Localization Fosters Global Growth: Ann Arbor Exec Outlines The Toyota Way to Manufacturing Success

 Listen to Yasuhiko Ichihashi discuss growth and localization at Toyota.

Toyota Technical Center President Yasuhiko Ichihashi highlights localization as a key to global success in automotive manufacturing

ANN ARBOR, Mich. -- Yasuhiko Ichihashi, President of the Toyota Technical Center (TTC) in Ann Arbor gave University of Michigan students and members of the public a glimpse at one of the reasons his company has flourished while others have floundered. In a word: localization.

At the November 10, 2006 event sponsored by U-M's Tauber Manufacturing Institute, a joint program for students in the College of Engineering and the Stephen M. Ross School of Business, Mr. Ichihashi said that by using local suppliers, local designers and local workers, Toyota has focused on manufacturing cars for customers in specific markets. The strategy is being implemented around the world, he said.

"Our goal is to enable our technology to produce the right car at the right time in the right place," said Mr. Ichihashi. For 25 years, Toyota has used American designers and engineers to help ensure that their vehicles meet local tastes and standards. He said that Toyota is also saving money by locating these engineers near local suppliers.

Through supplier collaboration and research, the company has pinpointed its customers' expectations and created vehicles that people want to drive, with the quality that they expect from Toyota. "For example, we met with farmers and construction workers to discover what they expect. We found that many of them today use their trucks as mobile office sites. So we incorporated lap top and file storage into the design. This is just one new feature that represents our desire to listen to customer needs," said Mr. Ichihashi.

Maintaining Corporate Culture while Localizing
Training is at the center of the company's success, with employees -- and suppliers -- receiving indoctrination into the "Toyota Way," the company's 14 overarching principles.

These principles, some would say, are why Toyota's North American auto division continues to gain market share, increase profits, build new plants, maintain harmonious supplier relations and an enthusiastic workforce with relatively lower labor costs while other automakers continue on a downward financial spiral.

"Our biggest challenge is to train people of diverse backgrounds to think and work as one team," Mr. Ichihashi said. All new hires go through the Toyota Way training, from factory workers to MBAs – with the latter often being asked to work on the assembly line or sweep floors when necessary. Suppliers are expected to adopt Toyota Way manufacturing principles in their operations as well.

TTC's Mission
TTC in Ann Arbor is Toyota's North American research and development center. TTC is engaged in a broad range of technical activities including engineering design, evaluation and design of parts and materials, prototype building, engine component design and evaluation, static and dynamic vehicle evaluation, emission certification, regulatory affairs and technical research.

Mr. Ichihashi said that in response to Toyota's growth, the company has hired more than 1,400 engineers since TTC's inception in 1991. "In our strong efforts toward localization, we have reached capacity in our Ann Arbor campus and have purchased 690 acres of land 10 miles to the south to create a new campus that will be completed by the summer of 2008," he said. The expansion of the technical center, which is moving to York Township, includes hiring 400 engineers by 2010.

In addition to engineers, he indicated that the company is looking for a variety of professionals who are flexible, teachable and able to see the benefits of taking a hands-on approach.

Toyota's Growth in North America:
• In April 2006, Toyota Motor Manufacturing North America, Inc., and Toyota Technical Center consolidated to form Toyota Motor Engineering & Manufacturing North America, Inc. (TEMA). TEMA is responsible for Toyota's North American engineering design and development, R&D and growing manufacturing activities in the U.S., Canada and Mexico.

• Toyota currently operates 13 manufacturing plants in North America including the recently opened Tundra plant in San Antonio, Texas. Toyota Motor Manufacturing Canada's second plant in Woodstock, Ontario, will open in 2008.

• Production of the Camry at Subaru of Indiana Automotive, Inc. (SIA) in Lafayette, is set to begin in Spring 2007.

• Toyota produced more than 1.55 million vehicles, more than 1.3 million engines and nearly 400,000 automatic transmissions at its North American manufacturing facilities in 2005.

• By 2008, Toyota will have the annual capacity to build nearly two million cars and trucks, 1.44 million engines, and 600,000 automatic transmissions in North America.

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Written by Nancy Davis

11/11/2006--

See related story in the Ann Arbor News: "Toyota execs provide insight"

Toyota Technical Center President to Speak at the Ross School

When:  Friday, November 10, 1:00 pm - 2:15 pm
Where:  0750 Wyly Hall, Ross School of Business

Industry leader tackles local to global challenges in the new era.

ANN ARBOR, Mich.---Yasuhiko Ichihashi, President of the Toyota Technical Center, will present a talk entitled "At Toyota: Growth Through Localization" at 1:00 p.m. November 10 in 0750 Wyly Hall of the Stephen M. Ross School of Business.

Toyota faces many challenges as a leader in the 21st century auto industry. Two of these are maintaining growth, while at the same time continuing to build and strengthen its foundation. Yasuhiko Ichihashi, Managing Director of Toyota Motor Corporation and President of Toyota Technical Center, will present aspects of this challenge for Toyota on a global, regional and state level.

About Yasuhiko Ichihashi

Curent Titles:
President, Toyota Technical Center

Managing Officer, Toyota Motor Corporation
Executive Vice President, Toyota Motor Engineering & Manufacturing, North America, Inc.

Yasuhiko Ichihashi joined Toyota in April 1974 after graduating from Gifu University's School of Engineering with a degree in precision engineering. Between 1974 and 1995, he worked in a variety of chassis-related positions. During that time, he also served a 3-year assignment in the United States. In 1995, Mr. Ichihashi was assigned as Chief Engineer for the Toyota Vitz/Yaris, followed by an assignment as Chief Engineer of the Echo and Vios. In June 2003, he was assigned to head Toyota's newly reorganized Research & Development Group. Also in June 2003, Mr. Ichihashi was made a managing officer of Toyota Motor Corporation.

In June 2004 he was named President of Toyota Technical Center (TTC), headquartered in Ann Arbor, Michigan. TTC is Toyota's North American research and development center. TTC is engaged in a broad range of technical activities including engineering design, evaluation and design of parts and materials, prototype building, engine component design and evaluation, static and dynamic vehicle evaluation, emission certification, regulatory affairs and technical research.

In April 2006, TTC consolidated operations with Toyota's North American manufacturing organization to form Toyota Motor Engineering & Manufacturing, North America, Inc. (TEMA), headquartered in Erlanger, Kentucky. At that time, Mr. Ichihashi was appointed as an executive vice president of TEMA, while maintaining his role as the president of TTC. TEMA is responsible for Toyota's North American engineering design and development, R&D and growing manufacturing activities in the U.S., Canada and Mexico.

Born in 1952 in Konan City, Aichi Prefecture, Mr. Ichihashi now lives in Northville, Michigan with his wife, Chikako. The Ichihashis have a daughter and two sons. In his spare time, Mr. Ichihashi enjoys listening to music and visiting art galleries.

This event was sponsored by the Tauber Institute for Global Operations.
Tauber Media Contact:  Email tauber.info@umich.edu