Case Study of Kaizen
CASE STUDY
TOYOTA’S KAIZEN EXPERIENCE “Human beings think our way is the best, but at Toyota, we are told we have to always change. We believe there is no perfect way, so we continue to search. The goal is to break the current condition through Kaizen.”
- Shoichiro Toyoda, Chairman, Toyota Motor Corporation, in December 2000. TOYOTA REINVENTS THE NEED FOR KAIZEN
In the early 1990s, the Japanese automobile major, Toyota Motor Corporation (Toyota) was facing acute labour shortage. The emergence of high wage jobs and a shortage of young workers due to the low birth rates in Japan in the previous two decades were the primary reasons for this. The number of women and aged people was increasing in the country’s labour pool. These people avoided heavy manufacturing work. Toyota’s strong focus on improving productivity and production efficiency over thedecades had created strained work atmosphere as the workers were reportedly over burdened. This led to an exodus of young workers from the company. In 1990, around25% of newly hired young workers left the company in their first year itself. To deal with the labour shortage problem, Toyota employed many temporary workers in the assembly plants. The ratio of temporary workers in the workforce soon reached more than 10% -some work groups had around 75% temporary workers. As these temporary workers werenot adequately trained, the annual working hours of the company increased, while productivity decreased
Further, according to analysts, Toyota management’s focus on increasing production efficiency by achieving higher production levels with less number of workers resulted in increased stress for the workers. This also played a major part in the worker exodus. Toyota’s problems increased with by the global upsurge in car demand during 1987-1991 because of which the demand for labour shot up. As high wage jobs were easily available to the limited pool of young male workers, many Toyota workers began to leave the
TOYOTA’S KAIZEN EXPERIENCE “Human beings think our way is the best, but at Toyota, we are told we have to always change. We believe there is no perfect way, so we continue to search. The goal is to break the current condition through Kaizen.”
- Shoichiro Toyoda, Chairman, Toyota Motor Corporation, in December 2000. TOYOTA REINVENTS THE NEED FOR KAIZEN
In the early 1990s, the Japanese automobile major, Toyota Motor Corporation (Toyota) was facing acute labour shortage. The emergence of high wage jobs and a shortage of young workers due to the low birth rates in Japan in the previous two decades were the primary reasons for this. The number of women and aged people was increasing in the country’s labour pool. These people avoided heavy manufacturing work. Toyota’s strong focus on improving productivity and production efficiency over thedecades had created strained work atmosphere as the workers were reportedly over burdened. This led to an exodus of young workers from the company. In 1990, around25% of newly hired young workers left the company in their first year itself. To deal with the labour shortage problem, Toyota employed many temporary workers in the assembly plants. The ratio of temporary workers in the workforce soon reached more than 10% -some work groups had around 75% temporary workers. As these temporary workers werenot adequately trained, the annual working hours of the company increased, while productivity decreased
Further, according to analysts, Toyota management’s focus on increasing production efficiency by achieving higher production levels with less number of workers resulted in increased stress for the workers. This also played a major part in the worker exodus. Toyota’s problems increased with by the global upsurge in car demand during 1987-1991 because of which the demand for labour shot up. As high wage jobs were easily available to the limited pool of young male workers, many Toyota workers began to leave the