Toyota’s New Product Development Process

February 8, 2009 - Tags:

The seemingly impossible deadlines set by top leadership for the Prius project and the numerous technical challenges faced by the Prius engineers dramatically improved Toyota’s already excellent product development process in two key ways:

1. The cross-functional team and chief engineer work together almost daily in the same room (obeya). In Toyota’s traditional approach, in the planning phase the chief engineer comes up with a concept, discusses it with the design groups and planning groups, and formulates a concrete plan as a result of joint discussion with those groups. With the Prius, a team of specialists from the various design, evaluation, and manufacturing functional groups sat in a big room with the chief engineer and made decisions in real time. Joining that group were not only the design engineers, but the production engineers as well so they could have discussions together. To assist these discussions, computer-assisted design (CAD) terminals were put into the room and it became known as “obeya” (big room). The obeya serves two purposes—information management and on-the-spot decision making. The nemawashi process can take a great deal of time to make decisions, but in obeya the right players are there to make decisions on the spot. There are many visual management tools (Principle 7) in the obeya—drawings of vehicles and schedules with checkpoints, so team members can quickly see where they are in every aspect of the program.

How often are people in the room? “It varies,” according to Uchiyamada, “but usually once every two days at least the whole team assembles there. One day for the obeya and the other day the chief engineer is in his own separate office. Obeya is the war room.” Before the Prius project, the chief engineer as an individual controlled everything, but with obeya a cross-functional team now controls the program. Since the Prius, the obeya system has evolved and is now a standard part of Toyota’s development process.

2. Simultaneous engineering. Manufacturing and production engineers are now involved very early in the design process—working with design engineers at the concept development stage, to give input on manufacturing issues. This level of cooperation at such an early stage is unusual in the auto industry. Toyota had been incorporating simultaneous engineering for several years before the Prius. But Uchiyamada intensified it. Because so much was new and because of the intense time pressures, there was unparalleled cooperation across divisions and between design and manufacturing for the Prius.

As a result of these innovations, along with innovations in the use of computer technology, Toyota’s product development process is now routinely down to 12 months or less for derivative vehicles in Japan, an impressive feat, considering that most competitors require twice this long. But the cornerstone of Toyota’s product development system is not computers or organizational changes. The cornerstone is still the chief engineer and the Toyota Way principles he and Toyota’s engineers live out in their work. According to Uchiyamada:

The role of the chief engineer has not changed too much. The personality of the CE and getting people to cooperate continues to be very important. The personality and perseverance and the ability of the CE really determine the success of the car.