"Arguably in every parameter that you can look at, the Toyota Production System is the finest product system in the world for designing and manufacturing products. They make products that people want and they do it with less resources and less time than anybody in the world. They're a magical machine." Not my words, but those of Alan Mulally, now charged with pulling a carmaker out of the swamp marshes of Fordor. Like Alan, I admire Toyota’s manufacturing processes, quality control and after-sales. But I also know their weakness…
First, to those of you who are tired of hearing what a great company Toyota is, Toyota is the world’s foremost manufacturer. Bar none. Other manufacturers must study, learn, apply and improve. That’s the only way they’ll build the war chest they need to fight back from a position of strength. Until they do, they’ll be playing a hopeless game of catch-up.
Back to Alan for a moment. Every day a 737 pumps out of the hangar at Boeing, and after a 35 minute flight it’s in revenue service. Of course, they told Mulally it couldn’t be done – ”You can’t build planes the same way you build cars!” Yes you can, and doesn’t Airbus wish they were? This was Mulally’s gift to Boeing, and in a strange game of hopscotch it could become Toyota’s gift to Ford channeled through a disciple. Bill Ford only wishes he’d thought of it sooner.
Reaching parity with Toyota– and adding a few bells and whistles of their own– is the best Ford can hope for. It’s a long shot, as ToMoCo isn’t standing still. But Mulally is a self-professed disciple of The Way and if Ford’s resources don’t run out first, he’s the man who can give it the best shot. Who would you rather have making the effort: Wagoner and Lutz in their constant states of denial, or someone who’s actually hit the bullseye already?
Mulally is already applying his knowledge to the task at hand. For example, he knows that Ford must align itself more closely with its suppliers’ best interest. FoMoCo’s suppliers are wobbling with fatigue, having been squeezed dry by their overlords. They’re so fed up they’ve started to squeeze back, exploiting the weakness of the rulers up at the Castle. Hopefully both sides will see the light before they force one another off the field of battle. Ford’s already seeking a more constructive relationship with its key suppliers, so don’t think Mr. Mulally is simply holding Thursday chat sessions.
Mulally’s also begun realigning his forces in the field, making the various divisions understand they’re answerable to High Command and that the brandmash has got to stop. That’s going to be the tough one. There are hundreds of stakeholders who will be resisting any transfer of power back to the corporate mothership. I suspect this is why Mulally insisted on being co-director along with Bill Ford. A fly on the wall would have heard this: ”I’ll do it, but only if you’re willing to rain hell on the holdouts that will be fighting my changes. You and me Bill, we’re in this together.”
Assuming Mulally can get Ford’s ducks in a row, it’s time to reveal Toyota’s weakness: a legacy. They don’t have one.
Where do Toyota owners go to proudly display their classic Toyotas to other owners? Right, nowhere. What comes to mind when you think of Toyota’s history? Nothing. Yes, 25 million Camrys sold is fantastic. But Toyota is not a brand builder. They’re blandbuilders. They’re not building dream machines. Instead, they are experts at playing the law of averages to their consumers’ satisfaction.
Without a legacy you’re not building brands, you’re building cars, you’re providing transportation. Toyota is aware of this. That’s why it’s in F1 and NASCAR. That’s why they’re pushing the envelope on alternative drive-trains, and spending without limit on Lexus. And that’s why they put the brakes on building more Scions – sensing an opportunity to harness brand cachet. They are wising up. Toyota is trying to build a legacy before their opponents notice their weakness. While we wonder whether there’s a future to GM and Ford (a pity given their past achievements), there is no past in Toyota, only a future that’s going to be better than average.
If Ford (or any of the domestics) want to take on Toyota, they’ve got to show what brand spirit is all about. Ford and GM have some choice morsels in their history, ready to be added to the mix. Of course, to do that Ford and its cohorts need to get rid of their spreadsheet ”car makers” and tune their brandlines for an exhilirating roll of the dice. Which is the topic of my next column.