Toyota: 97% Efficient

By Ron Pereira Updated on March 18th, 2008

Sitting on an airplane for 12 hours and dealing with a 14 hour time difference will definitely take it out of a person.  But after a day of rest (if playing and chasing my 3 kids can be called rest) I am beginning to feel a little more like myself.

I still have lots of notes to review and haven’t even touched my voice recorder which has hours of information on it.  Once this process begins I will be sure to share more things with you.  But for now, I want to talk about Toyota a little more. 

Toyota Production Control Boards

During our visit through the Toyota Kyushi plant we saw numerous electronic production control boards.  These boards are in position for all the workers and supervisors to see.

In addition to andon lights showing the status of what is running and not running, there are four numbers displayed on the board. 

The first (top left side) is the daily production goal.  The second (middle left) displayed how many cars they should have produced up that particular point in time. The third (bottom left) displayed how many cars had actually been produced.  The fourth and final number (bottom right) was simply the ratio between actual to plan.  This fourth number was a percentage.

97% Efficiency Goal

During our visit the percentage for actual to plan was 98% on one particular line, if I remember correctly.  Our Toyota tour guide was quick to explain that their goal is actually 97%.  I found this odd.  I mean this is Toyota.  They are the best.  Why then do they not aim for 100%?  Someone asked her this question.

She smiled, as if to say she has been asked this before, and explained line stops are actually welcomed rather than discouraged since stopping the line means they are catching problems before they escape to the next process. 

So, you see, Toyota never wants to set a goal of 100% as that would then penalyze the workers for doing the very thing they want them to do – stop the line when there is a problem.

Contrast to GM

I have never been in a GM plant and cannot really vouche for what I am about to say.  But, during our group discussion after the Toyota visit, it was mentioned by someone that they were once told by a GM supervisor that their goal was to eliminate line stops.  If the line stops, the GM supervisor explained, cars are not being made.  Perhaps people more familiar with GM can comment if this sounds factual in the comments section below.

Obviously, if this is true, there is a totally different mentality between the Toyota way and the GM way.  I will leave up to you which company you want to model yourself after. 

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  1. E.D.

    March 16, 2008 - 1:50 pm

    I used to work for GM. What you described perfectly explains how things used to be. Stopping the line was not a popular thing to do. NOt sure if it still works like this but if I were a betting man I’d say it does.

  2. Ron Pereira

    March 16, 2008 - 7:20 pm

    Thanks for the comment E.D. If anyone else has past or current ties to the Big 3 I am interested to hear your thoughts on line stoppages.

  3. mark graban

    March 17, 2008 - 6:21 am

    I recall seeing (last year) an article about a Ford plant that had andon cords, but workers were afraid to pull them because they would get yelled at for stopping the line. Can’t believe they are still struggling with the culture and management system after decades of studying Toyota.

  4. Ian Machan

    March 17, 2008 - 4:54 pm

    Your discovery mirrors the approach at a site in the UK that looks for a management team to be rewarded for achieving 95% of their plan, allowing them some leeway to fail, but encouraging them to aim for their “stretch target” that may be 120%. Allowing room for failure, can encourage the behavious that lead to greater, later success.

  5. Ron Pereira

    March 17, 2008 - 7:23 pm

    @ Mark – Yeah, hopefully folks begin to catch on… else the gap between them and Toyota will continue to widen.

    @ Ian – I like the idea of the stretch while also allowing people to fail as well. It’s these failures that make us better.

    Thanks for comments everyone.

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