TOKYO—Toyota Motor Corp. has outlined a new production initiative that it plans to implement worldwide over the next five years.
During the automaker’s most recent earnings announcement last week, Yoichi Miyazaki, chief financial officer, briefly explained how the strategy will reduce Toyota’s parts count by 35 percent while adding 35 percent more floor space at its assembly plants. The aim is to maximize flexibility and mixed-model assembly, while minimizing costs to avoid over-investing in electric vehicle production.
“Our goal is to shorten lead times companywide,” said Miyazaki. “To achieve this, among other things, we need to eliminate waste, end redoing of work and make it possible for anyone to get their job done.
“Specifically, amid a shortage of human resources, we have been working companywide across divisions and functions to create environments in which anyone can work and to improve what we call the ‘rate of value-added work,’ which is the ratio of work that is truly meaningful and that increases added value.
“There are two main things we want to accomplish,” explained Miyazaki, “The first is to increase how quickly we can respond to environmental changes in an age in which it is hard to predict the future. The second is to improve our fundamental capabilities that will enable us to carry on into the future “Toyota’s philosophy of ‘leaving no one behind’ and ‘producing happiness for all,’ even as advances in vehicle functionality mean that full-lineup, multi-pathway car making is not easy. As a specific example, we are currently advancing what we call within Toyota ‘Area 35’ project, which aims to improve our rate of value-added work through integrated efforts involving development, production and sales.
“To meet the diverse needs of our customers around the world, we are preparing numerous specifications for our vehicles. However, some of them contribute little to sales.
“By improving our accuracy in forecasting customer needs, we are working to optimize the number of types of specifications and parts. We expand the space for finished vehicle production and increase development efficiency.
“Although our activities have just begun, primarily focusing on domestic plants, we have managed to create a production capacity of 80,000 units per year and create surplus development capacity
equivalent to three vehicle model redesign projects.
“Toyota has 54 assembly plants worldwide,” said Miyazaki. “Going forward, we will expand our activities globally to create further growth drivers.
“Our efforts of shorten lead times, which we have been working on as our foundation strengthening, also enhance the flexibility of our production readiness and project review for electric vehicles. This allows us to adopt more effectively to changes in actual demand and make last-minute investment decisions.
“This process is particularly effective because Toyota’s strategy includes having all options available, including HEVs. This maximizes the benefits and strengthen our competitive edge. Since it is the customer who ultimately chooses the product, we are preparing to smartly build a system that can flexibly accommodate our customers’ choices.
“Internalizing battery technologies will be an important key to advancing the widespread use of our electrified vehicles,” added Miyazaki. “From that perspective, we are promoting in-house production of all types of batteries, including ternary lithium, lithium-iron phosphate and all-solid-state batteries. This will enable us to develop optimal batteries for the cars that we want to become a reality.
“At the same time, an important key factor to battery development and production is optimizing increasing production efficiency per battery type. We are working to ensure production flexibility such as through common usage of batteries for BEVs and PHEVs, so that we can respond to customers’ needs regardless of what products they choose.”
