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"Everything that doesn't add value, is waste. Waste of capital, waste of time, waste of employee ability to contribute".
Because of the way they put cars together, everything else follows. Lower cost, higher quality and virtually no defects.
Even when you spend some time reading how and why it works, it still takes some rumination to figure out how they do what they do. Then it hits you.
It is VERY different from the way traditional factories in the U.S. and Germany operate:
1) Quantity Management: Pull system with minimum inventory. Just in time, production line driven, component demand2) Quality Management: Constant inspection at each process step. Defects stop production with no inventory. 3) Maximum use of human capabilities. Empower the worker and teams. Rewards improvements from every level.
Toyota runs their factories 'mixed' producing similar vehicles. Order to fulfillment time in Japan is 5 days and has been for a decade.
The link below gives a good summary:
The following powerpoint presentation (58 pages long!) from MIT shows some of the differences in factory performances between Japan, Japan/US, US and Europe.
Given the way Mercedes (BMW, etc.) design their cars, build them and operate their factories, they are pretty hamstrung.
They consume an inordinate amount of capital in-production inventory, take longer to build, tolerate higher levels of defects, and despite their innovative nature, are often forced to bring products to market with technology that's not ready for prime time.
Mercedes won't go out of business, but the bar has passed them by and they fall further and further behind.
Plus much of today's significant automobile technology is electronics based.
The U.S. and Japan lead the world in electronics, microprocessors, embedded software development.
There are times that BMW and Mercedes both bring technology to market before the Japanese and U.S. companies, but it's usually buggy (Rev 4.2 already for the new 745).
They are desparately trying to figure out how to stay in play.
It's a pretty good write up of the production technology that Taiichi Ohno developed at Toyota in 1977.
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