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    New Blog Address: management.curiouscatblog.net

    Thursday, October 27, 2005

    Toyota Manufactures More Itself

    Bucking the trend, Toyota controls quality, cost by making many parts in house, AutoWeek via Lean Manufacturing Blog:

    On one hand, the company sees parts making as a critical piece of its overall quality-control program. Toyota argues that keeping some parts in-house actually makes it more efficient. Outsourcing parts simply to meet the changing industry norm is viewed warily by Toyota executives.

    "I don't believe we can outsource our responsibility to the customer," Seizo Okamoto

    Toyota spent 27.90 hours of labor to stamp and assemble its vehicles and powertrains in North America, compared with 29.43 hours at No. 2 Nissan North America Inc., and 34.33 hours for GM, the most efficient of the Big 3.

    Based on these figures, GM uses 23% more labor per car than Toyota.

    Toyota is simply following a different model, says Dave Cole, chairman of the Center for Automotive Research in Ann Arbor.

    "There isn't one magical business formula in the auto industry," Cole says. "Vertical integration works for Toyota. It doesn't work so well for the others."

    Do the others have any business formula that is working well?

    Mark Graban, Lean Manaufacting Blog:

    This article eventually reaches the conclusion I jumped to early on. Of course Toyota doesn't outsource as much as the other automakers. Toyota's own internal production can be cheaper and with better quality, I assume, than their suppliers.


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