Editorial: Lean approach hits the skids

OPINION: When German inventor Karl Benz patented his Autowagen in 1885, he was onto a winner. The horseless carriage took the world by storm and, 125 years later, the car is all-pervasive.

Cars have become more and more sophisticated as the years have gone by and it is hard to find an industry more competitive than car manufacturing.

Toyota, which was rebuilt from the ruins of post-war Japan, is the cream of the crop. It emerged triumphant in January 2009 as the world's biggest carmaker, knocking the almighty General Motors off its perch by selling close to nine million cars around the world in 2008.

Toyota got to the top by revolutionising production. The company is credited with introducing lean production, a method of working which cut a huge amount of waste out of building cars by drastically reducing the number of suppliers who provided parts and empowering workers to constantly improve what they did. It was a sort of manufacturing alchemy and its methods were closely studied by academics. They wrote books and the methods were adopted by thousands of companies which wanted to imitate Toyota's magic formula of cutting costs and maximising profits.

This week it came crashing down. Toyota has experienced a spectacular fall from grace, with its president, Akio Toyoda, fronting up to a congressional hearing into his company's safety record and shedding tears publicly for its failings.

The cars have been linked to a string of deaths and near misses because of unexplained acceleration.

It seems astounding that 125 years after the car was invented, Toyota's engineers hadn't figured out a failsafe to control such a basic car function.

Toyota's problems beg a basic question about the way modern corporates are structured. It led a rush to create the best cars in the world by the cheapest possible production methods. By becoming lean, the company appears to have put profits ahead of safety and quality. Indeed, the weepy Mr Toyoda conceded as much, when he said that Toyota's priorities, including safety, quality and volume, had become confused.

The frightening thing is that no-one appears to have seen the dangers in this approach, and the whole world has rushed to copy Toyota. The implications are far-reaching. While Toyota faces possible lawsuits for car fatalities, at least one driver jailed for a crash in a runaway Toyota is attempting to get his conviction overturned thanks to the newly developed "Toyota" defence, or in other words, "the car did it".

Toyota's worldwide reputation has taken a dent. That the company has the collective brains and wisdom to overcome its problems is undoubted. How it manages to put safety ahead of profit again will be fascinating to see.

- © Fairfax NZ News