Toyota to Reduce Span of Control in Engineering

The Nikkei reported on June 11, 2010 that Toyota is bringing back front line supervisors, adding a layer of management to staff positions that has been missing since 1989. This is an admission by Toyota, the world’s greatest lean manufacturing company, that they got their span of control in engineering and possibly other staff areas, wrong.

This move is in quite stark contrast to the “de-layering” going on at many global companies in an effort mainly to cut costs. While it may not seem lean to add layers of supervision, it is in fact very lean when done to reduce span of control. Form follows function and in this case the supervisors function as team leaders, coaches and first responders to andon cord pulls (calls for help). This in turn helps expose, catch and correct problems while they are still small, rather than letting them grow into bigger problems. These problems have apparently been escaping in recent years, based on the recalls and quality problems we are seeing at Toyota.

A few years ago we commented about an article citing concern among old-timers at Toyota that the rush increase volume and make large cost cuts in design was moving the company away from it’s principle of slow, steady growth through development of people. “When did Toyota get to be a company like this?” was the question asked in alarm at the way things were being changed. The person quoted in that article was Shoichiro Toyoda, the father of current Toyota CEO Akio Toyoda, who is leading this latest reorganization towards smaller span of control for engineers.

The Nikkei reports that this new team structure will be implemented first in the technology development sections. About 1,000 employees who have been with the company for about 10 years will move into supervisory positions. The span of control is a conservative five engineers per leader. Toyota has not given this position an official title yet, and plans to do so after a one-year pilot, according to Toyota.

For further reading on this important topic, here are three more articles on our blog about supervisor span of control:

Article 1
Article 2
Article 3
How does your company manage span of control in engineering or other professional functions?

Mike Lopez
June 14, 2010 - 9:58 pm
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Great post. I’ve been reading your blog for a while. Thanks for your keen insights.
Jamie Flinchbaugh
June 15, 2010 - 2:02 pm
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Thanks for sharing this Jon.
Many people de-layer in the “name of lean.” There is an assumption that the number of layers is inversely proportional to how you lean you are, so the more lean, the fewer layers. Wrong. It’s also not true that lean has more layers. It’s about the RIGHT structure, the right span of control, based on the needs of your process, your team, your problems, and so on.
Jamie
Luman Temby
June 15, 2010 - 4:38 pm
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There is actually quite a bit of confusion on the difference and relationship between these two actions.
I have worked with several companies in their efforts to change span of control, de-layer, or both. Layer changes are by far the harder of the two (either to make new layers or reduce layers) due to the re-distribution of tasks, as opposed to control span changes which require people to effectively manage their people better (easier when implementing new software and standard templates).
One of your other posts addressed this point well, I think, in saying that it is not the layers or spans of control on the org chart that matter, but the implied layers that are enabled through functional responsibility. Adding support personnel with broad functional scopes and mandates for action can improve results while enabling personnel related cost management objectives.
Joseph
June 19, 2010 - 2:44 pm
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Jon.
As I have said in answer to your other Blogs. Toyota are losing control. They are now multi national and the rules of engagement have changed for them. I think they should now be using the Western “5S” instead of the Japanese “4S”. They appear to have a problem with SUSTAINING their systems due to process decay. How low the mighty have fallen.
As they say in the army “Tell me sir are we retreating. No just changing direction”.
Although they are Japanese they do not follow the code of BUSHIDO.
The seven virtues associated with the Samurai are.
Gi – Rectitude
Yu – Courage
Jin – Benevolence
Rei – Respect
Makoto – Honesty
Meiyo – Honor
Chugi – Loyalty