet Higher Target from 50% fuel economy to DOUBLE the current fuel economy

1994 1995

Lead time 1 year to develop the showcase product

Phase III : Accelerating the Development Project

used a “Set-based” approach

Nov1994

Dec1994

Jan1995

Feb1995

Mar1995

Apr1995

May1995

Jul1995

Aug1995

Oct1995

Jun1995

Sep1995

Develop a Hybrid concept vehicle

Propose one alternative to the G21 team

an official development project

Auto show

a three-year plan

80 hybrid types

10 types The best 4 types

1st year 2nd year 3rd year

Developing a complete prototype

Working out details

through research

Finalizing the production version

and preparation

6 months

not requirement

one alternative to the G21 team

1998

19981995

A New President with a New Mission Prius Leads the Way• Hiroshi Okuda, new president, stay the same Toyota

plan but pursued it faster and more aggressively.o Ask for launching Prius a year faster

• The prototype Prius launch publicly in Oct. 1995o Energize the team to develop the true production

hybrid vehicle.

• Uchiyamada refuse to cut corners. (In the high timing pressure)o Refuse to apply hybrid engine on existing model of Camry.

“This car may change the course of Toyota’s future and even that of the auto industry.”

The Clay Model Freeze 15 Months to Go

- An unusual degree of thoroughness in decision making decision making. (Nemawashi)

- July 1996 : A clay model freeze process

- Joint venture company with MatsushitaElectric called “Panasonic EV Energy”

- Need battery as small as possible.

Principle 11 :“Respect your extended network of partners and suppliers by challenging them and helping them improve.”

In October 1997, Prius was launched in mass production.

-The price was subsidized by Toyota : “ volumes increased and cost reduction opportunities were identified” .

“ The importance of the Prius was the learning. Toyota employees knocked themselves out to do it their way, in house, and develop knowledge and new capabilities along the way” .

Toyota’s New Product Development Process

1 .The cross-functional team and chief engineer work together almost daily in the same room. 2. Simultaneous engineering.

Other Toyota Way Principles from the Prius Story

Production 1997-2001 Production 2003-2009