Another Look at How Toyota Integrates Product Development

Challenged by world-class competitors, manufacturing companies in the United States have greatly improved their product development efforts as well as their factory operations. Today, however, U.S. companies are beginning to see the effectiveness of their product development systems plateau. More important, that effectiveness seems to have leveled off far short of the best Japanese companies. The authors, Durward Sobek, assistant professor of engineering at Montana State University, Jeffrey Liker, associate professor of engineering at the University of Michigan, and Allen Ward, head consultant at Ward Systems, explore how one of those companies, Toyota, manages its vehicle development process. Toyota's managerial practices can be grouped into six organizational mechanisms. Three of them are primarily social processes: mutual adjustment, mentoring supervision, and integrative leadership from product heads. The other three are forms of standardization: standard skills, standard work processes, and design standards. Alone, each mechanism would accomplish little, but every piece has its own role and at the same time reinforces the others, unlike many of the sophisticated tools and practices at U.S. companies that tend to be implemented independently. Together, the mechanisms give Toyota a tightly linked product-development system that relies on training and standardization to achieve cross-functional coordination while still building functional expertise. Toyota has added a number of twists to ensure that each project has the flexibility it needs and still benefits from what other projects have learned. This balance allows Toyota to achieve integration across projects and over time, as well as within projects.

• Innovation
• Project management
• Product development
• Product engineering