Tuesday, May 23, 2000

Toyota looks back, ahead

CEO reflects on awards for quality

        Toyota's North American manufacturing assembly plants earlier this month took the triple crown in plant quality awards, taking all three North American awards issued by J.D. Power and Associates, a California marketing information company.

        The Power survey is based on the responses of 47,000 new-car buyers about vehicle problems in the first 90 days of possession. Power gave its gold award to New United Motor Manufacturing Inc. (NUMMI), Toyota's joint venture with General Motors in Fremont, Calif., which assembles Toyota Corollas and Geo Prizms.

        The silver award went to Toyota's Georgetown, Ky., plant, which assembles the Toyota Avalon, Camry and Sienna minivan.

        Toyota's Cambridge, Ontario, plant, which builds the Corolla and Toyota Solara, took the bronze award.

        Since 1990, Toyota, whose North American manufacturing operations are based in Erlanger, and NUMMI have won 18 plant quality awards from J.D. Powers, more than any other automaker.

        Teruyuki Minoura, president and CEO of Toyota Motor Manufacturing of North America Inc., recently sat down with Enquirer reporter Mike Boyer to discuss Toyota's vehicle quality efforts. Mr. Minoura's comments were interpreted by Kaz Sato, TMMNA's vice president and assistant manager for production control.

        Question: Sweeping the Power awards was quite a feat for TMMNA. What will the company have to do to repeat?

        Answer: We always strive to deliver high-quality cars to our customers. In our daily production activities, we have internal quality targets, which are easy to understand for everybody. We are constantly striving to clear those targets.

        There are many different elements to quality. It starts first in the production development stage. First, we must ask what does the market really want. During the design stage, the design and production people collaborate on building quality into the vehicle.

        We call this activity simultaneous engineering, or SE. For the last several years we have been putting a lot of effort into our SE activities. The design stage also involves our suppliers.

        When the design moves to actual production, we deploy the Toyota Production System, called TPS, which we use to build quality into each process.

        I believe if we do all these different activities in the way they're designed to operate, then we'll continue to build vehicles that meet customer expectations. It's my intention and Toyota's intention is to increase and enhance these activities in the future.

        Q: How important are these plant quality awards to TMMNA?

        A: Winning gives us the opportunity to remind everyone involved how important these activities are.

        The J.D. Power awards confirm we are going in the right direction. It's important to use this opportunity to motivate people so we can continue to build good, quality cars.

        Q: The Wall Street Journal recently reported that the Detroit automakers are struggling to maintain vehicle quality as production remains high in the face of strong sales, how is Toyota maintaining its quality edge?

        A: There is no secret to it. To maintain our quality level, we need to keep doing what we've been doing — bringing customer requirements to the design process and using the Toyota Production System to improve our assembly processes.

        Q: What are the keys to the Toyota Production System?

        A: First, it emphasizes quality and satisfying the customer — not just the final customer but the next person on the assembly line.

        To do that, it is most important to make sure that if any abnormality occurs it will be known immediately, so it can be fixed and won't occur again.

        This activity has to be practiced in our plants and by our suppliers as well. What is most important is the people. People make it possible. It is very important our team members and management have mutual trust and work together in all they do. We need many suggestions from team members.

        Q: Toyota recently has increased the number of different vehicles it produces in North America, adding trucks and niche vehicles. With the variety of vehicles increasing, is it more difficult to maintain quality?

        A: When the variety increases or when we shift production from one place to another to increase our flexibility, it is very important to have a system in place to assure quality. We always try to standardize activities done by our people through TPS training. It's important that people on the line have the ability to stop production if any abnormality occurs so that it can be fixed.

        Q: Toyota recently announced plans to shift Sienna production from Georgetown to its Princeton, Ind., truck plant and move Solara production to Georgetown. Have you begun working on that production swap?

        A: The shift isn't planned until 2003, so the work itself is a little bit ahead of us. At this point, there is no particular work going on, but we're in the midst of planning for it.

        Because the car market is so fluid, we'd like to postpone the actual transfer as late as possible. And right now, we've got our hands full introducing the new Sequoia sport utility vehicle at the Princeton plant.

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