Discourse on Management Practices (Installment Two): Mastery of On-Site Understanding and Digital Transformation Essential for Progress and Proficiency

Toyota Management Discusses Growth, Digital Transformation, and Challenges

Toyota Motor Corporation (TMC) held its second management-employee representative discussion of the year on March 3, focusing on the topic of growth and performance. The discussions covered a wide range of issues, including digital transformation, productivity, and the importance of taking on challenges for personal growth and industry trust.

One of the key points discussed was the need for speeding up overseas assignments for team members to encourage growth and improve knowledge of customers and genba (the shop floor). Yoshihiro Nakata, Toyota's Senior General Manager, mentioned efforts to streamline operations by eliminating coordination tasks aimed at obtaining upper-level approval and shifting towards a framework in which decision-making is based on direct dialogue between in-house company presidents and regional CEOs.

Keiji Yamamoto, an Operating Officer, is a proponent of 'software first' initiatives and plans to make 'bold investments' in IT tools. He also plans to provide support to bridge gaps between younger and older generations, considering what IT tools are appropriate for the younger generation of digital natives. Yamamoto is also working on promoting a "cloud-first" approach for digital transformation, following the lead of Toyota's Chief Digital Officer, James Kuffner.

Masahiko Maeda, Operating Officer in charge of technology, discussed the shift to outsourcing technologies over which TMC had control, leading to a loss of competitiveness. He highlighted the team-up of veteran staff with inexperienced team members to bring the production of ECUs (electronic control units) for certain models in-house as an example of regaining control and increasing competitiveness.

Mitsuru Kawai, the Chairperson, emphasized the importance of taking on challenges for personal growth, job satisfaction, and industry trust. He mentioned that productivity exceeded expectations even during the COVID-19 production halt due to quick cost-reduction and kaizen (continuous improvement) efforts.

Woven Planet, Toyota's advanced technology company, is experimenting to develop state-of-the-art processes and security policies. Koji Sato, Operating Officer and president of GAZOO Racing Company, emphasized the importance of taking a comprehensive view of car making, rather than subdividing processes, in order to make ever-better cars.

Information gaps between departments at TMC were identified as a problem that slows down work progress. Young workers in technical/production fields and office staff at TMC expressed concerns about difficulties in advancing their careers due to across-the-board training policies and job assignments. There were calls to move beyond traditional frameworks and offer people more opportunities to tackle new challenges on their own initiative.

The implementation of digital transformation at Toyota's locations outside Japan notably begins with a major investment in Europe, particularly in the Czech Republic, where Toyota is producing its first European electric vehicle and establishing a new battery plant, signaling the start of their digital and electrification initiatives abroad.

The discussion in Part 3 of the management series will focus on the Toyota Production System (TPS), a management philosophy Toyota has developed over the years to ensure the production of high-quality, reliable, and efficient vehicles. The goal is to use what works as the template and expand digital improvements across Toyota group companies.

In conclusion, the management-employee representative discussions at TMC have provided a platform for open and honest discussions about the challenges facing the company and the steps being taken to address them. The focus on digital transformation, productivity, and personal growth demonstrates Toyota's commitment to continuous improvement and innovation.