Almost two years ago, I wrote a blog entry in another blog about how Toyota was steadily stealing market share from the Big 3 American Automakers, GM, Ford and Chrysler - The Cost of Lip Service.
It is sad to see icons of American Industry go down the tubes like this. It is not that they did not have advance warning of this.
Almost three decades worth! From a high of 60 to 70 % market share of the U.S market, the big 3 automakers have been reduced to about 20 to 30 % over the past 30 years and it has been a steady erosion.
There are many mis-steps and reasons for this steady erosion, but a major contributor is the Continous Process Improvement that Toyota has made in its manufacturing. In other functions, Toyota is just as bad as the Big 3, but in Manufacturing, they have steadily improved their manufacturing process, factory by factory, model by model, imcreasing flexibility of the assembly lines to switch from one model to another very very quickly as well as constantly cutting the costs of manufacturing while improving the quality of the end product at the same time!
Continuous process improvement provides such a potent weapon and that too your competitor wielding it for dacades with you paying it lip service is just a sad story and inexcusable at that.
This is because the Quality Fad of the time american companies usually go through as a routine thing. They never allow any one method to settle down and start producing results in a consistent way before it's time for the next one - Total Quality Management, Zero Defects, and the list goes on!
Toyota also lucked out in that they were manufacturing small gas-stingy cars when they were needed most but that's only part of the story.
The Toyota Production System constantly is looking for ways to cut waste, waste of effort, people, time and unncessary movement in the manufacturing workplace. When you do this for three decades with the actual people who are on the floor contributing to this, the results are astounding! The cost to manufacture a car gets improved constantly since waste is cut out all the time.
This makes them a formidable manufacturer of cars! The same approach and the thought process can be applied systematically to Business Processes, realizing the same kinds of results if needed.
Hope Fortune 500 businesses realize this and start efforts towards doing thsi for all business processes. They can become very formidable, unbeatable competitors like Toyota became in manufacturing! The same principle applies whether yoy are selling insurance, healthcare, soap or cars. There are always ways to cut waste from business processes, improving margins.
All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved. - Sun Tzu
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