Toyota’s Indiana plant prepares to build the third generation Sienna minivan.
The nine-year-old plant has 4,200 employees and faced an uncertain future with the economic downturn. By mid-2008, the plant’s Tundra full-size pickup production had been moved to Toyota’s Texas facility. Toyota also decided to build the Highlander mid-size SUV in Indiana by late 2009.
Toyota invested approximately $450 million to upgrade the plant, which introduced the Highlander last October. Now, TMMI is poised to build the all-new, third generation Sienna.
“It made more sense to further invest in our experienced team members (rather than resort to layoffs),” an official said. “We refocused our work. When we weren’t building vehicles, and prepared for a brighter future.”
TMMI implemented a training program for team members. It also encouraged team members to further kaizen, a Japanese term for continuous improvement. No ideas for improving processes and reducing waste were too small; in fact, hundreds of improvements were implemented resulting in an estimated savings of more than $7 million.
Team member ideas bolstered safety and ensured consistent quality. For example, the installation of the lower front console on the all-new Sienna put the team member in an awkward position. Team members found a small power tool that ensured the console snapped securely in place every time while eliminating an ergonomic issue.
“The power of more than 4,000 people working together on this type of activity is incredible. Our decision to fully utilize our team members was expensive, but it’s paying off already. Currently, our quality is much better than it’s ever been and our safety is among the best in Toyota.”
Toyota offset some of the cost by adopting a “shared sacrifice” approach, including the elimination of executive and salaried bonuses, executive pay cuts, production team member bonus reductions, overtime elimination, and a hiring freeze. Could Washington learn something from this?