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9. Why Lean?

Fact 1: Toyota's Georgetown, Kentucky plant is Toyota's largest in the world outside of Japan. It has a total throughput time of just 22 hours! In other words, operating on two 10-hour shifts per day, coils of steel received first thing Monday morning will roll off the assembly line as finished automobiles sometime early Tuesday morning.

Fact 2: In 2004 the Toyota Motor Company had operating income of 9%. This was 45% higher than its nearest U.S. competitor.

Fact 3: Toyota's U.S. market share has grown faster than any other major competitors. The chart below shows the company's remarkable success in the United States.

U.S. Automobile Market Share Change

19902005% Change
General Motors35.5%27.3%(23%)
Ford23.9%18.3%(23%)
Daimler Chrysler12.2%13.0%7%
Toyota7.6%12.2%61%
Honda6.2%8.2%32%
Nissan4.5%5.8%29%
Other10.1%15.2%51%

Fact 4: In 2004, Toyota had less then a dozen re-calls. Their US competitors each have well over 100 every year.

Fact 5: In the past twenty years, Toyota has created over 50,000 jobs in the United States, while competitors are forced to lay workers off as more and more plants are closed.

Fact 6: Below is a table showing the profit per vehicle of major US car companies. Only Nissan makes more profit per vehicle, but they also command just 5.8% (see chart in fact 3) of the US Market share. Not only is Toyota big, but they are also very efficient.

2005 profit per vehicle in the United States
Nissan$1,603
Toyota$1,480
Honda$1,250
Ford$620
Daimler Chrysler$186
General Motors($2,311)

Fact 7: Toyota currently builds 4 models of hybrid cars. On March 31, 2002 the company built its 100,000-th hybrid car giving it a whopping 90% of the hybrid market at the time.

Conclusion
The Toyota Motor Co. is clearly doing something right. As any business leader knows, such repeatable successes do not happen by accident. They are the result of commitment, passion and the pursuit of excellence. For a manufacturer to become lean and follow Toyota's footsteps is not impossible. But it is not easy; if it was, every company would be lean and Toyota's numbers would not look that impressive. Visit http://www.toyota.co.jp/en/vision/production_system/ to learn more about this success. You may also contact Gembutsu at 425-301-3144 to learn more about what lean manufacturing can do for you.

Toyota is not alone
Literally thousands of companies worldwide have successfully made the transition to lean manufacturing. Below are just a few examples.

Some companies in Japan that have successfully implemented the Toyota Production System:

  • Hitachi Chemical Co., Ltd.
  • Nippon Co., Ltd.
  • Fuji Electronic Co., Ltd.
  • Honda Motor Car Co., Ltd.
  • Mitsubishi Heavy Industries Co., Ltd.
  • Sony Electric Co., Ltd.
  • Olympus Optical Co., Ltd.
  • Hundreds of other manufacturers.

Some Companies outside Japan that have successfully implemented the Toyota Production System:

  • Freedenberg Nok (Germany)
  • Terex Corporation (United States)
  • Porsche AG (Germany)
  • Alcoa (United States)
  • HON Industries (United States)
  • Steel craft (United States)
  • Federal-Mogul Corp. (United States)
  • Omark Industries (United States)
  • Automobiles Peugeot (France)
  • Fluke Corporation (United States)
  • Boeing Co. (United States)
  • Lockheed Martin (United States)
  • Magna Donnelly Corp. (United States)
  • Hundreds of smaller U.S. manufacturers including automotive and aerospace suppliers, healthcare facilities and a host of other manufacturing plants.
Good luck! And as always, do not hesitate to contact us if you have any questions or would like to provide feedback on this article.

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