Toyota Trimming Auto-Development Time to 12 Months

[notacarguy]

Toyota Trimming Auto-Development Time to 12 Months (Update1)



Sept. 15 (Bloomberg) -- Toyota Motor Corp. aims to slash to one year the time it needs to get new models off the drawing board and into production, a pace analysts say would be the industry's fastest and could save tens of millions of dollars annually.

Toyota, the world's second-largest automaker, previously sought to start building car and truck models within 20 months to two years of completing a new design, said Jeff Liker, an engineering professor at the University Michigan in Ann Arbor who studies Toyota's production methods. No automaker puts new models into production faster, and cutting the time to 12 months only widens that gap, said Liker and other industry specialists.

Reducing the preparation time to 12 months ``enables us to develop a variety of vehicles that reflect market needs and demands while fulfilling the advanced development structure,'' Katsuaki Watanabe, Toyota's president, told analysts and investors at a conference in New York Sept. 12.

Toyota, the maker of Camry sedans, since the 1950s has followed a manufacturing approach of ``kaizen,'' or continuous improvement, seeking refinements and cost-reduction at every stage. That's helped the Toyota City, Japan-based company set profit records of $10.3 billion and $10.9 billion in its past two business years.

Toyota's market capitalization of $153.4 billion, is more than eight times that of General Motors Corp., the largest automaker. In 2003, Toyota overtook Ford Motor Co. as No. 2 in global sales.

Watanabe didn't cite specific models being developed on a 12- month cycle. Liker said at least two, the bB wagon, sold in the U.S. as the Scion xB, and a minivan for the Japanese market, were completed in under a year. Yasuhiko Ichihashi, president of Toyota's U.S. engineering group, also wouldn't point to a North American model being developed within a year.

`Design Freeze'

The goal is to be able to start production in as little as 12 months from ``design freeze,'' or when the styling and engineering work on a new model is approved, Ichihashi said in an interview in New York.

The industry average for putting vehicles into production is between two and three years, said Ron Harbour, president of Troy, Michigan-based Harbour Consulting. Harbour, Liker, Deutsche Bank Securities analyst Rod Lache and Art Smalley, an efficiency consultant for the Brookline, Massachusetts-based Lean Enterprise Institute, all said Toyota already is a leader in development speed.

`An Absolute Nightmare'

Cutting development time to a year ``means savings of at least tens of millions of dollars,'' Harbour said. A shorter process means the company is tying up fewer financial and human resources on each product, and ideally allowing it to recoup costs faster by going to market sooner, he said.

``If they can do this, it's an absolute nightmare for GM and Ford,'' said Smalley, a manufacturing consultant and former Toyota engineer based in Huntington Beach, California. ``They can either lead you by putting new products on the market years before you, or if a you have a successful product they can sprint and catch you in 12 months.''




Source: http://www.bloomberg.com/apps/news?p...Vg&refer=japan

[tgagneguam]

I absolutely cannot wait to see what the GMIer's who persistently and pervasively blow smoke up the ass of Toyota say about this...

[Aerodynamix]

Well if they can do it in 12 months then congrats to them. I'd just be cautious about going so fast that you miss some of the details in the process.

[Ming]

It makes sense. People think you have quality conquered - that you are the KING - but in reality even Hyundai is ranking right up there with you. Solution? Obsessively work a system with your overtime-happy (or not so happy) engineers towards a goal that your "lazy" 40-hour work week competition cannot match by pummelling them with streams of new models every year or two while they struggle to keep up - until they submit under your product barrage and give in to your relentless pursuit of global market share.

Note that the cars don't have to be radically different (engines, platforms - the basics can stay the same), but with a Land Cruiser or Camry that gets significantly restyled in 2-3 years the Suburban and Impala will look even "older" if they stay around with 6-7 year styling cycles - and it will begin to look like GM can't keep up while Toyota is (to use their tag line) "Moving Forward". Much of this funded, of course, by the massive profits sent their way by the eager buying public in America.

Japan's domestic market has been conquered by Toyota partially for the same reason. Toyota and many big Japanese companies for that matter, like using styling and trendiness as a hammer with which to beat down companies that cannot afford to keep up with the "it" thing of the moment. Whether it be a certain look to a car, or a certain technology in a DVD player or a Washing Machine or a Rice Cooker (I'm not kidding - go to Akihabara and you'll see this phenomenon) - only those companies that keep up with the latest looks and trends can compete. Celebrities are used in the colorful cardboard ads that festoon the washing machine or car, all heralding some technology like "fuzzy logic" (for dryers, I remember this) or "IH" for rice cookers - the big names all fall in line with the trend.

With Toyota, think "Hybrid", and constant changes in styling that will make GM look 2-3 steps behind.

[plane]

FUD factor.
Of course everyone is racing to cut development times.
It's continuous improvement after all.
Does Toyota have a 12 month turn around? No.
Let's put this into perspective -

GM just turned out the Solstice in 27 months, using a hydroforming process for major body parts for what? around $250M total? If I were a Solstice Designer or Engineer at GM I would be tired, overworked, and extremely uplifted by such a great accomplishment.

Does anyone doubt that GM's next cycle won't be shorter?

It's great that Toyota is focusing the entire company on such a simply explained goal. However, Toyota just added more game day trash talking quotes to the GM bulletin board. Maybe this will fire up some GM managers and staff that want to kick butt and take names?

[AndrewGS]

This should help lower their quality scores.

[Infiniti Z350]

Originally Posted by AndrewGS

This should help lower their quality scores.

Not necessarily. Quick does not always equal sloppy or inaccurate.

[mbukukanyau]

Any the recalls will mount

[mbukukanyau]

Originally Posted by Ming

It makes sense. People think you have quality down but in reality even Hyundai is ranking right up there with you. Solution? Obsessively work a system with your overtime-happy engineers towards a goal that your "lazy" 40-hour work week competition cannot match by pummelling them with streams of new models every year or two until they submit under your product barrage and give in to your relentless pursuit of global market share.

What do you think the resale value will look like for toyota after a 2 year life cycle? good luck...
A lease lasts 36 months.. is it going to come down to 24 at Toyota financial?

[AndrewGS]

Originally Posted by Infiniti Z350

Not necessarily. Quick does not always equal sloppy or inaccurate.

Twelve month development means virtually no time to test drive designs to make sure they work as well in the real world as they do on the computer. A good example is Hyundai. They started taking more time in development and their quality shot from far down on the list to one of the highest.

[mrfunji]

You guys don't read between the lies. Toyota says 12 mo. after "design freeze." They can take 3 year to do all the development they want on the chassis, and then change the styling which, if done smartly, can be only a crashworthiness verification which takes ~ 1 year.

Mind you GM made the Solstice production concept to reality in ~25 mo (which smokes Toyota's claim, which you wouldn't know if you only read the headline).

It's not hard to take a vehicle already made (bB in Japan) and release it in the US in 12 mo. (xB.) I mean, GM made the GTO in 1 year...BFD Toyota.

[mjd1001]

I don't think this would affect resale values that much...simply because I think Toyota would still stick to their re-style cycle the same. All this would allow them to do is wait further into the cycle before they determine what changes they make.

For example..say a Car is launched in 2006, and would be restyled in 2009. Normally Toyota would have to wait till 2008 to plan the 2010 replacement. Now if they can speed things up to 12 months..they can wait until 2009 before finalizing plans for the 2010. This simply gives them more time to see what the competitors are doing.

[Ming]

Originally Posted by mbukukanyau

What do you think the resale value will look like for toyota after a 2 year life cycle? good luck...
A lease lasts 36 months.. is it going to come down to 24 at Toyota financial?

Well it can be the same car, just a different look. Didn't GM do styling changes every couple of years for cars back in the 50's? (When it had far fewer car models)

I considered other problems as well, but now I look at it this way. If a Suzuki Aerio gets in a wreck, it sure isn't easy to find cheap, plentiful replacement aftermarket body parts like it is for a Suburban or Jeep Wrangler. If Toyota changes styling - even radically - on the Corolla every 2-3 years, then it still sells far more Corollas in 3 years then Suzuki Aerios sold over 7 or 8 years. I thought body parts might be a problem for a frequently changing car, but not in this new market where low volume niche cars are so common - not for high-volume Toyota cars & trucks at least.

Japan's domestic market is what I see Toyota attempting to emulate,k where the basics of the cars aren't radically different but the looks change considerably. Get trendsetters who buy a whole lot of Toyotas (in California, for instance) keeping up with the Joneses by buying the "latest" Camry with the "latest" styling.

[Havasavana]

Originally Posted by mrfunji

You guys don't read between the lies. Toyota says 12 mo. after "design freeze." They can take 3 year to do all the development they want on the chassis, and then change the styling which, if done smartly, can be only a crashworthiness verification which takes ~ 1 year.

Mind you GM made the Solstice production concept to reality in ~25 mo (which smokes Toyota's claim, which you wouldn't know if you only read the headline).

It's not hard to take a vehicle already made (bB in Japan) and release it in the US in 12 mo. (xB.) I mean, GM made the GTO in 1 year...BFD Toyota.

Very important point, "after design freeze". With increasing use of processes to automate the implementation of metal forming components from digital to physical, this process is aided. But what about the suppliers? Everybody in the supply chain will have to be on board too. I sure won't be first in line to buy one of these quickies.

[goatgary]

They MIGHT be able to do a reskin on existing chassis and mechanicals, but NEVER a ground up new vehicle. Just as someone said, testing time alone can eat up most of twelve months (unless they want the customers to do the testing .......aarrrgggg!!!!). Just getting buyoff from the Feds on CAFE can take months. Then there are the suppliers. New contracts must be let and then they need to develop tools and test their parts for durability and a host of other standards. They must set up new manufacturing processes and tooling in their own shops. Then the suppliers have to develop new packaging for shipment which means the container suppliers have to get into the act. The assembly plant has to be retooled (and some tools can take months to make). The assembly process and in-plant parts delivery process needs to be designed and then the plant data build systems need to be completely redone. Parts sequencing to the assembly line needs to be orchestrated and the assemblers must be trained. Running prototypes must me made and tested. Pilot models must be run for several thousand miles. Assembly and engineering problems must be debugged. Marketing materials and promotions must be designed and produced including glamour photos of the finished product. Dealer ordering materials and pricing must be established months in advance, etc., etc., etc. To shortcut any of these steps for the sake of expediency or good press is at the expense of us, the unwitting customer.
I am willing to lay heavy money that a new Toyota will NOT be at your dealer 12 months from design freeze. OR recalls and warranty will go through the roof.