The Miracle at Toyota
Toyota's decimation of Detroit is nothing short of a miracle in the last quarter of the 20th century. Hearing the different perspectives and opinions about what I call the Miracle at Toyota is interesting. Many people credit Taiichi Ohno with the success of the Toyota Production System. Toyota, however, was also influenced by Shigeo Shingo. Ohno implemented Just In Time (JIT), the Andon Chord, and his infamous seven wastes. Shingo was responsible for several innovations, the least of which was the Single-Minute Exchange of Die (SMED). Toyota's quality initiatives in the 1950s were also taught by Joseph Juran, a quality expert who created the Pareto principle.
Dr. Deming played an essential role in Toyota's success as well. Several people have disputed Deming's influence, which is odd because Toyota was obsessed with Total Quality Control (TQC) as far back as the early 1960s. Isao Yoshino, a Toyota executive for over 40 years who hired and mentored John Shook at NUMMI, said:
Top executives from Japanese manufacturers were so impressed with Deming's practical theory that they applied it widely and experienced unheard-of levels of quality and productivity. In the area of Quality Control, the concept of "Quality Circles" started to prevail among Japanese companies and took hold at Toyota in the early 1960s as it advanced what is now known as the Toyota Production System (TPS).
Learning to Lead, Leading to Learn, Katie Anderson
According to Yoshino, Hoshin Kanri, a widely practiced process at Toyota, is based on Deming's concept of PDCA. Although Deming never called it PDCA, the Japanese named it PDCA. Toyota also used another Deming-influenced tool called Quality Circles extensively. In the early 1960s, they adopted a Total Quality Control (TQC) philosophy when designing the third-generation Corona. As part of that initiative, they won the Deming Prize in 1965. Their monthly production goal was 50,000 vehicles, and their monthly export goal was 10,000 vehicles by 1966. Shoichiro Toyoda's summarized Deming's influence on Toyota with his quote, "There is not a day that goes by that I do not think about what Dr. Deming means to our management."
Jonathan Mantle's book Car Wars also provides an intriguing set of influences. According to Mantle, the US government played a significant role in Toyota's success. Toyota was broke in 1950. To feed the workers, one plant switched to flour and bread production. Others made pots and pans. As the Korean War broke out in 1950, the Pentagon ordered Toyota to produce 1500 trucks a month due to Japan's proximity to Korea. Japan's auto industry was fueled by the Cold War between the West and the Soviet-Chinese Communists. From Mantle's Car Wars:
As had been the case in the Korean War, the cost of this strategy in financial terms would be colossal. Between 1945 and 1955, America spent $2 billion in economic aid and $4 billion in military procurements in Japan. Between 1955 and 1960 American spending on military procurements in Japan rose by a further one and a half billion dollars. Between 1965 and 1970, American spending on the Vietnam War accelerated. American military orders placed in Japan rose by a further $3 billion. The total was around $10 billion. This was equivalent to an average annual American subsidy for Japan of $500 million a year over twenty years.
The best answer to the question of who created the miracle in Toyota is Japan; however, all of the conditions mentioned above played a significant role.
